Tuesday, November 30, 2010


...to see Abram Goldman-Armstrong, beer writer, beer personality, champion of the Cascadian Dark Ale style and a Timbers Army 107ist mover and shaker on a Timbers billboard ad on Burnside (from a Twit pic by JoaqyBoy):

Super cool.

Monday, November 29, 2010

Beer in Brazil

I am in São Paulo, Brazil for a week to conduct research on child labor (I do occasionally dabble in economics when not writing about beer). There is not much to say about beer in Brazil, but my Paulista friends say there is a new micro-brewery called "Colorado" (not Oregon - for shame!) in a town outside of São Paulo, Ribeirão Preto, too far probably to fit in on this visit.  In the meantime, I went to the Astor bar in the Vila Madalena neighborhood and had a few 'chopp's (the amusing term for draught beer in Brazil).  The Astor is a Brahma tied house and so the beer selection is copious: you can choose among the Brahama claro (a light pilsner) or the Brahma oscuro (a dark beer which seems suspiciously like the claro with some caramel color and some added sugar).  Both are served on nitro and sport creamy heads.  You can also have it served 'Paulista' style with a claro pour and then and ocsuro head or 'Carioca' style with the opposite.  Since I am in SP, I chose Paulista.  Once you start, watch out, because they swoop on almost empty glasses and replace them with full ones before you even notice save for the pile of coasters that are accumulating which is how they keep track of your tab, sushi-bar style.   

The beer is bad, but the bar is great, the neighborhood charming and the wait staff very friendly.

The good news for Brazilian beer lovers is this Colorado stuff looks promising, they have an imperial stout named "Ithaca" and here is a 7% ABV IPA to warm the hearts and gullets of Oregonians.  I'll try and find some in the local store.

Wednesday, November 24, 2010

Contract Brewing

The Sand Creek Brewing Co. in Black River Falls makes about 7,000 barrels of beer a year. About 35 percent of it is for other companies such as Furthermore Brewing Co. in Spring Green. Furthermore’s owners have plans to build a brewery, but contract brewing allows them to grow their brand before investing in construction of a brewing facility. Eric Helstad, an employee of Sand Creek, worked last week to fill cases with six-pack cartons from Furthermore.
M.P. KING – State Journal

The Wisconsin State Journal has a nice article on contract brewing in Wisconsin (something that goes on a lot there).  What I find particularly interesting is the contrast of the culture of craft brewing there versus here in Oregon where contract brewing is essentially a non-starter.  The ethos here is if you didn't brew it yourself, it isn't legit.  This of course makes the whole endeavor a lot riskier.  I watched as a couple of friends in Ithaca, NY start a brewery by first contract brewing from Chicago.  Once the brand was established they leased some space and built a brewery and were able to stop contract brewing in a short span of time.  In many ways this seems like a better business model, and it allows for scale efficiencies, so why don't we see more of this in Oregon?

Anyway here is an excerpt from the article:

BLACK RIVER FALLS — Aran Madden hopes to someday make his beer in Spring Green.
He has plans for a brewery. But for now, he's quite happy with his Furthermore products being made here, 120 miles away in Jackson County, within the 154-year-old stone and red brick walls of what is now the Sand Creek Brewing Co.

The arrangement, called contract brewing, allowed Madden's company to begin production in 2006 within months of its inception, fulfill an agreement to make beer for American Players Theatre and avoid going $1 million in debt to build a brewery.
"We had shallow pockets," Madden said. "As soon as we walked in the door to Sand Creek, we said, 'This is silly not to utilize this facility. They're hungry and we're hungry.'"

Contract brewing is big business in Wisconsin, home to some of the biggest contract brewing facilities in the nation. The players include City Brewing Co. in La Crosse with a capacity of about 7 million barrels a year; Stevens Point Brewery in Stevens Point; and Minhas Craft Brewery in Monroe, where about 10 percent of the 280,000 barrels made this year will be for other brewing companies.

The relationships have helped the rapid expansion of the domestic craft brewing industry that grew to 9.1 million barrels in 2009 from 5.9 million barrels in 2000, according to the Brewers Association in Boulder, Colo. In the first half of this year, craft brewing was up 9 percent by volume.

Paul Gatza, director of the Brewers Association, said there are about 350 alcoholic beverage companies in the country that have their products made by other brewers. Between 150 and 200 of them are beer companies. Some do not have their own facilities, while others with breweries lack the capacity to meet the demand for their products.

"There's such a long brewing tradition (in Wisconsin) and, for efficiency's sake, they want to fill that capacity," Gatza said of contract brewers. "It's an inexpensive way (for brewing companies) to get into the market."

Tuesday, November 23, 2010

Pubonomics: Eat and Drink

Photo credit: Alamy

From what I have heard, brewpubs in the US do about 70% of their gross revenue in food.  Well in the UK, pubs have traditionally done more business in drink than in food, but now that has changed:

More people are dining in pubs because their relaxed environment is more attractive than stuffy restaurants, researchers claim.

A survey by the food market analysts Mintel claimed that 72 per cent of people go to the pub to eat, rather than 63 per cent who go to drink.

Experts said the advent of themes such as curry, steak or fish and chip nights have also enticed diners, whilst specials menus and meal deals, where pubs offer main courses for as little as £2.99, are a big draw.

