Brutal

Brutal Bitter, RIP - Long live Brutal IPA

I have long thought that Rogue's very best beer was the exceptional, but unfortunately named, Brutal Bitter. Brutal was anything but: a subtle and brilliant Northwest take on an English Best or Extra Special Bitter.  It is easily every bit as approachable as their flagship Dead Guy and very much a superior beer in my estimation.  Despite this, it was devilishly difficult to find and I had often wondered as I perused the Rogue selection in my local markets why such lesser beers as Yellow Snow, Chocolate Stout and Stig's Northwest Ale are in abundance but no Brutal Bitter.  I can only conclude that it is the name. 'Brutal' suggests in your face bitter while the beer was elegantly hopped and not a bit brutal at all.  So it gave the wrong impression, those who bought it for the 179 IBUs were left unimpressed and those who didn't want 179 IBUs just didn't buy it at all.

I was heartened then, to hear that they were changing the name and I expected to be enjoying Rogue Best Bitter soon after buying it from the aforementioned local market.  Alas the replacement name was not the brutal bit but the 'bitter' - replaced by 'IPA.'  But it is not really that either, at 59 IBUs and 6% ABV it just barely hits the mark of an IPA and most northwest IPAs are closer to 7% ABV.  And it is still not at all 'brutal.' 

New name and quite a new recipe: from 6 to 8 ingredients and a much more citrus hop flavor. IBUs and ABV remain the same but the clolor is quite a bit lighter.

I finally got around to trying the new Brutal IPA and was taken aback by the taste, which is when I discovered it got more than a name change.  It is an entirely new beer.  The new recipe is excellent, it is now more Northwesty with citrusy hops and slightly lighter in color, but otherwise it feels reasonably familiar - the heritage is evident.  But excellent as it is, I lament the passing of my favorite Rogue beer.  Brutal Bitter was a touchstone for me and was a beer I tired to emulate at home - unsuccessfully it has to be said - as I worked on what I called a NW Best Bitter. 

But there is one possible silver lining: I expect the new recipe to be a real crowd-pleaser and if it is and I can find it in someplace other than super-specialty beer shops I'll consider it a good bargain.  But I fear that the 'Brutal' moniker may work against it again.  This is not California, we aren't impressed by smack-you-across the face bitterness and names like Bastard and Brutal don't appeal to us.  But then again my finger might not be on the pulse of Oregon punters, after all Oregonians are gaga for Total Domination.  Still Brutal Bitter did not seem to sell well, and it certainly was not the beer - so what then? 

But let me put my plug in here for Brutal IPA.  It is quite a nice entry into the NW IPA fantasia we have here in Oregon.  A respectable companion to such faves as Total Dom, Watershed, Pelican, Blue Dot, Vortex, X-114 and so on.  It maintains its English-inspired restraint and in that reminds me most of X-114.  I hope it finds its market and I hope that market is near me.

Growing Your Own: Rogue Style

Rogue's Floor Malting House

I have been trying to grow hops for over a year now, and fortunately, after last years failed rhizome and then disappointing vine, it appears to be coming back with a vengeance.  Already there is a robust beginning.  Hopefully, I'll be able to brew a beer this year with my very own hops.

But if you want to find the commercial leader in the 'grow your own' movement look no farther than Rogue.  And it makes sense, right?  Rogue, marches to the beat of a different drummer and is fiercely proud of it.  They have been involved in a wholehearted effort to produce their own ingredients and now have a hops farm and a barley farm from which they are now producing their own beers under the "Chatoe Rogue" label.

But once you have grown your own barley you need to turn it into malted barley and this is no easy feat.  The delicate process of converting the starches into sugars requires a delicate touch.  The traditional way of doing it is through a floor malting process by which you create a hot floor and rake the germinated barley until it is sufficiently dry.  At least I think so - my knowledge of the process is sketchy at best.  What I do know is that floor-malting is the old school way of malting - a lot of hand raking and thus labor intensive - and is rarely seen in the modern industrial beer world.

Which brings us back to Rogue which has just completed the construction of their very own floor malting facility on their barley farm in Oregon's Tygh Valley.

From and earlier press release on the facility:

The Malt Floor will be a Heritage-malting operation in which Rogue Farm barley will be soaked, floor-germinated, hand-raked on the malt floor, roasted in a brick hearth, and bagged in small batches. Rogue Brewmaster John Maier plans on developing 4-6 varieties of floor malt that will be used in the brewing and distilling of Rogue Ales, Porters, Stouts, Lagers, and Whiskies.

Floor malting began in the 19th century but was gradually replaced by automated equipment that helped reduce labor costs. With the establishment of the malt floor, Rogue joins a select handful of floor maltsters in Germany, England, and the Czech Republic that continue to carry on the heritage malting method.

