Travel Guru Rick Steves recently did a radio show/podcast on beer in which he discussed European beer with  tour guide friends from Belgium, Ireland, England and Denmark. The guests weren’t beer enthusiasts as we know them in the US craft beer scene, but you got a sense of their affection  for the stuff and the everyday part it played in their lives.

As each guest spoke, he pointed out the territorialism inherent, these small countries’ beer culture. The Irish dude explained you’d never say “Slainte” in a Belfast pub, that in protestant pubs you’d be more likely to find Tennant’s than Guinness, and that proud Corkers would more likely drink a Murphy’s.  The American resident of Copenhagen pointed out that loyalty to a beer ran fiercely to Tuborg or Carlsberg, despite the latter owning the former.

We used to have that here in the USA. In her excellent book, “Ambitious Brew, the Story of American Beer,” Historian Maureen Ogle talks about German immigrant brewers setting up shop in the Midwest and competing locally for the hearts and taste buds of particular ethnic enclaves. She points out that, prior to the arrival of the tumultuous 20th century, only a few of the largest breweries attempted to ship to distant markets.

These days, we have those artisan conditions again, but absent is that that territorial culture, that ‘our stuff is the best’ mentality still prevalent in Europe. The modern American craft beer market disdains consumer loyalty.

The reason why seems obvious: the insane growth rate of the American market means breweries keep finding fresh customers. Distribution gets the beers of even small-batch small-town brewers to places where that growth takes place. At this point, craft breweries have the luxury of competing for the new guy, or luring a customer back to their particular tap, with gimmicky marketing, extreme beer line extensions, and flashy stunts.They can be content with letting beer drinkers revel in variety because the new customer stream is so strong.

So what happens when growth slows? How will hundreds of craft breweries compete for drinkers in a saturated market? When the chips are down, what are the modern beer luminaries doing to ensure future customer loyalty?

The principal way, of course, is to make great beer. Most small American breweries do this. But that raises the bar pretty high. At the end of the day, is an amazing Stone IPA really all that different from an amazing Dogfish Head 60 minute IPA? How do you keep your drinkers when the chips are down?

I’m not condemning anyone, or even suggestiing shortsightedness on the part of the brewers. Certainly business-savvy folks in this Wild West industry consider this problem. A bigger concern is that the industry created a type of core customer that shuns brand loyalty in favor of wild adventure.

From a beer lover’s point of view, that’s fantastic. I just wonder how things will turn out down the line.

-Mark

Last night, I shared some bar space with the local Harpoon Rep. Dude is brand new in the business, very personable, and obviously passionate about his job and his beer.

He mentioned we’d be seeing more Harpoon beer in Rochester, which is a good thing (especially when it’s the upcoming Harpoon Oyster Stout).  But a glance up at the at the taps begged the question, ‘where are you going to put this beer?’

No pub worth its suds leaves lines open, just hanging there, waiting for the perfect keg to roll itself up the handicapped-accessible ramp. Casual customers may not always notice the procession of sales representatives from distributors and breweries that prevent proprietors from enjoying leisurely games of solitaire during the earler hours of the day, and convincing bar management to allocate tap space is one of those beer rep responsibilities that resembles actual work.

This is tough for the America’s big beers, who fight over a stagnant market share. A Budweiser tap can stay a Bud tap for years, whereas pubs that stake their reputations on craft beer will rotate their taplines frequeently, ensuring that customers get variety and many breweries get a point of sale.

But the craft beer industry now commands 6% of the total beer market. The stakes are higher, and the competitors more moneyed, than ever before. Suddenly, when the rep from a brewery such as Harpoon wants to push up his volume in a market, he’s not facing a couple local companies selling beer out of a conversion van. He gets to push his way in among Stone, Victory, Dogfish Head,  the best of the best, nationwide.

