Heady Topper Invades San Diego

A couple of weeks ago, we saw rumblings on social media that Heady Topper, from The Alchemist in Vermont, was available in select bottle shops and bars around San Diego. My first thought was that these were black market beers since The Alchemist famously doesn’t distribute beyond an incredibly tiny footprint in Vermont. For years, if people outside of this 25 square miles wanted to get their hands on a Heady Topper, they had to trade for it or make the pilgrimage to Vermont, wait in line, and get their allotment of this hazy brew.  So how did Heady Topper, along with Focal Banger IPA and Crusher IPA, get so far West?

thorn brewing heady topper

Heady Out West

It turns out, the good people at The Alchemist did, in fact, send the beer out to SoCal. According to The Full Pint, who reached out to the Vermont brewery, they stated :

“Every now and again, we have some extra pallets of beer that we like to send sporadically to different markets. We’ve sent pallets to New York City for example, and we decided to send some to the Los Angeles and surrounding markets.”

Considering just how many posts we’ve seen announcing the beer at different locations throughout San Diego, that has to be a lot of pallets. Especially if they distributed beer to L.A. too. Could they really have that many extra pallets sitting around? Maybe. But maybe they are testing the market out here to see just how well their beer would do if the were to expand distribution. If it’s any indication, people were quite excited to see The Alchemist’s beers out here and get the opportunity to get their hands on them while they are fresh.

All It’s Hopped Up To Be?

For those uninitiated, Heady Topper is perhaps the original hazy IPA. Once infamously hard to get, this beer has been the gold standard in hazy IPAs by which many others are measured. Hazy IPAs were New England brewers’ answers to the dry, hop-monsters of the West Coast. By tweaking brewing recipes they were able to create IPAs that people described as tropical, fruity and juicy. Why juicy? Probably because these beers are known for their bright, tropical notes and soft finish. While hazy beers were once thought of as a flash-in-the-pan style, it doesn’t seem to be going anywhere anytime soon. In fact, this year, the Great American Beer Festival will create a category for hazy ales in a move that legitimizes this growing style further.

I took a trip to Vermont in April and brought back so many local IPAs that I had to buy a suitcase to hold them all. There really is a ton of great beer coming out of Vermont and this haul was no exception. This time, I brought back Head Topper, Focal Banger, Sip of Sunshine from Lawson’s Finest Liquids, Cone Head from Zero Gravity, and Second Fiddle from Fiddlehead Brewery. One notable thing was that it wasn’t difficult to get Heady Topper or Focal Banger this time around in VT. When, on previous trips, I had to align just right with drop-off times and locations to score a 4-pack, this time around, it was available pretty much in every bottle shop I went to. If the market for Heady is softening in VT, it could be one reason why they might be testing out new markets for distribution.

I brought the beers back to the brewery and we tasted through the East Coast IPAs. First, let’s be clear, they were all great beers. All were hoppy, bright and fresh, with a touch of malt character when compared to many West Coast IPAs. One thing did stand out to me; now that hazy IPAs have been a thing for a couple years out here in SD, the San Diego brewing community has gotten pretty good at making them. So good, that many San Diego hazy IPAs rival if not surpass Heady Topper and Focal Banger. When I first tasted Heady, years ago, I was deliciously surprised by the style, the myth, and the taste. Now, we have so many great hazy IPAs available to us that while the beer was still good, it didn’t seem to pack the punch it once did to my palate. Perhaps my palate has even evolved somewhat to expect the juice-bombs that we enjoy here in SD, including Thorn’s own Hopster Pot Hazy IPA. The West Coast likes going big, and it appears that our take on hazy IPAs is no exception.

In the end, if The Alchemist starts distributing regularly here to San Diego, it would be a welcomed addition to our already rich San Diego beer scene. After all, we aren’t exclusionary of non-local beers, as long as they are good and with the high-quality beers coming out of this Vermont brewery, that wouldn’t be an issue.

Do you have a favorite San Diego hazy IPA that you think is as good or better than Heady Topper?

big beer thorn brewing

Big Beer Wants Unity…When It Suits Them

The Brewer’s Association pulled no punches at the annual Craft Brewer’s Conference that was recently held in Nashville. BA chairman, Eric Wallace, addressed the issue of big beer in a fiery speech:

“Clever and deceptive packaging design, omission of ownership statements on labels, intellectual-property violations, denigrating and expensive marketing campaigns, monopolistic practices choking off raw materials and distribution channels, rampant violations of trade practices and exclusionary tactics in venues and accounts in many markets — these guys are out to eat our collective lunch and take your kids’ lunch money as well.”

Pete Coors’ Plea

He’s not wrong, but his words did draw the ire of Pete Coors, chairman of the board for Molson Coors Brewing Co. So much so that Pete decided to write an open letter to the BA about it. Don’t mind the fact that he never sent the open letter to anyone at the BA or that it was only released in a trade publication, Beer Business Daily, which is membership-based. Because nothing stays hidden on the internet, Coors knew that the open letter would leak out to everyone anyway. Still, it’s pretty funny to release an “open letter” that only goes to a small select few tradespeople. The full letter can be viewed here on Brewbound, but there are a few choice parts.

The leadership of the Brewers Association does a great disservice to the entire beer value chain by attempting to pit one part of the industry against another.