And speaking of the beer, I have blogged in the past about how much I liked their single malt ale for the beer itself not just because they used their own home-grown ingredients.  I liked the clean simplicity of the beer: one malt and one hop variety.  I look forward to the wonderful things John and his crew at Rogue will do with the new fully home produced malts and kudos to Rogue for investing so heavily in their own hops and barley operations.  
There are a lot of ways in which Rogue is just that - the could have easily become a Deschutes/Full Sail clone, settling on a standard line up of beer and selling far and wide.  That would have been just fine and I am grateful to have Deschutes and Full Sail, but Rogue has always had a different path, one that is not just about growing revenues as quickly as possible.  To my mind they should be celebrated for all of their fun and commendable efforts to create a truly home-grown Oregon beer.

Signalling Redux

The blogger and graphic artist whose "nom de plume" is Samurai Artist popped me a note to inform me of his very interesting interview with Brett Joyce of Rogue (the above is a sample of his work). During the interview he asked Brett about a post I had done in the past about Rogue and signalling. At the time Brett appeared quite annoyed by my post, and I was completely perplexed. But then I realized the problem, people were not understanding it as an equilibrium concept. Anyway, here is the exchange:

SA: There was another blog post (on the Oregon Economics Blog) that suggested that you guys use the economic term 'signalling' by pricing yourself higher to signal to consumers that your beer is of a higher quality. I know that you said that wasn't true, but I would like to see if you have more of a response to that.

Brett: Yeah, I'm not smart enough to know what 'signalling' is, but I would just say this, there is a lot that goes into the packaging, there is a lot of hops and malt that goes into our products. We have never told John in 21 years what to put into the beer. He is an artist, and it is our job to get out of the way and let him practice his craft, and it is our job to go sell it, go market it. Our beer is not inexpensive to make. It's because of ingredients and because of packaging, not because of 'signalling'. I don't even know what that means!

This is a good illustration I what I mean. I would not say that Rogue 'uses' signalling. What I was trying to provide an explanation for was the popular beer blogger complaint that Rogue is too expensive. Given that the craft brew industry in Oregon is intensely competitive it is hard to see how Rogue's prices are sustainable in the free market of beer. Signalling provides a potential explanation (not necessarily the right one or the only one, but a possible one): if people think price contains some information about the quality of a product that they cannot themselves determine before they purchase it (as opposed to something like a new shirt that you can touch feel, try on, etc.) then they may act on that information by purchasing it. Of course, all beer companies could try this, but the companies with a lesser product would find out quickly that consumers learn and their sales would plummet. Packing plays a similar role - Rogue's packaging is more expensive and a signal of the quality of what's inside. Other breweries could do the sam but if their beer is of inferior quality than their attempt to signal becomes a costly waste of time.

If the consumer tries the expensive beer and likes it then their assumption about the price being indicative of quality is correct. Only though repeated tries would the consumer learn that price is a reliable signal. And this confirmation will happen only if it is truly just the better beers that are more expensive (in general). So you see, signalling is essentially an equilibrium where better beers are priced higher, and consumers act on this knowledge.

This is why I was perplexed about Brett's annoyance with the story: it is an equilibrium story that is not an explicit strategy by Rogue. In fact it happens simply because Rogue responds to the incentives that are already in the market. And it only works if Rogue's beer really is thought of as that good once buyers purchase it. I think he thought I was saying it is an explicit strategy you can use to fool consumers and get a higher price. Precisely the opposite: it is a market outcome whereby better beers price higher and lesser beers price lower and it works because in equilibrium consumers are then correct about how price and quality are related. [Note that good and bad craft beer aren't necessarily any more or less expensive to produce so there is more to price differentials than the cost of ingredients clearly]

Full disclosure, I love Rogue and Brutal Bitter is among my top five favorite beers, but that has nothing to do with it. The answer to "how do they get away with charging so much?" is simple: the market thinks their beer really is that good. And as good beeronomists we should know not to question market outcomes, our task is to simply try and understand them better.

Finally, this model was originally applied to education: people get college degrees because they want to gain more skills and knowledge but (perhaps unbeknownst to them) it also serves as a signal to firms that they are smart and worthy of hiring. Getting a degree is hard, however, but a lot harder if you are not smart than if you are truly smart. So firms take the degree as a signal of quality and they are right to do so - because, in equilibrium, only the smart ones will find it worthwhile to spend the time and effort getting the degree.