At this point in time, screwing on those big name indie brewers’ taphandles does more than sell some pints to enthusiasts. Those names, those signs in the window, solidify a pub’s reputation as a place to get great beer. And there are a fair amount of big name breweries now.

Are we reaching a saturation point, now that every megacraft brewer, from every corner of the country, so frequently rubs up against all its competitors? Are we getting to a point where the venture capital firms funding some of these ventures see a business case for buying each other up?

I don’t like things to go this way, but everything I see points to a consolidation of the indie beer industry. It’s hard to definitively say that the customer would suffer, should that take place, since most of the large indie brewers passionately focus on high product quality, but it would definitely make the American beer landscape a bit less diverse.

-Mark

The Buffalo News Did a piece on the tribluations of Flying Bison Brewing. I really hope I’m not seeing the end times for one of my favorite New York State breweries. Since my first taste of their Oktoberfest in 1994, Flying Bison has had me hooked. Their take on traditional style has always been rock solid.

Some would say too traditional and too solid. I’ve read plenty of comments from beer afficianados that a lack of extreme beer, or beer made with exotic ingredients, or high-end beer marketing diminished FB’s ability to stand out, especially with Southern Tier, a brewery that’s all about adventurous beer, is right next door.

I’m not buying that. Buffalo has always been a blue-collar town, and its enclaves of craft beer are few and far between compared to my neighboring city. It seems like a straight financial matter, and it sucks that, although revenues were on the increase, FB wasn’t able to grow its sales quickly enough to outpace rising ingredient prices.

Many small brewers ride that line. People just assume you’re making liquid gold because of the craft beer category’s explosive growth. But the competition that growth brings, coupled with supply prices that rise with demand, means some guys ride razor-thin margins.

I wish Flying Bison the best, and hope F.X. Matt, or any other purchaser, does the right thing for their community, restructuring the brewery to stay and brew beer in Buffalo New York. I think there’s viable business there.

Buffalo’s a blue collar town. Tim Herzog understands that, and he’s one of the few brewers that’s not afraid to make craft beer as a blue collar beverage, geared more to sipping after a hard day’s work than pairing with your Chilean sea bass. That mentality reminds us all of what beer used to be, and what it still fundamentally is.

Thank you Tim Herzog.

-Mark

It kinda goes to show what a crummy business analyst I am.

When KPS took High Falls Brewing Company, I predicted the end of Genesee and Genny light, and the cancellation of the entire Dundee line except Honey Brown, with KPS using Labatt to cover their mass-market light lager in the premium category and Genny Cream Ale positioned as a regional specialty/heritage beer a’ la Yuengling.

The new company, North American Breweries, has not taken that approach. They’ve thrown tons of marketing muscle behind Dundee, with a huge rollout of Dundee Oktoberfest (a pretty good American take on the style) and a rollout of the new Dundee IPA that begins tonight.

I still don’t see how Genesee Beer can compete withthe Budweisers and Millers of the world, but NAB has certainly gotten those white cans into bars all over Rochester. I’m also seeing Genny regular, my preferred mainstream-style American lager, on tap handles with increasing frequency, indicating a push to preserve an iconic brand. They’re doing this, however, by chopping the price. Basically, Genny and Genny Light are now the ramen noodles of the beer world. Like they say, lose a little on every sale, but make up for it in volume.

I haven’t heard a peep on what Genesee plans to do with Cream Ale, a beer I feel is poised to become the Yuengling or Shiner of our area. It’s a hip beer with a backstory, and could have massive youth appeal (over 21 youth, of course).

One thing that Genesee is doing right: they’re reversing the brand image of their beers in their hometown, getting out to the points of sale, talking to customers, and making smart use of nontraditional media to connect. I wonder how much of that is Genesee and how much is Eric Mower and Associates, their PR firm.

For the moment, the old brewery on the gorge seems to be firing on all cylinders. For Rochester, that’s a good thing.

