Lost and Found: 2008 in Beer

January 1, 2009 By Gregg Glaser

Lost

If it’s Wednesday, It Must be Belgium (or is that Brazil?)

What happened to big U.S. breweries being owned by Americans? (Correct that to North Americans; no, we need to be more specific—North Americans who are citizens of the U.S.A.). Well, there’s no need to be jingoistic about it, but here’s the scorecard and it’s bloody confusing:

SABMillerCoorsMolson
The SAB stands for South African Breweries (with HQ in London, not Johannesburg). A few years ago this brewer bought Miller to form SABMiller. A few years later Coors merged with Molson of Canada to form MolsonCoors. This year Miller merged with Coors to form MillerCoors.

A-B-InBev
Earlier this year, Anheuser-Busch gave in to an almost-hostile takeover from the world’s biggest brewer, InBev (which itself is the result of a merger a few years ago of giant Belgian brewer Interbrew with Ambev, a giant Brazilian brewer). By the end of 2008, InBev was supposed to have swallowed A-B, but the international monetary crisis may or may nor scuttle that deal.

Carlsberg-Heineken-Scottish & Newcastle
Carlsberg of Denmark and Heineken of the Netherlands bought Scottish & Newcastle of the United Kingdom and carved up S&N’s brewery holdings around the world. For those of us in the U.S., this means that Newcastle Brown Ale is now owned and imported by Heineken’s U.S. importer, HUSA.

What’s it all mean? Pete Reid, publisher and editor of Modern Brewery Age, an industry trade magazine, said this has been the “biggest year ever for beer news. The whole structure of the industry shifted to a duopoly, controlled by foreign multinationals. Most of the import sector was already controlled by foreign firms (and all importers selling foreign beers, obviously), so now 96 percent of the U.S. beer industry is dominated by foreign interests.”

Micros are a huge focus of better beer for All About Beer readers, but A-B, with its own craft-like beers and its financial interested in craft breweries (Redhook, Widmer, Goose Island, Kona, Old Dominion) is now basically the largest single player in craft-style beers, and A-B will be owned by InBev. The question on the table: Will InBev care a rat’s ass about craft beers?

2008 Losses

Bill Leinenkugel, for many years the president of Jacob Leinenkugel Brewing, died on September 22. He joined the company as a salesman following World War II and served as president from 1971 to 1986, the fourth generation of his family to do so. When he retired, his son Jake Leinenkugel stepped into the position heading the nation’s seventh oldest brewery. Bill L. served the beer industry as a director and past president of the Brewers Association of America and director and secretary of the Wisconsin State Brewers Association.

Jay Misson, head brewer for the Triumph brewpubs of Pennsylvania and New Jersey, died on June 9. Mission had also brewed at Vernon Valley Brauhaus Brewery at Action Park Water Park in Vernon Township, NJ, and at Gordon Biersch in California.

Matt Luhr, the brewer at Dillon Dam Brewery in Dillon, CO, died on October 16. His brown ale received a gold medal at the recent Great American Beer Festival just days before his death.

First It’s Here, Then It Ain’t

Miller launched, tested, announced a national roll-out and then killed the Miller Lite Brewers Collection because the brand did not perform as well as hoped in test markets. These beers, which included Miller Lite Wheat, Miller Lite Amber and Miller Lite Blonde Ale, were designed to be light beers with something of the flavor of craft beers. They were pretty good. Miller will instead focus its attention on its priority brands: Coors Light, Miller Lite, Blue Moon, Miller High Life, Keystone Light and MGD 64 (which has been performing well as it ramps up for a national launch).

Coors discontinued the Zima line of almost-beers due to challenging malternative sales and declining consumer interest in the category. Coors is asking retailers to replace Zima with Sparks.

U.K. brewer Charles Wells has lifted Young’s Winter Warmer and Young’s Oatmeal Stout from the United States. Theakston’s Old Peculier is gone from U.S. shelves, too. So is McEwan’s Scotch Ale from Scottish Courage in Edinburgh.

Stone Coast Brewing of Maine is out of business.

Wood-Aged Beers: Are Their Days Numbered?

