Beer Town: The Year in Beer 2014

31 Dec 2014 | Author: | No comments yet »

2014 was a good year for Oregon craft beer.

To prove it, here are some compelling headlines and statistics from the Brewers Association, the not-for-profit trade association of small and independent American brewers: U.S. brewery count returns to historic levels. Mike Stevens, co-founder of Founders Brewing Co. in Grand Rapids, Mich.: ‘I started to ask the question of what happens to Founders and where does it go when we’re gone — and I don’t mean retire, I mean leave this Earth.’ When craft brewers found a brewery, they aren’t typically considering what that brewery will look like 20 or even 100 years down the road.For the first time in its 27-yer history, the Oregon Brewers festival opened on a rainy day, not that it dampened the spirits of Rogue brewer and Grand Marshal John Maier any as he tapped the first keg. (FoystonFoto) 2014 also saw the 30th anniversary of two of the state’s pioneer craft breweries: BridgePort and Widmer Brothers Brewing.hose who thought 2014 would bring the collapse of the Inland Northwest’s craft brewing bubble are going to have to wait — and wait for a long while, it seems — for that prognostication to become reality. In November, the United States passed the mark of 3,200 brewers in the country and the number of brewery licenses reached the highest ever, topping 4,500 in the first sixth months of the year.

BridgePort celebrated with the Trilogy Series, including Aussie Salute, a tribute to Phil Sexton, the Australian winemaker who made Portland an IPA town in 1995 with the then amazingly hoppy BridgePort IPA. There, chief executive Carlos Brito and directors from the world’s largest brewer peeled and sliced oranges for wine barrels filled with beer to make a farmhouse ale. The free 30-minute, walk-through of the malting, brewing and packaging areas at the giant MillerCoors Brewery (13th and Ford streets in Golden) is a short course in beer production. In fact, through Nov. 30, volume sales of craft were up more than 17 percent in IRI’s multi-outlet and convenience store (MULC) universe (which comprises grocery, drug, Wal-Mart, Club, Dollar, Mass-Merchandiser and Military stores). Thirteen states (California, Colorado, Washington, Oregon, Michigan, New York, Pennsylvania, Texas, Florida, Wisconsin, Illinois, North Carolina and Ohio) now have more than 100 breweries each.

Widmer celebrated all year, reprising 30 beers from its back pages, remodeling the Widmer Pub, creating special collaborations with several Oregon breweries and celebrating craft brewing’s happiest accident — Widmer Hefeweizen, which began in 1986 as a hurried improvisation and is still Widmer’s flagship beer — with the summer-long 100 Days of Hefe. The reason: growth in the US isn’t in mass-produced brands, but small labels like Chicago-based Goose Island, which makes labour-intensive beer like the orange-infused Sofie ale and was acquired by AB InBev in 2011. Afterward, visitors 21 years and older, with ID, can sip a cold sample in the “fresh beer room.” The tours are offered Thursday through Monday from 10 a.m. to 4 p.m. and Sundays from noon to 4 p.m., except holidays. No longer can a brewery — as Community Brewing Company was able to do last year for its deserving win — stand out on medal wins or quality beer production alone. When you have no fewer than five area breweries medaling at the 2014 Great American Beer Festival and countless others making exceptional beer, quality product and shiny medals almost become the baseline.

Underscoring that growth were a pair of high-profile craft acquisitions as well as a handful of notable investments from private equity and strategic partners alike. The Commons is the quintessential Beervana success story: 5 years ago Mike Wright brewed on a one-barrel system in his Southeast Portland garage as Beetje Brewing. In the increasingly trendy Perry district, former Big Sky brewer Ben Lukes and his wife, Christy, opened Perry Street Brewing, offering a wide array of creative brews (thanks to Lukes’ use of multiple yeast strains) inside the slick space. But beyond the increased investment activity, a variety of important storylines emerged, setting the tone and shaping Brewbound’s ongoing coverage of the rapidly maturing craft beer category.