-Mark

For the first time in, I dunno, maybe a decade, Genesee is actually going to try to build awareness in its hometown.  The brewery will sponsor numerous events this summer, including Zoo Brew, and Taste of Rochester.

It’s not really craft beer news, but it’s kinda nice to hear. Genessee has been the J.D. Salinger of breweries, hiding its brand in their fortress on the gorge and basically gifting public perception to regional rival Labatt. What’s really heartening is that North American Breweries, new owners of both Genesee and Labatt USA, are leading with Genny here in Rochester.

Why get excited over some corporate sponsorships? Mayb e because it’s a clear signal from N.A.B. that a piece of my hometown history, circling the drain for 20 years, might make a recovery after all.

-Mark

New company North American Breweries is pouring $10 million into their Rochester HQ brewery High Falls Brewing, which falls into line with my anticipation that they’d use the place as a source for domestically produced Labbatt Blue.

I did not, however, expect them to change the name back to The Genesee Brewery, nor did I think they’d express any interest in reviving the Genesee Beer brand. That’s a ballsy move.

Standard American Lager from any manufacturer exists within a tight style spectrum; all brands look and taste pretty similar. As the documentary Beer Wars demonstrated, even extremely brand-loyal beer consumers have difficulty picking their brand out of a range in blind taste tests.

With such similar products, the only way the large lager manufacturers can differentiate their product is by positioning and hyperexpensive image advertising, battling for the same saturated market which, incidentally is stagnant, or reaching up to 2% growth at best.

Does NAB have the scratch to go toe-to-toe with Coors, SAB Miller and InBev/Anheuser Busch?  Probably not. But they don’t have the production capacity or enormous costs of those companies either. It looks like the smart play for Genessee is to use the Yuengling model as a case study, drive loyalty in the home market, and position via product pride.

Genesee Beer, the beer that saturated bars and supermarket shelves back in the ’70s, is hard to get nowadays. Let’s hope that NAB’s decision opens the tap lines once again.

-Mark

As every beer blog is doubtless proclaiming (I’ve been too lazy to check), the national one-day screening of Beer Wars takes place tomorrow.

Narrated by everyone’s favorite former Nixon speechwriter, Ben Stein, Beer Wars takes a look at the battles involving both craft brewers and major conglomerates within the beer industry; battles of market dominance, competitive advantage, and simple survival.

After the movie, a panel discussion will follow featuring a bunch of the notables who appear in the film. They’ll be talking about their current, uh, stati, and what’s the future holds for beer.

This is a must see for anyone who cares about craft beer. Learn more, get your tickets online, then get some insight into what craft brewers really face in bringing you the beer you love.

-I had a Budweiser on Monday.  It was my first Rochester Red Wings game of the season, and for some reason American standard-style lager goes very well with baseball. I must admit, the Bud tasted pretty good, better than I remembered it.

Still the lager from St Louis is not replacing Victory Prima Pils for me anytime soon. For each beer a time and place, and Budweiser’s is in the ballpark on a hot summer day. Or a freezing, arctically miserable night, as was the case on this April evening.

-Mark

Brewery acquisitions are nothing new. It’s almost an American business tradition. Huge national conglomerates buy small, struggling regionals and eliminate them to get market dominance, resulting in the overwhelming predominance of a few national brands and their line extensions. Kinda the American way, isn’t it? How’d you enjoy that last lunch at Applebee’s?

At any rate, financier KPS’ entry into the US beer market, via their new company North American Breweries, seems to be strategically different. Oh, they still want to be a huge player, but their model doesn’t seem to call for the destruction of regional identity for the sake of an overwhelming unified brand presence. “We intend to continue to grow North American Breweries aggressively, both organically and through acquisition of new brands and exceptional breweries,” says KPS partner Rachel Vargas. The new owners of High Falls and Labatt USA apparently recognize the value independent brands have toward their regions, and want a portfolio of individual breweries that remain where they’ve always been, and trading on the power of their established brands.

