Oregon Beer Notes: Widmer O'Ryely IPA, Ninkasi Problems?, Winter Beers

Some beer notes from Oregon:

One: Widmer. Since I have talked about and polled about the others it behooves me to mention the latest Rotator IPA from Widmer (well, okay not exactly the latest, Spiced IPA is now out, but most store shelves are stocked with O'Ryely).  I did not expect to like O'Ryely as my palate and rye do not often get along.  I am an outlier - beer geeks rave about Oakshire's Line Dry Rye for example but I find it unpleasantly soapy on my tongue.  However the rye in this IPA is very subtle and I quite liked the hint of spice it gave the beer which was a very nice compliment to the Nelson Sauvin hops.  Nelson Sauvin divide people, at Thornbridge in England they brew a single hopped Nelson Sauvin beer, Kipling, that is now one of my all time favorites (if you ever have a chance to try it fresh on cask...do so), but the head brewer there dislikes the hops.  Interestingly, as used in O'Ryely, they strike me as more Citra like than NS.  In fact, if I hadn't known, that's what I would have guessed, it tases very citrusy.  I associate NS with more tropical flavor like passion fruit.  I would love to try this one along side the X-114 as they both give off that great citrus note and I can't really compare from memory (I am far too old).  But whatever the end result, this beer rocks! It seems a perfect IPA for the season, slightly darker and spicier than X-114 but with that characteristic NW juicy hop note that I adore.

As an aside, I bought some Nelson Sauvin hops from Steinbarts the other day and look forward to trying to brew a beer similar to Thornbridge's Kipling.  Belmont Station offers a number of Thornbridge beers but as of yet, not Kipling.  I hope that changes soon. 

Two: Ninkasi. I have had a few bottles lately of quite possibly my favorite beer of all, Ninkasi's Total Domination, that have been bad.  In fact I bought a sixer of TD and the first three bottles were fine, but after a couple of weeks in the fridge the last three were almost undrinkable.  Fearful that I was imagining it all I had two other people try and confirm the bracingly bitter astringent note.  Ah well, my bad for waiting to long to drink it I thought.  But then I bought a fresh bomber a couple of weeks later with precisely the same problem.  I suspect oxidization and maybe there is a problem with the new(-ish) bottling line but it wasn't an obvious oxidization flavor.  No one else I have talked to has experienced this but then I don't talk to people that often.  So I wonder if this was just a one-off if if there has been a systematic problem.  I can't tell you how excited I get by TD and how disappointing it is to get a bad bottle.  I don't care about the money, I just hope there isn't a problem at the mother ship. So, has anyone else had a bad bottle of TD lately or am I just unlucky?

Three: Winter Beers. I had an exchange with Bill from It's Pub Night and the Full Sail folks on Twitter about my struggle to find Wreck the Halls in the store.  I still claim it was hard to find, but they also reminded me that it came out in September.  I also has a sixer of Jubelale that was unpleasantly alcoholic and raw in the first bottle so I put the rest away in the cellar and pulled them out about six weeks later where they had substantially improved: softened and rounded out.  So there are two problems, winter beers should not come out in September and it is being put out too early.  I know it is expensive to store, but breweries should care about the product that is consumed and let it sit for a while if it need more conditioning.  Also, beers like Wreck the Halls, which are balanced and ready to go from the start should come out in November not September.  I have spoken. 

As an aside I had some Wreck the Halls on cask at the Pilsner Room which was great, but they also had ESB on tap.  Now, c'mon, if you are going to serve only one on cask, it really should be the ESB!

Sierra Nevada: Economies of Scale vs. Transportation Costs

The announcement yesterday that Sierra Nevada has chosen a site outside Asheville, NC to build a new brewery came as no surprise - they have been looking for a long time for the right place to expand.  Other western breweries are also reportedly looking to follow suit, most notably New Belgium, and it has also long been rumored that Deschutes have their sights set on an east-coast brewery as well. 

Which of course all begs the question, will these breweries loose some of their sense of craftiness - Sierra Nevada that is not brewed in Chico?!?  I hope not, but in a country which has been defined beer-wise by Budweiser and their many regional breweries, I have some trepidation.  I hope the punters will still respect Sierra Nevada in the morning.  It will help to provide the east coast brewery with a lot of autonomy: letting their brewers do lots of specialties and one-offs that define the east coast brewery as distinct from the mother ship. 

But that's not what interests me most as an economist, what interests me most is the economies of scale vs. the transportation costs. As breweries expand there is always a tension between growing big an one site and capturing the considerable economies of scale and getting close to customers thereby reducing transportation costs.  In international economics this is known as the proximity-concentration trade off and some interesting empirical work has been done to understand where the tipping points are.  It is interesting, then, to see where that tension resolves itself in craft beer.  Sierra Nevada is up to an annual production of around 800,000 barrels, New Belgium is up to about 600,000 barrels annually, but Deschutes is still less than 250,000.