The buzz created by not only its seasonal Breakfast Stout but its limited-release Canadian Breakfast Stout (CBS) and Kentucky Bourbon Stout (KBS) helped increase demand so greatly that production has nearly tripled from 74,000 barrels in 2012 to an estimated 190,000 this year. In 2011 he took the plunge and bought a bigger system, leased commercial space and hired a crew to start The Commons Brewery, and now they’re about to move to Southeast Belmont, add a second brew house and triple their space.

English Setter arrived in Spokane Valley with rotating beers, almost all with dog names, while Newport got into the game with the arrival of Top Frog Brewery. From beer to burgers to yoghurt, consumers in recent years have shifted their affections from the established names that long dominated the industry to upstarts that offer more inventive products, greater cachet, or the perception that they are healthier or more natural than the products of giant conglomerates. The already established breweries continued to grow, with Orlison Brewing Co. installing its own canning line and taking those cans — including the ALS-fighting Pilsner 37 inspired by Steve Gleason — to more and more stores and bars across the Northwest. In my mind, it’s all about advancing the community — be it the community of craft brewers in North Texas, the community of craft brewers statewide or, hell, just the local community, period.

The Rogue Nation recently had its first JJ day, on Joyce’s Birthday, and Rogue, Columbia Distributing and a mystery donor gave away three $10,000 Jack Joyce brewing scholarships in October. McDonald’s Corp. ’s sales are suffering at the hands of fast-growing smaller chains like Chipotle Mexican Grill Inc. and Five Guys Burgers & Fries. Overall, packaged food manufacturers with less than $US1 billion ($1.23bn) in sales grew 6.2 per cent annually between 2009 and 2012, four times faster than those with more than $US3bn in sales, according to PricewaterhouseCoopers. River City Brewing rolled out excellent seasonal beers like their Afternoon India Session Ale and the Riverkeeper IPA, the latter of which raised funds to maintain the health of the Spokane River. That exponential growth got both Stevens and Engbers thinking about the next step, which eventually led to the Dec. 17 announcement that Spanish brewer Mahou San Miguel would be joining Founders as a minority investor.

Angst aside, it’s not necessarily a bad thing: Anheuser-Busch is a hands-off owner of other respected craft breweries, such as Goose Island, and has owned about 30 percent of Widmer for several decades. A good rule of thumb — leave your tree for recycling in the same condition as you would find it naturally in the forest. If you ring in the New Year with a bit of bubbly, you should not get behind the wheel.

Here in Georgia, several new breweries opened in 2014, including Creature Comforts in Athens, Eventide, Orpheus, and Second Self in Atlanta, and Service in Savannah. Mahou, which was founded in Madrid in 1890 and now has seven breweries in Spain and one in India, will take a 30% stake in Founders with an eye on helping Founders expand and get a toehold in U.S. craft beer.

In addition, Peticolas released several exceptionally high-quality beers, including a special, delicious IPA (the appropriately named Thrilla in Brazilla) inspired by the World Cup in Brazil and its first Belgian-style beer, a dangerously boozy yet incredibly drinkable Belgian Tripel called A Lost Epic. Rather than sending it to landfills, the handshake transaction between brewers and farmers has been lauded as mutually beneficial by many industry watchers and advocates. Longtime contract brewery, Wild Heaven, opened a brick-and-mortar brewery in Avondale, while Burnt Hickory in Kennesaw expanded from nano to micro with a new 20-barrel brewhouse. The move gives 10 Barrel access to Anheuser-Busch’s distribution and unfathomably deep pockets, but it’s also changed the way the brewery is perceived by Oregon beer fans. 2014’s best beer promotion: During the summer, 10 Barrel had a pop-up free-beer vending machine to promote Swill, its blend of beer and soda: put in your driver’s license to prove legal age and you got back your license and a bottle of Swill. Budweiser has gone from being one of four beers available on draft in a typical bar to one of 10 or more. “We are late to the game,” said Luiz Edmond, AB InBev’s North American president. “It took us more than it should to recognise the trends.” He added that “you shouldn’t be surprised” if the company bought more craft brewers.

