Anheuser-Busch is making a mistake by hiding its role behind The High End brands

While Anheuser-Busch (AB) made a lot of headlines acquiring small independent breweries into its High End portfolio, it has very conspicuously avoided any association with those brands. A recent 10 Barrel 10th Anniversary celebration made no mention of AB’s ownership of 10 Barrel, which it acquired in late 2014. A controversial plan for AB’s Golden Road Brewing to open a brewpub in Oakland led to the jaw-dropping whopper from Golden Road’s Meg Gill, as reported in East Bay Express, who told “…a group of  (Oakland) residents on Wednesday that “non-factual opinion columns” are trying to paint Golden Road as part of Anheuser-Busch, and that such reports are — her words — “fake news”

Whether or not you think this is all an evil corporate cover-up by AB to masquerade as a local brewery, I think this is a bad idea from the standpoint of pure capitalism. That’s right, even from a perspective driven by naked greed, I think AB would be more successful with their High End if they disclosed their ownership in their craft beer brands like 10 Barrel and Golden Road. Sure, people care a lot more about where their beer is made than they do their toothpaste, so I understand the logic behind it. I just think it’s the wrong approach.

I write this as someone who spent the last 20 years selling technical equipment to companies for measuring things like the power of a laser beam. You may think selling equipment like that is a lot different than selling beer, and you’d be right. But there is a common ground in sales, whatever is being sold, which applies to both power meters and beer. I certainly realize AB InBev has plenty of smart, experienced sales and marketing folks, but there’s plenty of cases where smart, experienced marketing folks made bad decisions. I think this is one of them. Besides, lacking relevant experience on a subject has rarely stopped any blogger from spouting off their opinions on something and it’s not going to stop me either. So allow me to explain why it’s in AB’s best interest to disclose their ownership in their High End brands with consumers.

Point 1: It’s a lot harder to hide the truth in the information age

It’s rather futile for AB to hid their ownership of breweries in The High End portfolio when a simple Google search of terms like “Golden Road Brewing”, “10 Barrel Brewing”, “Elysian Brewing”  generates links to news stories of these breweries acquisition by AB on the first page of results. You don’t have to be a brewery obsessed beer wonk to learn those Golden Road brews you liked at your friends party are in fact, from the same company that produces Budweiser and Bud Light. A big problem with AB’s approach in hiding the ownership of their High End brands is that people are going to very find out the truth very easily sooner or later.

Point 2: “The High End” should become the AB InBev “Seal of Approval” in an Era of more suspect beer.

Say what you want about about craft beer sell-outs, breweries like Golden Road, 10 Barrel, Goose Island, and Elysian brew mighty tasty beer. I’ve had a fair share of beer from  independent breweries that may have been brewed with honesty and integrity, but basically sucked. Small independents brew lots of great beer, but I’ve found the quality can be very uneven at times, especially from new breweries. AB brands don’t have these issues. I’m fine to give my local brewery a mulligan on a lackluster brew full of off-flavors, but the typical beer drinker isn’t that way. Identifying beer as an AB High End brand is a great signal to consumers the beer is going to be good.

Final point: AB has a lot more to gain from loyal Bud drinkers and others ambivalent about “purity of craft beer” than beer geeks that probably wouldn’t drink their beer no matter what

More or less, beer drinkers can be lumped into three categories:

a) Those that drink mass market lagers and might occasionally drink a beer of a different style like a Pale Ale, Saison or IPA.

b) Those that drink a mix of mass market lagers and Pale Ales, Saisons or IPA.

c) Those that drink almost exclusively a wide variety of beer styles, often exclusively from independent breweries.

There’s certainly debate about the size of these groups, but a) and b) put together easily dwarf group c).  Even though c) is certainly getting bigger and a) is getting smaller, group c) consists of maybe 10-20% of the beer drinking population with a) and b) comprising the rest. Those in group a) aren’t going to care all that much that 10 Barrel’s Cucumber Crush comes from the same folks that bring you Budweiser. In fact, they may prefer it comes from a company they are comfortable with than a suspect brewery they never heard of.  Those in group b) also won’t care that much about who owns the brewery either as long as they can be confident in their purchasing decision.  Of course, group c) is full of of beer geeks, many of whom would refuse to drink anything from AB and they’re such information driven consumers, you’ll never fool them into drinking AB.

