Pubs Getting in on Brewing and Where to Find Brew Dog

Here is a little tidbit from the Willy Week: Kells has applied to open Kells Brew Pub in Nob Hill and Old Town Pizza have applied to start brewing at their Vanport location.

This is interesting to me as most brewpubs start as a brewery pub combo or start as a brewery and then add the pub.  I wonder if the whole brewpub idea is becoming so ubiquitous that pubs are beginning to find it a necessary selling point?  It is one thing to be an avid brewer and figure out a business to support your hobby-turned-profession but quite another to be a successful pub and decide that you need to add on-site brewing.   Thoughts?

On another note altogether.  After my soccer game last night in Oregon City a few of us stopped in for a quick drink at the wonderful Highland Stillhouse.  I had already been eagerly anticipating a draft Bellhaven Twisted Thistle so that is what I got, but the beer selection was fantastic - everything from Ninkasi's fresh hop beer to a great cask offering (which escapes me at the moment).  But what really caught my eye was an extensive list of Brew Dog beers.  I suspect, though I didn't ask, that these are from the bottle.  And they don't come cheap: a glass of Brew Dog will set you back $12!  Still, if you want to see if all the fuss is due to genius at self-promotion or to great beer, here is your chance.  You can even enjoy you Brew Dog with haggis balls!  Yum. 

If you are a little more budget conscious, I do recommend the Bellhaven. 

On Brewpubs and Economies of Scale

Here is a nice Washington Post article about Brewpubs outgrowing their breweries:  

You can brew only so much beer in a restaurant, and you can shoehorn only so many fermentation vessels among the tables and chairs and deep-fryers.

With thirst outpacing output, several regional brew pubs have been building, buying or renting off-site breweries to keep their own taps flowing and to supply an off-premises market of grocery stores, liquor marts, bars and restaurants.

I have always thought that there are two models for aspiring professional brewers that want to start their own company: packaging brewery or brewpub.  The problem (or curse) of the first is that economies of scale demand growth.  Unless you can sustain an incredibly loyal following that will pay a premium for your beer, you have to grow to keep prices competitive and survive.  I don't think that in the modern era of craft beer you can ever count on loyalty - there is just too much good and new beer out there to grab attention.  There is nothing wrong with a packaging brewery per-se, just that your business model must plan for growth (see, e.g., Ninkasi).

The brewpub model is the escape, if you will, from the tyranny of economies of scale.  From what I can glean, most brewpubs do about 75% of their business in food, can keep beer prices reasonable by cutting out the packaging, distributing, retailing and associated costs and margins.  The brewpub is the model of choice, in my view, for the homebrewer-going-pro in that it allows for lots of flexibility and creativity.  The problem with this business model is that you are in the business of a restaurant first, and the restaurant business is incredibly hard and tiring and easy to muck up.  Smart owners (see, e.g., Block 15) get experienced restaurant managers to handle the food side and concentrate only on beer. 

So this trend of brewpubs getting stars in their eyes is troubling to me.  I think the temptations are great, but the business of packaging breweries is hard.  It is easy to think of selling in volume as the path to riches and success, but the craft beer world is getting ever more competitive and to leverage a successful brew pub to start a packaging brewery is fraught with danger.  As I understand, here in Portland, Laurelwood's great scheme to open an off-site production brewery and expand the brew pub empire is on indefinite hold.

The WaPo article addressed the complications with moving into off-premises sales: 

Off-premises is “a different market, no doubt,” says Bowers of Brewer’s Alley. You need to persuade a distributor to carry your beers, then entrust them to retailers who might plop them among dozens (perhaps hundreds) of rival brands. Bowers was cautious: Before sinking thousands into a production brewery, he was able to gauge demand by contract-brewing the six-pack version of several of his brands at the Flying Dog Brewery across town. He found a ready market, selling 4,000 to 5,000 cases per year.

The enticements outweigh the risks. For the first half of 2011, craft beer volume grew by 14 percent nationwide, and sales soared 15 percent higher than in 2010.