Better yet, the brewery did all this while continuing to produce a lineup of local favorites that includes such notables as Velvet Hammer and Royal Scandal. The Craft Brew Alliance of Widmer Brothers, Redhook and Kona Brewing has a distribution and marketing agreement with Anheuser-Busch InBev BUD, -0.39% that gives A-B a 32.2% stake. Belgium-based AB InBev has flourished globally by focusing on big brands such as Budweiser and Stella Artois, and has recently acquired the largest brewers in Mexico and South Korea. Duly noted by a group of Georgia beer lovers polled at year’s end, new breweries like Creature Comforts and Orpheus are dedicated to producing the year’s most celebrated styles, such as Berliner Weisse, Gose, and other sour and funky beers. It was also ample space for Twelve String Brewing to display its impressive 10-tap pouring system for the big crowds that came out on the unseasonably warm late-September weekend.

In October, Dogfish Head announced significant changes to its executive leadership team, including the departure of longtime vice president of sales, Adam Lambert, who left the company to pursue a new opportunity with Michigan’s New Holland Brewing. Not only has owner and brewery namesake Michael Peticolas openly trained in his shop many brewers who would go on to become his local competitors, but he’s also developed a mini army of rabid volunteers with little to no commercial brewing experience that he eventually turns to when it comes time to hire and expand his operations. In June, Lagunitas founder Tony Magee cut the ribbon at his new 300,000 sq. ft. brewing facility, a site that began producing, and shipping, liquid in May. Belgian brewer Duvel Moortgat, meanwhile, took ownership of Cooperstown, N.Y.-based Brewery Ommegang in 2003 before buying out Kansas City, Mo.-based Boulevard Brewing last year.

For reimbursement instructions, visit True cinephiles can dig deep into the movie world for just $1 during the Tattered Cover Film Series. The first Sunday of every month film critic Howie Movshovitz hosts the screening and discussion of a silver-screen classic, culled from the world’s finest filmmakers. But, perhaps the biggest “more” of them all is the company’s recent foray into the Texas state legal system — previously fertile ground for this brewery owner.

Stevens: Quite honestly, I think everyone wants to think about whether or not this is a big sale, but it was a way for us to ensure and protect the future legacy of the brand and to protect our positions, what we do and to carry on the longevity of this plan we have in place. Pay attention to ME!” Not that much of a surprise, really, given that two of my favorite beers in the world are good old standbys — Anchor Steam and Mac’s Amber.

Teaming up with the likes of Austin’s Live Oak Brewing Company and Granbury’s Revolver, Peticolas is challenging recently passed Texas laws that essentially forfeited a craft brewers territorial distribution rights. Stock Ale is another; a great beer, especially that year-old keg the lads found in the cooler earlier this week to tap at Sunday’s fourth anniversary party.

General Mills in September agreed to pay $820 million to buy Annie’s Inc., a Berkeley, Calif., maker of organic and natural foods with annual sales of $204 million. Dann Paquette, the co-founder of Boston’s Pretty Things Beer & Ale Project took to Twitter at the wee hours of the morning on October 14 to complain about what he, and many other brewers, call pay-to-play — under-the-table transactions in which brewers or wholesalers offer cash and incentives to retailers and bar owners in exchange for guaranteed placement. Coca-Cola Co. said in August it would buy a 16.7% stake in fast-growing energy drink maker Monster Beverage Corp. for $2.15 billion and recently acquired niche beverage brands Honest Tea and Zico coconut water. Best beer release: January’s release party for Sierra Nevada Bigfoot Barleywine at the White Owl Social Club included two vintages of the beer and two local Bigfoot experts, Guy Edwards and Rhettman A. MillerCoors, the US’s No 2 brewer, makes Blue Moon, a specialty wheat beer it introduced in 1995, and recently launched small labels such as Batch 19 and Third Shift.

