Filed under: News Stories
I found this in my Google Alerts today, a story on TV station KATU in Portland about Lucky Lab’s green side. The story relays that Lucky Lab has installed solar panels used to help heat their water – even in Portland. It’s not a long story and doesn’t say a whole bunch, but it’s always good to see the brewers on TV.
Yes, that’s right, Russian River’s famed Pliny the Younger is on tap, as of today. This won’t last too long, so if you can make it out there in the next couple of weeks, do so. For those who don’t know, Younger is Vinnie’s “Triple IPA”, a hopped up super beer with more alcohol and flavor than you’re used to.
Enjoy it if you can, knowing that it won’t be long before Pliny the Elder (Double IPA) and Blind Pig (IPA) are available in 16oz bottles.
Speaking of Russian River… It appears assistant brewer Travis has set them up with a WordPress page. I don’t know ANYTHING about this, but can only drool at the pictures here. It was only set up today, but the pictures here are stunning! 400+ barrel (wooden) capacity! It’s a dream…
A few days ago I posted this picture with a few questions. It took a few days, but I did get a reply from Sierra Grossman. I’d asked whether or not this was a “one-time” thing, or if Sierra Nevada was moving forward with a new label. Sierra answered:
“Bigfoot – this is a onetime occurrence. We thought we would celebrate the 25th expedition of our Bigfoot Ale and do something a little bit different. It’s a one-of-a-kind beer and we wanted to have a one-of-a-kind label to go with it!”
So, there you go – we can now rest a bit easier and appreciate the Bigfoot and its new get-up.
UPDATE: I clarified with Sierra Grossman that “one-of-a-kind” beer is not an allusion to a change in recipe. It was a general statement regarding the overall quality of the product. So, expect the same great beer in 2008 with a one-of-a-kind label.
I read about this over at Brew Blog, although we’ve been hearing rumors about this for some time. A-B appears poised to follow Blue Moon (Coors) lead in the craft beer market with a Belgian White of their own – Shock Top. They don’t mention when this beer will be released, but just judging by the label (right) I’d guess this is a late Spring to early Summer release.
So, that’s the news portion for the morning. What follows is random musings about timing and the industry overall.
Is this the perfect time for A-B to do this? Yes. If you’re a shareholder for the company, this is great news I would think. Beer prices are rising in the craft beer market, that’s no shock. What’s more, there are a ton of new (newish) labels out there. You see this every time you walk down a beer aisle in a grocery store. I can’t help but imagine that with their strangle hold on distribution in the US, A-B is poised to put their crafts in every market. Your local bar with 4 Macros and 2 Micros… well, it isn’t a stretch to think you’ll lose one of the micro’s in place A-B’s product. Reps will push it, signage will be provided and the incentives overall to switch will speak loudly to bar owners.
I saw this a couple years ago in Northern California with Bare-Knuckle stout (another A-B craft). Bars in my area all of a sudden had this new stout nobody had heard of, posters were on the walls and glassware was provided for those willing to try this new beer. In one bar, in Auburn, the Bare Knuckle replaced a regional micro brewed stout. Who will they go after with Shock Top? I actually can’t help but think they’re going after Blue Moon, but I also can’t help but think that more than a handful of publicans will drop regionals like Great White or even national brands like Widmer.
Will it work? I think it will, to a certain degree. I don’t have the stats to back me up here, but I have a feeling that many of those buying craft beers don’t have any sort of strong loyalty to micro brewers as a whole. I was talking with a beer buyer for a great store in Souther Oregon last week and he was amazed at how many 20-somethings were buying craft beer nowadays. What was more amazing to him was that a majority (his word) would walk up and buy a 22-ounce craft-beer and with the other hand buy a 12-pack of PBR. That doesn’t mean much of anything, except that I believe such buying habits benefit A-B.
Will it hurt the Craft Beer Movement? No, I don’t think so. If anything, I suppose shelf space in chain grocers and convenient stores will opt to carry the A-B products. Beyond that (and don’t get me wrong, that’s not a small thing) I think we’ll still be able to support the movement in specialty stores and on-premise sales. This could potentially slow growth for budding brewers, but as a whole I see the industry continuing to grow in double digits this year.
So, in conclusion, here’s a summary of what I was trying to say. I think this is good for A-B because:
- A plethora of brands exists, and A-B is a trusted name for most beer buyers. When I did business consulting I used to tell companies if they had more than 5 goals, they didn’t have any goals. I think this works for choice too, with a whole lot of buyers. Overwhelmed with variety, not wanting to make the ‘wrong’ choice, it’s just easier to buy from a name you trust.
- Rising prices in craft beer (and macros, but buy smaller margins) means something for so many people out there now, worried about employment, debt and interest rates…
- A-B understands more about buying habits than most of us care to admit.
Enough said? I’ll be looking for answers soon, but it appears this is not a ‘one-time’ deal celebrating 25 years, as the COLA application stipulates that the years can change. While the label looks nice and classy and all, I know I am not alone in lamenting the loss of the iconic label for one of my favorite beers.
I read a whole hell of a lot every day; whether it’s online, in print or even on TV, especially about the beer industry. I hope this blog helps pass on some info we all glean so that you don’t have to read it all, as do other great beer bloggers online today. With that said, I read the Fitch Ratings for Anheuser-Busch in its entirety, something I suspect I wouldn’t just volunteer to read had I a different job and passion. In this there’s some pretty important and revealing information for those of us who enjoy our craft beer. I’ll try to keep this short.