Gastropubs in big cities have also been a big hit, even during the recession.
Helena Spicer, senior food analyst at Mintel, said pubs have been forced to adapt to provide customers with exactly what they want.

She said: "Pub food has had to adapt and now bar snacks and menus have become more variable from value ranges to more upmarket offerings. For some venues, catering has become more important than serving a pint.

"Add to the mix cheaper and more accessible alcohol from supermarkets, the recession, rising tax and duty and a smoking ban and the pub sector has faced what has been dubbed the perfect storm.

Monday, November 22, 2010

Parliament Hopadelic

All right I give up.  After visiting OakShire and seeing that one of their fermentors is called, yes, Hopopotamus, and after Silver Moon Brewing named their fresh hop beer Hoppapotamus, and since it was Roots that started the whole thing I am hereby jettisoning the name Hopopotamus.

This is appropriate as I have tweaked the recipe by adding a fifth hop which has elevated the beer to new heights and it has now crossed over into seriously funky territory.  I am not talking the kind of funky that comes from poor sanitation, I am talking about P-Funk funky. So from now on my IPA, the "best beer in the world," shall be known as PARLIAMENT HOPADELIC (TM).  Aka the legendary P-Hop. 

By the way, I was planning on a worldwide release in the future (like when the beer was actually ready), but that danged Alworth had to start suggesting P-Funk names on the #1 beer blog in the USA.  This is what I get for letting him into my confidence...

Friday, November 19, 2010

Quick Hits from a Trip South

I spent the last two days on a whirlwind tour of southern and mid-valley breweries with The Beerax which will take a while to digest and report on.  Jeff will carry most of the water I am sure (he actually took notes!) and I will try and add some thoughts on the economics (of course), the business and the contrasting and complimentary visions of the four breweries/pubs we visited which were (in order of visit): Oakshire, Ninkasi, Brewers Union and Block 15.

But here are four quick hits I'll start you off with:

1.  If you are a beer enthusiast in Oregon you MUST get yourself to Oakridge, Oregon and spend time in Ted Sobel's Brewers Union pub.  Ted fell in love with the village pubs that brewed beers in rural England and has recreated one in his own vision in Oakridge.  It is a cozy, warm and friendly place that serves hand made authentic English style real ales on cask.  Add in great pub food and spectacular scenery on the way and it is well worth the trip - even, or especially, in winter where you marvel (as I did) at the clouds shrouding the tall fir trees and the snow flocking the trees on the hilltops.  Gorgeous.

Plus if you are a Duck fan or a fan of Oregon sports history take a close look at the Brewers Union floor - it is an old basketball court from Mac Court.  Ted doesn't know what years the floor was in service but Jeff and I encouraged him to claim it was the floor played on by the legendary Tall Firs who won the first (1939) NCAA national basketball championship.  And it could be too, those floors back then were used forever.

2. Oakshire has made a small beer from the the second runnings off the mash of their special winter seasonal: Very Ill-Tempered Gnome.  It is known as, amusingly, the Well-Mannered Gnome.  If you are a fan of small beers and mild beers than your trip to Oakridge should include a stop at Oakshire to have a taste. It is 3.8% ABV beer, very light and quaffable.  I have often wondered why more Oregon breweries who are brewing gigantic beer don't do small beers more often - now I wonder even more.  Yum. 

3. Ninkasi's new tasting room and patio are really nice - even on a cold wet fall afternoon, punters were huddled around the outdoor fire pit keeping warm and drinking beer.  And if you go soon, you can taste Ninkasi's stereotype shattering Berliner Weisse, and their stereotype enhancing dry-hopped Tricerahops hop bomb.  Both are excellent and the Weisse is a softer, less tart version that does not call for syrup.

4.  Block 15's Figgy Pudding is indeed exceptional.  It goes on sale tomorrow and quantities are very limited so it is highly unlikely you'll see any more of it available in Portland.  Go and get some and plan to stay for the food and some great beers on tap.  I didn't try but all the talk was a special IPA with Sorachi Ace hops (Brewers Union has a Sorachi Ace IPA as well) called NuIPA.  I get a strong and unpleasant dill note from Sorachi Ace hops which is shared by others I know, but we appear to be in the minority and most love the hop and its lemony/peppery notes.   So I didn't sample it but the bar was raving about it.   

Wednesday, November 17, 2010

Montana Sends Their Best: The Great Northern Brewing Company

Whitefish: The Great Northern Brewing Company is the last building on the left 
A while back while writing about the beer and brand that is Black Star I commented on the sort-of tangential relationship it has to The Great Northern Brewing Company (GNBC) in Whitefish, Montana.  I lamented that it was not possible for this Oregonian to try the myriad of other beers GNBC brews.

Well, the good folks at GNBC noticed and decided to take it upon themselves to rectify the problem by sending me a little care package with a couple of their more special beers.  I was delighted to receive them straight from the Flathead Valley, and you can read my take on the beer with this felicitous acquisition in mind.

By the way, the internets tell me that Whitefish, MT emerged as a proper town with the arrival of the Great Northern Railway, and thus the provenance of the brewery's name is established - and it is pretty cool.  It is a really beautiful facility and the pub looks pretty spectacular as well.  But its location is truly remarkable, in northwest Montana right on the doorstep of Glacier National Park.  Wow.