So when AB goes to great lengths to hide their involvement in their high end brands, they are pursuing a strategy that matters the most to the smallest group of beer drinkers less likely to drink their beer, while failing to leverage and enhance their brand to a much larger group of beer drinkers that would. Not only is it dishonest and raises questions about what AB is trying to hide, it really seems like a lost opportunity for AB to claim a position of superior brewing quality with their brand.

So far, AB is doing fine with their High End portfolio without my advice, but I expect at some point they’ll be more forthcoming. That’s because it’s to their advantage to do so, and even an evil corporation will figure out it’s the right thing to do.

 

 

Elysian to be Brewed at AB InBev’s Fairfield, CA Brewery

Ten years ago, the thought of a huge corporate brewery pumping out IPA’s was some people’s idea of utopia. For others, it was the apocalypse.

Whatever you might have thought about that, it’s happening now. In a recent press release, AB Inbev announced a two billion dollar capital investment program that includes “$15 million to begin innovative cross brewing capabilities at the Fairfield brewery through Elysian partnership, including significant updates to brewery infrastructure.”  Elysian Brewing, as you may recall, was acquired by AB InBev in January of 2015 and roughly a year later, six packs, bomber bottles, and tap handles of Elysian IPA’s like Spacedust and DayGlo started showing up all over the Bay Area

It’s not a surprise that AB InBev will migrate some production of Elysian to their Fairfield, CA facility as they continue to expand distribution of their recent acquisitions. In fact, according to a Tweet from Monterey beer writer Leslie Patino, the Fairfield, CA facility was already brewing beer from another AB InBev acquisition, Golden Road Brewing.

It’s worth pointing out that AB InBev’s plans also include “$58 million to improve and increase sustainability at our facilities”. Say what you want about AB InBev’s diabolical plans to grow their business, crush the spirit of craft beer, dupe the masses, ect. they are one of the more environmentally sustainable businesses out there and continues to invest in lowering their environmental footprint.

But let’s get back with the news about the Fairfield brewery.  You’re going to see more AB InBev “craft” brands in the San Francisco Bay Area as they leverage their existing manufacturing facilities to earn better returns on the investments of their brewery acquisitions. Retooling corporate breweries to produce less light lagers and more IPA’s sounds like the march of progress. Economists calmly explain that this is how everyone benefits: AB InBev sells more beer and consumers, who increasingly prefer more flavorful beers like IPA’s over light lager, have better opportunities to buy beers they want.

Most craft beer fanatics would claim this is simply more of AB InBev’s evil corporate plans to crush small breweries, and despite the fanaticism, they have a valid point. Whether or not most consumers care if their beer comes from a local independent brewery or from a major conglomerate, AB InBev is clearly hiding involvement in their craft brands and has long engaged in various anti-competitive practices against smaller breweries. And if you’re a small or mid-size brewer depending on retail sales for a significant portion of your revenue, life is only going to get harder when Elysian comes online at Fairfield.

 

 

 

Scenes from Faction Brewing

I hadn’t been to Alameda in a long time and never on the west side of the island when I ventured there a few days ago. I was there to visit Admiral Maltings to gather research for an article I’m working on for the next issue of Edible East Bay on the malt house. The west side of Alameda is full big old weather-beaten World War II-era buildings from a time when huge flying and floating machines were cutting edge technology. I fell in love with the place immediately.

After spending an hour at Admiral Maltings talking about malt gave me a hankering for a beer, so I headed over to nearby Faction Brewing. The Faction patio has great views of enormous freight barges docked in Oakland’s port and off in the distance, you can see the skyline of San Francisco. Beer is an industrial beverage and has historically thrived among the working class. Faction’s location embraces this history.

