Death of the Flagship…

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There comes a time in the story of every generation when the end draws near and a new chapter begins. In the craft beer industry, it has taken nearly thirty years for that page to turn but a new story of is about to be written, one where many of the beloved main characters are going to be written out or relegated to background roles.

For the better part of thirty years a handful of big name craft beers, from pioneering brewers, led the way as the industry’s ultimate front line warriors. Beers such as Sierra Nevada Pale Ale and Samuel Adams Boston Lager were the twin drivers of craft beer’s narrative and growth. They fought a ground war in airport bars, chain restaurants, and convenience stores from coast to coast. They ran ad campaigns to bolster the public’s understanding of better beer and to teach consumers that taste, flavor, and character meant something. Their salesman built the tracks on which the craft beer express smoothly rides today.

A funny thing happened to these wildly successful brands on the way to craft beer utopia: a new generation of craft beer know-it-alls used the success of the beer pioneers against them. Content to reject Sam Adams, Sierra, and other popular brands as passe examples of the Old Guard, or even dismiss them as corporate beer shills, these founding fathers suddenly became something other than craft. Beyond the industry insider definitional debates over volume and barrelage numbers, the young started to prey on their elders in quiet but vicious fashion.

After enduring years of cheap shots, the generational attitude shift appears to have rubbed off on the beer pioneers themselves. For the first time, the future prospects of the industry’s two most stalwart brands, Samuel Adams Boston Lager and Sierra Nevada Pale Ale, the yin and the yang of the craft beer world, look dim. Supplanted by seasonal brands, endangered by the race for the holy one-off grail, and lost in the hunt for more hops, these respected and balanced brands look increasingly out of place in the wider world of craft beer. And the pioneers seem to know it. In response, Sierra Nevada has focused a lot of energy on its Torpedo IPA brand, which ups the hops from the company’s style defining flagship Pale Ale. Even Boston Beer has launched its own IPA, Latitude 48, even as Twisted Tea offering surpasses Boston Lager as the company’s best selling product and a series of seasonal beers capture the attention of beer drinkers and distributors.

Other breweries aren’t immune from this shift. Widmer Hefeweizen receives a lot less attention from the brothers in the wake of new releases, including a rotating IPA series. The flagship brands of Redhook, Boulevard, and Deschutes have also started to lose focus to other brands and line extensions. Even once seemingly invincible Fat Tire is losing share of New Belgium Brewing’s mind to the brewery’s juggernaut Ranger IPA.

So in the end of an era for some pioneer brands, where consumers appear ready to fully embrace their long-developing beer brand promiscuity, the first era of the flagship is over. The ultimate result of the evolving craft beer consumer’s fickle palate is the end of relations with these former beaus, only to be replaced with a new, younger, and hipper string of beer relations.

While some nostalgia for these great and trailblazing brands is warranted, the new chapter shows the continued maturation and development of craft beer in America. Even as market share slowly inches up, consumers are deciding for themselves that they want new beers, happy to push beyond their early favorites into new and unexplored flavor territories.

–Article appeared in Issue 66 of BeerAdvocate Magazine.

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Redefining Local In A New Era Of Craft Beer…

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Support Your Local Brewery. Drink Local, Think Global. For more than a decade, brewers have doled out countless bumper stickers, coasters, and stickers with these and similar slogans promoting their community-based beer offerings. And the campaign served them well, helping to build a connection to area consumers. After years of communal camaraderie, things are about to change.

If 2011 was a year for celebrating a return to local beer, 2012 will be a year when consumers and brewers seek to redefine what local really means. This past year saw dozens of breweries, including many well-known names, retreat to their home markets due to supply issues, in what I’ve previously called the Great Beer Retreat. From Allagash to Great Divide to Flying Dog, capacity restrictions and demand in closer-to-home markets has drawn mid-range and some smaller regional players to rethink their growth and distributions strategies.

While these larger breweries were busy trying to send beer to dozens of far-flung markets, a host of smaller, nimbler craft outlets, including hundreds of nano-breweries, have crept into their once safe home markets. Many larger players publicly heralded this new wave of craft brewing entrepreneurs, while some privately questioned their abilities to sell enough beer of sufficient quality to survive. As many have grown and continued to prosper in their hometown markets, the inevitable competition for local tap lines and shelf space has taken hold.

