Big beers gain marketshare

Photo by Jason McArthurI love seeing craft beer in mainstream media. It heartens me to know that people are paying attention and that it’s not being dismissed as an insignificant niche. (Next thing you know, Rush will be nominated to the Rock & Roll Hall of Fame.)

Anyway, I stumbled across an Associated Press article recently about the increasing popularity of “big” beers and craft beer in general.

Beers with more alcohol, flavor gain market share

High-alcohol brews like Black Butte XX and The Abyss, known in the trade as big or extreme beers, are among many craft beers that are grabbing a growing market share in the United States from their mass-produced and heavily advertised counterparts. Even at prices ranging from $4 to more than $100 for a single bottle.

“We are looking for what we like to term that `Wow Factor,’” said Deschutes CEO Gary Fish. “We want somebody to take a drink, stop, look at the glass and say, `What was that?’”

Sales of premium beers, which include the household names of Budweiser, Coors Light and Miller High Life, have been nearly flat — up just 1.9 percent last year according to Information Resources Inc., a retail research firm.

As consumer tastes change and rising costs for ingredients pinch their profits, the nation’s biggest brewers are looking for relief in consolidation. No. 1 Anheuser-Busch is being taken over by Belgian beverage giant InBev SA. No. 2 Miller Brewing Co. and No. 3 Molson Coors Brewing Co. are combining U.S. operations.

Meanwhile, craft brewers are grabbing more of the market as they reshape the image of beer. They posted 17.1 percent growth last year over 2006 and accounted for 6.5 percent of the $9 billion in supermarket sales of beer in the U.S., up from 4.5 percent in 2003. Many in the craft beer industry expect their products to continue tugging at “premium” beers’ share of a market valued at $95 billion, including sales in bars and restaurants.

“They are not lawnmower beers,” cautioned Don Younger, owner of the Horse Brass Pub in Portland.

Yeah, no kidding. An 11% ABV late in the evening recently really kicked me in the head. Fortunately I wasn’t driving.

Their small size gives craft brewers the freedom to explore the outer limits of beer, and they are being rewarded by consumers who value good flavor, said Sam Calagione, founder of Dogfish Head Brewery in Milton, Del.

“This hasn’t happened because of some half-billion dollar advertising campaign on behalf of the big brewers,” he said. “It’s truly the consumer becoming self-educated.

Read the rest of the article.

850 miles

That’s how far I drove this past weekend.

Okay, my wife actually did all the driving. (Why? I don’t know. A glutton for punishment perhaps?) Still, it’s a long way to go in a weekend and I am, to use an English colloquialism, knackered.

The occasion was a get-together/family barbecue at Ron’s house in Saratoga County, New York. We drove from our house in Central Maryland to Keasbey, New Jersey to pick up my brother Don. Then up to Ron’s place, where Max’s family had already arrived.

It was a long drive. We got up before 5:00 AM on Saturday, then Sunday left around 10:00 AM and didn’t get home until after 9:00 PM. (There were some rather nasty storms, traffic jams, and, well, little girls need to stop more often than I do.)

But it’s okay. We got to spend time with some of our favorite people in the world. Oh, and we also managed to drink some good beer. I’m not looking to do it again any time soon, but I would do it again.

Thanks guys.

Hop Talk turns two!

Today marks the two year anniversary of the launch of Hop Talk. Two years! Can you believe it?

We’re not much for navel-gazing around here. We’d rather talk about beer. And drink it. Preferably in conjunction with each other.

For those of you who are interested in such things, here are some statistics (as of yesterday):

  • 314 posts
  • 508 comments and trackbacks
  • 48,312 unique visitors
  • 79,136 page views
  • 350+ RSS subscribers
  • Most popular article: How to Pour a Black and Tan
  • Busiest day: March 17, 2008

View the stats from the first anniversary

I’ve renewed the domain and web hosting for another year, so it looks like we’ll be doing this again next July.

Of course, it’s the readers that make a blog worthwhile. So thank you for staying with us another year. I am humbled by the fact that people have added us to their daily reading regimen.

We’ve had a great time this past year. Raise a glass with us.

George Will: Beer is essential

In his Op-Ed piece in the Washington Post two weeks ago, George F. Will used the (at the time) as yet unaccepted offer from InBev for Anheuser-Busch as seen in Investor’s Business Daily as a lead-in to meander from beer as a staple, to beer as essential to civilization, to beer and its role in natural selection.

The story asserted: “The [alcoholic beverage] industry’s continued growth, however slight, has been a surprise to those who figured that when the economy turned south, consumers would cut back on nonessential items like beer.”

