Faces Made for Podcasting

Here is a video from Jeff and my appearance on local Portland TV:

UO MNCH 'Ideas on Tap' Talk Slides: The Future of Craft Beer

Here are the slides from my talk in Eugene for the University of Oregon's "Ideas on Tap" series.  Mostly just stuff cobbled together from the Brewer's Association and Josh Lehner at the Oregon Office of Economic Analysis.  Thanks to both parties.

UO MNCH Ideas on Tap Presentation: The Future of Craft Beer by Patrick Emerson on Scribd

New Pod! Beeronomics 2: 5000 Breweries, M&A Mania and Scarcity in Beer

Live in Eugene! The Future of Craft Beer

I will be talking and answering questions about the economics of craft beer and the future of the industry at the University of Oregon Museum of Natural and Cultural History's Ideas on Tap series this coming Wednesday (Dec 7) at 6pm at Sprout! Regional Food Hub in Springfield (I really hope Mayor Quimby is coming).  This is a science pub-type event where you come, eat and drink, listen to a short presentation and then join in a conversation about the future of craft beer.  Come and join the fun!

If nothing else, the beer will be good...

Brewing in Europe: Old and New

Jeff and I had hoped to have a new pod ready for public consumption by today, but circumstances beyond our control have pushed that back another week.  It is entirely my fault, not Jeff's, as I have had a ridiculously busy fall and have had a number of unforeseen bumps along the road - the latest being my son's pneumonia.

So, to keep you engaged in the beery world I bring you two interesting articles about beery things from two august institutions.

Fist, the BBC has an interesting and very well-written article on the origins of brewing in the British Isles.

One of the homes excavated at Scotland's Skara Brae, a village that dates back to 3200BC and where people may have malted grain (Credit: Alamy)

Second, the New York Times has a rather sad-yet-hopeful article on the Benedictine monks of Norcia Italy who had their monastery destroyed by an earthquake.  Beer might just be their path to salvation:

After the Oct. 30 quake, one of the few things left standing at the monastery was a small brewery, where for the past four years the monks have been making Nursia, a beer named for Norcia’s ancient Latin appellation.

 Interestingly, the monks that populate the monastery are all American.

Check out this video:

New Pod -- Finally! The Mystery of Lambic

Jeff and Patrick solve the mystery of the lambic, the spontaneously fermented beer of Brussels. They talk to Frank Boon of Brouwerij Boon and Jean Van Roy of Cantillon about the process and art of lambic and describe the complex processes by which it is made.

Beervana Podcast: Historic Beer Re-Creations

The new Beervana podcast is out. In it Jeff and I explore Goose Island's new stock ale, their attempt, with beer historian Ron Pattinson, to faithfully recreate the lost style. The podcast includes interviews with Pattinson and Mike Siegel, Goose Island Brewing Innovation Manager. Enjoy!

New Pod: Women in Beer

New Pod: Alan Taylor

New Pod: Your Guide to the Oregon Brewers Fest 2016

New Podcast - Your Summer Tour Guide to Portland Beer

One Year Anniversary Pod - The Best Beers in the World! (Number 3 will blow your mind!)

New Pod - Czech Beer!

New Pod! How to Taste Beer

From NZ

A colleague sends me this photo from Auckland:

I assume the Pilsner is excellent.

New Pod - Mughal Cistern Beer

New Pod: Beeronomics!

Beer Taxes!

Update: The Tax Foundation sent out a corrected map this morning (3/18)

This was prepared for St. Patrick's Day, no doubt (thus the green):

New Podcast: Barrel - Aged Beers

Spatial Economics and Where to Locate a New Brewpub

Migration is my bell-weather:
questionable quality, but great location
and lots of punters despite a lot of local competition.  

Recently I was chatting to a fellow who is planning on opening a new brewpub in Portland.  A discussion ensued about whether it is better to find a nice untapped neighborhood or locate near other brewpubs.  There are really two aspects to this question that, to my mind at least, relate immediately to economics: location theory and externalities.

Location theory is pretty straightforward at first.  Imagine a city being one big circle with people distributed evenly within that circle.  If you are the first brewpub in Portland there is a strong incentive to locate centrally to minimize the average distance from customers.  In Portland density is not uniform and there are lots of natural barriers to travel that make it more complicated but to a first approximation, this is essentially correct.  Now what if you are the second brewpub?  Should you try and distance yourself from the first to set yourself apart?  Well if you do, you have to go nearer to an edge of the city and you potentially lose customers.  So the interesting result is that, in general, the best move is to move in next door and share the customers.

The easiest way to conceptualize this is to think of a long linear boardwalk (a la the Hotelling model) where there is a hot dog vendor right in the middle.  If you are another vendor where do you set up?  Well suppose you set up half way between the existing vendor and one end.  Assuming the hot dogs are the same and you are charging the same price then customers will simply come to the closer one (and we will assume that for those customers for whom the two vendors are equi-distant will split evenly between the two carts), you get all the customers between you and the end and, between the two carts, you get the customers that are nearer to you.

Now, is this the best you can do? No. If you move a bit closer to the one in the middle, you'll get more customers between you and the end - all of which buy from you - and the cut off point between your customers and the other stand's gets closer to the stand in the middle.  Thus you sell more hot dogs by moving closer.  This is true as long as there is some distance between you and the other stand.  The end result is that you end up right next to each other.  

There are, of course, lots of strong assumptions here (uniform distributions, same product and price, low enough prices that all customers want to buy, etc., etc.) but next time you are traveling around to smaller towns and see two supermarkets located near each other, you'll have an idea why (this was true, for example, in Ithaca, NY where I lived for 5 years).

Is this applicable to the brewpub market?  Not entirely because you would not expect to divide up customers by traveling distance alone and density of brewpub customers varies a lot.  So you probably face the trade off of finding a neighborhood with no brewpubs to locate in and capturing most of the local custom versus sharing the customers in a high brewpub goer density market.

Which brings us to the other aspect I mentioned: externalities.  Most people think of smokestacks and smog when they hear the term, but externalities can be good as well.  In the case of brewpubs, I tend to think neighboring brewpubs compete for customers but they also bring more potential customers to the neighborhood.   So the presence of one more brewpub in a small area with existing brewpubs increases the total demand for all of them (though it may well diminish the individual demand as you are dividing the customers by a bigger number).

In the end then there is no right answer but, all else equal, my instinct would be to try and stay pretty central Eastside - very high density of brewpub customers, thriving existing brewpubs.  Especially starting up, you need folks to discover you. I would be very hesitant to locate too far afield as I might capture the local market but not attract any others and it might be hard to make a reputation that would get people to come from other neighborhoods. That said, there are still many pretty close-in neighborhoods that are, as yet, untapped or barely so.  I would think that there are still some sweet spots in Portland.  Good neighborhoods with no pubs.  Or, perhaps even better, one with just one pub where a second would boost the custom for both. 

Of course, if it were me and I was a great brewer that was going to start an exceptional brewpub there is one obvious choice: Sellwood.  Yes, that's it - Sellwood.  Sellwood is the clearly the best place for a great brew-pub.  You could not do better than Sellwood.  Unless your beer is going to be mediocre then Sellwood is not for you.  Stay away.