As these smaller players continue their dueling dance for hometown beer dominance, another force looms large in several markets across the country. In many industries, cash is king, but not so in the beer business. For brewers, stainless steel reigns supreme. That and the warehouse space in which to install shiny new fermenters or dinged up, used conditioning tanks. In this age, if a brewery can leverage the debt load and possesses the physical space to support growth, it has a good chance of dominating the game. And there are a few breweries that have amassed sufficient size as to wreak some havoc with the whole concept of what is ‘local.’

The issue is coming to a head in the little town of Asheville, North Carolina, where two western craft brewing giants will be opening new breweries. With its growing craft beer reputation and excellent garage breweries, Asheville is making a lot of noise for such a small brewing town. But when word started leaking out that the Sierra Nevada Brewing Company and New Belgium Brewing were visiting sites around the town, the local brewers started to worry. Talk of tax credits and development deals started to swirl around as attempts to entice the two brewing giants, whose combined production is well north of 1 million barrels annually, to make North Carolina their second brewing homes.

Trying to hawk the localness of beer has always struck me as an odd selling point as next to none of the raw materials involved in production actually come from the region and nearly every production brewery sends beer far from home. The hyper-vigilance of some local brewers also seems misguided at times. In the case of Asheville, it’s understandable that local brewers grumble when a seemingly carpet-bagging West Coast brewery swoops into town and charms millions in tax incentives out of county representatives. But who’s to say that setting down roots doesn’t make Sierra or New Belgium ‘local’, especially when they’ll employ hundreds of North Carolinians?

As the credit and stainless steel crunches hit breweries bent on expansion, the stratification of craft brewers will grow deeper, likely straining the communal ethos that has been so central to the craft beer industry’s identity. Already big breweries will expand quickly, while smaller operations beat retreats back to their home markets and dream of stainless days to come. It may be time to redesign some bumper stickers.

-Article appeared in Issue 61 of BeerAdvocate Magazine.

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The Dick Cantwell Interview…

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Born in Germany and raised in the Upper Midwest, Dick Cantwell developed his passion for beer as a homebrewer living and writing in the Boston area in the late 1980’s. By 1990, he decided to move once again, this time to Seattle, where he became the head brewer for the Duwamps Café and Seattle Brewing Company. He eventually left to work as a brewer the nearby Pike Place Brewing Company before spending time at the Big Time Brewery and Alehouse. By 1996, Cantwell was ready to break out on his own and with the help of partners Joe Bisacca and Dave Buhler, formerly of the Rogue Ales Brewery of Oregon, he founded the Elysian Brewing.

Taken from a Greek word of varied meanings, references to Elysian can be found in a wide variety of literary works, which makes sense considering Cantwell’s background as a writer. The partners’ original location in the Capitol Hill neighborhood of Seattle boasts a 20-barrel brewing system that has provided the backbone for an operation that now extends to two other locations in the city, Tangletown and Elysian Fields (a reference to the final resting place of the souls of the heroic and the virtuous). These smaller operations, three and four barrel systems respectively, allow Elysian’s brewers to experiment, resulting in more than 60 different beers. In order to manage it’s growth, Elysian recently announced a unique brewing arrangement, in the form of a cooperative, with the New Belgium Brewing Company of Fort Collins, Colorado. I recently spoke with Dick Cantwell at his Elysian Fields restaurant and pub.

Andy Crouch: Tell me about your recent announcement of collaboration with the New Belgium Brewing Company of Fort Collins, Colorado.

Dick Cantwell: One of the things that I’ve been working on over the last six months is this New Belgium thing. That’s taking a fair amount of communication time and I’m down there four or five times and I’ll be heading down there soon to make post-fermentation decisions about the beers I brewed recently. Can I say that I brewed them? I was there, I contributed information but I didn’t actually, well that’s not true, I did dump pumpkin into the mash tun. Dropped the bucket into the mash tun actually (laughs).

AC: What was the genesis of that arrangement?