Domestically, BUD participates in a mature beer market and is facing growing competition from craft and imported beers as well as spirits and wine. In addition, rising energy and commodity costs have pressured margins recently. Price increases instituted in the United States late in 2006 and the beginning of 2007 and less promotional activity have produced a better than expected operating performance in 2007. BUD is again raising prices going into 2008, which should help to partially offset continuing rises in commodity costs, particularly agricultural ingredients. The pending SABMiller/Molson Coors joint venture, which could close in the second quarter of 2008, is expected to eventually result in additional competitive pressure on BUD’s brands but may sustain an improved pricing environment.
Longer term, low domestic beer volume trends, limits on pricing actions, changing consumer tastes regarding craft and imported beers as well as other alcoholic beverages, and trading up to more premium products are concerns. Expected profit growth from international markets including equity investments, which accounted for 24.5% of net income in 2006 up from 14.2% in 2000, somewhat offsets potential weakness in domestic operations.
A few things I find important to note.
- “facing growing competition from craft and imported beers…” No surprise here, right? Hooray for craft beer!
- “rising energy and commodity costs have pressured margins recently.” OK, pay attention to this. If there’s ANY concern with margins and costs with energy and commodity prices for A-B, you can bet your shiny pennies that craft brewers are feeling the squeeze even more. Why? Well, it sorta says it when it talks about ‘economies of scale’ prior to this quote. A-B accounts for 48.4% of beer’s total market share in the US today, which means they get the sweetest deals in terms of raw material and indirect costs… and not just by a little bit.
- “BUD is again raising prices going into 2008…” Did that get your attention? If you missed the point of number 2, this is it folks. Price of beer is going up, and if there’s an exponential savings afforded to A-B for their buying power and sheer size, you can assume an exponential nature in price increases for your favorite craft beers. Now, there is something we’ve got going for us, the vast majority of brewers in the country are private businesses owned by a few investors. It is more likely that these people won’t demand equal compensation, like A-B’s share holders, but they’re business people too and won’t sit back and just eat all the new/rising costs of materials. Remember this. Your beer will be more expensive in 2008, but you can rest assured this increase isn’t making your favorite brewers rich. Tip well.
- “… changing consumer tastes regarding craft and imported beers… and trading up to more premium products are concerns.” Interesting, I think that’s pretty self explanatory.
The report referenced was all supporting one thing, Anheuser-Busch is still a “stable” investment, regardless of the items mentioned here. Why? Seems largely due to their impressive cash flow and manageable debt. You can read that to also say, they can absorb the flux in material pricing experienced globally right now. Can the same be said for the craft brewers of the world? I suspect, for the most part, they can. I really don’t think we’ll see a horrific year of doom and gloom – I just don’t see it happening. However, I suspect there are more than a few who don’t have the cash-flow and perhaps lack the credit to get them through these price increases.
In the far northern region of California, in the heart of the Siskiyou Mountains, is a small town named Weed. I stop in Weed several times a year as I travel to my folks’ place in Southern Oregon, the people are great and there’s quite a nice ‘homey’ feel to the downtown area – this, by the way, is not a big city, it’s barely a small town. Anyway, Weed is home to a nice little brewery, Mount Shasta Brewing Company, that recently was granted permits for an outdoor beer garden, a place for tourists and locals to enjoy a pint (or sampler) of beer when the weather is nice (and it can be down-right beautiful).
Not surprisingly a few town-folk got mad about this new development. After all, the brewery was ‘near’ a park and a public swimming pool where youngsters could be corrupted by the view of adults enjoying a beer. Petitions were filed and an appeal was made to revoke the license, for the kids’ sake of course. Finally, the city council convened over the matter and a shocking clarity of opinion was expressed by none other than the Mayor of Weed. But first, let’s get an idea of what the city was fighting here (this is from the Mt. Shasta Herald).
“Children use the swimming pool all the time,” said Gubetta, “this is too close to the park, it’s not right.”
Well, that’s almost logical, right? I mean, what if a kid accidentally mistakes the beer garden for the park and then gets his hands on a few pints of beer – don’t you care about poor Johnny, you know he gets confused… and garden, park… they’re so similar sounding. I may be a bit mean there, but come on.
The mayor had this to say in response.
“in regards to the park, people can go to the park with a keg of beer and cook, and get drunk. So, being next to the park, as far as I’m concerned, is a little insignificant.”
Whoa, seems the only logical thing to do now is ban alcohol in the park, lest the kids be forever endangered by the evils of beer.
In all seriousness, I am impressed with the logic expressed here by the mayor. I’m even more impressed with his next comment.
“I don’t think some people understand what a beer garden is. It’s not a bar or a party house, it’s a place where people go to taste beer and have a sandwich or a hot dog. It’s not a place where people typically go to get drunk and party, that’s not what a microbrewery is.”
How do you like that? I couldn’t agree more with this rational statement expressed in a meeting where it seemed some lacked reason. Wouldn’t it be great if all city representatives had the same reasoning ability, to be able to look at the world around them and realize that it isn’t black and white? I love that this mayor understands the business of his town, that he can distinguish a beer garden from a frat house. Score of for Mayor Sutton.