That’s good for High Falls. I, for one, half expected to see the new owners pull up with a flatbed, cart everything of value out of the building, then burn it down for the insurance claim. Instead, the new company will use High Falls as its base, and has explicitly stated its commitment to run the company as a sister to Labatt.

NAB seems unsure how to utilize the 2 million barrel capacity surplus at High Falls, and has suggested that future acquired brands could be produced at the brewery. At first glance, it seems natural that they’d want to produce Labatt there, but that idea is being met with strong pressure from distributors who feel it is vital from a branding point of view that Labatt continue to be a Canadian beer. North American Breweries has also stated that they’re considering a Canadian brewing facility.

However this goes, Vargas has stated they’re here to stay.  “”With this environment, we told our investors to expect to hold on for a long time. We build companies, we don’t tear them apart.”

That’s a refreshing change.

-Mark

Well, it’s happening again, this time in Oregon.

Lawmakers are trying to position themselves as tough on substance abuse by proposing a punitive tax on that favorite substance of substance abusers: craft-brewed beer.

House Bill 2461 would impose a $49.61 tax on every barrel of beer produced in the state. Guess what the bill’s sponsors want to do with the revenue raised? Plow it into infrastructure programs? Nope. Actually begin building an alternative-fuel infrastructure so people can fuel cars based on non-petroleum fuels? Nope. Reduce the state deficit? Nope. The money would ‘ fund prevention, treatment and recovery programs for those addicted to alcohol and other substances.’

So who’s brewing beer in Oregon? Not Anheuser-Busch, Coors or Miller, who account for the overwhelming majority of beer consumed in the Beaver State. It’s the little guys who followed the good ol’ American dream and opened up their own craft breweries.

Obviously, that’s a great way to put the onus of dealing with addiction’s societal toll directly on those who produce it. I mean, what alcoholic worth his or her salt wouldn’t, when waking up with the shakes and soaked in their own urine, grab a fine IPA or smoked porter as beverage of choice ? Because after all, what people addicted to alcohol really care about is the quality of their buzz-delivery system. Vodka is too harsh, and the convenient portability of a hip-flask is negated by the cumbersome jug of mixer.

Oregon, of course, is also a prominent producer of wine. Fortunately, people with alcohol dependency don’t drink wine. It is instead consumed by urbane white-collar professionals, who along with their law degrees and Volvos acquire an immunity to alcoholism. One wonders how much wine is consumed at fundraising events sponsored by lawmakers  Ben Cannon, Michael Dembrow, Jackie Dingfelder, Diane Rosenbaum, and William Morrisette, sponsors of the bill.

The beer industry has experienced a revival unlike any in modern history, especially in Oregon, with nearly 100 indie breweries and brewpubs providing jobs to thousands AND operating without the economies of scale enjoyed by major national manufacturers. Why not fuck that up? After all that’s why business exists, right? To serve as hosts for the tax-tapeworms of the State?

Of course, the generic assorted senators and representatives whose names appear on this bill don’t really give a crap if it passes; what’s important is the Look Of The Thing. Guess who’s gonna represent themselves as ‘tough on addiction’ during the next election cycle? The whole thing is a complete load of beaver crap.

To pull this in our economic times is cynical and amoral. But that never stopped a senator who sends his shoes in to have them cleaned after stepping on too many other people’s fingers, hard work, and beer suds on their climb up his own personal ladder of sanctimonious greed.

-Mark

It’s part of the inborn Rochester inferiority complex; we tend to view our own town as a bit of a backwater. When it comes to beer, that thinking simply does not apply.

We’re a hot commodity in the American beer scene. You can tell by who’s showing up in it. Over the past few months, brewers and brewery owners from Michigan, Pensylvania, even California have been flying, driving or crawling in to pimp their beer in our pubs.

People are starting to realize that the home of Genesee is something of a beer-lovin’ town.

-Mark