DC: I think that it came from a number of things. For one thing, we’ve always been friendly. Peter and I have been kicking around the idea of brewing together for four or five years and actually had it scheduled at one time and we had to cancel. It really started picking up some steam when I got on the Brewers Association board and I became friends with Kim Jordan. During the course of board discussions, we found ourselves agreeing about not necessarily what the solutions were but over our concerns for the future of the craft brewing movement. One thing that we talked about independently and with our own little spin on it was the notion of cooperatives in the future. There is a real source of concern that a lot of breweries—there are a lot of people my age and older who have been in this business for fifteen or twenty years and their getting to the point where they are thinking about what they’re going to do. Are they going to sell their places or get their kids to try and become brewers and take over the business? It’s not a matter of urgency for me because I’m not that old but it’s something to think about. That is a real area of concern. I think we’re going to see a lot happen in the next ten to fifteen years and we’re seeing the big breweries take interest in what we’re doing, especially with Anheuser-Busch. I think those of us who don’t want to take those avenues have to come up with some creative ways to not just survive but to go into the future. I see a lot of different combinations for how people can come together. One thing that has really kind of intrigued me over the last year has been the deal between Pabst and Southampton. There was no portion of ownership changing hands and it was just a creative arrangement to try and make more beer from a reputable source. That’s not exactly what we’re doing but we’re trying to figure out a way that we can make more beer and grow our demand and market to the point where in two or three years when we think about taking the plunge with a new bigger brewery. In the meantime, we don’t have to make that enormous capital investment. And we haven’t worked out the fine points yet but I’m really looking forward to having some of their people here to brew some specialty beers and to give some of our local customers a chance to try some of New Belgium’s really great beers. A lot of people around here just think of them as the Fat Tire brewery and we all know that they make some really terrific stuff in these smaller batches.

AC: What are you guys expecting for the next three to five years?

DC: I think we’ll definitely increase our brewing capacity. We opened in California in September and that is enormous for us. We don’t want to get too far ahead of ourselves. We’ll do that for a while and examine what makes sense. We need a bigger brewery to serve this region so we’re trying to set that up. We’re trying to decide whether we want to do a standalone thing on our own or as I’ve talked about, some kind of cooperative. We’re exploring all of these options.

AC: Are you thinking of including other breweries in a cooperative?

DC: I don’t know if we will but I think that is the sort of cooperative that we will be seeing. There is precedent for this. In Denver about twelve years ago, Broadway Brewing, Flying Dog, Wynkoop and Crested Butte were together. I don’t see why it won’t happen.

AC: What are your thoughts on the business partnerships between craft breweries and large entities, such as Anheuser-Busch?

DC: I’m sort of glad that we weren’t at that point when Anheuser-Busch was really looking around for the next place to acquire. I’m glad that the whole movement has matured and that we’ve grown to the point that the deal that we’ve made makes sense for us and we’ve totally escaped the notice of…Well, not totally. One time we had a Brewers Association pow-wow with August Busch the Fourth a little more than a year ago in D.C. We all sat down in a room with him and his posse and his sort-of right hand man shook my hand and said that he had enjoyed our beer for years. It was like the touch of death (laughs) that someone at Anheuser-Busch had taken notice. It turns out that August the Fourth has a house out on Lake Washington and so they had stayed in the area.

AC: How did you get involved with the Brewers Association and the Board?

DC: Well, I’ve judged at the Great American Beer Festival every year since 1995 so I’ve been doing that for quite a while. I’m written for several magazines and wrote a book on barleywine for the association. After we won the small brewpub of the year award, that sort of brought us more into the fold right there. A couple of people suggested that I should try and get on the board. It’s been a good experience and I’ve learned a lot about administration and knowledge that works well in the business. And of course it’s helped cultivate this new association.

AC: How has your experience been on the board with some of the industry politics?

DC: The people on the Brewers Association board will do things without being self-interested. Jim Koch is able to separate himself. He’ll say, “What I’m saying now is completely at odds with the policy of Boston Beer but here is what I think this organization should do.? I think we see that from everyone who is on it and that they operate with the view that we all have to hang together or we’ll all hang separately. Over the last four years, the melding of the Brewers Association of America and the Association of Brewers was absolutely essential for the success of our industry. Here we were, an industry segment commanding 2-percent of the national market at that point yet we had two trade organizations? I’m pretty impressed at how people are able to set aside their individual corporate sensibilities and priorities in favor of the greater good.

