Tuesday, March 18, 2014

State of Beer in Oregon

This is just a plug for Damon Runberg's nice report on the brewing industry in Oregon.  Go have a look to get a very nice snapshot of the facts and figures surrounding the industry.

Monday, March 17, 2014

Happy St. Pat's Day: Time to Remind You That Guinness is Not Really That Irish

This time The Economist Mag takes up the case:
Arthur Guinness, who founded the brewery in Dublin in 1759, might have been surprised that his drink would one day become such a potent national symbol. He was a committed unionist and opponent of Irish nationalism, who before the Irish Rebellion of 1798 was even accused of spying for the British authorities. His descendants continued passionately to support unionism—one giving the Ulster Volunteer Force £10,000 in 1913 (about £1m, or $1.7m, in today’s money) to fund a paramilitary campaign to resist Ireland being given legislative independence. The company was alleged to have lent men and equipment to the British army to help crush Irish rebels during the Easter Rising of 1916, afterwards firing members of staff whom it believed to have Irish-nationalist sympathies.

The beer the company has become most famous for—porter stout—was based on a London ale, a favourite of the street porters of Covent Garden and Billingsgate markets. Since 1886 the firm has floated on the London Stock Exchange, and the company moved its headquarters to London in 1932, where it has been based ever since (it merged with Grand Metropolitan and renamed itself Diageo in 1997). Even in terms of branding, the company was considering disassociating itself from its Irish reputation as recently as the 1980s. Worried about the impact on sales of the IRA’s terrorist campaign during the Troubles, Guinness came close in 1982 to re-launching the brand as an English beer brewed in west London. But as Northern Ireland’s situation improved in the 1990s, the company’s marketing strategy changed again towards marketing the beer as Irish, aiming its product at tourists in Ireland and the estimated 70m people of Irish descent living around the world. Now the Guinness Storehouse, part of the original Dublin factory which was reopened as a tourist attraction in 2000, promotes Guinness to tourists as an Irish beer once again.
But for economists, the real story of Guinness is the Student's T-Distribution, from the authoritative Wikipedia:
In the English-language literature it takes its name from William Sealy Gosset's 1908 paper in Biometrika under the pseudonym "Student". Gosset worked at the Guinness Brewery in Dublin, Ireland, and was interested in the problems of small samples, for example of the chemical properties of barley where sample sizes might be as low as 3. One version of the origin of the pseudonym is that Gosset's employer preferred staff to use pen names when publishing scientific papers instead of their real name, therefore he used the name "Student". so he had to hide his identity. Another version is that Guinness did not want their competitors to know that they were using the t-test to test the quality of raw material.

Gosset's paper refers to the distribution as the "frequency distribution of standard deviations of samples drawn from a normal population". It became well-known through the work of Ronald A. Fisher, who called the distribution "Student's distribution" and referred to the value as t.
So raise a Guinness today not for Ireland, but for Econometrics!

Friday, March 14, 2014

Dis-Honest Large Beers in Idaho

From the annals of truth in advertizing comes a story from Boise, Idaho where the local minor league hockey team, the Idaho Steelheads, sell "small" and "large" beers that are actually the same size but with differently shaped cups that make the large look bigger by being in a taller cup. 


Boo!  But at least they didn't call it a 'Pint'!

Thursday, March 13, 2014

Britain's Own Craft Beer Boom

The craft beer boom appears to be alive and well across the pond in Britain as it is in the US. As told in the pages of the Guardian:
British drinkers' thirst for such artisan and craft beers appears to be unquenchable. Sales of the brews rose by 8% last year to an estimated 1.55m barrels, according to a new report from the Society of Independent Brewers (SIBA). It said that chancellor George Osborne's decision to scrap the controversial beer duty escalator last year had helped to boost the sector.

Separate figures confirm that British beer tastes are changing. In a huge shift, demand for lager, which has dominated the UK beer market for nearly 50 years, is falling, while sales of stronger-tasting ale and stout continue to grow as they win over an increasing number of converts.

The latest figures from the retail analysts Kantar show that, year on year, sales of ales in off-licences and supermarkets grew by 4% and demand for stout was up by nearly 4%, while sales of lager fell by nearly 4%.
This is good news especially since macro brewers lock on the major retail outlets appears to be on the wane:
Tesco's ale buyer, Chiara Nesbitt, said: "The UK beer market is undergoing its biggest change since canned lager was first introduced here in the 1960s and these days there are more choices available for drinkers than ever before.

