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.

Widmer Does Lompoc One Better

Pays to be a paid sponsor:



But Drifter?!? It is a fine beer, but not particularly evocative. What the Timbers beer should be is a big giant IPA, hopped-up and ready to go. I think the Widmers should make their X114 IPA, which is sensational, the official Timbers beer.

Here Come the Firkins!

Easily my favorite event of the year, the Green Dragon Firkin Fest, is approaching quickly - Saturday, April 16.  [Sorry for the small image, I could not find a bigger one] Why is it my favorite?  Three reasons. First, it is all about cask beer, my special interest.  Second, it is a small laid back affair.  And third, it is at the Greet Dragon, which is a pretty cool place.

This year, I am hoping for more milds, bitters and other traditional English ales that are native to cask.  But sometimes the hop bombs are a revelation on cask as well.  Last year, Double Mountain's IRA was phenomenal.  Ted Sobel from Brewer's Union will be there and I have it on good authority that he is bringing a mild, as he did last year.  Other breweries are still trying to figure out the cask thing, but they seem to get better each year (let's hope for no fishy smelling Hopworks!).

Last year the weather was outstanding, warm and sunny, and the patio was the place to be. This year, who knows with this ridiculous weather, but the inside is inviting as well.

It costs $30, but for that you get 8 6oz tasters and two food vouchers which last year could be redeemed for sausage, chocolate or cheese. I did two sausages and loaded them up with kraut and voila: lunch.

Speaking of the Timbers

Lompoc has a new beer out in bottles:

NICE.

Oh No!

The new beer sign at the Portland Timbers Jeld-Wen Field.  C'mon, in Beervana?  Really? 

The Widmers will have a beer garden so perhaps this is the AB - Craft Brewers Alliance deal showing itself in the stadium.  This sign is in a key location in that that will appear on lots of national TV, so it doesn't necessarily make sense for a local brand.  And, even in Beevana, I suspect that 75% of beer sales in the stadium will still be Bud Light. 

More on Goose Island

Over the weekend there was an Op-Ed in the Chicago Tribune by John Hall, the CEO of Goose Island explaining the sale.

Apropos of what I said on Friday, here is Hall explaining AB's rationale:

But Anheuser-Busch didn't buy us to change us. It bought us because we can do things its people can't. They're megabig, so it's harder to get people who sell huge brands to really push new products. As in a lot of industries, it's the small guys who are really creative, because they have to be creative. That's what's made us what we are.

***

My executive team, including Greg, who's my son and our brewmaster, all agreed that Anheuser-Busch would be far and away the best alternative for us if it would agree to certain conditions. We didn't work 23 years to build what we have just to throw it away.

Goose Island had to remain an independent company, with me in charge, with brewing centered here in Chicago and with sales and marketing reporting up through me. And I would report to just one person in St. Louis.

In other words, we wanted to continue to do what we've done. And they agreed to that right away.

Also in the Trib is an article on the many other craft beer options local to Chicago reinforcing the notion that craft beer is not in peril. The article focuses on Two Brothers and Three Floyds, too bad they chose to ignore the Four Horsemen...

Budweiser buys Goose Island

A few folks have e-mailed me wondering why I haven't posted some comment on the AB-InBev purchase of craft brewery Goose Island.  There are a few answers.  The most important is that this blog is an offshoot of my main blog, the Oregon Economics Blog, but even that blog is an offshoot of my real job which is as a full-time economics professor at Oregon State University.  OSU is on trimesters and my schedule is particularly heavy in the winter and spring quarters, meaning January through June.  So it is hard to find time to sit down and write for both blogs as well as keep up with all my other responsibilities.  Which is all a mea culpa for posting so infrequently these days.  Sorry.

The second is that what interests me is economics not business, so pure business rationale is not necessarily something I am motivated to post on, what I like as an economist is to think about why certain business decisions make sense - what are the economic forces at work behind the scenes as it were.

The third is that, given my interest in the economics, I am still trying to think through all of the angles of this.  As a academic I am trained not to shoot from the hip and so my bloggy persona and my professional persona are often in conflict.

So with that needlessly long-winded intro, here are some thoughts on the deal:

1. My first thought was something that Rogue owner Jack Joyce said to me and a group of students a few years ago.  He was saying that the big brewers could easily best the craft brewers but that the corporate structure lacked patience.  Once you are corporate and divisionalized, the marketers want to know how to sell the beer, the bean counters want to know that there will be big sales at the outset to justify the marketing budget and the corporation is worried about the bottom line so why should they go for lower profit-margin beer?  Since, getting the public to accept and adapt to a good craft beer takes a lot of patience - you have to be willing to grow a craft beer line slowly and wait for the delayed rewards - this is something the modern brewing behemoths are not used to doing.
2. Part of craft brewing's ethos is the idea that it is an artisanal product and the brewers themselves are part of the 'personality' of the beer.  It is hard for a generation of craft beer drinkers that have been brought up on this to accept a big brewers brewing quality craft beer.  Converting mainstream drinkers to things like Bud's American Ale has not been very successful.  So either you create a faux craft brewery ala Blue Moon and grow it slowly (see point #1) or you look to acquire an established brand.
3. Economies of scale are the name of the game in brewing, but in craft brewing I think the demand is such that a brewery should accept the economies of scale hit you take from sticking to a smaller brewery, and instead leverage the economies of scale you have in distribution and ingredients.  This is not too distant from the Craft Brewer's Alliance deal with AB. 
4. This is a typical big corp. play in a world of innovative entrepreneurs - think of Microsoft and Google gobbling up the Hotmails and YouTubes.  I think it demonstrates three things.  One, that the craft beer market is only going to get bigger and bigger.  Two, that there is a lot of great new breweries and brewers out there.  Three, that the big timers are getting in the market for real this time and they are not going away.
5. I don't think this is anything to fear, I think it means that craft brewing is going to grow that much faster.  Either AB-InBev leaves Goose Island alone in terms of creative license or it will fail.  In this modern era of new and innovative beers, no one company will every be able to create meaningful market power.

So in the end I think this is good for craft brewing and I don't see any reason to stop supporting Goose Island and their beer. In the future it'll either be good or it won't. If it is good, buy it.

An e-mailer asked me about this comment:

It is the lack of AB’s actions to do anything serious in this sector that speaks the greatest volumes. AB has more of everything that anyone has ever needed to move into the craft beer market. They have had the capital, the physical plant, the brewing expertise and the distribution chain to do this on their own for their entire existence, IF they truly wanted a card of genuinely high-quality beer in their product line. There is no company in the world with more opportunity to deliver on whatever intention they have to make great beer. There are but two things that have stopped them: bean counters and shareholders. They demand growth and increased profits. Growth they will get by buying decent breweries. Profit they will get by cheapening their product. That has been the A-B modus operandi for 50 years. The burden of proof to show that they are changing is on you, and not on the justifiably skeptical beer geeks.

To which I would respond with a reference to Jack Joyce's comment from a few years ago. Big corporate brewing doesn't understand how to market and grow a quality craft beer, but they do know how to buy a successful company. It remains to be seen if they will keep hands off, and in that will lie the true judgement. But the market is sophisticated now and I think it'll punish quickly any attempt to use the Goose Island brand to sell American Ale.  Hopefully Bud will see this and understand.  I don't think it is a forgone conclusion that they will dilute the Goose Island brand.