thorn brewing cutwater

AB InBev Buys Into San Diego with Cutwater Spirit Aquisition

Many people thought that it was just a matter of time before Anheuser-Busch (AB InBev) sunk its teeth into the San Diego craft beer scene but in a slight pivot this week, they announced that they acquired Cutwater Spirits, the San Diego-born craft distillery.  Many people in the craft beer scene were not surprised by this purchase because the founders of Cutwater were also the founders that sold Ballast Point to Constellation for the monumental price tag of $1 Billion in 2015. They obviously know how to grow a brand (quickly, in Cutwater’s case, since it’s only been around since 2017) to a level that it’s highly desirable to mega-corporations and for that, they deserve kudos since that is no small feat.

The disappointing part of the situation is that they sold to AB InBev, one of the worst big beer companies when it comes to how they behave and compete in the craft beer sphere. In fact, if it was any company other than AB InBev there would likely be no discussion at all because there is nothing wrong with people make money by working hard on their dream, something that most of us in craft beer are trying to do too. But with beer sales not in the same insane growth pattern they once were and their core brand Budweiser suffering as much as it is, it makes sense that AB would make their moves on spirits and canned cocktails, one of the faster-growing segments in the alcohol industry.

While we certainly don’t fault the Cutwater owners for selling the company, many of us have to find other delicious canned cocktails to love because we just can’t stomach putting money into AB InBev’s pockets when they continue to work against the craft beer community. Just to go over a few of AB InBev’s moves over the past few years, here’s an excerpt that explains it pretty well from one of our recent blogs:

The reason why many craft beer insiders and consumers are bummed when their favorite craft brewery is sold to AB InBev is that they are actively trying to squash the ability for smaller breweries to compete fairly in the marketplace.

They put big money into lobbying for legislation that favors big beer (AB InBev spent nearly $8 million lobbying last year while the Brewers Association spent $294,000 on lobbying in the same period). They take part in pay-to-play tactics with stores, bars, and restaurants earning tap handles and cooler space (and have been fined multiple times for such practices). They buy up wholesalers and distributors and in some regions, they are the only distributors for craft beer. On top of that, they incentivize these distributors to heavily sell their portfolio which they were fined for in 2017 citing anti-competitive practices.

Furthermore, AB InBev has its hands in every part of the beer industry. From owning RateBeer.com, October, and Good Beer Hunting, to owning both Midwest Supply and Northern Brewer, the two biggest homebrew supply companies in the country, to the countless alcohol distributors they own, to all the craft breweries that they have purchased over the last few years. AB InBev is invested in nearly every segment of this industry.

Things’ll Never Change

Another concern when a big buy-out happens is whether or not the employees that work there now get to keep their jobs. If history is any sort of predictor, when big beer comes in and buys up a brewery, whether they would admit it or not at the announcement of the acquisition, changes are often inevitable.

This past October, Lagunitas laid off 12% of their workforce after being bought out fully by Heineken. In August, Constellation laid off dozens of craft beer sales employees from Ballast Point, Funky Buddha, and Four Corners Brewing and AB InBev cut down its High End national sales team that deals with craft beer (i.e. the sales reps from the craft breweries they have bought) by 360 people in September of 2017. It’s rare that a company remains the same after it’s bought by big beer, so we will have to see what shakes out in those changes that will take place. Hopefully, they keep their talented staff that has helped grow the brand to the level that it was desirable to AB.

San Diego Comes Through

In the end, nothing is likely to stop the expansion of AB InBev into new markets or their continued growth into all segments of the beer market. Cutwater is just a drop in the bucket when their parent company AB InBev reported revenue of $54.9 billion from September of 2017 to September of 2018. To put that in perspective, that means that they make approximately $150 million per day. While many people won’t care that Anheuser Busch now owns Cutwater, there is a small segment of consumers that are interested in company ownership. For these people, there is a great group of craft distilleries that can fill the void. Check out some of these spots next time you have a hankering for craft spirits:

You and Yours Distillery 

San Diego Distillery

Liberty Call Distilling

Malahat Spirits Co

Henebery Spirits

Seven Caves Spirit

619 Spirits

Old Harbor Distilling

California Spirits Company

Swinford Spirits

Copper Collar Distillery

Oceanside Distillers

Perfect Soul Whiskey

117 West Spirits

Pacific Coast Spirits

Shadow Ridge Distillery

Please shoot me an email at info@thorn.beer if I’ve missed some San Diego craft distilleries on this list.