One month later, the Massachusetts Alcoholic Beverages Control Commission launched a formal investigation into pay-to-play practices, sending subpoenas to a number of brewers, distributors and retailers throughout the Commonwealth. With that in mind, we recently caught up with owner Michael Peticolas to talk about the year that was, there beers he brewed and what’s next for both his brewery and the North Texas craft beer world on the whole. In March, the country’s 10th largest craft brewery issued a request for proposal, and detailed plans to begin building an east coast brewing location. The award this year goes to two new beer festivals, last winter’s Coffee Beer Invitational at Goose Hollow where a dozen talented brewers created beers made with locally-roasted coffee and the Handmade Bike & Beer Festival, a joint effort by Hopworks and the Oregon Bicycle Constructors Association, which featured handmade bicycles and local brewers pouring bike-themed beers.

We created a list of three priorities that we wanted to achieve throughout the interviewing process: No. 1 was to find a partner who could understand the legacy desires of our company. Priority No. 2 was to have growth opportunities built in and, obviously, Mahou, with their global reach and distribution, offer some excitement in the global market. Although many were appalled that profitable craft brewery would ask its fans for a handout, Stone successfully raised $2.5 million, more than doubling its initial stated goal. AB InBev also hopes to preserve qualities that made Goose Island successful to begin with, while giving its roughly 15-person brewing staff the resources to develop unique beers the company can distribute nationally. In the past year, Brett Porter, who stayed as Goose Island’s brew master after AB InBev’s acquisition, has launched two new beers: 312 Urban Pale Ale and Rambler IPA.

Looking at this concept in terms of legacy, who better than a brewery that’s 125 years old and going on the seventh generation under the same family? On a recent day at the original Chicago brewery, he prepared to bottle a special version of its Bourbon County Stout that had been aging for seven months in wooden whiskey barrels with Madagascan vanilla beans, Congolese cocoa nibs and Vietnamese cassia bark. “We’re all about big, bold flavors,” he said.

Another idea whose time has come: OSU’s Oregon Hops & Brewing Archive is assembling historical material and oral histories from the people behind the amazing growth of Oregon’s brewing industry. Reception-wise, things have gone much better than planned four years ago — and not just the reception, but the subsequent support of our brand has also turned out much greater than anticipated. In January, the he newly-minted CEO of CBA used the annual Beer Business Daily “Beer Summit” as a platform to fire specific and cutting remarks at the BA. Porter said he can now experiment with hops from AB InBev’s 1000-acre farm in Idaho that he calls “hop fairy land.” That is important because the plant imparts bitterness and aroma to beer.

Taking the stage in front of 300 beer industry professionals, Thomas leveled a series of charges against high school-style cliques and labels in the beer industry, and instead suggested that brewers worry more about their companies than what they are called by others. He can add Brettanomyces, a tough-to-control yeast that gives beer a “pleasant barnyard” taste, from the sealed fermenting room that AB InBev built. Through that process, Mahou found out about us and we found out about them, had a couple of meetings, got to know the family and found out that our value systems and the things we care about are fairly identically matched. Best reason to embrace the darkness: Fort George’s Festival of the Dark Arts, which fills up the Fort George brewery block in Astoria with art, entertainment and dark beer.

There’s a Dark Art Gallery, onsite tattoo studio, belly dancing, tarot card reading, a blacksmith forge, glass blower’s kiln and fire dancers and 55 dark beers on tap. Throw the sales figures and public opinion stuff out the window: Push comes to shove, which of your beers, one-off or otherwise, would you consider to be your favorite? Name-calling, labeling, craft versus crafty.” “Definitions will come and go,” Thomas wrote, “And, they will change as surely as the market does; this latest BA announcement is a very current reminder of that. Embracing the lightness: Migration Brewing and Portland State University students and staff brewed Little Foot Red Ale, a beer with a smaller carbon footprint than most craft beers. As Redhook turns 33, as Widmer Brothers turns 30 and as Kona turns 20, we can maturely and confidently define ourselves; we don’t need others to do that for us.” At a two-day meeting held February 26-27 in Boulder, Colo., the BA Board of Directors voted to revise its at-times controversial definition of what it means to be a “craft brewer.” By softening its stance on adjunct ingredients like rice or corn to allow breweries using “traditional or innovative brewing ingredients” to fit the definition of craft, the BA also brought millions of barrels of beer under the craft tent — a move that will allow it further tout the growth of craft brewing as a category.