There are singular successes, such as Oskar Blues in Lyons, Colo. Nine years ago, it was an average-size brew pub in this Rocky Mountain gateway town of 1,600. Then owner Dale Katechis began canning his Dale’s Pale Ale with a manually operated canner capable of filling two cans at a time. Other U.S. craft breweries had contract-brewed canned beers (mostly amber lagers and golden ales) at bigger breweries, but Oskar Blues was the first to operate its own canner and the first to can an aggressively hopped pale ale.

Today, Oskar Blues operates an off-site plant in nearby Longmont, Colo., which is on pace this year to turn out 58,000 barrels’ worth for shipping to 26 states. In December, the company will take possession of a new canning line able to fill 300 cylinders a minute. That machinery will enable Oskar Blues to begin filling 16-ounce cans with a new brand called Deviant Dale’s IPA, an 8 percent alcohol powerhouse seasoned with pungent Columbus hops.

“It’s been a wild ride,” says Chad Melis, marketing director for Oskar Blues.

And it probably has a lot of pub brewers stroking their chins and going, “Hmmm.”

Enticements indeed.  All I can say is brewer beware.  Whatever you do, shield the core brewpub business from the packaging brewery in case it all goes wrong. 

A Beautiful Day at Skamania Lodge

With drink tickets you get this stylish mug, here with the incomparable Killer Green from Double Mountain

Last Saturday Skamania Lodge hosted its third annual Cheers to Beers Fest on their front lawn. I went last year and had a blast despite the lousy weather. This year I was invited to return and fortunately the weather was amazing, but the fest was surprisingly subdued. The beer selection was great and I was delighted to see Snipes Mountain back as it is one of those favorites that is impossible to find locally.  The beer based buffet dinner was once again great and the brunch is always a treat.

But, as you can see from the photo I took right in prime time fest mode, the attendance was pretty light and was not very beer geeky.  Which is too bad.  Perhaps one problem was the fact that it was scheduled on the same day as the OBG's Fresh Hop Festival at Oaks Park. Another problem might have been the lackluster effort at publicity this year.  I did not do my part - I had intended to post a notice or two here, but life got busy and I just plain forgot.  Still, I got no PR blasts to remind me which is kind of what I was relying on as my 43 year old memory is, well, 43 years old.  When I asked beer blogger friends about it the were not even aware of the date this year, which is a shame as there a a number of unique things to recommend this fest. 

The best setting for a beer fest in the world.

First is the location which, as you can see from the picture above, is absolutely the best setting for a beer fest...ever. Second is the venue which is wonderful itself, the lodge and its restaurants may be a little pricy but there is no reason you can't come for the afternoon and enjoy the setting and the beer. Third is the beer themed dinner which last year was festive and energetic - sadly this year it was subdued and slightly, well, morose. I say this because there is nothing more depressing than a humongous buffet largely going to waste. Pound for pound there was probably more food than punters.

But the single best thing about the event is to get to sample the far-flung beers from Washington that rarely make it across the Columbia. Once again Snipes Mountain was a big favorite of mine, as was Prodigal Son from Pendleton. The beer of the fest had to be Double Mountain's Killer Green which is a phenomenal fresh hop beer made by the most meticulous brewers around.

My gripes are the same as last year: not enough info on the beers and not enough brewers around to with whom to chat.  In fact the server at Prodigal Son was serving their wheat beer which is amazing and perfect for those hot sunny Pendleton days, but she thought she was serving their pale ale.  Ooops.  (At first I thought it was the most wildly radical rethinking of a pale until I realized what must have happened)

So while I enjoyed my stay and the lodge and staff were great, I fear that this fest might already be on the way out. I hope not - it rocks - but I think if they do it again next year they have to get the PR right and schedule it around the fresh hop fests in Portland. Here's hoping that they do.

Poll Results: X-114 is the Winner

In my scientific and representative random and completely meaningless poll asking which of the two initial Widmer Rotator IPAs you preferred, you have given X-114 a resounding victory.  

But I suspect that as random and unscientific this poll was, this is reflective of the general mood.  The X-114 is not beloved by all, the Citra hops don't dance on all tongues like they do on mine, but the Falconer's IPA is, I think fairly undistinguished.  Which does not mean it is not a great IPA (and worlds above the entirely forgettable Broken Halo) but X-114 has character that differentiates it from other great IPAs - which is about as high a compliment as I can pay.

I'm excited for the next iteration - this whole Rotator business is genius (assuming X-114 comes back regularly).

