Tuesday, March 28, 2017

AB InBev's Golden Road to Open a Brewery in Oakland - Can they successfully transplant into the Bay Area?

The East Bay Express article seemed ominous enough. Under the headline "Corporate Beer Overlords AB InBev to Open Golden Road 'Craft' Beer Garden in North Oakland", readers were warned  Golden Road Brewing filed permits with the city of Oakland to open a beer garden on 40th Street between Broadway and Manila Avenue. Golden Road became part of the growing empire of A-B InBev brands late 2015 when they were acquired by the multi-national brewing giant.  The short article ends with a quote from Tom McCormick of the California Craft Brewers Association claiming A-B InBev's takeover of breweries like Golden Road is the biggest threat to the craft beer industry. The article seems little more than a call to arms to be spread on social media to rally the masses against big evil corporate beer.

Fair enough. People should be informed what companies are behind beer brands like Golden Road to make informed choices. But the "big beer evil, local beer good" vibe to the article seems rather dated, especially given the tremendous transformation in the brewing industry in just the past few years and the triumphs of "craft" over large corporate breweries. Still, the message still has a lot of resonance given AB InBev is no longer a lumbering giant resorting to using talking frogs to sell tasteless lagers. In just the past couple years, AB InBev co-opted the craft beer playbook, buying up craft breweries to create a local presence in major markets, acquiring Seattle's Elysian, Oregon's 10 Barrel, and LA's Golden Road as part of that strategy on the West Coast.

Notice there are no Northern California breweries on that list. Over the past couple years, Elysian, 10 Barrel and Golden Road six-packs and tap handles popped up all over the Bay Area, and AB InBev has demonstrably built up a following in the Bay Area with their craft brands. But what's going on in Oakland is a step further than that. By building an actual Golden Road brewery in the Oakland, AB InBev is effectively attempting to establish themselves as a local Bay Area brewery, a plan as diabolical as it is smart. Of course, most people are in favor of things like new beer gardens to go to and new businesses which increase employment, raising these sort of positives about AB InBev's investment in Oakland makes sense, but seems like missing the point.

Of course, the big questions are: "Can AB InBev pull this off?" and "Could they be planning to create breweries in other Bay Area neighborhoods?"  Well, looking at some of the social media comments on the East Bay Express article, success for AB InBev seems like a good bet. While there's plenty of dissent like "Nope, not stepping foot on the premises", I noticed a surprisingly number of counterpoints. "I agree that this seems a great development for North Oakland" wrote one commentor.  AB InBev is muscling into the Bay Area to become a "local" brewery under their craft brand Golden Road, and the questions is not so much can they pull off this audacious feat, but how successful they'll be at it.

Monday, March 27, 2017

Rambling Reviews 3.27.2017: New releases from Magnolia, Sapporo, and Alpine

Enjoying a can of Kalifornia Kolsch
on my back patio
This edition of Rambling Reviews features beers from three breweries who successfully persuaded me to sing the praises of their beer to the millions of readers of this blog tuning in breathlessly to learn what beers they should be drinking. That's right, today's reviews are all about free beers sent to me in hopes I would write nice things about them.

We'll start with long time San Francisco brewery Magnolia Brewing, who want you to know their Kalifornia Kolsch and Proving Ground IPA can now be bought in cans, as they roll out their distribution in the San Francisco, Portland, and Los Angeles areas. That's right, no longer do you need to venture into the Upper Haight neighborhood full of stores selling bongs and Grateful Dead T-shirts to get a fresh pint of Magnolia. I've enjoyed a few pints of Kalifornia Kolsch and rather than go into a detailed flavor decomposition of the brew, let me just tell you this: It's a damn good Kolsch. As for Proving Ground IPA, Brewmaster Dave McLean describes it in a press release as "showcasing a hybrid approach to IPA, marrying an aggressive, American hop profile with an English malt backbone built around our favorite malt, Marris Otter." And indeed this brew has the wonderful solid biscuit-like malt and subdued, leafy, grass hop character one finds in a good English IPA, with some citrus in the background to remind you it comes from California. Magnolia's website claims this IPA checks in at 100 ibu's, but it seems more like 60 in this refreshingly well balanced brew. At any rate, it's not the usual West Coast hops and alcohol explosion. Instead, Proving Ground is a creative yet traditional dimension to the IPA style.