These guys have seven breweries, they’re global brewers, they’re global distributors of their beer, we want to learn from them and they want to learn from us and they’re going to help us bring that American craft beer to new markets with respect to our brand. Independent: Less than 25 percent of the craft brewery is owned or controlled (or equivalent economic interest) by a beverage alcohol industry member that is not itself a craft brewer. As another indication, Bushwhacker Cider, the country’s first cider-only taphouse, will soon open a second location, this one in the Woodlawn neighborhood.

Tell us a little bit about your decision to team up with Live Oak and Revolver for the lawsuit against the State of Texas concerning compensation for distribution rights. This year, it rolled out Goose Island’s first national advertising campaign, with full-page ads in craft-beer magazines like Beer Advocate and an online video with the tagline, “We don’t need to be the only beer you drink. While some brewers stand by the BA’s decision, and even applaud the group’s efforts to let consumers know about the larger, more resourced owners behind brands like Shock Top and Blue Moon, other brewers would rather see the BA include language that speaks to quality, instead of spending so much time discussing ownership. Best art and beer: The Drunken Cobbler Portland artist Eric Steen, Widmer and the Portland Art Museum invited five Oregon brewers to make beer inspired by a work in the Museum’s permanent collection Jean-Baptiste Greuze’s “The Drunken Cobbler.” Let the hoppiness begin: Lucky Labrador’s 10th annual hop harvest in late August saw dozens of volunteers pick several hundred pounds of fresh hops from backyard vines brought in from around the city: it’s the annual beginning of a month or two of fresh-hop buzz in Oregon that includes special beers, hop farm tours and fresh hop beer festivals.

It helped us to quickly make decisions and say: “I’m sorry, guys, but I don’t think we can go on talking.” In private equity, for instance, we’ve talked to a lot of folks and I’ve talked to private equity for years and years just to hear them out. BA president Charlie Papazian asked brewers to continue improving various aspects of their businesses — mainly urging attendees to focus on producing quality beer and continue innovating. Of those, 76 are in Chicago, and Eric Hobbs, who left Goose Island to start Penrose Brewing, estimates 20 more breweries could open in the city next year. There were eight notable transactions involving craft breweries this year: A-B InBev snatched up New York’s Blue Point Brewing and Oregon’s 10 Barrel Brewing. I thought about what would happen to this brand, and it would get flipped to another private-equity firm and get flipped again and get flipped here and get flipped there.

Then you’re dealing with people who want to rack ’em and stack ’em, bring your pricing down and get your volumes up and a whole different model than what we and Mahou want to do with our brand. With your continued brewery expansion and your company touting the creation of new jobs as a result, that seems like the antithesis of what you’re going for.

As for collaborating on events, our event with Community [Beer Company] was a success, and I’ll certainly participate in additional co-events in the future. We were doing that whether we had a partner or not, that whole deal was debt-financed and the Mahou partnership isn’t paying the bank of or anything. With this new opportunity internationally, we’re putting together a short-term and long-term international plan, but that’s a brand-new team made up of all new individuals not from our domestic team, and they will not cross each other. Whatever way we’re defined within that box doesn’t concern us, because we’re still functioning the same way today as we did yesterday when we were termed “craft.” Nothing’s changed.

Marketing agency CP+B Copenhagen worked with Danish brewer Rocket Brewing to create a beer that, it claims, will allow a person to reach the 0.075% blood alcohol content required for peak creativity. From University of Illinois at Chicago professor Jennifer Wiley, whose research concluded that the average man is at his most creative when his blood alcohol level hits 0.075%. However, it’s a tough enough number to hit that Rocket Brewing had to place a meter on bottles of The Problem Solver to indicate exactly how much beer it takes to hit that level. Growth at Corona, Dos Equis, Modelo and other brands could be lazily attributed to a growing Hispanic population, but Hartung notes that generation demographics play a far larger role in the discrepancy.

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