Rogue and Green Dragon

VIA E-MAIL FROM ROGUE, THEIR FAQs ABOUT THE PURCHASE:

VIVA LA REVOLUTION!
FAQ’S
11/19/2008

WHY DID YOU PURCHASE THE DRAGON?
· We love the place; part of what we do is preserve iconic institutions which have served the craft community. Just as we have with West Brothers in Eugene, the Portland brewery, Bogart’s, and Issy brewery and public house.
· In its short life, The Green Dragon has established itself as a national treasure for its support of craft brewers and distillers. The owners developed a well-earned legacy of community loyalty and support. It would be a crime against antiquities for the Dragon to be slain.

WHAT IS YOUR GOAL? ROTATE TAPS NOT OWNERS – WE ARE THE 3RD IN 16 MONTHS.

WHO ARE YOU? A privately held company established in 1988 with the same ownership as today. We are Oregonians with our World HQ in Newport, Oregon.
We are artisianal varietal fermenter trying to do 4 things:
1. Create world class product – John Maier in charge since opened
2. Place the product in world class varietals packaging; 12 oz, 22 oz, 750, 5 gal cans, Black Beauty kegs, use painting and seriography.
3. Create unique thunder – do things differently than the “Beer Industry”
4. Integrate our sales in our communities by participating and giving.

FUNDAMENTALLY ROGUE IS A REVOLUTION THAT EXPRESSES ITSELF THROUGH HANDCRAFTED BEERS AND THE WAY THEY CONDUCT BUSINESS.
The key words
There are a few key words in this statement.
Revolution:
The spirit of the Rogue brand, even the name suggest doing things differently. There is a desire and a willingness to change the status quo. The reality is the Rogue brand is a revolution…started by entrepreneurs.
Expresses itself:
A revolutionist expresses themselves, their values and beliefs through their actions. They do so because they have a passion and a personal commitment to that passion and their beliefs. In the case of Rogue, it can be found in the products and in the people. The Rogue product is the way the brand and the people express themselves and their beliefs.
The way they conduct their business:
Being big or getting big does not necessarily mean you are successful. Rogue’s business will never get “big” as big is defined by the brewing industry. There are a limited number of consumers who can really appreciate the Rogue quality and craftsmanship. The product and the people of Rogue have high standards, standards by which they live. These standards and product must never be compromised for the sake of volume or broader appeal. These things alone will limit Rogues’ size, but that does not limit Rogues’ ability to be successful financially or to be a leader in the real beer industry. The great passion people have for the brand and the product will see to it that the product finds the consumer or that the consumer finds the product.

WHY DO WE DO WHAT WE DO?
To become an industry leader with an entrepreneurial organization that creates truly unique and meaningful products and program.
The key words
There are a few key words in this statement.
Industry leader:
To be a leader does not mean you have to be the biggest or bureaucratic or compromised. The best leaders lead by example and by doing the right things at the right time. Often that may mean going against the grain. The only meaningful questions to ask at times like these are: is this right thing to do for the brand, the product and the consumer? In addition, an important part of being a believable industry leader is running an efficient, profitable business.
Entrepreneurial:
For Rogue this isn’t about being innocent and simply jumping into something because there was an idea or an opportunity to make a buck or two. Rather it is about the attitude of being small but very good, it is about doing your thing your way. It is about being David and not afraid to throw the stone. In the case of Rogue, it doesn’t matter so much if the thing hits the target or not. It is the attitude of being willing and able to throw the stone that’s exciting. This attitude will build the Rogue brand into an industry leader.

HOW BIG IS ROGUE? 60,000 BBL’s in size, sold in all 48 states and 17 countries – we do not care about being bigger. Just better. Smaller than Portland, Pyramid, Magic Hat, Bridgeport, and Full Sail. And obviously, Red Hook/Widmer.

WILL THERE BE CHANGES – YES! SOMEONE DEFINED STUPIDITY AS REPEATING THE SAME ACTION AND EXPECTING DIFFERENT RESULTS. WE WILL MAKE ONLY THOSE CHANGES REQUIRED TO SURVIVE AND SERVE THE CRAFT COMMUNITY.

CAN YOU BE MORE SPECIFIC?
We will not change – rotation as a tap theory – Rogue will only have one or two as before. Brewers’ Nights will continue under the guidance of Jim Parker; games and shuffle board will stay for now.

WHAT WILL YOU CHANGE?
· Turn up the lights, turn music down as it was when the Dragon opened.
· Double the # of taps
· Finish construction as required by regulators: $50-75,000
· Add video poker and Lego table for kids
· Ban cell phones at we have for 18 years
· Staff will be in identifiable gear as well as name tags so you can tell them from the customers
· Deliver beer and food to your home or office.
· Sell to go – bottles, cans, growlers, and kegs.

WILL BEER PRICES GO UP? TBA – Prices need to be high enough for Dragon survival.

ISN’T RENT HERE LOWER THAN THE PEARL? Not for us it’s higher.

WILL HOPOES AND ROGUE NATION CARDS BE HONORED? Yes.