Then there's Sapporo Premium Black Lager. Now I've enjoyed Sapporo's regular Lager with sushi a few times, but it's never really been one of my "go-to" beers. Unfortunately, lot's of other people feel the same way about Sapporo, and they've faced declining sales in the US as the brand is largely limited to Asian restaurants. Sapporo Black Lager, released last fall, is an effort to reverse that trend, which explains in part why Sapporo touts their Black Lager for pairing with "traditional German, Asian, Cajun and Latin cuisines and crème brûlée". One thing going for it is lots of nice chocolate aromas. It's crisp with very deep roasted flavors on a broad spectrum from a little toasty up until the point burnt notes are detectable.  This good news it's mostly bitter chocolate flavors that dominate in the light brew. Nice beer, but will people choose to drink Sapporo Premium Black Lager with Wienerschnitzel or enchiladas? That seems like kind of a stretch.

Finally, we end with Alpine Beer Company's Windows Up IPA, which debuted just this year.  "I am especially excited for our newest IPA addition, Windows Up, to hit the market," excudes Alpine Head Brewer Shawn McIlhenny in a press release.  "It's got big hop aromatic and a really bold flavor profile with very little bitterness; this beer is a home run." Given that Alpine has made their reputation on big hoppy beers, it's no surprise this one is a real dank monster. The good news is there's plenty of complexity and depth to round out all danky, cannabis-ness character, with as some fruity apricot, light tart cherries and piney finish also in the mix. All those big flavors get plenty of support on a solid malt substrate. It's not just a beer crammed with a bunch of big flavors, it's an impressive composition of all those flavors.  Yes, I do believe Alpine hit one out of the park.

Monday, March 20, 2017

Update on Speakeasy: Back up and running but on life support

March 10th, Speakeasy Brewing stunned the Bay Area brewing world by abruptly announcing they were ceasing operations due insolvency. A week later, Speakeasy announced some good news for those rooting for brewery's rebirth when the brewery declared they were resuming operations under receivership. Earlier today, Speakeasy proudly tweeted out they were brewing up a batch of Big Daddy IPA.

I'm not a bankruptcy lawyer, but what I understand receivership to mean is that Speakeasy is allowed to continue to operate under the ownership of their creditor. That most likely is Union Bank, which funded an ambitious and apparently failed expansion to the tune of 7.5 million dollars in 2015. So while Speakeasy is back to brewing beer, their future is no longer in the hands of CEO and co-founder Forest Gray. Instead, it's largely up to whatever Union Bank thinks is the best way to recover due to them for their unpaid loan. So for the near term, Speakeasy will be running again as Union Bank allows the company to continue to brew again to help pay off their debts. 

But in the long term, I envision three likely scenarios, and two of them aren't going to make most Speakeasy fans happy.

1) Union Bank decides to shut down Speakeasy, and sells off all assets of Speakeasy (the brewing equipment, the tap room) to recover what they're owed on the loan. Speakeasy dies.

2) Union Bank decides to sell Speakeasy to a private investment group, mostly likely one that invests in breweries, wineries, and/or distilleries. This investment group takes over the brewery and gets it up and running again to get the best return on their investment.  Yay! Speakeasy lives!

3) Union Bank decides to sell Speakeasy to a large industrial brewery like Anheuser-Busch, MillerCoors, and some other large brewing concern eager to to pick up a strong Bay Area brand at a fire sale price. Speakeasy lives, but it becomes part of big, corporate industrial beer. I suspect for a lot of Speakeasy fans, becoming part of big beer is a decidedly unappealing outcome.

For those of you thinking "No way would Speakeasy ever sell out to Anheuser-Busch!", I'm afraid it's highly unlikely that Speakeasy has much say in the matter. Notice I started each possible scenario above with "Union Bank decides...". Assuming they are the major creditor, they effectively operate Speakeasy now and their priority is finding the best way to get the money Speakeasy owes them.

Whether someone like Anheuser-Busch would want to buy Speakeasy at this point is rather interesting to consider for brewing industry wonks like myself.  For what it's worth, Anheuser-Busch seems to have the West Coast covered pretty well with their acquisitions of Oregon's 10 Barrel, Seattle's Elysian, and Los Angeles's Golden Road. Do they think a Bay Area brewery will significantly improve their West Coast market share? In addition, Anheuser-Busch's parent company, ABInBev's recent acquisition attention seems to be overseas with recent brewery acquisitions in Europe. My guess is that Anheuser-Busch takes a pass on Speakeasy, a strong brand in Northern California, but comparatively unknown elsewhere. 

At any rate, I hope Speakeasy finds a way to survive and I continue to root for them.

Monday, March 13, 2017

Thoughts on the closure of Speakeasy Ales & Lagers

In a time when hundreds of new breweries open each year, long-time San Francisco brewery Speakeasy Ales and Lagers has abruptly announced its closure.

On their website and in social media, Speakeasy declared they were ceasing operations due to insolvency, stating "Difficulty securing capital investment and outstanding debt obligations led to this difficult and painful decision."  Speakeasy founder and CEO, Forest Gray, further elaborated, explaining "The brewery has worked with multiple investment banking groups and have had numerous meetings. One fact has become central to the process, and that is the company is financially insolvent and requires new capital to move forward. Whether that will happen is unclear, but I do hope the brewery and brand will persist."

