Co-opting Craft, Miller Style…

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As we head into December, people in the beer industry start to wonder how their respective channels performed during the year. Overall, it appears that craft beer has weathered the economic downturn pretty well, albeit with an expected decrease in sales compared to recent year juggernauts. While increased sales and volume are two important ways of measuring the craft beer industry’s performance, they are not the only measuring sticks. How the craft beer industry’s competitors have responded to its performance is another way to judge how well it is doing.

Take for instance the recently unveiled website for MillerCoors, the joint venture between the American brewing divisions of SABMiller and Molson Coors. After getting through its buggy age verification system (took me four tries over a three week period to finally gain entrance), I perused the Our Beers section, which breaks down the company’s brands into four curious categories. The first category, Domestic, is pretty self-explanatory. The second, Import, is a little more unusual and a sign of how global the brewing industry has become and how involved these two powerhouse corporations have become. The final two categories caught my attention. Under the heading of Craft, the website promotes the Blue Moon, Henry Weinhard’s, and Leinenkugel’s line of beers. The final catchall category, titled Specialty, includes other brands such as Killian’s Irish Red, Fosters, and the recently departed Zima.

The website doesn’t detail the distinctions to be drawn between the final three categories and they remain a bit of a curiosity. I’m not at all clear of how the company defines ‘craft’ or ‘specialty’, why Killian’s qualifies as a specialty brand while Blue Moon is a craft, and why Fosters isn’t an import. I could make some educated guesses on these points (Killian’s was once an Irish brand purchased and long-produced by Coors in the United States, while Blue Moon was created by Coors and Foster’s is brewed in Canada and brought into the United States as opposed to being brewed outside of North America).

I’m also not sure how I feel about the brazen use of the word ‘craft’ to promote its products. While this attempt at co-opting the cool of craft is no new trick, the Big Two have given up on any pretense of trying to muscle in on the success of craft beer. This is a bit ironic considering the underwhelming public response to Budweiser American Ale and to the suspended Miller Lite Brewers Collection a line of “craft-style” beers.

With that said, these beers continue to do well at the Great American Beer Festival and excluding their numbers from consideration considerably undersells the growing popularity of craft beer, better beer, or however you want to define the consumptive phenomenon.

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The Full Sail Interview with Jamie Emmerson…

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Based in the heart of the beautiful Columbia River Gorge, the Full Sail Brewing Company of Hood River, Oregon, is one of America’s oldest craft breweries. The brewery is an interesting mélange of personalities and attitudes, ranging from assertive American-style ale lovers to hard core Germanophiles. Backed by its powerful flagship, the Full Sail Amber Ale, and its slogan, “stoked to brew, brewed to stoke,? the brewery produced more than 120,000 barrels in 2007. Full Sail also proudly touts its status as an employee owned business. Full Sail is also known for the introduction in 2005 of its excellent Session Premium Lager, a pre-Prohibition style beer bottled in the classic stubby container. The brewery also produces a line of limited edition lager beers, called LTD.

In a break from the ordinary craft beer experience, Full Sail struck an agreement with the Miller Brewing Company in 2003 to contract brew the iconic Henry Weinhard’s brand for the Milwaukee-based company following the closure of the Tumwater, Washington, brewery in 2003.

I recently visited Full Sail, where I met with Executive Brewmaster Jamie Emmerson, who showed me around the place before sitting down to a tasting panel of the brewery’s beers.

Andy Crouch: How did you Session lager product get developed?

Jamie Emmerson: Session came about because of the stubby bottle. The last brewery to use it was Tumwater and they closed and we spent three years talking about what to do. And one of my neighbors down the street used to be a lineman for the University of Oregon and when I invited him over and offered him a beer he would say ‘no thanks.’ I figure he didn’t drink. Later on I thought that this style would be a good one for that guy that could go against a continental pilsner. It’s done in that style, all malt, so no corn or rice. It’s a bit hoppy and as my dad says, “it’s just beer.” Low sulfur. It’s lagered start to finish in three weeks. It’s a warm ferment and you get a little bit of fruit. You rack it down very cold and it ages about two weeks and four days.