Anecdotally it would appear to make sense for breweries to grow pretty darn big on one site before opening a second.  Of course, a big factor is how much you currently sell and expect to sell in the future to east coast customers. Also factoring into the equation is the desire to reduce the carbon footprint of the business.  Beer is heavy and bulky and it take a lot of energy to get it from Chico California to New York.  But this gives us some idea of where the tipping point is 600,000 to 800,000 barrels a year.  [As a side note, the Tremblay's in my department have estimates that the economies of scale in brewing accumulate until about 2.5 million barrels a year]

Congratulations to Sierra Nevada!  One of my first entries into craft brewing was Sierra Nevada Pale (as it was for so many others) and it remains perhaps the ur-classic American craft beer.  Founder Ken Grossman is also known as one of the truly good guys in a business with a lot of them and has opened a lot of doors for future craft brewers.  Cheers.

Your Chance to Kickstart More Beer in Portland!

The Oregonian has the story of a new brewpub, "Stickmen Brewery & Skewery" hoping to open in Lake Oswego in the former Oswego Lake House: a great building and location right on the lake.  This is cool: I am always excited to see a new brewery open in Oregon, especially one in prime spots to relax and enjoy the Oregon summers.  And Portland's west side is a wasteland for breweries so creating some balance is good for Beervana's feng shui.

But as an economist I am especially intrigued by the fact that they are raising capital through crowd-source funding.  They have a Kickstarter page where they are hoping to raise $30,000.  This begs an immediate question: why?  Fort the owners, $30,000 is small potatoes for a brewpub whose price tags usually run about $500,000 with a brewhouse and all.  For the donors, all you get for your contribution is some schwag. So, is this just a gimmick?  Can a Kickstarter campaign mostly be about publicity?  Perhaps.  But what is most plausible in my opinion is that Kickstarter is in some ways free money.  People contribute but do not invest.  You get nothing but a sticker or t-shirt and the warm glow of feeling like you helped make the project happen.  They say the money will go toward the purchase of brite tanks and fermenters.  Whatever floats you boat, I say. 

I, for one, am happy to support the endeavor with my custom if the beer and food are good, but if it is a good business plan, I'll let the banking system handle the financing.  Still, I wish them luck and hope they get their $30,000 because there are probably plenty of people who, for $5 or $10 would feel good about helping buy a brite tank... I suppose.

Given the location in Lake Oswego, I predict a lack of the hipster in-crowd that populates many of Portland's brew pubs but it could become a gathering place for Lake O folks, which is always a nice aspect of pubs in general.  If only the LO streetcar hadn't been shelved they might have even drawn a hipster or three.

Bad News For New York Area Imported Beer Consumers

Photo Credit: Michael Nagle for The New York Times

From The New York Times:

Customs officials intend to shut down their inspection station at the Red Hook terminal; the closing would force companies to unload thousands of containers a year and deliver the cargo by truck to another terminal equipped with a customs inspection station, either in New Jersey or on Staten Island.

...the Red Hook Container Terminal also accepts 15 percent of all beer heading into the region, which means prices could rise about 75 cents on every 12-pack.

“Basically you’re just taking beer on a ride to Staten Island, and right back from where it came from,” said Greg Brayman, vice president of Phoenix Beverages, which receives 90 40-foot containers of beer like Heineken and Red Stripe each week at Red Hook. “It’s a huge deal.”

Bah, what do you want with Heineken and Red Stripe? There are plenty of quality domestics that don't have to go through customs!

Brazil, Beer and Futbol

Three of my big passions: Brazil, Beer and Soccer, all come together in one new story:

Beer must be sold at all venues hosting matches in the 2014 World Cup in Brazil, football's world governing body, Fifa, has insisted.

Fifa General Secretary Jerome Valcke said the right to sell beer must be enshrined in a World Cup law the Brazilian Congress is considering.

Alcoholic drinks are currently banned at Brazilian stadiums and the country's health minister has urged Congress to maintain the ban in the new law.

Brewer Budweiser is a big Fifa sponsor.

Mr Valcke is visiting Brazil to press for progress on the much-delayed World Cup law.

'Won't negotiate'
Fifa has become frustrated because voting on the legislation has been held up in Congress by the dispute over alcohol sales.

The Brazilian government has also failed to resolve differences with Fifa over cut-price tickets for students and senior citizens, and demands for sponsors of the World Cup to have their trademarks protected.

In remarks to journalists in Rio de Janeiro, Mr Valcke sounded frustrated with Brazilian officials.

"Alcoholic drinks are part of the Fifa World Cup, so we're going to have them. Excuse me if I sound a bit arrogant but that's something we won't negotiate," he said.