As for the beer, I just enjoyed the atmosphere as a worked through a few four-ounce samples. Each brew was just one effortlessly well executed beer after another, the flavors all popping with the right balance. Sorry, no elaborate flavor deconstructions, I was just quietly and slowly enjoying the brews without thinking too hard about them. Like so many breweries I discover, I wish it wasn’t so far away from my home town. I leave you with a few photos from the afternoon.

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Scenes from Admiral Maltings

Unfortunately, people just don’t pay a lot of attention to malt, with hops grabbing all the headlines. An exciting new development is happening in Alameda might change that, at least in the Bay Area. It’s Admiral Maltings, which is building their floor malting facility and pub, to be completed this summer. The effort is led by Thirsty Bear’s Ron Silberstein and Magnolia Brewing’s  Dave McLean, with the day to day operations being run by Curtis Davenport, who learned malting techniques at the Canadian Malt Barley Technical Center and North Dakota State University.

There’s plenty of barley grown in California, mostly around the Sacramento area, but nowhere in the state to malt it.  The last malting facility in California closed over 20 years ago, with the last Bay Area malting facility closing in 1982. Admiral Maltings will use traditional floor malting techniques rarely used today rather than the highly automated manufacturing methods used in high volume malt production. Most brewers swear that floor malting produces a better product.

It’s a dirty secret in the craft beer industry that despite all the talk of “buy local”, the ingredients used to brew beer come from several hundreds, if not thousands of miles away. Barley malt is mainly sourced from places like North Dakota, Montana, and Canada and even Europe. Admiral Maltings will be a key step in building a Bay Area ecosystem of local ingredients, allowing a California terrior to flourish. And as we strive to lower our carbon footprint in the face of climate change, reducing the distance heavy bags of barley and malt are shipped to Bay Area breweries plays a role in that.

It’s a story I’ll telling in the next issue of Edible East Bay and for research on the story, I met with Admiral Maltings’s Curtis Davenport last week at Admiral Maltings site. The facility is a very active construction zone and I appreciate him taken time out of his day directing forklifts and consulting with plumbers to explain what’s about to happen at Admiral Maltings.

I took a few pictures which I’ll leave you with. Those big gray tanks are the steep tanks used to germinate 20,000 lbs of grain. The smaller silver tank is the water recirculating tank delivers water used in the steeping process.  Those smooth concrete floors?  That’s where the floor malting magic is about to begin.

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The Session #123: Simply Cutting Through the Beer Noise

“It’s been my policy to view the Internet not as an “information highway,” but as an electronic asylum filled with babbling loonies.”

Chicago columnist Mike Royko wrote those words way back in 1996 not long before he died. If he were alive today, he’d probably say the same thing. Plenty agree with Royko, both then and now. It’s with this perspective as I consider Josh Weikert’s question of “Is the Internet helping or hurting craft beer?”.  Josh wants us to keep it simple. I’ll try.

Dipsite all the noise, the Internet is clearly helping craft beer, or breweries and beer drinkers wouldn’t use it. Everyone has their reasons. Breweries talk about connecting with customers. Beer geek swap opinions and arrange beer trades in ways that would be virtually impossible without the Internet. I have no idea how I could fully understand, appreciate and write about beer without the Internet so I’m grateful for it’s existence. The Internet dramatically reduced the cost and increased the speed in communication, so there’s no way we could be as knowledgeable about beer, or anything else, without it.

The great thing about the Internet is it gives everyone a voice.  The bad thing about the Internet is that you can hear everyone’s voice. Which means unless you have an infinite amount of time to kill on the Internet, you better develop some good filters to extract the few nuggets of good information from all the noise out there.  And if you want to get heard, you want to impose that filter on yourself and make sure when you grab the Internet mic to talk to the world, you really have something good to say. Otherwise, you’ll just get filtered out. It becomes even more important to find your unique voice, because otherwise you’re just like millions of other ones out there.