AC: That doesn’t put you guys out much in terms of tank space.

JE: It didn’t really improve with any extra age in fermentation and that’s what we found in our taste panels. All ales are the same yeast and the lager yeast is used across all the lagers.

AC: How did you get involved with the Harborside site in downtown Portland?

JE: The Harborside Restaurant used to have a dance club called the Shanghai Lounge and it was the meat market of its time. It’s right in the middle of all of these nice condos and people got tired of the 3 a.m. yelling and they we’re told to cut back their hours. They called us and asked us if we would be interested in brewing there. In basically six weeks they tore the dance floor out and we put our old brewery down there, encased in glass, so you get the brewpub feeling but it’s actually two separate entities. They can have alcohol and anything you can get at the brewery you can get there. So what brewer John Harris did originally was to make the Amber when we were short and he was cranking out five to six thousand barrels of Amber out of only 800 square feet. So when demand settled down and we sat down to figure out what we wanted to use the place for, then we decided on the Brewmaster’s Reserve series. It has become an entity of its own. The Brewmaster’s series are all high gravity beers, very interesting, and the people who like those beers really like the bourbon barrel beers are tremendous. All of the bourbon barrel beers have to be made here, however, because he doesn’t have room.

One of the nice things about growing is that we can afford really good equipment, the top equipment. For a long time, we we’re on a shoestring and you just had to make it work. I think beer quality in general has approved across the board no matter where you go. Back in the day, it was a little sketchy. We’ve had a lab for a long time and back then no one had a lab. We also have taste panels which a lot of place doen’t have.

AC: What is the genesis of the LTD program?

JE: I started here in April of 1988 and we were doing a golden ale. The first specialty beer we made was imperial porter in June of 1988. Then we did a Christmas beer and then Amber came. The next we made was maibock and the bartenders called it ‘Mindblock.’ It’s 6.5-percent alcohol so it’s strong. When we were looking at bringing something back later, we started looking at seasonal beers and how part of the problem was that you were so tied to one particular time frame. If you’re short in production in Octoberfest season, then you have Christmas beer on the shelf. We wanted to make a seasonally appropriate beer but one that if it rand long it wouldn’t matter. We’re trying to figure out how the next one will work with our three LTD beers, like whether they will run for longer periods of time or even in order. Our brewers are given some freedom to create their own beers with their names on them. If John has something odd going on at Harborside, they can use that. They can use Full Sail yeast and session yeast. They can use hops we have in inventory and we’ll buy specialty malts. It’s more of a challenge to them. People who come in here have already been filtered a bit. It’s not the Bud light guy coming in. With that group in mind, I ask them, “Where do you fit in?” I think this ESB, Extra Special Barney, named after the brewer, is particularly interesting because when you compare that with the Amber, a Northwest-style ESB, and it’s very English. Set them up side by side and it’s very interesting.

AC: When did you start working with Miller?

JE: About five years ago.

AC: Tell me about the connection with Miller and how that came about.

JE: Tumwater was closing and they wanted to keep some of the production here in the northwest partly because with the hefeweizen, which is very popular, Miller doesn’t due live yeast post-secondary. They bought beer off the shelves at Safeway and brought it back to Milwaukee and tested it. They were looking at all of these things. They wanted to bring the brands they had trouble managing. At one brewery they make our annual production in three days. SO to have a brand, such as Amber Light, that is perhaps 400 barrels a month, they couldn’t do it. From the lab back in Milwaukee we got the green light. It’s been very nice to deal with them, they are very pleasant and knowledgeable. It’s been a very good relationship. We’ve come to a certain point where the only knowledge I can gain anymore is from books or technical journals. And here you have guys who live and breathe that stuff all the time. Miller has guys who only work on efficiency and that’s impressive. Henry’s is not micro beer but it’s a high quality regular beer. We’ve talked about recipe formulation because I think there may be a few things, such as hop usage, that we may know more about than they do. With the four brands we manage, we’re up to about 40,000 barrels of production.

