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Celebrate The Independence from Big Beer

When the California Celebrator began its serendipitous coverage of the nascent microbrewing scene in 1988, the mission was to cover all 20 of the existing small breweries in the state. There were a few bars that offered exotic beers, along with some retail stores and homebrew shops that helped fuel the interest in and development of better brewing techniques, the use of higher quality ingredients and the desire to explore the diverse world of quality beer styles for the very few who appreciated such things. The beer scene was evolving, but at a glacial pace.

The early 1990s brought expansion of the small brewing phenomenon, and many regions of the country began to explore and embrace the small brewery and its inspiring products. The Great American Beer Festival, which began as essentially a homebrewers’ party in the early 1980s in Boulder, Colorado, grew and expanded along with the good-beer scene itself.

The mid-1990s saw a huge increase in the number of small breweries and an equally large influx of “entrepreneurs” eager to be a part of (and get a part of) this new sudsy enterprise. With everyone from Elvira (capitalizing on her considerable cleavage) to that Wanker fellow auditioning models for his labels (a different girl on each bottle in a six-pack) to that Rhino Chasers dude offering investment opportunities, the small-beer battlefield began to resemble Appomattox in spirit.

A lot of bad beer was being made for the wrong reasons, and the industry went through a painful “shakeout,” affecting everyone from equipment producers to ingredient suppliers to consumers wondering what all this mediocre choice was about.

With the new millennium came a renewed interest in beer styles, flavors and comfy neighborhood locals serving pints of freshly brewed wonderfulness. Laws changed, and all 50 states benefited from the brewing renaissance captivating America and challenging Big Beer. Big Beer was not amused. Content with making massive profits from uncomplicated products, the Brewers Grande saw declining sales and narrowing margins.

Finding little success in producing high-quality craftlike beers (Miller’s Velvet Stout and A-B’s Crossroads hefeweizen were only two of many), they saw a path to growth in profits by acquiring small breweries and further consolidating the distribution side. With the merger of the two remaining giants, there is only Big Beer, and he (she, it) means business.

Today, we revel in an embarrassment of riches pouring fresh from taps all over America. Almost everyone lives within a few miles — and in many cases, a few blocks — from a brewery or multitap alehouse. If our choices are many, the quality issue continues to be problematic for many newbies. Meanwhile, venerable marquee brewers are seeing waning sales of their flagship beers. Importers bringing us some of the world’s greatest beers are also suffering flat or diminished sales.

The number of beer lovers demanding anything new continues to increase, independent of the quality of the new beers on offer. Celebrator readers are quick to point out the disparity on the quality/choice continuum. Supporting your local is important, but so is including the benchmark beers that have established and defined various styles and categories over many years, if not centuries. Reference beers should be an important part of your continued craft beer education and appreciation. Drink local and global and celebrate quality and independence from Mr. Big.
LETTERS TO THE EDITOR (December 2016/January 2017)

Hello, Tom,
The picture you took of my son, his girlfriend and their friends is terrific! [CBN cover, October/November 2016]. The pic really captured the fun time they were having and the entire atmosphere of the beer fest, with the California State Capitol building in the background. My husband and I love going to beer fests and visiting different breweries here in Erie, Pennsylvania and in California with our sons and in Chicago with our daughter.

Thank you,
Darlyne Nedresky
(via Internet)

Hi, Darlyne,
Thanks for the kind words on the cover shot. It took all day to get the sunlight just right to show the Capitol building and the foreground. Glad your son and friends were there in the moment. — Ed.
Waiter, There's a Craft Beer Bubble in My Glass

If you are still considering getting into the craft beer game, Google “craft beer bubble” and be sure to have a defibrillator handy. The results are, let’s say, cautionary at best and downright scary at worst.

During the past few years, new breweries have been opening at the rate of three per day in the United States. Most are small to tiny, with equally small but loyal and enthusiastic followers and supporters/investors. Today, one in every eight beers sold in the U.S. is a craft beer. More important, more than 20 percent of the money consumers spend on beer goes to independent and small brewers.

The Big Guys, AB InBev and SABMiller (soon to be just The Big Guy, after the $100 billion–plus deal goes down), are busy consolidating, shedding spendy employees and rigging the distribution system in their favor as they try to freeze out the smaller craft brewers that they don’t already own. No monopoly here, folks, nothing the Department of Justice should worry its pretty, preoccupied head about.

Although growth on the craft beer side continues to explode like a poorly primed bottle of homebrew, those with long memories recall the craft beer downturn in the mid-1990s and wonder if it could happen again. At that time, too many were getting into the beer biz for all the wrong reasons. Like wanting to make a lot of money, for example. Does anyone remember Rhino Chasers? Wanker Beer? Pink Triangle? (For the gay community, silly.) Even Elvira got her well-documented cleavage involved in a contract beer (and got kicked out of the GABF for overexposure).