I get a lot of great information from breweries that get this.  Other breweries don’t and deliver things like breathless announcements about expanding distribution into South Dakota or a steady drumbeat of Chicken Wing Specials at the brewpub. These breweries get closed from my social media feeds pretty darn quick. Jeff Alworth had some great ideas for breweries trying to find their voice in social media.

This may be obvious, but from the looks of things on the Internet these days, it bares repeating: If you want to be heard above the rising beery noise on the Internet, you need to find a way to say something worth listening to.

Is that simple enough?

 

 

 

Returning to Devil’s Canyon

For a couple years, I lived in Belmont on the San Francisco Peninsula. Devil’s Canyon was my home town brewery and on the last Friday of each month, they’d hold an open house simply called Beer Friday. I remember the first time I went. I expected just a few like-minded beer geeks to show up with maybe a few other curious onlookers. As I drove that night into the small industrial park where Devil’s Canyon was located, the large crowds walking by quickly changed that notion. They had a band, a food truck, it was just a big fun casual neighborhood party. That evening, I realized people want to connect with their local brewery, even if they have only a passing interest in beer.

I moved away from Belmont in 2012 to Campbell in Bay Area’s Silicon Valley and never went back to Devil’s Canyon until last Friday. Devil’s Canyon also moved south, to San Carlos in 2013. I was there to do research for a story in the upcoming issue of Edible Silicon Valley. I won’t give up too much about the story for the next issue, but suffice to say, it has something to do with the way Devil’s Canyon was well ahead of its time in drawing people into their brewery, connecting people with the place their beer comes from.

I’d been away from Devil’s Canyon for too long. The Deadicated Amber I sampled fresh from the brewery really popped with toasted malt flavors. Deadicated Amber was my regular beer on “burrito nights” in Belmont when my wife and I would walk down to our local taqueria for dinner to recover on long work days when we were both too tired to cook. I always enjoyed Deadicated Amber on those burrito nights, but drinking it straight from the brewery was even more special on at least a couple different levels.

I’d like give special thanks to Devil’s Canyon’s Rebekah Atwell who showed me around the San Carlos facility and told me all about the Devil’s Canyon beers. Rebekah handles marketing and customer relations for Devil’s Canyon, though her official title at Devil’s Canyon is “Herself”. Her title seems like clever way of confronting conflict of identity versus categorizing people into traditional roles, but perhaps I’m just over thinking things here. Anyway, thanks to Rebekah and everyone else at Devil’s Canyon who helped with the story and looking forward to when it’s published in the next issue of Edible Silicon Valley. I’ll leave you with some pictures taken during the visit.

 

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Strike Brewing Adds Another Brewer

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Strike’s Newest Brewer Ben Spencer  (Strike photo)

Today Strike Brewing  announced veteran brewer Ben Spencer joined their company as Director of Brewing Operations & Brewmaster.

As detailed in a press release, Spence was previously the Head Brewer at Magnolia Brewing in San Francisco for 11 years and prior to that a Production Brewer at Colorado-based Rockies Brewing Company  (now known as Boulder Beer) & Oskar Blues.  Ben brings over 20 years experience in not only brewing but facility management as well. Ben is an award-winning brewer, holding three medals from the Great American Beer Festival (1 gold, 1 silver, 1 bronze).

“Now wait a minute,” you might be asking, “Isn’t Strike co-founder Drew Erhlich the Brewmaster at Strike? Well, at least I was wondering how that was going to work out and so I e-mailed Strike CEO Jenny Lewis, who quickly responded.   “Drew was actually instrumental in bringing him in,” she explained.  “They will both carry the title of Brewmaster and work closely together in creating new recipes and help fuel our growth.  We are super excited!”

It’s hard to beat a pedigree that includes Magnolia, Boulder Beer, and Oskar Blues and those breweries clearly mesh with what Strike has accomplished so far, so it looks like a good fit. So yeah, I’m pretty super excited about Ben and Drew’s upcoming collaborations too!