 

thorn brewing murky ipa

The Murky History of the IPA

With the triple IPA season upon us, we thought it would be a good time to revisit the origin story of the mighty IPA. What’s interesting is that the story of how IPAs got their start is somewhat hazy. The most well-known storyline appears to swing from muddled to exaggerated to outright wrong but it’s so well known it’s hard to sift through information and find out what is fact and what is a myth.

When Conventional Wisdom is Wrong

If you ask most people how the India Pale Ale style was invented, you will get something along these lines:

In the early 1800s, the East India Company was shipping supplies to British forces overseas, in India, on their way to fill their ships with spices, silks and other valuables from the Far East.  The popular beers to drink at the time in Britain were stouts and porters, both of which were subpar beers to ship across the violent seas, and they often ended up stale, spoiled or infected. Also, the heavy beer wasn’t what was craved in the hot Indian climate, so even if it did arrive unspoiled, it was met with a middling reaction. George Hodgson’s Bow brewery decided that instead of sending a porter, they would try to send what was called an “October Beer.” This strong, pale beer was brewed at harvest time and loaded with just-picked hops to keep a fresh taste even when it was aged, sometimes for years. Apparently, the rough ocean journey matured this beer much like it would taste after 2 years aged, so when it arrived, it was at peak flavor. The resulting brew was a hoppy success and created a taste for India Pale Ale in India as well as back in Britain.

This paragraph came from one of our blogs about IPAs from a couple of years ago and features claims that come from sources like Business Insider and The Guardian. According to Zythophile and other sources, however, there are some myths in this version of the IPA origin story.

The first issue is that there appears to be no evidence that Hodgson’s brewery invented IPAs or that IPAs were “invented” at all. It’s more likely that this style of beer developed over time starting in 1709 when pale ales first began being sold in London. Over the years, these beers became known as “Pale ale prepared for the India Market” because of their popularity over there and then shortened to India Pale Ale. Hodgson was definitely the most well-known exporter of pale ale to India in the early 1800s but the pale ale that Hodgson was shipping to India wasn’t termed India Pale Ale until 40 years after he started exporting the beer.

The second myth in this storyline is that the ale being shipped to India was not primarily consumed by British forces. The troops preferred a homey porter to other styles of beer and it was readily available in India. In fact, porters and stout shipped just fine and were no more likely to spoil than pale ales. The pale ales exported to India were most often consumed by the upper and middle-class European expats who lived in India. They also found their way to military officers and civilians who were working for the East India Company at the time.

The third and perhaps the biggest myth is that strong IPAs were shipped over other styles because they were better preserved over the long journey. Not only did beer not need to be “strong” for the seaward journey, but IPAs were not really strong at the time anyway, usually around 6%. Sure many beers arrived spoiled or infected but that had nothing to do with the style of the beer and mostly had to do with the packaging and how the barrels were treated on the ship. While it is true that many breweries added extra hops to the beers being sent to warmer climates, this was commonplace by the 1760s.

In the early 1900s, IPAs fell into the British beer background; brewed occasionally but not really focused on. Then in the 1970s, IPAs were brought back with gusto by American craft brewers. They took the English IPA and amped up the hops, the alcohol content and reduced the amount of malts, creating a bold, hop-forward beer that is best consumed fresh.

Go West (Coast IPAs)

Brewers here on the West Coast have tapped into an even more amped up version of the American IPA, with even higher alcohol levels, more intense hoppy aromas and serious bitterness that is loved by many but also can be too extreme for some palates. West Coast IPAs are sometimes accused of lacking subtle flavors after the bracing hoppiness that slaps your palate with the first sip but this slap is exactly what many beer-drinkers love, and one of the reasons that IPAs are still one of the fastest growing segments of the craft beer market.

While some beer connoisseurs lament the rise of the IPA and its palate blowing characteristics, IPAs aren’t going anywhere anytime soon. They are still far and away the most popular style of craft beer and their sales continue to grow with IPA sales rising by 10.1% in the US over the last 12 months. Now, with the additional style of hazy IPA becoming mainstream we have more hoppy beers than ever to kick our palates into submission.