Now back what seems eons ago, circa 2008, Speakeasy was one of about six breweries in San Francisco, and one of the most prominent members of the San Francisco Brewers Guild. Founded in 1997, six-packs and tap handles featuring Speakeasy's Roaring 20's Mafia-themed branding with its piercing eyes was pretty ubiquitous wherever beer was sold in the Bay Area.  Their beer, while not always excellent, was pretty solid, and Bay Area beer geeks have plenty of fond memories surrounding Speakeasy. I was a fan of their Prohibition Ale (a 2013 GABF medal winner) and their Payback Porter ranked as one of all time best porters I've ever had. Given all the changes in beer over the last decade, Speakeasy was a rock of a brewery in Northern California and its apparent passing is a real death in the Bay Area beer family.

It's unlikely Speakeasy's downfall was about the beer. As Jeff Alworth noted on his Beervana blog, Speakeasy embarked on an ambitious expansion in 2015, to increase their capacity five fold from 15,000 to 95,000 barrels a year, at an estimated cost of 7.5 million dollars. It's a pretty safe bet those plans didn't go well. And looking back, given such an increasingly crowded and competitive beer market, it's a little hard to figure out why Speakeasy thought they could simply march into new territories and unload tens of thousands of barrels of beer in already saturated craft beer markets full of strong breweries. More than one brewery has told me finding new markets is getting to be a real challenge.

Now virtually every brewery I've been in contact with in one form or another is investing in some level of expansion. Usually it's something like a new 7 or 10 barrel system, expansion plans into an adjoining county, or embarking on a modest packaging operation to expand their distribution footprint.  Whatever their plans entail, they might result in doubling annual beer sales in a year or two if successful. Speakeasy comparatively went "all in" on their expansion and appears to have paid the price.

Does the closure of Speakeasy signal an ominous trend in the industry? It's a bad idea to predict a trend on a single data point, so I won't do that. What I will say is this is what a market correction looks like. Multiple firms in the same industry all expand at the same time to capture a growing market which cannot grow fast enough to absorb all the excess inventory. Weaker or poorly positioned firms are unable to sell enough to pay off their loans, and go out of business. Only time will tell if Speakeasy is an outlier that just poorly executed their expansion or is the proverbial canary in the coal mine.

Could an investor or another brewery come to Speakeasy's rescue?  Hard to tell, since we don't know what the problems actually are. Given that craft beer enjoys a pretty hot investment climate and they still couldn't do a deal behind closed doors, it's not looking good that Speakeasy is going to find a good suitor.  Especially now after they've told the world how desperate they are.

But enough about the beer industry crystal ball gazing. Speakeasy looks to be leaving us and I'm sad to see them go.

This may have been my last taste of
Speakeasy Big Daddy IPA

Wednesday, March 8, 2017

Small victory at the San Jose 408k

The year 2016 was memorable for so many reasons. Running-wise, it was a year I hit some running highs, but plenty of running lows in the form of injuries. As soon as my injured left hip recovered, my right hip would start hurting. For 2017, I've battled the flu a couple times, but simply running around relatively pain free has been a victory in itself.  The San Jose 408k, held last Sunday, was a chance to start the year to see just where I was at.

Named for San Jose's area code and 8 kilometers long, the point to point course starts at the SAP Center just west of downtown San Jose and finishes at the upscale Santana Row mall. A heavy overnight rain threatened to last into the morning and drench the race, but it died down once the sun came out, leaving the course under undercast skies and ideal running conditions. My modest goal entering the race was to hit 7:00 per mile pace, or 35:00 for the 4.97 mile course.

This goal was complicated by the fact that my GPS watch had some problem, or wasn't charged right, or something. It had trouble reaching the satellites and started flashing all sorts of warning lights and messages which I could read with my feeble eyes as I desperately stared down at it standing at the starting line. Whatever problems my watch was having, never worked them out by the time the race started and so I race the whole race having no idea of my time until the finish.

It was one of those run where I fought pretty hard to keep pace, but could never find a higher gear.  I just kept working over the course, until I turned down to down the Santana Row mall way, looked up and saw the clock ticking away at 33 minutes and something. Finishing with whatever sprint I could muster, I crossed the finish line at 34:13, way under my goal, or so I thought. Runners finishing next to me remarked their GPS watches had the race distance at 4.9 miles. Uh-oh. GPS watches typically overestimate distance by about 2% meaning the course was short. I'll just say I met my goal of 35:00 for just under 5 miles, and leave it there.