If your goal is to make a pile from craft beer, the odds are ominous. For most, that ain’t gonna happen. If it’s a beery lifestyle you seek, or if you wish to be surrounded by a forest of stainless steel tanks full of liquid bliss and a gaggle of adoring fans, go for it.

Bart Watson, crafty economist for the Brewers Association in Boulder, Colorado, remains as upbeat as his beer beat. Ten new breweries are opening for every failure, he reported recently. He also points to the huge contribution craft beer makes to our economy, with around $55 billion being generated and supporting nearly half a million jobs nationwide. However, Watson cautioned that certain areas of the country may be reaching the saturation point, such as San Diego and Portland, Oregon.

But the future remains as bright as a properly conditioned helles. Just keep your expectations real and avoid quick-buck investors who use the term “no brainer.” Brew it real, and they will come…
LETTERS TO THE EDITOR (October/November 2016)

Hello, Tom,
Congratulations on your terrific reportage on Mallya’s history, far from being limited to brewing. Straightforward, objective journalism at its best, weaving current events and background/context into an important story.

Around 1990, back in D.C. (I moved to Portland in ’92), I tasted Mendocino’s Eye of the Hawk. It was ironic that it came from the middle of California’s premier wine country.

Again, thanks for such a splendid, valuable, and sad tale.

Don Lief
Portland, Oregon

Hello, Don,
Thanks for your kind words and support of craft beer for such a long period of time. A sad and cautionary tale indeed and perhaps one that demonstrates that those keeping true to the good-beer ideal will prevail. — Ed.
Is the Bloom Off the Craft Beer Rose?

The buzz on the street is hard to ignore. Craft beer sales, seemingly always on an upward tear, have slowed and are indeed down for some top 10 craft brewers for the first time in recent memory. Reminiscent of the slowdown in the mid- to late 1990s, this time we are seeing continued expansion and growth of small breweries and brewpubs while at the same time seeing an unprecedented loss of sales and market share from some of the largest craft brewers’ flagship brands.

According to the data of market research firm IRI, sales of mainstream craft flagship brands like Sierra Nevada Pale Ale, Boston Lager and New Belgium Fat Tire were down 5.9 percent, 13.8 percent and 5 percent, respectively, through May 15 of this year.

Are American beer drinkers drinking better but drinking way less? We now have over 4,400 breweries in the country and over 700 in California alone. Support for these breweries continues to be strong, but consumption of some of the bigger stars is waning. Nielsen sales data show that craft beer sales are up only 6 percent this year, well under the 19 percent increase seen only two years ago.

With five of the top 10 craft breweries facing shrinking sales, Constellation Brands’s recently acquired billion-dollar baby, Ballast Point, along with Lagunitas, which recently partnered with global giant Heineken, are among the exceptions. Is it possible that the distribution muscle of these global powerhouse partners is making a big difference?

Part of the problem may be that IRI research includes Blue Moon and Shock Top in the data set, along with beers we know to be craft, not crafty. These two beers are also down 5 and 9 percent, respectively, and their volumes tend to depress the category significantly.

In our rush to embrace the newest local brew, some of our life-changing, epiphany-inducing beers of the past are suffering the consequences. As craft beer enthusiasts, we need to keep some perspective in making our multitudinous choices and not forget the benchmark brews that got us here in the first place.
LETTERS TO THE EDITOR (August/September 2016)

To the Editor:
The irony of calling a beer “America” [CBN Notes from the Publisher, June/July 2016] when it’s produced by a brewery owned by a Brazilian hedge fund was NOT missed by PR geniuses in St. Louis. These guys were canned not too long after InBev’s acquisition of A-B and were replaced by geniuses in New York who report to geniuses in Brazil… the land of dirty water and dirtier politicians.

Tom Schlafly
St. Louis, Missouri

Dear Tom,
Thanks for the input. The Olympics of Beer Marketing could very well take place in Rio de Janeiro too. The locals have home-field advantage. — Ed.
Is America Worthy of "America"?

As Shakespeare’s Juliet might have asked, “What’s in a name? That which we call a beer by any other name would smell as…” well, beery.

The self-proclaimed “King of Beers,” in a desperate attempt to pump sales into a dying brand, has decided to rebrand its iconic Budweiser as “America.” Budweiser, in the glory days known as “Big Red,” was long ago dethroned by its stablemate, Bud Light, and has continued to lose market share in a beer market unkind to bland industrial light lager. This attempt to give the brand some cachet is planned for the hot summer months on through to the presidential elections in November. A blatant attempt to tap into the Trump phenom?