Another cool thing about their location is that it is suitable for hops cultivation: warm, dry and long summer days.  Makes sense given the northerly location and the arid Inter-mountain West climate.  Which explains the first beer they sent: the Frog Hop Fresh Hopped Pale Ale.  This beer used hops grown a couple of miles from their brewery at a farm called Purple Frog Gardens which explains the name Frog Hop.  The brewery staff went and picked the hopes themselves and they were added to the kettle within 24 hours of harvest. 

Unlike NW fresh hop ales that generally use one or two hop varieties, GNBC used four: Mt. Hood, Chinook, Nugget and Cascade.  It was a cool and wet summer in Whitefish this year and so the hops did not fully develop.  The brewery believes that this left the alpha acid content low, but did not want to add dried bittering hops to correct this.  I applaud this decision as to me the point of fresh hop beers is not fantastic, well-engineered beers, but different, earthy and unique beers.  It is also important to note that it is now November and the subtleties of the fresh hops are sure to have diminished with so much time in the bottle (which is also okay - another thing I like about fresh hop beers is that the exist in a specific place and time).   

The beer is a truly different sort of fresh hop ale than what we typically see locally.  It has a lively pour (it is bottle conditioned) and produces a wonderfully creamy head which it retains admirably.  It is very light bodied and is a golden/straw color (the picture actually does a good job of showing this).  The nose is very subtle, the material describing it mentioned grassy aromas which you expect from fresh hops, but in this bottle they had become very faint.  Amazingly perhaps my first thought upon tasting this was 'pilsner.'  This thought never left.  The hops are very subtle, but balanced nicely by the very light body.  This stuff is hard to judge, but they produced a wonderfully balances, very light ale that distinctly resembles a cross between a light NW ale and a Czech Pilsner.  How this could be true given the NW hops and ale yeast is not clear to me but the result is quite wonderful.  I do not know what NW hop heads would have said of this beer were it in one of the fresh hop fests, they probably would not have though it as good as the hop bombs, but I think all would agree that it is a finely crafted beer.  This is a 5.1% ABV and I am guessing IBUs in the thirties.  On a hot summer day, a sure winner.

If the fresh hop beer was a last vestige of the summer now past, the other beer was a perfect welcome to winter beer: the Snow Ghost Winter Lager.  Now, I am a big fan of lagers and lament their rarity in the Northwest and the idea of something other than a winter ale is quite appealing.  I'll also state at the outset that while I am a big fan of winter beers, I take them in moderation finding many to be a bit overbearing.  My NW favorites are the classics: Jubelale and Wassail.

Snow ghost immediately evokes Samuel Adams' Winter Lager (which I haven't had recently and will not try to compare).  But Snow Ghost is another beautiful GNBC beer: a rich creamy and tawny head on top of a dark reddish brown body (this beer is also bottle conditioned.  It has a strong malt presence and a subdued hop note, like an Octoberfest on steroids but not quite a dopplebock. I immediately smelled and tasted the roasted malts along with a hint of chocolate and caramel and like a typical lager it as creamy and smooth.  If I were in charge, I would amp up the hops but I am in incorrigible hop-head and don't like malt forward beers as much, for example, I am not a big fan of Scottish ales.  This beer is not spiced, so the winter warmth comes from the roasted malts and gentle spice of the Aurora and East Kent Goldings hops.  Again, like Frog Hop a superbly crafted beer without an off note and very, very well balanced.  The literature identifies this as a 6.3% ABV beer (the website say 5.9% with 34 IBUs).  

It is good to know what goes on beyond the borders of Oregon and Washington, and I am very happy to report that, based on these first experiences, Great Northern Brewing Company crafts exceptionally well-mad beers that represent a slightly different beer culture: beautiful lagers and not as hop-crazy ales.  I can't wait to take the Amtrak to Whitefish and give them a visit.

Tuesday, November 16, 2010

Two Notes from Down Under: Free Beer and iPhone Beer Tasting App

Ricky Ponting is ... thirsty (AP).

In Australia they are gearing up for the biennial Ashes cricket tournament with England.  This is a competition that has been contested since 1882.  In recent decades, Australia has been the dominant side, but in 2005 in a now legendary Ashes played on British soil, England came back from the dead after being thrashed by the Aussies in the first test to win back the Ashes for the first time in 18 years.  Australia won the Ashes back at home in '06-'07 and England returned the favor in Britain in 2009.& (The dates are not every two years due to the hemispherical juxtaposition)

Now England and Australia are gearing up once again to contest the Ashes down under and for the first time in recent memory, England are thought to have a real chance at claiming their first Ashes on Aussie soil in over 20 years.

So to fire up the Australian fans local beer producer Victoria Bitter has promised each and every adult Australian a free beer if Australia wins the Ashes. How much beer is this? Well, there are 13 million adult Australians ...

And lest you think that in the modern era cricket is an anachronism - I think 1.2 billion crazed Indian cricket fans would disagree. It is actually a pretty fun sport to watch but I prefer the World Cup limited-overs version (sacrilege, I know) where matches last a reasonable 2-3 hours.  I can't quite get into the 5 day test match thing.