"The fact that we have the right to sell beer has to be a part of the law."

Alcohol was banned at Brazilian football matches in 2003 as part of attempts to tackle violence between rival football fans.

Greene King and A Brief History of British Beer: Part 7

In the far distance is Greene King's new bottling plant - and yes, that massive pipe bridge carries beer all the way from the brewery to the bottling plant making a stop along the way at the kegging plant.

Which leads us, finally, back to Bury St Edmonds and Greene King. One thing that becomes evident when you are on the roof of the tower brewery is just how vast the Greene King estate really is. Tunnels under roads carry pipes that connect the brewery to the kegging and bottling lines. A new modern building, built on piles to withstand the annual floods that occur in the river on which it sits, houses an ultra modern bottling operation. Greene King trucks Belhaven beer down from Scotland (the rumor that Greene King brews Belhaven in Bury is false: Belhaven is all Scottish born and bred) to be bottled in Bury and then those bottles are trucked far and wide. But though it is vast and impressive, they still brew less beer than Sierra Nevada.

5X in the oak Vat #1.  Greene King has some room for another on but they haven't decided if they are going to add another.

And though they still get criticized for being commercial, big and lacking in character, not many breweries have the gumption to brew a special beer, 5X, that sits in giant oak vats for two whole years taking up space and burning profit margins. But Greene King does and is considering doing even more.

To stand on the roof and look out over the impressive Green King empire (from the roof you can even see a Greene King pub close by) one can’t help but feel gratified that the future of real British cask ale is bright. As a style that Americans have not adopted with any gusto, this part of world brewing heritage lives on in Bury, Chiswick, Southwold, Burton, Tadcaster and other British heritage brewing sites.

Greene King Head Brewer John Bexon in front of one of the old coppers.

Descending through the tower brewery (and notice how far the malt is carried by a pipe from the storage building in the distance and up four stories to the milling room) and see equipment starting with old de-stoners and mills and down to the new boiling kettles one has the sense that you are seeing both the past and future of British brewing.

Greene King and A Brief History of British Beer: Part 6

Thornbridge in the Peaks District

But there is another parallel trend in British craft brewing - one that takes it cues from the American craft beer renaissance. The existence of both makes the ‘craft’ beer scene in Britain a tale of two distinct types: the traditional cask ale producers that are enjoying a resurgence in popularity and the new, typically young iconoclasts that are brewing much stronger, much more hop infused beer that are also starting to gain popularity in Britain.

Dark Star Brewery in Sussex - They are all Dead Hop Heads

The perseverance of the traditional ale brewers probably has a lot to do with the tied pub tradition in Britain. It was only this year that UK customers began to consume more beer at home than in a pub. So the pub network is vital for the sales of beer and maintaining that network has been crucial to the heritage brewers or else they might have gone the way of their American counterparts and died off completely. But until the Beer Orders, access to pub outlets was severely restricted by the preponderance of tied houses. So while good for helping heritage brewers survive, this made it very hard for small, American style, upstart craft brewers to find a market.

As close to an American-style brewpub as I saw - Burton Bridge in Burton upon Trent is exceptional

But that is slowly changing. The renewed interest in cask ale has created openings for smaller, innovative breweries to get into pubs that want to supply the new demand. Brewers like Thornbridge are shattering the mold of low alcohol session beers and surprising punters with robust flavors all the while sticking to cask ales to gain a foothold in British Pubs. [This is not true of all new craft brewers, Dark Star in Sussex, for example, kegs almost all of their beer]. The off trade, beer sold in shops and supermarkets, is still difficult for craft brewers and heritage brewers alike. Green King alone has the scale to be able to turn a profit out of supermarket sales, where beer is often discounted heavily and treated as a loss-leader. Specialty shops are still rare in Britain where craft beer is still seen as simply beer: a working-class drink without the sophistication of wine.

Even in the capital - Meatime in Greenwich

So craft brewers that have had some success are quickly turning too pub ownership. Thornbridge has four, Meantime in Greenwich has two and Marble in Manchester has three. In some respects, then, this a bit akin to US brewpubs - though the idea of a brewpub in Britain is still carries with it the old rural agricultural smell – so most pubs do not have breweries on-site.

Marble in Manchester seemed to have the most buzz among beer geeks in Britain

The heritage brewers have, in general, recognized that they and the new craft brewers are all puling in the same direction. What is good for craft brewers is good for heritage brewers as both are generally focusing on ales and on cask, but even in keg form, craft beer is helping change the perception of beer in Britain. This understanding is turning into outright cooperation. John Keeling, Head Brewer of Fullers in London, for example, has teamed up with Marble in Manchester to brew a collaborative beer. And more tied pubs are bringing in guest beers from the craft sector.