Wells and Young's Buys McEwan's and Younger's

Nigel McNally of Wells and Young's

 
From the BBC:

Leading Scottish beer brands McEwan's and Younger's have been sold to a Bedfordshire-based family brewery.

The ales were bought from Heineken UK by brewers Wells and Young's for an undisclosed sum.

The firm said it would continue brewing McEwan's draught ales at the Caledonian Brewery in Edinburgh.

So, I wonder if the Scots prefer to have their beer owned by the Dutch or the English... Ach! Just go get a Brew Dog...

Taxes and Beer: The BEER Act is in Trouble

Photo Credit: Ángel Franco/The New York Times

From The New York Times, an article suggesting that the tax break for brewers bill, now known as the BEER act is probably dead:

Mr. Boehner, along with fellow House leaders like Representative Eric Cantor of Virginia, Representative Kevin McCarthy of California and Mr. [Paul D.] Ryan, who is the party’s leading crusader for spending cuts, were co-sponsors of a 2009 version of the beer tax break bill, which has never passed. Known as the Brewer’s Employment and Excise Relief, or BEER Act, it would halve the excise taxes on the first 60,000 barrels of beer for small brewers.

Steve Hindy, owner of Brooklyn Brewery, said his company stood to save about $400,000 a year if the tax break was approved.

“The tax break would boost our financial situation and allow us to further expand our business,” he said. “We would be able to create more jobs.”

But the bill has stalled, and none of the four Republican leaders are now sponsoring it. But Bob Pease, chief operating officer of the beer industry group, the Brewers Association, in Boulder, Colo., said that Mr. Ryan’s staff had assured the organization in a private meeting that he would continue to support the bill.

Mr. Ryan’s spokesman, Kevin Seifert, said that the congressman had no plans to sponsor the beer tax break, but he did not address the Brewers Association’s assertion about Mr. Ryan’s private support. Mr. Ryan supports “letting individuals and entrepreneurs keep more of their hard-earned money,” Mr. Seifert said.

I have to say as much as I like craft beer, I never supported this. I don't like these specific and targeted tax breaks in general, but even if I did, why does craft brewing need a specific tax break, the craft beer industry is booming?

Kölsch Will Rule the World!

Deutsche Welle has a nice article on the spread in popularity of Kölsch:

It's relatively easy to find German beer in pubs across the world. Major brands like Beck's have global distribution networks, while the traditional Bavarian brews being served at the Oktoberfest are easily found in major cities like London, New York or Beijing.

Recently, however, a much smaller, straw-colored beer from the western German city of Cologne has been making waves abroad. Exports of Cologne's local brew, Kölsch, have rocketed in the past year, with more and more foreign distributors wanting to get their hands on this light ale.

"The United States has been a strong market for us – we've had a 200 percent sales increase in the past three years," the CEO of the Gaffel Kölsch brewery, Heinrich Phillip Becker, told Deutsche Welle.

"Countries like Russia, China and Brazil are picking up the Kölsch culture too," he added.

It is starting to gain in popularity for American craft brewers as well. It is Flat Tail's first bottled product and is my personal favorite from Double Mountain (and that is saying something).

But, as with everything, the Germans would prefer they didn't call it Kölsch. In the EU only beer brewed in an around Cologne can be called Kölsch. But for now they are laid back about it:

Kölsch's wave of popularity in the US has led microbreweries in New York, Boston, Charleston, Philadelphia and Portland to start producing a Kölsch-style drink – something the Cologne brewers are willing to tolerate as long as the newcomers don't grow too much.

"They are producing Kölsch-style beer in small, small quantities – so it's not really a danger for us and our market. We see them more as ambassadors for the category Kölsch," Becker said, adding that any major brewer who tried the same thing would face a lawsuit in no time.

One note to local beer snobs, Kölsch is properly served in a "Stange," a thin glass that holds only 200ml of beer. But who cares, I am overjoyed at the growth in popularity of Kölsch because I love the style and it is also one of my favorite to brew. The Wyeast Kölsch yeast rocks and I have gotten fantastic results. I even gave some to my Cologne born German friend and he was impressed with how authentic it tasted (of course he could have just said it to be polite). But now I know to call it "Kölsch-style" beer....