In other Aussie beer news:

MELBOURNE: Australia's oldest existing brewery, Cascade in Tasmania, has developed a world-first iPhone application that allows beer-lovers to scan and get tasting notes on nearly 500 beers, as well as track what beers their friends are drinking and where.


The Carlton & United Breweries brand has been working on the application with ad agency Droga 5 for several months and has listed nearly 500 beers.

Awaiting approval by Apple, the application is expected to be available free within the next fortnight, and industry observers predict it will be a hit not only in Australia, but also around the world.

The Brewer's Nose app lets users scan a beer's barcode using the iPhone's camera, bringing up a description of the beer, a video explanation of one of the 32 different styles from a brewer and a video suggestion from an independent chef on food matches.

Drinkers can add their own tasting notes and post them on Facebook. The application also lets them geo-tag were they tasted the beer and at what time - potentially revealing the depth of some people's affection for the fluid.

This is interesting in light of my post on social media and the comments about how some aspects of new media, like on-line review sites, reduce the experience good aspect of beer - allowing you more information about beer before you try it. Still, whether a beer tastes good is a personal judgment and this you only know once the beer hits the nose and mouth.  A good label on a beer should give you the essential information about the style, but quick access to consumer reviews could be helpful.

Finally, and gratuitously, I leave you with this tribute to my fellow academics in Australia, who could use a free beer, no doubt.

A Brewpub in the Neighborhood

From Ezra at The New School I learn the facts about rumors that have been swirling about in my neighborhood: a brewpub is coming to Westmoreland. 

Here is Ezra's photo and write up:

Owner and brewer Jason Webb (left) and Aaron Gillham who will run the homebrew shop (Photo Credit: Ezra Johnson-Greenough)

Introducing the next homebrew shop and brewpub in one the Portland U-Brew aka P.U.B. where you can brew on premises, or walk next door and drink the pub's own housemade brews.

Opening in an estimated couple of months on SE Milwaukee avenue. The P.U.B. will fill are your beery needs with three separate yet indefinitely intertwined business models with two doorways, one opening to a complete homebrew shop with everything a homebrewer might need, the other entrance a brewpub offering housemade brews, sandwiches and panini's, and a private party room. And finally the third section downstairs where a complete brewery is housed with lots of fermenter space for both the P.U.B.'s housemade brews but also where customers may produce their own small batches at up to a 20 gallon size.

Portland U-Brew is located in the quiet Sellwood neighborhood on the corner of Milwaukee and Tollman kitty corner to the Dairy Queen that has been around since I was a child. Housed in an unassuming and seemingly still vacant (from the outside) ex-office building that has been around since prohibition era 1923. The building is spacious and full of big and small spaces, one can imagine that an accounting firm once occupied the building. Owner/Brewer Jay Webb and homebrew shop manager Aaron Gillham are putting some serious work into spicing the place up though with a hippy/british vibe and lots of mural artwork.

Go to The New School to read the interview.

(Photo Credit: Ezra Johnson-Greenough)

They will have a small four barrel system with six 20 gallon fermentors which means a lot of work for them, but a lot of variety for us punters.  They are also opening up a homebrew shop, which is excellent news for me, but I have a hard time envisioning myself anywhere else but Steinbarts - it is like going to communion in an Episcopal church for Catholics, it just seems wrong somehow. I imagine I'll change my mind when I realize I can walk to this shop. 

I am not crazy about the name, but I am very happy to have a real brewpub in the neighborhood. We currently have Philadelphia's (which is only about 100 yards away) but it is not a pub, rather a cheese steak shop that brews, and the Oaks Bottom, which is a Lompoc pub, but does not brew. So, welcome to the neighborhood boys!

Monday, November 15, 2010

Brewpub Consolidation: Rock Bottom and Gordon Biersch Merge

From Jay Brooks I learn of the merger of Gordon Biersch and Rock Bottom into CraftWorks (though the individual brands will remain) which also includes the Old Chicago chain and interestingly "maintains the intellectual property rights to Boulder Beer Company" whatever that means.  This will create a chain of over 200 brewpubs!  Wow.

This could lead to the age old question: is a big chain good or bad for local independents?  In craft beer, I am still inclined to think 'good' as craft beer is an experience good and an acquired taste.  To me, such places are the 'gateway breweries' which do a ton of the educating and experiencing of nascent craft beer fans.

A big question for local Van Havig fans, of which I am one (Van is the head brewer at Portland's Rock Bottom), is whether Rock Bottom will still give the local brewers the independence they now enjoy or whether they will want to try and have them hew more to the corporate ethos.  Which, for example, Oud Heverlee does not.  Still, I think they will at least allow Van to brew an integrity style beer now and then...

Anyway, here is the press release:

Centerbridge Capital Partners, L.P. and its related entities (“Centerbridge”), formed CraftWorks Restaurants & Breweries, Inc. (“CraftWorks”) by closing on concurrent acquisitions of Rock Bottom Restaurants, Inc. (“Rock Bottom”) and Gordon Biersch Brewery Restaurant Group, Inc. (“Gordon Biersch”) today. The companies will operate as subsidiaries of CraftWorks and will retain their brands. The combined business becomes the nation’s leading operator and franchisor of brewery and craft beer-focused casual dining restaurants with nearly 200 owned and franchised locations across the United States. CraftWorks’ primary concepts include Old Chicago, Rock Bottom and Gordon Biersch.