WILL ROGUE FARMS HOPS AND BARLEY, FARM TOURS ORIGINATE AT DRAGON? Yes and so will OBF bus.

WHO IS MANAGER? Russ Menegat whose craft career started on Belmont at the original Dublin Pub – a pioneer in great beers. He has been with Rogue for 18 years in SF, Newport, Astoria and Portland. His love of ales, porters, stouts and lagers has been his only career. A lifetime Oregonian.

DO YOU DISTILL? Yes.
Where/What? White, Dark, Hazelnut Rums in PDX. Spruce and Pink Gin, Vintage Vodka, Dead Guy Whiskey in Newport. Equipment is not as fancy as Integrity but good enough to be award winning and available in 20 states and 5 countries.

WILL STAFF BE RETAINED? YES, IF THEY MEET OUR STANDARDS OF CUSTOMER SERVICE AND CONDUCT.

WILL YOU BREW ROGUE HERE? No – Only in Newport; Issaquah brews “Frogs”; Eugene “Track Town.”

Will you have:
· Garage Sales – yes
· Hoppy Meals – yes
· Aloha Thursday – yes
· Dog Menu – yes
· Kids Menu – yes
· Lapiniere – yes
· Bathoom Tours –yes
· Outside seating – yes
· Patio – yes, hopefully with access from the inside
· Mug Club – yes
· wheel chair bar seating - yes
· Thanksgiving and Christmas service - We are at other locations. Staff decides.
· TV’s - TBA- we are not a sports bar. On only for major events. Sound on once a year.

WILL YOU CONTINUE MUSIC? Yes, for a while. Not part of original concept. Not if City wants handrails. Not if we need the space.

WILL YOU CHANGE THE MENU? Yes.
How? TBA – Hope to add items made with beer and retain smoker.

WE CANNOT GIVE YOU THE SECRET TO SUCCESS. WE CAN GIVE YOU THE SECRET TO FAILURE: TRY TO PLEASE EVERYONE.

BridgePort, Rogue

Word on the street is that BridgePort, the godfather of Oregon craft brewers, is faltering. In a time where almost all craft brewers are seeing double digit growth in sales, Bridgeport is going backward. I have no way to confirm or disprove this but, if true, it is surprising for a company with such a storied history and strong brand identity. Bridgeport's IPA is, probably, the quintessential NW IPA. They are fully invested in the latest trend of brewing special brews and those brews, like the new Hop Czar, are often excellent. They also have a signature brew pub in the newly trendy Pearl. All brushed aluminum and gleaming timber. Unfortunately for those of us who used to frequent the BridgePort when it was all brick and odd little nooks and crannies in the then still quite ragged Pearl, the new brewpub seems sterile and uninviting. I wonder if this has rubbed off on the brand. For whatever reason the bloom seems to be off the rose.

Contrast this with the thriving Rogue Brewery. I was in Newport over the weekend with the in-laws and my father-on-law, who arrived first, called up from the grocery store to ask what beer to buy. When in Newport, get Rogue, said I. Later, with a sixer of Dead Guy in hang, he was amazed at the price: "I have never in my life pain $11 for a six pack of beer, how can they possibility sell any beer at that price?" It was a very good question. Rogue is always the most expensive beer in my local grocery, and yet they thrive. I told my father-in-law that they have a loyal following and a strong brand identity, but that felt a little hollow even to me. I rarely buy Dead Guy, it is good, but there are almost always just as good beers for two to three dollars less. Over the weekend I lunched at the restaurant in the brewery. It is a decidedly low key place, especially compared to the BridgePort. Plywood and unfinished surfaces, wobbly tables and no decor. And yet they charge $15 for a hamburger and had a line out the door of people waiting to get in. Go figure. The food, by the way, was good, and the beer was exceptional. I brought home a bottle of Juniper Pale Ale and blew the father-in-law away.

Rogue seems to play by its own rules, and for whatever reason almost everything it touches, turns to gold. My impression of owner Jack Joyce is that he doesn't care to think too much about it, but rather go with his gut. He is also not really interested in going for the big selling high-volume beer. And even they have had some misfires: remember the short-lived packages with historic photos of fishermen and such? No? I got your back. But in all of this remains a mystery of the business. How do you stay fresh and relevant in consumers eyes? Jack Joyce does it by following his inner muse. BridgePort seems to be trying to listen to its inner MBA. The former is not always a good idea - many a good brewery has been lost to those not very business savvy. And the latter is not always bad. Full Sail's regrettable new packaging, session beer and slogan "Brewed to Stoke, Stoked to Brew" seems to have worked out very well.

Economics has lots of theories of branding, advertising, consumer preference and the like, but when it comes to trends, fads and the like. We are just as in the dark as everyone else. So, ideas?