"For the beer novice, a trip down a beer aisle these days can be as daunting as seeking out a good wine, which is why we have worked with Marston's to launch a range of easily identifiable brews."
If craft beer becomes a staple in supermarkets like Tesco, the tide has really turned.

Wednesday, March 12, 2014

Denver Post on Craft Beer Growth Ambitions

A nice article on the abitious BA goal of achieving 20% market share by 2020  in the Denver Post.  The article is especially nice because it quotes my favorite Beeronomist and does so very well: he got my point spot-on:

The number was put on the table. It sounded good. It was big, ambitious and bold. Or crazy and unrealistic.

When the guiding lights of American craft brewing met last weekend at the St. Julien Hotel in Boulder to sharpen their vision and undoubtedly drink a lot of good beer, the suggestion was raised that craft brewers should try to claim 20 percent of the U.S. beer market by 2020.


Patrick Emerson, an associate professor of economics at Oregon State University who studies the economics of beer, said those larger craft brewers are the key to the 20/20 goal.

“It is not fantasy to imagine that kind of overall growth but the big factor is always going to be scale and competing on price,” he said. “Why I think it is possible is not so much the proliferation of new tiny breweries but the maturation of the big craft brewers ala New Belgium, Sierra Nevada and the like that are starting to achieve very significant scale economies and can keep prices competitive.”
This point will not be foreign to any reader of this blog (if there are any). One of the things that fascinates me about the craft beer industry, however, is this constant tension between being cutting edge and innovative and scaling up. How cutting edge and innovative can you seem when your brand becomes part of the establishment. Will New Belgium and Sierra Nevada be able to grow like nuts when faced with local competition in many markets that is seen as newer, fresher, cooler?

Who knows!  That's what is so fun about it. 

Tuesday, March 11, 2014

A Mid-Major IPA Showdown!

The NCAA men's basketball tourney is around the corner and in honor of this event I have decided to coin the big craft brewers in Oregon the Mid-Majors: Bridgeport, Full Sail, Deschutes, Portland, Widmer and Ninkasi. 

These are craft brewers that are packaging breweries of considerable scale, not nearly the scale of the big boys like Miller, Coors and Bud but quite distinct from a Gigantic or Ecliptic, say. 

They are kinda underdogs, but kinda not: they can play with the big boys, they box out the shelf space and defend the tap handles....oh, I give up on this silly basketball theme.

Anyway, both Bridgeport and Widmer have revamped their IPAs and are out with new recipes and new marketing.  Bridgeport is talking a page from the Widmer playbook and starting a rotating IPA series using the (admittedly wonderful) Hop Czar monkier and Widmer is going the opposite direciton in creating a permanent IPA in its Upheaval IPA. 

It appears that the Hop Czar rotating IPA now replaces the regular Hop Czar so there could be some confusion about this for a while because their ├╝ber-classic, the eponymous IPA, is still going (and a huzzah for that!). 

What the rotating IPA strategy does, is appears, is allow breweries to make and market new beers from the latest hops which seem to be multiplying like rabbits.  It means minor changes to labels which probably speeds approval and registers better with consumers. 

Bridgeport's first entry is dry-hopped with Citra, one of the new 'it' hops that breweries are using in vast quantities.  It is a fine beer and the citrus aroma and flavor of the Citra hop is well captured.  My only quibble is it feels slightly thin.  They have not achieved the total saturation that is characteristic of my favorite IPAs these days like Gigantic's or Breakside's.  This is probably down to the reliance on dry-hopping instead of using a massive infusion in the hopback.  On the other hand, that makes the Hop Czar a bit more sessionable - it is a wee 6.5% ABV (que the guffaws from across the pond...)

Widmer's Upheaval is a bit bigger, 7% ABV and a little less aromatic but with a bit more heft (as the ABV suggests).  But the use of wheat gives it a softer touch and the myriad of hops, highlighted by the Widmer's own Alchemy hop makes it both more nuanced and less distinct.  

I can quite honesty say that I like them both and I don't have a clear favorite.  I have both in my fridge in six-pack form and they are both disappearing at the same rate which, by revealed preference, shows that I am relatively indifferent.  I suppose I'd say the Bridgeport is a more summer/session IPA while Upheaval is probably the one in the Oregon gloom.  Both are definitely worth a try.

One note however: as breweries of considerable scale, I expect a prime selling point for both to be their price-point.  However, I remember paying almost $9 for a sixer of both.  That's simply too much.