Well, maybe only in Sunny California. That state is considering legislation that would force brewers to prove that barrel-aged beers are not distilled spirits if they can’t prove that their barrel-aged beers have less than 0.5 percent alcohol from the barrels. A tax will be imposed if the proof isn’t positive. Looks like the brewers are going to have to explain to the lawmakers that barrel-aged doesn’t mean that gallons of spirits are added to the beer.

Beer Distributors: Consolidation

There has been an onslaught of beer distributor consolidation in the United States. Beer distributors are the unseen leg of the so-called “three-tier system” of beer sales in the U.S., mandated by federal law since the repeal of Prohibition. These legs are the breweries (or importers), the distributors and the final sellers of beer (stores, restaurants, bars).

Why does this matter to you? Joe Lipa, of the pioneering beer import business Merchant du Vin, said this consolidation will greatly affect the craft and specialty import segment. His worries?

Will the new mega-distributors drop some of the smaller breweries because they don’t meet volume expectations?

Will the new mega-distributors pair down the number of styles of beers offered by these respective breweries?

Will the new mega-distributors only want to deal with the top tier of specialty importers?

Will the present A-B distributors who presently sell craft/specialty lose interest after the InBev merger?

Will we see a return of the small craft/specialty distributor?

Lipa believes that in three to five years, the new mega-distributors will pare down to one or two national crafts brands, one or two regional crafts, one or two local crafts and two to four of the top specialty importers.

Bye-bye, Burton

Coors closed the Bass Museum in Burton-on-Trent in the United Kingdom. Coors acquired Bass several years ago in one of the big international buy-sell-close brewery deals.

Legal Loss

Costco lost its court case in Washington State. Costco sued the state over its alcohol laws, which prohibited Costco from buying beer directly from breweries.

Found

Retro Beers

Schlitz, “The Beer That Made Milwaukee Famous,” returned to its birthplace with what is claimed to be the original formula (gleaned from old notes and interviews with former brewmasters). Schlitz is brewed by Pabst, the maker of another popular retro beer of the past few years, Pabst Blue Ribbon. Schlitz was first brewed more than 150 years ago and was the top-selling beer in the United States for most of the 20th century. The brand died an ignoble death as clueless brewery owners dumbed-down the recipe, eventually making it undrinkable for many of its regular customers. The Schlitz brewery closed in 1981 and the next year the owners sold the brand to the Stroh Brewery of Detroit, which later sold Schlitz and other brands to Pabst.

Iron City Brewing in Pittsburgh is the new brewery formed from the assets of the former Pittsburgh Brewing. The Iron City name harkens back to the original name the brewery was founded under in 1861.

All Rye

Bear Republic Brewing of California brewed the world’s first 100 percent rye beer, called Easy Ryeder, overcoming the difficulties in brewing with this delicious but notoriously tricky grain.

Micros Merge, Co-Brew, Co-Mingle, Miscengenate, Get Animalistic

Two of the country’s original craft breweries, Oregon-based Widmer Brothers Brewing and Washington-based Redhook Ale Brewery (with a second brewery in NH), merged to form Craft Brewers Alliance.

Magic Hat Brewing of Vermont took over/merged with Pyramid Breweries of Washington. The holding company for the new combined breweries is named IBU (Independent Brewer’s United). IBU is also brewer’s shorthand for International Bitterness Units, a measurement of a beer’s bitterness from hops. Cute name for the new company.

Flying Dog Brewery of Colorado bought Frederick Brewery of Maryland in 2006, and this year, as of January, all the animals were happily making beer in Maryland. The doggie brewery in Colorado was closed in favor of the larger, more modern brewery in Maryland.

We can expect more of these mergers/buy-outs among micros.

Partnership

Gordon Biersch Brewing of California began brewing beers for sale in Costco stores.

The Sky Didn’t Fall—Hops Didn’t Disappear

The big story at the end of 2007 and into early 2008 was that there was a monster worldwide shortage of hops and that prices would be astronomically expensive for years. Fuggedaboutit.

