Getting Closer to Beer

May 1, 2015 By Christopher Shepard

Recent TV ads and other marketing for a couple of the biggest beer brands in the United States—Miller Lite and Budweiser—refocus viewers’ attention to the beer. Extreme close-ups taken inside tanks, hands rubbing hops, barley fields, liquid pouring and more. With these new spots, the companies that operate the country’s largest breweries seem to be inviting conversations about the beer they brew, who brews it and where. Those conversations may differ from others about how and where smaller brewers work, but the precision and scale of big breweries still impress many visitors. And hometown pride can be a powerful driver, regardless of the size of the team or town.

Eugene Kashper, the new CEO of Pabst Brewing Co., recently visited Milwaukee to scout sites in the city where, in the 1840s, Philip Best founded the company that would become Pabst. Kashper plans to open a small brewery and tasting room there and to potentially move some offices to a site in town, perhaps in the renovated old Pabst brewery, now a mixed-use development. Just after that visit, Pabst announced it may bring some production of Rainier, another brand in the portfolio, back to Washington state. It’s looking to open a small brewery and taproom there, too. Even though it’s produced elsewhere, Rainier’s flagship lager has already made a big comeback in grocery stores in Seattle and Tacoma. Consumers bought 25 percent more of it in 2014 than the year before, pushing it back to the third-largest brand by volume there, according to data from SymphonyIRI Worldwide.

Much smaller companies have figured out how to establish a strong home market presence by connecting with beer drinkers at their breweries. Look no further than Portland, OR. About a quarter of the top 200 companies that sold beer in Portland grocery stores last year were Oregon breweries. And one of every $4 spent on beer in Portland grocery stores went toward beer from a home-state brewery. Nearby Californians show plenty of local love, too. The top 10 Northern California breweries represented about 16 percent of all dollars spent on beer in San Francisco grocery stores; the top 10 Southern California breweries had about 11 share of dollars in San Diego food stores and gaining rapidly, according to IRI.

“Support Local” isn’t just a West Coast thing. Nor is it new. Texans have supported Shiner Beer since its founding in the early 20th century, and it’s still the No. 10 beer brand by dollar sales in both Houston and Dallas/Fort Worth supermarkets, according to IRI. Shiner is the largest in The Gambrinus Co.’s family of beer brands these days. The idea of having a “family of brands” is starting to become popular among smaller and smaller brewing companies, merging with or acquiring even smaller operations, like San Diego’s Green Flash acquiring Alpine Brewing.

Gambrinus also operates BridgePort Brewing, a 30-year-old brewery in Seattle. Although it’s significantly smaller than Shiner, BridgePort still does much of its business at home, like its bigger family member. Soon, a much larger company, Anheuser-Busch InBev (AB InBev), will run another longtime Seattle beer company that’s gotten bigger than BridgePort at home. AB InBev could increase its market share of the Seattle-Tacoma grocery stores by more than two points, or over 11 percent, with Elysian Brewing in its portfolio. It’s a similar story with 10 Barrel in Oregon. But sales at supermarkets are just a piece of the larger picture. Another: Between Elysian and 10 Barrel, AB InBev will operate a handful of brewpubs in a region where it’s struggled to be as big a player as it is in other parts of the country.

These Pacific Northwest brewpubs and taprooms won’t be the first (or last) operated by a much larger brewing company in the United States. Head to Coors Field in Denver and stop by the Sandlot to see one of the ways MillerCoors does it. Pairing baseball with beer goes way back. Live baseball and fresh beer made on-site? That can be a recipe for a pretty memorable experience. And the freshness factor is key, too. Serious amounts of money have been spent in the name of keeping beer tasting the way it does at the brewery. Cut down on the time and distance the beer travels away from the brewery and breweries also cut down on the time between investment and positive cash flow. That’s helping pave the way for the current boom in nanobreweries, really small production breweries selling almost all of their beer on-site.

Bringing folks to the brewery to buy and drink the beer has the added benefit of providing an opportunity for beer maker and beer drinker to form a deeper connection. Part of that is education: drinkers identifying characteristics of a beer and brewers pointing to specific processes or ingredients that create those characteristics. It’s an old tradition, maintained in Europe for centuries. At farm breweries, just now becoming more popular in the United States, brewers can literally point to fields of barley, allow visitors to rub hops in their hands, see beer and each step in its creation up close. Seeing, even participating, in that compelling, impressive process is an experience I look forward to sharing with many, many more beer drinkers in the years to come.