The irony, seemingly missed by the PR geniuses in St. Louis, is that the company has not been an American company since it was bought out in 2008 in a hostile takeover (“Over my dead body,” said young master Busch IV at the time — spoiler alert: he lived) by a Belgian-Brazilian consortium and is now managed out of Leuven, Belgium.

In a statement worthy of Mad Men, Tosh Hall, the creative director at branding firm JKR, said, “We thought nothing was more iconic than Budweiser and nothing was more iconic than America.” The Brazilian bean counters must have agreed. The response (thanks to the Internet) was instant and brutally hilarious.

A few Twitter posts will give you a sense of the outrage and disbelief. One tweet said, “We are not mad because Budweiser is calling themselves America. We are more upset that they call themselves beer.” Another tweet mused: “Budweiser’s rebrand means hops will now be infused with crumbling infrastructure and student loan debt.” Yet another: “If Budweiser is now called ‘America,’ when do they make America great again?”

Peter Sagal, host of the NPR news quiz, “Wait Wait… Don’t Tell Me,” said, “When you think of washed-out beer water, think of America.”

Tiny Saugatuck Brewing in Michigan got its 15 minutes of fame by announcing (with a fanciful graphic rendition) that it was introducing a new beer called ’Murica. The brewery says, “It’s brewed in a style America’s founders might describe as ‘Freedom,’ and the process is naturally overseen by 1,776 bald eagles.” Gullible beer fans demanded to know where to buy the spoofy suds. The brewery had to follow up with, “This beer, ’Murica, was and is a piece of satire meant to bring a few laughs.” While the brewers there insist they love America, they can’t make this super-patriotic brew because, for one, they “do not have 1,776 bald eagles at the brewery,” although they did add: “But how cool would that be?” Brewers.

So, if Budweiser is America, then Bud Light is what, Canada?

Dear Editor,
It is true we are in a golden age of craft beer. Your comparison of wine history is right on (“Notes from the Publisher,” April/May 2016). Here are a couple of other ideas.

First, beer soldiers. Back in 1984, when I turned the corner away from macro beer and imports, I was one of those who championed craft beer, asking major restaurants, bars and grocery stores why they were not serving or selling great-tasting beer. People like me and publications like yours provided the information to keep the movement going forward.

Second, beer festivals. I have been volunteering at festivals since the mid-nineties. At my last two festivals, OBF 2015 and Spring Beer & Wine Fest 2016, volunteers were not showing up. Brewers and brewery reps hardly came at all. They just sent in their kegs and let the beer be served by people who had no vested interest in whether they sold or not.

The people who attend have changed also. Very rarely do you find someone with a program and a notebook who is just interested in taste-sized samples. Young people today now have growler bars, with 30–40 taps selling a different style of beer every single day. Why spend $20 or more when you can step into your local establishment and conduct your own festival?

In the beginning, a festival was a great way for breweries to show off their products and skill as brewers. Lately, it feels like those breweries that are well established have no need to send their beer. People know who they are and what beer they sell. Festivals are supposed to be fun, not work, and that is what they are turning into.

Keep writing and publishing, and I will keep reading and exploring.

Don Knott
Portland, Oregon
Beer's Future Through a Wineglass Darkly

Craft beer’s enormous success can be troubling, too. Many fans and industry insiders wonder about craft beer’s ability to continue to grow and capture new enthusiasts. Will this rapid expansion, with small breweries and brewpubs popping up like spring hop shoots after a rain, lead to a glut of beer? Can the rapid expansion of breweries sustain itself, or will there be a downturn or, Ninkasi forbid, a crash? It happened in the mid- to late ’90s. Who will step up to drink all this new beer? The “King of Beers” and its multinational, foreign-owned management, now known as Anheuser-Busch InBev, based in Belgium, still command the largest piece of the U.S. beer pie, accounting for 46 percent (or 351 million barrels) of beer produced, with the SABMiller(Coors) conglomerate, also foreign-owned, producing 276 million barrels. AB InBev is in the process of buying its rival for over $100 billion to become the largest brewer in the world and totally dominate the American beer industry.

Our nascent craft beer segment, now celebrating 4,200 breweries around the country, produces about 22 million barrels annually. The largest brewery in the craft segment is Samuel Adams, accounting for some 4 million barrels of beer. The craft segment of the beer pie, however, is growing rapidly, whereas the Big Beer segment is in steady decline.

We are often asked how many more small breweries can be supported before the good-beer market is saturated. Back in those halcyon days over 50 years ago, when small wineries were popping up like mustard weeds among the vines, the same questions were asked. At the time, the wine industry was dominated by one enterprise started by Italian emigrants by the name of Ernest and Julio Gallo.