CraftWorks is led by Frank Day and Allen Corey. Frank Day, founder of Rock Bottom, serves as Chairman of the Board and brings over 45 years of restaurant experience to the newly formed company. Allen Corey, an original investor and 13 year CEO of Gordon Biersch, is the President and CEO of CraftWorks and brings over 18 years of restaurant experience to the position.

Regarding the formation of CraftWorks, Frank Day stated, “This merger marks a new era for both Rock Bottom and Gordon Biersch and I am very excited about the growth potential that the future holds for CraftWorks.”

“Gordon Biersch, Old Chicago and Rock Bottom are differentiated casual dining concepts with strong guest loyalty, high energy atmospheres and a high quality offering of craft beer and made-from-scratch food,” stated Jason Mozingo, a Managing Director at Centerbridge. “We are excited by the prospect of partnering with the management teams to strengthen the long-term operating performance of the business and position it for growth.”

Mr. Corey said, “I am honored to have the opportunity to lead the combined company. There is a long-standing relationship between Rock Bottom and Gordon Biersch which will facilitate a smooth and efficient integration of the two businesses. With the help of our new financial sponsor, Centerbridge, we look forward to a successful future as the nation’s leading brewery and craft beer-focused casual dining restaurant operator.”

Gordon Biersch Brewery Restaurant Group, Inc was formerly majority owned by Hancock Park Associates. Rock Bottom Restaurants, Inc. was owned by founder Frank Day and his investment group.

Duff & Phelps Securities, LLC, an affiliate of Duff & Phelps LLC (NYSE: DUF), and North Point acted as the exclusive financial advisors to Rock Bottom and Gordon Biersch, respectively, in connection with this transaction. Faegre & Benson and Miller Martin acted as legal advisors to Rock Bottom and Gordon Biersch, respectively.

Centerbridge was advised by Weil, Gotshal & Manges. Duff & Phelps Securities, LLC, also advised CraftWorks on the acquisition of Gordon Biersch. Wells Fargo and GE Capital were joint-lead arrangers for a $150 million credit facility to support the transaction.

There are no plans for re-branding or closing any units at this time.

About CraftWorks

CraftWorks Restaurants & Breweries, Inc., through its three principal operating units, Old Chicago, Gordon Biersch and Rock Bottom, is the nation’s leading operator and franchisor of craft beer-focused casual dining and brewery restaurants with nearly 200 owned and franchised locations across the United States. CraftWorks also operates strong regional brands, including ChopHouse and Big River and maintains intellectual property rights to the Boulder Beer, Inc. microbrewery. The company maintains dual headquarters in Chattanooga, TN and Louisville, CO. For additional information, please visit www.craftworksrestaurants.com

Portland does not have a Gordon Biersch, but I have been to the one in Palo Alto, California and, unlike NW brewpubs, they concentrate on very nicely done lagers so I would actually welcome one in PDX, though I'd rather see the Heater-Allen pub than a chain.  But I do loves me the lagers.

Thursday, November 11, 2010

How to Brew Beer after the Apocalypse

Give SABMiller credit, they understand that when global environmental catastrophe displaces populations, makes water scarce and energy prohibitive, people are going to want BEER!

And so why not build a floating brewery and bring it to them?  Genius.

Okay so this is actually all notional, but hey, a brewery ship is cool nontheless. 

From the Guardian:

SABMiller has predicted how its breweries may look in the future, given a range of different scenarios determined by the cost and availability of water and energy.

Working with innovation consultancy, Innovia Technology, SABMiller envisioned four plausible business environments, based on the different uncertainties facing the brewing industry over the next 30 years. These scenarios informed thinking around how the "Brewery of the Future" might look under different circumstances, with some surprising results.

The most extreme scenario, Marginal Surviva, envisaged a market with limited access to water and high energy costs. This scenario – where people would migrate from areas of water shortage or turbulent weather – provoked the most unorthodox response. One of the proposed solutions was a smaller, mobile brewery which would move from place to place on the back of a ship.

Rob Wilkinson, Director of Innovia, said: "The descriptions are intended as food for thought rather than as blueprints for building new facilities. However, the example of the brewery on a ship is entirely feasible. It would allow for rapid entry to new markets, especially where no infrastructure is in place. It would also provide flexibility in positioning and length of stay and allow SABMiller to move with water sources, with people, with crops, or even away from severe weather, natural disasters or political instability."

Maurice Egan, SABMiller's group head of manufacturing said: "While this research has produced some imaginative solutions, the business case behind the thinking is very serious. We need to ensure that, given the rapid pace of technological developments, the impacts of climate change and growing wealth in developing economies, SABMiller has the capability to define, design and deploy our future breweries and supply chains."

Wednesday, November 10, 2010

Global Beer Demand on the Rise

Thanks in large part to the Chinese.  From the Edmonton Journal:

All those beers you have been putting away on the weekend are a mere drop in the suds bucket with humanity set to consume up to two billion hectolitres of the foamy stuff by 2013.

According to a report released Monday by Canadean, a beverage information specialist firm, the worldwide financial downturn has not killed our thirst for beer. Canadean predicts global growth in beer drinking will continue to increase at a "robust" level.

And, it seems everyone is getting into the act.

