This is a column about beer, not business. But when the two intersect, as they have with the spate of recent craft beer mergers and acquisitions, it’s worth taking a look at what’s going on.
Let’s be candid: Big beer is brewed (and brewed with great precision) to appeal to the largest number of consumers. In doing so, anything that’s compelling or edgy or different about the beer is either dialed back or done away with. What we’re left with is beer that is drinkable but hardly memorable. OK, I remember choking on an orange slice garnishing a Blue Moon I had seven years ago, but I digress.
For many years, this kind of brewing was OK here in Sacramento and nearly every North American city. Enter the craft beer revolution, which gained traction in the 1980s, boomed and then retreated in the 1990s, and has grown up and into the mainstream in the past five years. Many consumers now understand that craft beer is much tastier, eminently more interesting and significantly more diverse. They have well-informed palates. They know their beer. Many who have yet to understand that probably will in the years to come. To enjoy craft beer in 2015-16 is to taste amazing brews all over the flavor spectrum.
Which leads me to an important piece of beer business – the decline of beer brands that are deeply rooted in the American way of life. From 2009 to 2014, sales of Budweiser have plummeted by 26 percent, Natural Light has dropped 26.6 percent and Miller Genuine Draft is off 54.5 percent, to name a few of the free-falls. What do these beers taste like? Unoffensive sameness. Defiant blandness. Gently flavored beer product. Take your pick. When I have friends tell me they don’t like beer, these are the beers they’re talking about.
Depending on your perspective, these numbers are either encouraging or frightening. Multinational behemoths don’t take these losses sitting down. A couple of months back, Anheuser-Busch InBev announced plans to buy rival SABMiller. Did they do so in order to take on more decaying beer brands? Of course not. There are expanding markets in Africa and Asia and lots of growth potential.
It’s also relatively easy to start throwing money at high-performing craft breweries. Heineken bought half of venerable Lagunitas, MillerCoors acquired promising upstart Saint Archer Brewing and, in a move that blew away craft beer fans, Constellation Brands (owner of Robert Mondavi wines and Corona beer) snapped up San Diego’s Ballast Point for $1 billion. The key selling feature? Ballast Point’s continued growth.
Constellation has said Ballast Point will continue operating as an independent brewery, but there are those who find that hard to believe. I would imagine Greg Koch of Stone Brewing in Escondido is one of them. When I interviewed him in August about Stone’s plans to open a brewery in Berlin and tap into the West Coast IPA craze in Europe, he was adamant about remaining independent. The corporate numbers crunchers, Koch insisted then, are bound to find ways to use cheaper ingredients, speed up the brewing process and tone down the boldness. Little by little, we’ll end up with sameness. “You can’t have the cheapest and the best,” he said.
Shifting gears, I just learned that Stone’s Berlin brewhouse has produced its first batches of beer and began distributing them to bars, restaurants and retail outlets in Germany, Belgium, Italy, Netherlands, Poland, Spain and the United Kingdom. Stone refers to this venture, a $25 million brewery and destination restaurant (opening in 2016) as the “first American craft brewer to independently build, own and operate their own brewery in Europe.”
Stone has also released a collaboration IPA with Sierra Nevada, and the description sounds incredible. This is two brewing greats coming together to show off and do something cool. It’s also time-consuming, expensive, ambitious and more. According to Stone’s brewmaster Mitch Steele, batches of the IPA were brewed with Magnum hops, followed by late additions of Amarillo, Chinook and Cascade, the latter being the signature hop in Sierra Nevada’s repertoire. A batch brewed months ago was divided in two, with half going into gin-infused bourbon barrels for aging, and the other half in rye whiskey barrels.
The aged beers were then blended with a fresh batch of IPA. Beer lovers have to be salivating. Just imagine all those layers of flavors, the balance, the complexity, the passion. In fact, I was at Pangaea Bier Cafe on Tuesday and a customer asked for it specifically (coming soon, he was told). It’s called Stone and Sierra Nevada NxS IPA and will be available in 22-ounce bottles from select retailers. A quick YouTube search will take you to a video about the collaboration.