Why big distribution really matters and what smaller breweries can do about it

Southern Tier Celebrated their alliance with Victory
Brewing with this picture on their Facebook site

Jeff Alworth over at Beervana recently predicted that it's distribution that will drive beers future, using a somewhat alarming development to drive his point. He notes that Goose Island's Goose IPA's recent explosive growth rate of 260% , making it one as the top five nationally selling IPA's. Goose Island is owned by Anheuser-Busch InBev (A-B InBev), and accomplished this feat by largely leveraging there pre-existing distribution system, simply putting Goose IPA into the hands of more people than any smaller brewery could.

Personally, I find Goose IPA to be a rather underwhelming IPA compared to more national favorites like Sierra Nevada's Torpedo, Green Flash West Coast IPA, Deschutes Inversion IPA, and Lagunitas IPA. Go to rating sites like Rate Beer and BeerAdvocate and you'll find a similar story. Goose IPA rates well, but other IPA's with large, national distribution rate higher. It's hard to come to any other conclusion that Goose IPA's success is largely driven by the resources its corporate parent has to get it on more shelves in front of customers.

That's what makes makes all the recent "craft" brewery acquisitions by large corporate breweries a scary development for small regional breweries heavily dependent on retail sales. How can smaller breweries fight back? Well, they can join forces and get bigger. That's just what eastern regional breweries Victory Brewing and Southern Tier decided to do, effectively merging as Victory Brewing was brought into Southern Tier's parent company, Artisanal Brewing Ventures.  On their own, each brewery was a strong regional brand, with both ranking around 30th in size by the Brewers Association.  (Victory was a little bigger than Southern Tier before the merger.) Combined, they now rank as the 15th largest breweries craft brewery, with an annual capacity of 250,000 barrels a year.

Expect to see more of this. Brewing involves many economies of scale, whether in sourcing materials, investing in brewing, bottling and other production equipment, and of course, distribution. Brewery consolidation is inevitable and don't be surprised it the merger and acquisition frenzy of smaller breweries joining forces becomes every bit as intense as what the big corporations have been up to these days.
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Two weeks to the Napa Valley Marathon

The first mile of the Napa Valley Marathon
(Napa Valley Marathon photo)

I haven't written anything on running the Napa Valley Marathon since the personal, soul searching post I wrote last October.  Well, the big date is two weeks away. I'll do my best to spare you the gory details on all the training I've done. Going into this, the whole idea of running 26.2 miles was scary. With over 700 miles in the last four months, including six runs of 20 miles or more under my belt, let's just say this whole marathon thing doesn't scare me anymore.

The last four months of training produced elation, disappointment, and pure tedium. Going out the door at 6:00 am into a dark, drizzly morning to run 10 miles is not the way I prefer to start my day, but that's what I signed up for when I decided to do this thing. Some days, I surprised myself with how strongly I ran, making me feel nearly invincible.  Then there were those days where I struggled through the miles and after several furtive glances at my stop watch, I realized it was time to just turn the damn thing off, forget about time and just trudge my way back home. It's days like these that made me feel fragile.

They say it's not the destination, but the journey. Of course, what happens on race day is a big part of how the journey really turned out. Without boring you with time goals, I've had to dial back some rather ambitious expectations I had for this race that clearly aren't in the cards given my performance on some key runs.  But that's OK.  Three years, I couldn't even conceive of running a marathon.  A hip imbalance and some other bio-mechanical issues made any run over 12 miles a pretty dicey proposition. After four months of training, I can say that finishing a marathon at a pace that would challenge a lot of people of is definitely in my grasp. I just need make sure I'm prepared properly, run smartly with the necessary effort on race day. I'm not worried about have the desire necessary to run a good marathon. It's been with me the last four months, and it will be there again the morning of March 6th.

In many ways, that is a victory in and of itself.

Craft? Independent? Why is it so challenging to describe breweries these days?

There's been much passionate debate among something as seemingly meaningless as what is "craft" beer, and whether the term really means anything.  Some, like All About Beer editor John Holl, declared they would be doing their best to avoid the  term "craft beer", simply calling it "beer".  Now, a new semantic debate has reared its head on whether we should use the word "independent" to describe the small, local breweries that are independently owned, differentiating them from large corporate breweries that either attempt to mimic them ("Shocktop, Blue Moon, 10th and Blake) or smaller breweries the corporate giants have recently acquired (Goose Island, Saint Archer, Ballast Point).  Should we all just call it beer?

Well, maybe. But I think the growing difficulties in using a word like "craft", "independent" or simply "beer" these days shows the world of beer has changed a lot in the past decade and one-word descriptors are problematical.  Part of this seemingly pointless semantic debate is fueled by a growing fear that if consumers aren't educated that, for example, 10 Barrel Brewing is just a front owned global beer conglomerate A-B InBev, the bad guys will win. This is a genuine fear. Of course, stuff like that really doesn't matter to the other 99% of the US population which would just like to drink something they enjoy.  And like it or not, a very large fraction of the rest of the world is still perfectly happy drinking a lager produced by a huge global corporation, thank you very much.

Is one word really enough to describe a brewery these days?  Again, let's take 10 Barrel. Isn't "corporate owned regional brewery" a more accurate description than "non-independent" or "craft" (or "non-craft", depending on your point of view).  What about breweries that have a small taproom and maybe distribute a few kegs to taverns here and there?  Doesn't "small local brewery" describe these breweries better than "craft" or "independent".  Has Boulevard Brewing and Firestone-Walker lost their "craft" or "independent " status simply because they are owned by an international corporation, granted one that demonstrably cares about quality and delivers excellent beer?  Maybe "major national breweries" best describes these two. What about Lagunitas?  Is it "half independent" now that it's half owned by Heineken.  Or is Lagunitas better described as a "national brewery". Aren't large breweries fairly ubiquitous across America like  Sierra Nevada, Deschutes, and New Belgium really "national mass market breweries" rather than "craft" or "independent". I could go on and on.