David Edgar of Mountain West Brewery Supply said: “Germany had a bumper crop, best in decades, so the pressure from Europeans trying to buy U.S. hops (with Euros) is dramatically reduced. The U.S. crop is at least average, so generally it’s been a good year. Willamette (a variety of hops) had all but disappeared a year ago. Now we have reports of A-B offering Willamette to other brewers, kind of flooding that variety back into the market. Some specialty varieties and high-alpha varieties will still be tight. Probably no more extreme $25-$30+ per pound, but maybe instead gravitating toward the $15-$22 range per pound.”

Ralph Olson of Hopunion also said that the hops situation is much better this year, “but I still think the supply is on the light side. By next year we will be out of the woods for sure. This year in the U.S. we put in quite a few acres of hops. This helped out, along with getting a pretty good crop from the established fields.”

And in the midst of all this hops angst, Jim Koch of Boston Beer Co. (Samuel Adams beers) stepped into the picture last February offering 20,000 pounds of East Kent Goldings and Tettnang Tettnanger hops from his brewery’s stocks. Because of the overwhelming number of requests (close to 400) that Boston Beer received, Koch held a lottery to allocate the 20,000 pounds of hops. Ninety-nine breweries shared the spoils. On October 3, after Koch took two trips to Germany for the hop harvest and hop selection, he decided to release another 20,000 pounds of German noble Tettnang Tettnanger hops to help brewers who still had difficulties obtaining hops.

New Brew Mag

Beer Northwest magazine enjoyed its first full year as a new beer publication.

Beer Cans

New Belgium Brewing of Colorado released its huge-selling flagship beer, Fat Tire Amber Ale, in cans for the first time. New England Brewing of Connecticut cans its beers. Oskar Blues Brewery of Colorado, the first micro to can its beers, continues full-force as a micro-canner. They’ve even tapped beers from a casket (on Halloween).

A brand-new micro in Nevada, Buckbean Brewing, began operations in 2008 with only canned beers. Black Noddy Lager, a Bavarian Schwarzbier, and Original Orange Blossom Ale, an ale brewed with Munich and caramel malts, American hops and orange flowers, are only available in 16-ounce cans.

And many other micros can their beers, touting facts that cans protect beer better than glass, are lighter to transport, can be taken places glass is prohibited (parks, forests, golf courses) and are more compact than glass.

New Beer Styles?

Discovered on some asteroid or in the middle of the jungle of Central America? No. This year the Great American Beer Festival added these new beers styles to its annual competition of 75 styles:

Fresh Hop Ale, American-Belgo Style Ale and Leipzig-Style Gose.

A New Beer Tasting Dedicated to Beer and Food

New in 2008 was SAVOR: An American Craft Beer & Food Experience, held in Washington DC. SAVOR 2009 will be held on May 30, again in DC, at the National Building Museum.

Seasonals Appeal

Newly launched in 2008 was a website entirely dedicated to seasonal beers (the number one selling craft beer style if you seasonal beers can be called a style). www.seasonalbeerandfood.org lists seasonal beers by state availability and also mentions foods with which to pair the beers.

Repeal

2008 was the 75th anniversary of the Repeal of Prohibition. That’s a good thing for all of us who love beer, wine, spirits, cider, mead, saké—and so forth. There’s even a website for the occasion: www.75YearsofBeer.org.

Beer was actually made legal on April 7, 1933, but you couldn’t stock a whole liquor cabinet until the 21st Amendment repealed the 13-year disaster of Prohibition on December 5, 1933. If you want to toast the exact moment, President Roosevelt signed the proclamation that day at 7:00 p.m. Cheers.

Bavarians Hit U.S. Market with Beer Glasses

If the Bavarians think there’s gold in ‘them thar U.S. beer hills,’ who are we to say no to them? Maximilian Riedel, CEO of Spiegelau USA, presented the Bavarian glass-making firm’s new Beer Glass Collection at an Oktoberfest in August luncheon in New York City. On display, and then filled with beer, were glasses named Lager, Stemmed Pilsner and Wheat Beer, each specifically designed to showcase the aromas and flavors of these beer styles. The glasses are sold in sets of two and packed in tubes.

The PET Beer Bottle Celebrated 10 Years of Market Success

It was in October 1998, culminating years of research and testing, that O-I Plastic, now part of Graham Packaging, and Miller Brewing, now part of MillerCoors, introduced the innovative polyethylene terephthalate container. Say that 10 times fast after a few pints.