By 2015, Canadean predicts one in every four beers consumed in the world will be guzzled in China. Beer consumption in Asia overall is expected to grow by five per cent by 2015.

In North America, consumption will increase only slightly at 0.5 per cent.

However, that slight jump in buying will translate to big beer dollars.

According to Statistics Canada, beer stores and agencies sold $8.8 billion worth of beer during the year ending March 31, 2009. Statistics Canada says an estimated 10 million Canadians drink beer.

Beer drinking is also set to rise in Africa by five per cent and by as much as 5.5 per cent in the Middle East and North Africa by 2015.

"The strong performance of the Asian beer market means that the region is forecast to account for 38 per cent of total beer consumption by 2015," the firm said in a news release.

One hectolitre contains 100 litres.

Okay, so who besides Rogue has any presence in Asia?

Tuesday, November 9, 2010

The New Media and the Business of Craft Beer

The Portland Beernoscenti 

The craft brewing revolution predates the intertubes, e-mail, blogs, facebook, twitter, text messaging and blurts (okay this last one is a figment of my imagination).  In Oregon the early days of Bridgeport, Widmer, Full Sail and the McMenamins were about one or two new, flavorful beers that tried to gain a foothold in a market dominated by the mega-brewers.  News spread by word of mouth and the occasional print media story.  A minuscule beer enthusiast crowd might get excited about a new or special offering, but generally the name of the game seemed to be: brew a good beer or two and try as hard as heck to get it in stores and in bars and restaurants, perhaps aided by an ad or two bought in the local paper or a billboard.

Cut to 25 years later and the business had been radically transformed by the new media and especially social media.  Now breweries generally have facebook pages, twitter feeds, blogs and, coming soon, blurts! There is now a huge number of beer themed blogs on the internets that create an echo chamber for breweries as well, and they are always hungry for new content.  [The recently concluded Beer Bloggers Conference is testimony to the emergence of beer blogs as a force in the industry]

This has changed the market in many ways, but it seems to me the most important way the market has changed is the fact that it is much more about generating instant buzz.  25 years ago, buzz took months or years to spread: "hey have you tried that crazy wheat beer that Widmer makes?  No?  You gotta try it!"  Now buzz happens instantly and fades just as quickly, so breweries need to find ways to generate a constant stream of news or the 21st century attention span will quickly forget about them.

I don't know the counterfactual, but I strongly suspect that this wave of new media is largely responsible for two trends: the sudden explosion of small, local breweries and the massive expansion of more and more special, one-off and extreme style beers.

Small local breweries (which still take a pretty sizable investment in equipement) have a much better and cheaper way to become known and generate a following of loyal customers through the new media.  They can make themselves known, have a steady stream of special events and beers and make a go of a new business much easier than in the 80s and 90s.  [This can also lead to more speculation and quick successes and failures so I suspect the volatility of the business will increase]

To keep potential customers and beer entusiasts attention, new beers, new beer styles and new beer methods are critical.  Yes at first only the beer geeks will know and care but in this day and age word spreads daily not monthly as it did before.  Get the beer geeks attention and pretty soon buzz will spread far and wide.

To me this is almost all upside - more breweries, more beer, what's not to like?  But there are some potential downsides as well: by always needing to try new experimental things the quaslity of the beer might suffer.  With short attention spans brewers are now needing to brew many one-offs and do not have the luxury of refining recipes as before.  Also, the attention paid to 'regular' beers may suffer what with so much effort going into new beers.

From an economics perspective this creates a real danger zone for breweries.  Beer is what we call an experience good - meaning that you cannot tell its quality until after you purchase it, unlike a piece of clothing, say, or a TV that you can touch, examine, try on, view, etc. before buying.  Ideally, then you want that first impression to be great if you are a brewer.  So having a superb basic line-up serves that purpose.  But having lots of new experimental beers of varying quality runs the risk of creating bad first impressions.  If I was a new brewer, I think I'd find this tension difficult to deal with.

When I think of masters of the new media and masters of this tension I think of Ninkasi.  Extremely adept at using the new media outlets, they created a lot of buzz.  But they also came out with a basic line up of stellar beers that ensured customers were getting a great first impression and built from there.  They have a few seasonal beers and an occassional one-off like the fresh hop beers, but they are careful not to cannibaize their core beers.  This makes sense for a major packaging brewery, but might be harder for a small local brewpub in a crowded marketplcae like Portland.  

In the end though, I am willing to say that on balance the rise of the new media and its association with craft brewing is a tremendous boon.  Walking into my local Safeway or QFC or New Seasons demonstrates the power of the new media, what with a huge amount of cooler space given over to craft beer including obsucre and limited offerings. I am pretty convinced that this would not have happened in the absence of the new media.  New media is all about unfiltered information and the craft beer movement, with the right amount of enthusiasts, artistry and energy has tapped into its power better than most industries it seems.


Update: In the comments, Tim Wright points to a fascinating bit of research on the use of new media among Scotland's brewers.  Apparently not yet very common.  Guess who has it sorted though?  Yep, Brew Dog.  

Update 2: Brady at The Daily Pull responds as well.

Friday, November 5, 2010

Getting There...