“Non what“? Do not try to peddle that proposition in the bleachers or at the beaches in July. It is closer to the truth to say: No beer, no civilization.

The bulk of the piece discusses the research in The Ghost Map: The Story of London’s Most Terrifying Epidemic — and How It Changed Science, Cities, and the Modern World by Steven Johnson. More specifically, how alcohol, specifically beer, was necessary for civilization to grow. Alcohol has natural anti-bacterial properties (not to mention the long boiling necessary to brew killed plenty of “bugs” as well) and was safer to drink than the water.

He concludes that beer is very much essential.

George F. Will – Survival of the Sudsiest

I only had two problems with the article. One, the mugs of Budweiser in the accompanying photograph look so…weak. Okay, sure, it was appropriate to include A-B’s flagship beer, but my goodness it looks like it has no flavor at all.

The other issue I had was that Mr. Will unfortunately perpetuated the beer urban legend that Ben Franklin said that “Beer is proof that God loves us and wants us to be happy.” It just ain’t so.

An interview with Will Golden

To celebrate International Brewers Day, I decided to profile a brewer. Deciding who to profile was pretty easy. My family and I have been spending a lot of Sundays at Barley and Hops. It’s fairly close to home and has some very nice beers (I’m partial to the Annapolis Rocks Pale Ale and the Schifferstadt Stout). Additionally, on Sundays, kids eat free and pints of their regular lineup are only $2.00. Great news for families on a budget.

So, I reached out to Will Golden, head brewer at Barley and Hops.

Hop Talk: Who are you?
Will Golden: William Byrd Golden, age 26, from Brunswick, Maryland.

HT: How long have you been at Barley and Hops?
WG: I’ve been at Barley and Hops for 8 months.

HT: How long have you been a brewer?
WG: I’ve been brewing for about 3 Years.

HT: What were you in your previous life?
WG: I worked for Toyota as a certified master parts consultant. I was also an art student.

HT: What drew you to brewing as a career?
WG: I have always loved beer, but I hated what I was doing. It was just a job and there was no satisfaction in it. So I quit that job and was pursuing my degree but needed a job close to home. One of my buddies was a cellar man at Frederick Brewing Company and I asked him to get me a job. The idea of working for a brewery sounded great to me!

HT: What kind of education did you need to become a brewer?
WG: I was very lucky to get in the way I did, however my mechanical background helped a lot. I started at the bottom and worked my way up with lots of long hours, reading, and hard labor!

HT: Besides the atmospheric salary, what is the most rewarding thing about being a brewer?
WG: The absolute pride of making something you love and love to share with others who feel the same way! Also FREE BEER! And having a good time at festivals!

HT: What’s not so great?
WG: The heat during the summer, long hours, and stuck mashes!

HT: I know this is like asking which of your children you like best, but do you have a favorite among your beers?
WG: I know this is a standard answer but it depends on the day. Usually my seasonal, but the pale ale is the old standby.

HT: Besides your own beers, what is your favorite?
WG: I love Victory Brewing’s Prima Pils; that is a stellar beer. I also love the Oatmeal Stout from Wild Goose and Houblon Chouffe Dobbelen IPA Tripel. There’s many, many more but that’s just a few off the top off my head.

HT: To relax after a long day in the salt mines, I like to go relax at a brewpub. What does a brewpub brewer do to relax?
WG: Take a nice long ride on my bicycle then sit down with a friend and enjoy and discuss beers we have not tried. That or enjoy some of my beers with the patrons at the pub.

HT: Finally, is there something you wish the non-brewing public knew about brewing?
WG: I wish more people would home brew so they can understand the smells and tastes of the raw materials. That way they could further appreciate the beer they’re drinking and the amount of effort that goes in to making great beer!

Many thanks to Will for taking time out of his busy schedule to spend a little time with us. On the topic of International Brewers Day, Will opines “I think it is a fine idea, to pay homage to all of our predecessors. Oh, and maybe drink a beer!” Hoist one with me to Will and his brewer brothers and sisters.

Beer on TV

Premiering tonight (July 17) on CNBC is “American Originals: Budweiser“. (check your local listings)

They’re losing marketshare to microbreweries and facing a change in ownership. Join CNBC inside Anheuser-Busch for an unparalleled look at how the King of Beers plans to meet the challenges of an ever changing marketplace and stay on top.

Very timely, I’d say. The information on the CNBC website also has a bunch of other goodies, like some photo slideshows, illustrated history, and related video news segments.

Further, I ran into this interesting blurb from National Geographic about the brewing of beer.

National Geographic: The Perfect Beer

July 26 Event at the Flying Barrel, Frederick, Maryland

The Flying Barrel is a homebrew and winemaking supply shop as well as a Brew-on-Premise located in Frederick, Maryland. On July 26, 2008 they are having an open house of sorts.

