Beervana Podcast #3: The Italian Craft Beer Scene

Beervana Podcast #2: The Rise of American Craft Lagers

Beer Taxes by State

The Tax Foundation has produced another Beer Tax Map to show taxes on beer per state. 

Oregon ranks quite low and has a big industry (by number of businesses at least) so I imagine that the causality runs both ways.  I enjoy looking at the South and wondering if the high taxes on alcohol were fundamental in creating the black market that led to the moonshiners (my knowledge of whom is largely from the "Dukes of Hazard") .

Pod

Jeff Alworth and I have decided to have a little go at podcasting.  Might not last long, but as I am interested in the economics of the brewing industry and he has loads of knowledge about beer and brewing we decided to collaborate on a blog wherein he and I discuss brewing, the economics of beer and beer itself.

We are rank amateurs but we gave it a go.  Let us know what you think.

The first episode is on parti-gyle brewing.

Cheers!

There Will Be Blood

Dave Infante has written the best piece on the evolution of craft beer market I have read in quite some time (and not just because he quotes me).  I get asked all the time if I think there is a craft beer bubble and my answer is always no, but that I think the market is maturing to a point where price competition is coming and it will put a lot of pressure on small-scale breweries.  I expect that we will see a fair number of breweries closing but because of this dynamic, not because of a bubble. 

Go and check it out. 

A Visit to Growlers Hawthorne and the Wonder of Digital Pour

I found myself at Growlers on Hawthorne yesterday at the invitation of Jim Hillman, the owner, and came away impressed by the business in general, but particularly impressed by the Digital Pour system they have installed.  The place is simple and elegant: you come in, choose from about 40 different beers and ciders (and a separate kamboucha station that even includes craft root beer), fill your growler and off you go. You can sample anything you want  They even have parking right in the heart of Hawthorne.  They have a cute bike like painted on the floor from door to door inviting you to roll your bike right on up to the filling station so you don't have to lock it up outside - brilliant.  A growler fill starts with at CO2 purge and then a fill using a freshly sterilized hose each time, as good as it gets. 

But what really caught my eye was the Digital Pour system for displaying the beers.  As you can see above the information includes a logo (which allows Growlers to avoid tap handles and yet still let customers identify the brewer by logo), the brewery name, the beer name, a description of the beer, the place of origin, ABV, IBU and an icon that gives the customer an idea of the SRM or color of the beer and then the price of a growler fill for that beer.  Finally, there is an icon that describes the state of the keg - how much beer is left.  This information is uploaded in real time to their - wait for it - iTunes App, so you know exactly what choices your have when you go in (or if you need to hurry before a keg blows). The display also have a twitter feed that displays any tweets that mentions the store and information about what is on deck - beers about to be put on.

Turns out Digital Pour is a Portland company, as you might expect, and I have a feeling we will be seeing a LOT more Digital Pour displays around town very soon.


In the meantime, I recommend you check out Growlers.

Why AB is Buying Up Craft Breweries...and Why You Shouldn't Be Too Concerned.

News today that Anheuser-Busch InBev NV has agreed to buy Seattle's Elysian Brewing Company has, once again, rattled the craft brewing community as it follwos closely on the heels of the acquisition of 10 Barrel and, a couple of years ago, Goose Island.

This has arisen me from my stupor and prompted me to do an actual blog post which, ironically, follows my remembrance of Jack Joyce with whom I once had an extremely interesting conversation about the big breweries and craft beer.  The crux of the conversation was this: macro brewers could, if they wanted, brew outstanding craft beer: they have ultra-modern brewhouses, amazing brewing talent, access to the very best ingredients, fantastic distribution networks and the resources to invest in craft beer.  So why don't they?

Jack's answer was that their corporate structure, all centered around mass sales was not conducive to growing a new beer or brand.  The corporate culture insists on clear sales goals and to displace Bud Light on shelves and tap handles any new beer had better taking off flying.  There is no patience for slowly establishing a beer or brand.  Not to say their efforts have not been somewhat successful - Blue Moon and Shock Top are two moderate success stories but ones that have not really broken into the craft market.

So what does acquisition do that in-house cultivation doesn't?  First and foremost it solves the impatience problem.  By buying an established and respected brand you already have a proven winner to show the bean-counters and share holders. 

Which is why I am not worried about this that much.  They have learned that they cannot replicate craft brewing within the macro brewing corporate structure.  This has been a lesson that has taken some time to learn but I think has sunk in.  I think the attitude is, therefore, not to try and bring these craft brewing companies into the corporate fold, but to let the operate independently - to continue to do what they do and help them grow with capital infusions and improved distribution.  If you can't beat them, join them (or have them join you).

I don't know how long the corporate restraint will last, but it is quite possible that it will continue to last for a long time if the Goose Island experience is any guide.

Time will tell, but for now, I personally have no qualms reaching for a 10 Barrel or Elysian beer.

P.S. My apologies for the lack of blogging - it has been a combination of: becoming chair of the econ department, writing an economics textbook and a major family health event that has caused a lot of adjustment and changes (all is well - no worries).