AC: Are they doing high gravity brewing?

JE: Everything is high gravity and that is real standard. We’ve talked about why they use syrup. I don’t think it’s cheaper any more due to the cost of corn. We could convert that and I don’t think anyone would notice the difference. There is just something missing in the palate and I think it’s a malt thing. You can’t put your finger on it. A couple of them are 20-percent adjunct. If you go back in brewing history the reason that adjunct was brought in was to bring the soluble nitrogen levels down to the level of the malt in Europe. The nitrogen levels in the malt in Europe was lower. It’s strictly a condition like growing grapes in California versus France, things are just different. SO all these brewers were German and they are trying to make beer like back home. The nitrogen palate was something you had to deal with. So you add some adjuncts or low nitrogen material to balance it out. And you can make some excellent beers and I think that is what they are doing here, just old school. I think you could do the same thing here, only with malt. But I’m trying to make it my beer and it’s not.

AC: Any thoughts on the recent announcement that the Magic Hat Brewing Company intends to purchase Pyramid?

JE: From a business standpoint, you can go on the web and see their financials. Then you have to ask why you would spend that kind of money on a place that has never made any money. Then you look at the main pub in Seattle and its located right next to the stadium. That alone is worth a lot of money. If you are coming in and want production, that’s one thing. If you want pubs, that’s another thing. If they haven’t figured out how to make money yet, I just don’t know. It may not be a dumb deal, but what survives the cut? Whose beers are made when it’s all done? When you look at Portland’s portfolio and that is really shrinking. MacTarnahan’s really was the big hitter there so that was an easy one as Pyramid didn’t make it.

We’re independent and employee owned and it’s a little odd when you’re competing with these larger breweries. When we started, we built our brewery for a lot less than other people with a high capacity so now we don’t have to do what a lot of other people have to do. If you look at the IRI’s, we have three beers in the top twenty. We’re not a one horse pony and I like that. When people come in the door and ask, ‘what do you have on tap?’ The answer is, ‘what do you like?’ We have a broad enough selection that are all solidly made and we have something for everyone to like. The trick is to find that out. What I find a lot of times is that we’ll do tastings and we’ll be pigeonholed in one way or another. And I offer something else and they’ll be surprised by it.

AC: What are your thoughts on the recent price increases consumers are seeing in the marketplace?

JE: I think $4.50 to $5 pints are going to be the norm. We’ve been lucky that we’re not in debt so we don’t have to go up as much. Now some other breweries are different. I heard that Widmer spent $32 million on its brewery. That’s more interest than my debt payment. That’s a lot of beer.

AC: What are your thoughts on the future of extreme beers?

JE: Everyone here wants to think they are normal and I think, ‘Dude, you like a 100 IBU beer?’ You may be one of a hundred or more. The other people don’t like it. It’s not like they’re going to try it and suddenly the skies will open up. It’s just not going to happen. I like a nice firm pilsner and I like IPA’s but it’s not a beer I’m going to pick all the time. We’ve gotten into a habit locally, one that I think that is a cycle that will come and go. When we started, everything was very bitter. And now, we’re the ones who are the most bitter and then it will be back to bitter again. It’s a cycle and all of a sudden we may not be the beer of choice. I mean, Pabst sells more beer in Portland than all of the micros combined and no one talks about that. But that will flip again eventually. Right now, we look at some of the one note beers out there and people say, ‘ok, I’ve had it. Show me something else.’ It is what it is. I think we have a good house character and it’s a Full Sail product. We had some brewers visiting from Norway and one of them said, ‘none of the beers are extreme but they are all very good.’ And I though, ‘that’s a good way to put it.’ The dichotomy is that in Germany there is a constraint of style but it doesn’t mean that those beers are bad. And that is frustrating for me because if you look on, you see that Full Sail is the world’s best premium lager and then someone gives it a two. I understand the guy likes barleywine but it’s a style that you have to judge it by.

–Article appeared in the August issue of Beverage Business Magazine.

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