Plan to be Here
Saturday, July 26, 2008
10:30-3 PM
3 Great Reasons

BEER: Brian Gruner, the Best of Show winner at the Great Frederick Fair will be here doing an all-grain batch of beer demonstration! Bring all your brewing questions.

WINE: MDCrush‘s Rob will be here to take orders for this year’s Californian grapes and giving samples of his wine, made from the grapes he imports.

MEAD: Dave Pugh and Buck Reed, two long-time mead makers will be here with samples of their mead and related honey beverages. National Mead Day is August 2nd. We’re a week early.

Directions

It’s official: Anheuser-Busch InBev

$50 billion and you can become the world’s largest beer manufacturer.

Anheuser-Busch Agrees to Be Sold to InBev

The combined company is expected to be named Anheuser-Busch InBev, fulfilling a promise by the Belgian company to include the Anheuser name in the new brewer’s title, people briefed on the matter said. Anheuser will be given two seats on the board, including one for August A. Busch IV, the company’s chief executive and a scion of its controlling family.

When this deal is consummated, the three largest brewers in the U.S. will not be American-owned at all.

Job Cuts Inevitable For InBev-Anheuser

Gerard Rijk, an analyst with ING Financial Markets, said job cuts would happen particularly at the corporate level, as well as in the marketing and administrative departments. “The companies can merge their businesses in the UK, China and North America,” he said.

In response to concerns of job cuts, InBev, whose mostly Brazilian management team has a reputation for ruthless cost-cutting, promised to keep the headquarters of the North American division of the company in St. Louis and pledged that it wouldn’t close any of Anheuser’s breweries.

That $50 billion purchase price will require $45 billion in debt. Gotta pay off those loans somehow.

I guess if you want to drink an American light lager that’s truly American, Pabst is your beer. Or Yuengling. They’re #4 and #6 respectively of the top beer brands in 2007. Samuel Adams is #5.

Anheuser-Busch sells out at $70 a share

It is being widely reported this weekend that InBev has increased their offer to $70 per share for Anheuser-Busch, and that the A-B Board of Directors is prepared to accept the offer.

InBev had recently begun a campaign to unseat the current Board. But, apparently confident the deal will go through, InBev has already begun setting up the loans it will need to finance the deal.

Belgian brewer would pay $70 a share

An official announcement will probably be made Monday.

There are still plenty of folks opposed to the deal. Some, however, haven’t completely thought things through.

This Bud Might Not Be for Them

Jordan Moore took the news that his beloved Budweiser could soon fall into foreign hands very personally: He decided he would scrap his plan to get the logo of the King of Beers tattooed on his right rib cage.

“I’ll tell you one thing,” said the 21-year-old concrete worker during his lunch break at The Brick of St. Louis bar, in the shadow of this city’s storied Anheuser-Busch Cos. brewery, “if Budweiser is made by a different country, I don’t drink Budweiser anymore. I’ll go back to Wild Turkey.” (Wild Turkey, a Kentucky bourbon, is owned by French drinks giant Pernod Ricard SA.)

InBev logoI’ll bet he also shops at Wal-Mart, where just about everything in there is manufactured in China. (Except for some of the display racks. I know they’re made in the U.S. because my brother makes them.)

Expect there to be continuing resistance from political corners as well.

InBev Raises Its Offer for Anheuser-Busch

Anheuser’s about-face risks raising the hackles of Missouri politicians and customers who rallied to the brewer’s side as it sought to fight off the unwanted advances. InBev sought to head off criticism by promising to keep the combined company’s headquarters in St. Louis and to maintain “the Anheuser-Busch heritage” in the new entity’s name.

That did little to assuage Matthew R. Blunt, the governor of Missouri, who said he was “strongly opposed” to an InBev takeover of Anheuser. Last month, he requested a review of the offer by the Federal Trade Commission.

“I am concerned that this sale would have destabilizing impacts on our nation and state’s long-term economic interests,” Mr. Blunt wrote in a letter to the regulator. “I am opposed to this buyout and am asking you to conduct this review as quickly as possible.”

Anheuser’s political support crossed party lines. Mr. Blunt and Christopher S. Bond, Missouri’s Republican senator, were joined by two of the state’s top Democrats: the state’s other United States senator, Claire McCaskill, and Mayor Francis G. Slay of St. Louis.

Mr. Bond said, “InBev buying Anheuser-Busch is as popular in St. Louis as $4 gas.”

And perhaps just as inevitable.

Once again, it looks like the only winners in this deal are shareholders.