Doughing in

A while back I wrote a lengthy post about my first disastrous attempt at all-grain brewing.  Surprisingly the finished product from that comedy of errors is quite enjoyable.  It has some residual sugars that didn't ferment thanks to our mash temp going way too high too soon, but we also hopped the heck out of it so the result is actually quite balanced and the hop note is fabulous.  So it is probably the worlds first 3% ABV hop bomb.  Weird but kinda nice.   By the way, such failure does not warrant the moniker THE HOPOPOTAMUS, and as we were worried that it was just going to be a thin beer with an enormous amount of hops, we decided to christen it the FIRE-BREATHING DRAGON!  [This after considering and rejecting 'Chemical Burn' and 'Shock and Awe']  

Still, it was time to get back in the saddle and after much consultation with my baby brother, the pro (and a graduate of UC Davis's Master Brewer Program and an IBD certified Master Brewer) I thought I was ready to do it again. Nice to have an expert in the family. I guess I should note that absent my own hubris I would have had a long conversation with my brother prior to doing the first one which might have headed off many of my problems - thought it is hard to anticipate things you have no experience with.  I am not sure that in the end such a strategy would have been better as failure is very, very instructive.  And doing it all right the first time inevitably leads to questions of whether it is all really necessary and whether some corners could be cut, etc.  Nothing quite like learning by doing...

Anyway, the prospect of the last great day of the season induced The Beerax and me to brew.  So we came up with what we thought would be a perfect beer for the season: a nice porter (a little extra hopped because we are, after all, in the NW).  So we ran off to Steinbarts again and were a-ready to roll. 

So here were the adjustments I made which I share in case others out there are ready to give it a try:

The mash

-My prized and overly fancy mash tun is quite wide and has a false bottom that is about an inch and a half off of the bottom of the kettle.  When figuring the appropriate amount of water I need (roughly one quart per pound of grist) to figure it as in addition to the water below the false bottom.   A little test revealed that this area contains 1.75 gallons of water!  So my original mash was way low in water volume.

-My original strike temperature (heat of the water before you dump in the grain) was 165 degrees, my brother suggested that 175 would have been better for my last beer.  For this beer, given its lower grist volume, we went for about 172.   This ended up being spot-on and we mashed beautifully at our ideal 150 degrees.

-My brother urged us to vorlauf (recirculate the mash water by draining off the bottom and slowly pouring it on top of the grain bed) slow and long.  We did it for about 20-25 minutes.  Previously we drained about two quarts off until it seemed clear and then dumped the thing back in and called it good.

-My brother also urged going very slow on the sparging (adding fresh hot water to rinse the grain) and draining the mashing out at the same rate as the sparge water was coming in. We increased the sparge water temp at the advice of the bro to 175.  Last time we drained and sparged very quickly (in about 5 minutes).  This time we sparged for 30 minutes.

Sparging ... slowly

-Previously we lost a startling amount of liquid in the boil, partly this was due to loose hops we figured (and the sheer volume of hops) but we also thought (and my bother agreed) that we underestimated evaporation.  This time we figured for one gallon loss rather than the half gallon we had before.  We also increased our estimate of water loss from the hops.  

-Final advice from my brother: increase the amount of grain by about a pound because you can always add water if your OG is too high, but if it is too low you have no recourse.

So what was the result? Almost a complete success, our mash efficiency was spot-on and the wort and hops additions appeared just about perfect.  Our only problem was that we did not loose the amount of water we thought we would and so our sparge water calculation was too high.  This might be because we boiled in a narrower pot, and thus the loss due to evaporation was less?  Anyone know if this difference could have a significant effect?  We did adjust our grain bill by adding an extra half pound but in retrospect we should have probably done a full pound extra as the bro suggested.

We also put our hops in a nylong bag this time rather than using the mash tun as a hopback which I think means a lot less water is lost through the water retention of the hops.  Maybe loose hops also increase the surface evaporation?  Anyway, we ended up with a lower OG than we were targeting and out final result will be a bit too light.  Dang.  Still, I consider it a huge success with only one final little wrinkle to iron out.   It will still be a good beer, just not quite perfect.

Next time...

By the way, my brother now brews for Summit in St. Paul, Minnesota check it out when you are in the area.  

Wednesday, November 3, 2010

Does Supply Create Its Own Demand?

NOTE: Another one from the archives of the Oregon Economics Blog, this one from April 2008.

I am a little late to jump on this, but a while back the Oregon Brewer's Guild released figures that showed the volume of beer produced in Oregon has increased substantially. I will outsource the data analysis to Beervana.

This raises an economics question I have asked in a lot of different ways in this blog: why is the brewing industry in Oregon so robust and why can so many brewpubs survive in a market like Portland?

Perhaps it is a set of exogenous 'fundamentals' (in economist-speak): Maybe Oregonians are predisposed to like beer more than others, and want to drink it fresh in a pub because of some genetic quirk. Perhaps the climate is conducive to not only beer consumption but pub crawling. Maybe it is the fact that we are in a hops producing region. I have no doubt that in each explanation one can come up with along these lines lies a grain of truth, but I can also just as easily imagine lots of other places with similar characteristics but which don't have nearly the beer culture we have here.