AC: Did you have any involvement in the definition of craft brewer and the controversy that went on with that?

DC: (Laughs) Oh yeah, I was part of that. I wasn’t on the committee that came up with it but that is such a tough thing. At times, I’ve argued about every possible point of view and have been on both sides of this issue. The most recent thing I think I’ve said is that we should just give up and not have a definition and trust the consumer to make the right choice. But that was admittedly a rarified position being as small as we are. I got reaction from other people on the board saying, “You know, you’re wrong.? I guess at this point that we’re just trying not to make too much of it. I do, however, see some positive effects even though there is disagreement and there is disagreement, even among members of the board. There are absolutists who think that if you even have any ownership by someone else that you couldn’t be considered independent. And I don’t even know if we would qualify because we have like six percent foreign ownership, depending upon where you draw the line. I mean it’s like, “How much of a vegetarian are you?? I do see some positive effects. Take Starr Hill for example. I remember at the Craft Brewer’s Conference in Austin there was this enormously contentious members’ meeting where everyone was arguing over whether we should kick the Widmer’s [of Widmer Brothers Brewing] out and wasn’t it a shame about the Hall’s [of Goose Island Brewing] and that we shouldn’t cut out any of our pioneers. And that is tough. At the same time, they do gain advantages by their associations so I don’t know. After that meeting, I went out and spoke with the guy who owns Starr Hill and his wife and they we’re grilling me about it. And they had no indication or announcement of anything they were going to do and we talked for quite a while. And then when the announcement came that they had reached a deal with Anheuser-Busch and that it was only twenty-five percent, I kind of felt like that was a victory. That people were actually taking into account where they would fall in the camps of designation and that they had taken that to heart in determining how to forge their deal. What does that mean? I’m not sure.

AC: And what of Boston Beer and its production nearly reaching the threshold amount of two million barrels.

DC: Exactly. It’s inevitable that they will go above two million barrels and this was my point in saying we should dismantle it. The definition of our success ensures our failure. All of a sudden our market share would drop. And yes, Blue Moon, or what we are now calling it, Blue Moon by Coors, their success and the decency of their beers—I mean twenty years ago wouldn’t all of us have considered that a good thing, that one of the big brewers is actually making a beer we can drink, it is a victory in terms of sensibility but it’s scary in terms of the inroads it makes on our more purely defined arena but I still think it’s a victory.

AC: Blue Moon by Coors?

DC: We’re going to do a whole campaign of ‘who makes your beer?’ So that it is right out there. It will be right out there that this percentage of our beer is made at New Belgium and I’m ok with that. But it’s also going to be, ‘how much of your company is owned by Anheuser-Busch’ and ‘who makes this’ and what the Plank Road Brewery really means. We want consumers to go to the website or generally have it forged into their consciences so that they pay attention and give a damn where it comes from and who does it.

AC: What brought on the move to New York?

DC: We knew we wanted to open some new markets and when we started thinking of New York, the New Belgium deal wasn’t even on the horizon. The way it has worked out, we know we want to increase our profile in markets where we haven’t been before and New York is the media market. The week after we went to New York, we received a query from Men’s Journal wanting to do something on our ESB and other beers. That’s a victory right there. Eric Asimov of the New York Times won’t write about beers that aren’t available in New York. There have been tastings there that I just wish our beers could have been a part of. I wish our ESB could have been in the Bitter category as we’ve won three gold medals with that beer. It’s for exposure as we grow. I think we’ve always had a larger profile than we are. We’ve just grown to being a five thousand barrel brewpub with distribution in a cluster of states. I think there are a lot of people who would be surprised to realize that we are that small. We’ve had a good profile at national events and because of the board. We’re trying to create a profile that we hope to grow into. It’s an area we have strong ties to and as I have strong ties to Boston, I hope to get there soon as well.

–Article appeared in February issue of Beverage Magazine.

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