Can we all just call it "beer"? Somehow, it doesn't feel quite feel right. Given the tremendous differences in scale and business practices at different breweries across the country, calling it all "beer" is like saying McDonald's and your local high end bistro sell "food".  Except that's basically what people say and both are normally called "restaurants".  Perhaps that's because fast food restaurants and high-end restaurants have mutually co-existed for decades. Since beer brewed by the millions of barrels global corporations, and breweries smaller than 100,000th of this size have only existed in parallel only in the last few years of human history, maybe we just haven't figured out the right words we're comfortable in using to describe them just yet.

Rambling Reviews 2.10.2016: New beers from 21st Amendment, 10 Barrel and Sierra Nevada

Time once again to ramble on a few new beers that crossed my path.  Here in the dead of a San Jose "winter", these new brews are decided on the lighter side.

Such as El Sully, described as a Mexican-style lager from 21st Amendment. Presumably named after 21st Amendment Brewmaster Shaun O'Sullivan, it's a damn good lager. New I realize most of you are probably not breathlessly awaiting the next new lager, but if you ask me, the simplicity of a well executed lager is a thing of beauty.  El Sully's decent malt heft, effervescent crispness with a light grassy hop bite is sometimes exactly what's needed in a beer, nothing more, nothing less. It's not a flavor explosion, but give me a basket of chips, a good salsa and a pint of El Sully and I'd be pretty happy.

Next up, Riding Solo Pale Ale from 10 Barrel Brewing, a single hop beer made with Comet hops which 10 Barrel sent me to sample. Riding Solo is the brain child of "Benny" who, according to a 10 Barrel press release "was on the fast track working for a large brewery, and then it all came crashing down. He made a bad choice, climbed the wrong building in Bend and found himself in the clink without a job."  Hmmmm...am I the only one finding the "large brewery" word choice rather ironic given 10 Barrel is part of A-B InBev's global beer empire? At any rate, we'll assume Benny paid his debt to society and is working hard to turn his life around. If he comes up with more beers like this, it won't take him too long. I enjoyed the unique flavor of this Pale Ale, with a subdued bitter grapefruit peel character with a herbal character similar to mint. It's one nice little Pale Ale.

Finally, we come to Otra Vez, a Gose with prickly pear cactus and grapefruit, released with much fanfare from Sierra Nevada. The Gose has emerged from near extinction to become the fastest growing craft beer style and this addition to Sierra Nevada's year 'round line-up has cemented the Gose's status status in the craft beer industry. Having enjoyed many a recent Gose, when I saw a six-pack of this in my local bottle shop, I snapped it up. Unfortunately, it left me wishing Sierra Nevada just brewed a regular old Gose without dumping a bunch of exotic fruit into it and dialing back the sourness. A more traditional Gose is a study of yin-yang balance between the interplay of salt and sour in a light wheat ale. Otra Vez is basically a light fruit ale with a little salt and nary any sourness. It's reasonably enjoyable but comes across as a missed opportunity, the fruit becoming a distraction rather than an enhancement of the Gose style. I'll even go so far as to say if there was ever such a thing as a mass market Gose, a profit driven modification of the style to better conform to more general tastes, it would taste something like this. Sorry, Otra Vez just isn't my idea of a Gose and I just wasn't turned on with what really was just a light fruity ale.

Which of these four breweries is the most local to the San Francisco Bay Area?

Here's a little test.  Which one of these four Northern California breweries is the most local to the San Francisco Bay Area? Is it:

a) Russian River Brewing
b) Lagunitas Brewing
c) Sierra Nevada Brewing
d) Anheuser-Busch InBev

Yes, it's meant to be a trick question. I argue d) Anheuser-Busch InBev (A-B InBev) is a very valid answer, and arguably the best answer. That's because A-B InBev has a Bay Area brewery right here in Fairfield. All the other beers from the other breweries travel much further to get to get into the hands of Bay Area beer drinkers. A-B InBev's employs more people in the Bay Area than any other brewery and while foreign owned, clearly brings more money into the Bay Area than any of these other breweries . True, not every A-B InBev beer is brewed in Fairfield, but if you live in the Bay Area and are drinking Bud, Bud Light, Shocktop, Busch, Busch Light, Keystone, Keystone Light, or Rolling Rock, your beer was made right here in Fairfield.

You could make a case for Russian River, but I consider Russian River really local to Santa Rosa/Sonoma County and not really the Bay Area. Despite Russian River's popularity in the Bay Area, it's remains a cultural import from the north. Petaluma's Lagunitas has become a national brand, with another brewery in the Chicago area and another pending in Southern California and 50% of Lagunitas is owned by Heineken, headquartered almost on the other side of the planet. Sierra Nevada headquartered in Chico is a 3+ hour drive from the Bay Area, and while it remains independent, has also emerged as a national brand and operates another brewery in North Carolina.  Do any of these three breweries really strike you as "local to the Bay Area".

Do I really consider A-B InBev the most local brewery to the Bay Area from the four on this list? Emotionally, I just can't bring myself to say yes, yet logically the argument makes a lot of sense. I'm not sure there's any right answer, just a little test to make you think about how slippery the concept of "local brewery" is these days.