This leads me to believe more in endogenous explanations than fundamentals. I think palates and pub culture are created not inherent. I think that the early introduction of such places as BridgePort and McMenamins had the effect of starting a small ball rolling that slowly began to get bigger and bigger. In effect, I think that the supply of micro-brewers and brewpubs created the demand for even more. I also think it was important that the beer started as available primarily in brewpubs - that it was hard to find the beer in the stores. This promoted the pub going culture that so typifies Portland and many other Oregon communities today.

This is not a new idea in economics, there are many goods for which demand increases after consumers learn about its presence by seeing it in stores, think the Nintendo Wii - the demand keeps grouting as more and more people experience it.

I think this can also be related to Network Externalities. This is the idea that the value you get from consuming a product goes up the more that others consume it. (Thus the externality - the benefit from one consumer's purchase of a good that accrues to another consumer) Think about telephones, the very first owner of a telephone probably didn't get a lot of value out of it until all his/her friends got them as well.

How do network externalities fit in with the Oregon microbrewer and brewpub scene? Well, for bottlers, the more that consumers buy craft beer in general, the more retailers will be willing to give up shelf space and taps to microbrew. Thus, one person's purchase of craft beer benefits others by making more available to choose from. For brewpubs it is the same story, the more people frequent brewpubs the better the atmosphere and the greater the variety of the beer offerings.

It is also likely that these effects are not proportional: they might have been small to begin with, but may have snowballed as time passed and have reached a type of critical mass that creates a true, unique culture.

So here is the punchline: Portland (and Oregon in general) may have a substantial advantage over other cities as a place to start a new brewery/brewpub despite the fact that there is so much competition. In fact it may be because there is so much competition that Portland is a great place to start a new pub. Just ask Christian Ettinger of Hopworks Urban Brewery which is off to a roaring start. Sometimes a little competition can be a good thing.

Monday, November 1, 2010

How is John Harris Like Lady Gaga?

John Harris, King Lupulin

It is all in the hips, baby! No, seriously. John Harris, brewmaster at Full Sail, is the godfather of brewing in Beervana. His fingerprints are all over a number of Northwest classics, perhaps most prominently is Deschutes' Mirror Pond Pale Ale.  I was asked once what my favorite beer was and I demurred, how could I pick just one beer?  But, if I had to commit to only one beer in my fridge for the rest of my life, I'd probably pick Mirror Pond. It is perfect and can go with about any food, any season any mood.  It has an amazing hop note yet isn't aggressively bitter and the malt body is sublime.  And it is a flagship of Deschutes - it and Black Butte Porter (which I think is also a Harris creation) are the two Deschutes beers you are almost always bound to find where the beer is sold.  I don't know how much of Deschutes sales are accounted for by Mirror Pond, but it is a lot. 

A few years ago I posted about the idea that the difference in skill among brewmasters is small, but that tiny difference can yield outsized returns, and thus John Harris' true worth is likely to be gigantic. But I didn't really flush out the idea (though I had in an economic post).  So the answer to the question in the title is that what makes John Harris like a pop diva is that his talents are both rare and reproducible.  Like Lady Gaga, who records her talent, reproduces it and sells it globally, a brewers art can be reproduced and sold indefinitely. This process suddenly makes that little difference in talent a huge revenue advantage over other brewers.  Which is why we see such outsized returns for those at the very top of professions where such scarcity and reproducibility exist.  

Mirror Pond is just that much better than other beers in a crowded marketplace.  And once John perfected the recipe, Mirror Pond could be made, essentially the same, forever.  Deschutes has built, and continues to build, an empire off its early recipes which John created.   In fact, the mind boggles to think about the present discounted value of the revenue stream Mirror Pond will be responsible for when all is said and done.  Deschutes is on the road to becoming a national craft brewer like Boston Brewing or Sierra Nevada, all on the shoulders of Harris. 

This is not to discount the skilled helmsman ship of Gary Fish or others involved in the business side, you can (and economist's do) make the same claim about top CEO salaries: their talents are not reproducible but a marginal difference in talent can mean billion dollars differences in outcomes.

Which all raises the question, why are top brewmasters not paid huge salaries?  One reason my be that their talents are really not that rare - many skilled brewers are out there and so the supply of good brewers brings the price down. It is certainly true that many good brewers are out there and want jobs, but the point is that being good isn't enough, you have to be one of the best.

I actually think the problem is an inference problem: one assumes Deschutes would have done just as well without Harris, after all they are thriving now and surely another skilled brewer could have come up with fine recipes.   But this is a classic problem of making inference where there is selection.  A brewery that did not choose a brewer wisely would probably no longer exist and the memory of the failed attempt soon forgotten.  In fact, the very best breweries are probably those that had and hoarded good talent either by accident or design.   Failing to recognize this will probably doom many nascent breweries but the lesson will not be learned.

I also think that many top brewers are figuring out this market failure for themselves and correcting it by opening their own breweries, where the market returns come to them - think Jamie Floyd at Ninkasi.  but these brewers will have to realize that good business acumen is a little scarce too and understand that they need to pay for it in a curious market reversal (think Ninkasi v. Roots).  Perhaps John Harris himself made this calculation when he went to Full Sail where he is an employee-owner. 

Maybe Harris cannot tickle the eyes and ears like Lada Gaga, but he sure can excite the nose and tastebuds.  And besides, Lady Gaga is going to get old and tired, Mirror Pond won't.