The brothers Gallo started post-Prohibition in 1933 and struggled for many years against some 800 other start-up wineries, mostly in California. By making clean, affordable products and doing a lot of their own distribution, Gallo came to dominate the U.S. wine market, taking over other brands, putting many out of business and jealously guarding shelf space.

As varietal wines became more attractive, the jug brand category shrank, but Gallo, not an organization to let such matters go unnoticed, began buying up and marketing other smaller-sounding, if not actually small, wineries. Gallo now owns some 60 brands of domestic and imported wines, including Apothic, Barefoot, Bridlewood, Columbia, Covey Run, Dancing Bull, Ecco Domani, Frei Brothers, MacMurray Ranch, Mirassou, Turning Leaf, William Hill and many others.

Consider our beer world as being much like the wine world of the past. As fewer people embrace “jug” beers, the trend toward flavor-forward “varietal” beer is now the tail wagging this dog. Big Beer (AB InBev and SABMiller) is moving rapidly in acquiring brands to market and distribute, including Blue Point, Elysian, Four Peaks, Golden Road, Goose Island, Meantime, 10 Barrel and others.

Today there are over 10,000 wineries across the U.S., compared to 4,200 breweries. And we are a beer-, not wine-, drinking nation. Statistics for beer and wine consumption show that beer is the overwhelming leader, with 87 percent of the beverage alcohol pie, with wine at 8% and spirits at 5%. That looks like a lot of room for new roots-based breweries across our country.

We are truly in the golden age of beer. Your support and enthusiasm for craft beer is making a huge contribution to the continuing evolution of the beer industry. As a Celebrator reader, you are in the unique and enviable position of leading others to the rewards to be found in the beverage of flavor and moderation: craft beer. Spread the word…
The Year In Beer – Celebrator Turns 28

When our first issue of the California Celebrator dropped in January 1988, we had only 20 breweries to keep track of in California. Last year, the total number of breweries in California hit 600, while the brewery count for the country reached a record level of 4,144! This number bests the historic high of 4,131 breweries in the United States established way back in 1873.

Breweries continue to open at a rate of two a day all around the country. Fifteen states are now home to over 100 breweries, including Michigan, New York, Pennsylvania, Illinois, Texas, Ohio, Florida, Virginia, North Carolina, Wisconsin and Indiana.

The rising popularity of craft beer has led to a rising valuation in brewery properties, a highlight of which was the stupefying price paid late last year for the Ballast Point brewing operations in San Diego — one billion dollars!

In 2015, we saw yet another year of double-digit craft beer growth. According market research firm IRI, craft volume sales in key U.S. retail channels grew 18.8 percent in 2015, while dollar sales grew 23.4 percent, to more than $2.9 billion. So, the key U.S. craft beer sales equal three Ballast Points? Hmmm…

With the major brewers, venture capital and private equity players acquiring craft brewers at a rate of one a month for the past 14 months, the question of valuation becomes as important as the quality of the beer being bought. The big brewers want prestige craft labels for their distributors and seem to be looking long-term on their acquisitions. The private equity players seek sound investments and no doubt want to see increased valuation for their investors. Their “day of reckoning” seems to have a much shorter shelf life than the big guys can afford. Breweries recently acquired in private equity–backed deals include Abita, Full Sail, Odell, Oskar Blues and others. Recently, Milton, Del.–based Dogfish Head, the nation’s 13th-largest craft brewer, sold a minority stake to a private equity firm.

Our contemporary craft beer scene is on much more solid ground than what existed in the mid-1990s, when the then-termed microbreweries “hit the wall” and quite a few breweries went out of business. Start-ups today depend on crowdsourced funding and local supporters for success. The viability of craft beer in 2016 will depend on enthusiastic consumer support far more than on investor valuations. You can take good beer to the bank if you stay true to your brew.
LETTERS TO THE EDITOR (February/March 2016)

Dear Tom & Co.,
Catskill Bill here. I have pursued the most delicious beers I can find since 1970. My first visit to California 27 years ago led me to the Goat Hill Tavern, where I first discovered the California Celebrator. Your Hop Spots have led me to countless great beer destinations all over the country. Thanks for all you do.

Catskill Bill Sand
Hurleyville, NY

Dear Catskill Bill,
Thanks for your kind words regarding the Celebrator and support for our Hop Spots. They are evolving to a directory of where you can find good beer AND copies of the Celebrator. Please continue to encourage breweries and taprooms to carry the Celebrator. Your passion for our efforts and for good beer is laudable. — Ed.



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