Next race is The Great Race in Los Gatos April 30th.

Tuesday, March 7, 2017

Rambling Reviews 3.7.2017 : Brews from Santa Clara Valley, Left Coast, and Karl Stauss

Saratoga Gap Scotch Ale at Taplands
It's been awhile since I last rambled on beers. A bunch of busy work weeks will do that. Still, I've been able to squeeze in a few beers along the way, so let's ramble about three of them.

I was able drop by Santa Clara's Taplands hosting a Santa Clara Valley Brewing (SCVB) tap take-over as part of SF Beer Week. There I enjoyed SCVB's Saratoga Gap Scotch Ale, full of toffee, some smokiness, and a little sweetness. There's also some noticeable fruit character to the brew, and SCVB Brand Manager Peter Estaniel was on hand for the evening and as we chatted about the beer, he pointed out some of it's similarities to SCVB's fine New Almaden Imperial Red Ale. All the flavors come together rather nicely and at 9.6% abv, you'll want to sip it slowly.
Left Coast's Voodoo Stout on the floor
of an LED Lighting trade show

After that evening at Taplands, work started getting pretty intense and blogging came to pretty much a complete stand still. At an LED Lighting Trade Show at the Anaheim Convention Center, I enjoyed a Voodoo Stout from San Clemente's Left Coast Brewing, albeit in a plastic cup, poured at the late hour of the trade show. It's a rather full bodied stout with a creamy consistency with some sweetness and lots of milk chocolate character. Nice way to end a
trade show and I can only imagine how much better it would taste with a proper glass.

Trudging back to the hotel after a long day at the trade show, I made my way to the empty hotel bar. For a cheap hotel mostly catering to tourists going to Disneyland, they actually had a pretty decent selection for the eight taps they had set up. I went with Queen of Tarts from Karl Strauss and what a great choice that turned out to be. Aged in wood with Michigan tart cherries, the cherries and light sourness played well off the underlying brown ale. A pretty amazing beer to find in an dingy, empty hotel bar. Further proof that you can find great beer anywhere.
Karl Strauss Queen of Tarts, all alone in
quiet hotel bar in Anaheim

Friday, March 3, 2017

The Session #121: A Brief Ode to Bocks, Past and Present

This month's Session, host by John Abernathy over at The Brew Site is on Bock styles, which seems appropriate for March when Bock beers had traditionally rolled out.

In fact, Bock is the very first beer style I became aware of back when I grew up in the small Ohio town of Bowling Green in the 70's. When March rolled around, my dad would eagerly bring home a six-pack of Rolling Rock Bock, a departure his usual Rolling Rock's flagship Lager. Except back then, it wasn't called a Lager, it was just "beer". One time I asked him "What's Bock beer?" Dad went into this explanation about breweries traditionally cleaning their tanks in the spring and brewing Bock beer to celebrate the occasion. I suspect Rolling Rock Bock was basically the flagship Lager with the grain bill tweaked a bit and some caramel coloring added. That was Bock beer in America just before the brewing revolution started taking off in the 80's.

A Vintage Rolling Rock Bock Neon Sign

Thirty years later, I discovered craft beer. One of my favorite spring seasonals was Anchor Brewing's Bock.  Maybe I liked the deep roasted chocolate and caramel flavors, or maybe it reminded me of those simpler times in the 70's, learning about the mysterious Rolling Rock Bock. Then, in 2014, Anchor decided it would no longer release their Bock each spring, instead focusing on the more popular IPA's and Saisson styles. A year later after that announcement, I caught up with long-time Anchor Brewmaster Mark Carpenter at a brewery event and we reminisced about Anchor Bock. I jokingly tried to talk him into bringing back the Bock. I got the distinct feeling Carpenter didn't miss it all that much. At any rate, it was clear I shouldn't get my hopes up that Anchor Bock was coming back.  And it hasn't.

Anchor Brewmaster Mark Carpenter
I guess Bock beers are pretty old school these days. In an era where "craft beer" and "IPA's" are becoming synonymous the way "beer" and "light Lager" once was, there just doesn't seem to be a lot of enthusiasm from most breweries to brew Bocks. Maybe that's why one of my favorite go-to beers is Blonde Bock from Gordon-Biersch, a brewery that's been a long time rock in an ever changing beer landscape. Brewmaster Dan Gordon learned to brew at the Technical University in Munich in the 80's and the brewery focuses solely on Germanic styles. Their Blonde Bock is one of those highly underrated beers, a light thirst-quenching brew with some character to it, with it's bready, yeasty character with very faint citrus notes and a good dose of sweetness. No, this isn't my father's Bock Beer. But thankfully, it should be around for a good long time.

Stacks and stacks of Gordon-Biersch Blonde Bock, ready to ship