You must know that it is insulting to those of us who don’t meet the clever criteria of your self-proclaimed definition of “craft brewer.” This approach prioritizes insults and division over unity for a beverage that has been used to unify and celebrate together for generations.

We share distributors, many of whom would not be able to distribute Brewers Association beers without the scale provided by the large brewers. You claim that your members are precluded from distribution at retail, while I visit account after account that do not carry any “big brewer” products.

That is a slippery slope that does not end well for our industry. We have enough competition inside the beer business and outside it with wine, spirits and, increasingly, marijuana.

You undermine your credibility by pitting us against one another to the ultimate detriment of the entire beer industry.

Coors’ letter stirring lots of feelings throughout the craft beer community and ignited many rebuttal letters, including a well written, point-by-point letter from founder and owner of Ninkasi Brewing, Nikos Ridge.  It also garnered a letter of support from Coors’ big brother, AB InBev, in a letter from CEO Michel Doukeris to wholesalers that was posted in a tweet by Harry Schuhmacher from Beer Biz Daily:

Scott Metzger or @beermonkey on Twitter had a few choice tweets for Michel Doukeris and his “unity speech”:

Metzger’s tweets are a succinct argument for why these pleas for unity seem disingenuous. This argument that all beer brands need to stand together against outside threats from liquor, wine, and now Mary Jane is a familiar one. It was used in the AB InBev’s promo video called “Six Viewpoints from the High End” which simultaneously called for unity and crapped on the BA’s, at the time, new independent beer seal. Why does craft beer need Big Beer in this fight? Craft beer has grown in this country despite big beer, not because of it. Independent craft beer is still such a small segment of the overall beer market and these big brewers have so much more weight to throw around, legally and politically. It’s not surprising that AB InBev would praise the viewpoint of Coors, but after so many of their marketing dollars spent maligning craft beer, why would they be pushing for unity now?

Why Big Beer Want Unity

It’s pretty clear why Coors and ABinBev want the support of the craft beer community. Sales and volumes are dropping for Big Beer and they are struggling to stop the bleeding. As reported by Fortune,

AB InBev, Heineken, and Molson Coors have all reported significant drops in beer volume in the U.S. in the first quarter of this year. According to The Wall Street Journal, AB InBev (BUD, -2.46%) saw a 4.1% drop, Molson Coors (TAP-A) a 3.8% drop, and Heineken (HKHHF, +0.64%) saw a “high-single-digit percentage” drop.

Craft beer has also has seen a dip in growth over the last two years, but overall, the craft breweries that Big Beer has bought out, are doing pretty fantastic. Terrapin Brewing, which sold to MillerCoors a couple years ago, is doing great sales-wise with a 25% growth in sales through the end of March. Golden Road Brewing, owned by AB InBev, opened up a brewery and beer garden in Sacramento to a full house after much opposition from Sacramento area independent brewers. Maybe this is why Big Beer wants to focus on “uniting” the craft segment. Focus on what’s working, in the U.S. at least, and put money where the growth is still happening, even if it’s at a slower rate than in previous years. It seems even with indie brewers working to distance themselves from Big Beer, the bulk of craft beer buying people don’t know or don’t care who owns these former craft breweries.

Craft brewers have long memories and there have been too many instances of Big Beer behaving badly to try and get everyone to come together now. Americans are drinking less beer than they were in past years and that definitely has something to do with shifting tastes and the availability of legal marijuana in some regions. These beer behemoths have so much money, however, the real question is why aren’t they buying up wine, liquor and weed ventures? Seems like that would be the move for these companies with deep pockets. Until Big Beer outlines exactly the ways in which they will help craft beer withstand this “outside threat,” it’s a non-starter. Pleas of unity after decades of divisive, monopolistic, and in many cases, underhanded business tactics, are falling on deaf ears.

 

thorn brewing green flash

Green Flash and Alpine Sold to Private Equity Firm

Green Flash Brewing has had a rough year. First, it was announced that they were shutting down and liquidating their Virginia Beach brewery, along with pulling out of distribution in 32 states and laying off more than 40 employees. Then, last week, they shut down their Cellar 3 tasting room and barrel aging program. This week, it was announced that Green Flash has been sold to a private equity firm after Comerica Bank, their largest shareholder, foreclosed on its loans because of high outstanding debt and poor health of the business, selling its assets in a foreclosure sale.

While there are differing opinions on why Green Flash has fallen on hard times, the U-T reported that a former brewer said much of the issues have to do with “expanding to the East Coast before its West Coast brewery had reached peak production; moving from six-packs to costlier four-packs; and tinkering with the recipe of its flagship ale, West Coast IPA.”

The West Coaster reached out to Mike Hinkley, the founder of Green Flash and this is what he said:

“Green Flash continues on and so does Alpine.  The beer is being brewed, packaged and delivered to retailers today.  The tasting rooms are open for business.  It is true that the companies have new ownership and that the company has refocused on being local and regional, versus national.  And it is also true that the investments of its previous owners, including myself, are now gone.  I am very, very sorry about that.

“I am trying to focus on the positives.  Green Flash and Alpine, and all of the folks that brew the beer, prepare the food, drive the forklifts, wait the tables, tend the bars, and work in sales, marketing and accounting all have jobs today.  Good paying jobs with real healthcare coverage.  That was not a sure thing, not too long ago.  I worked very hard to get this transaction accomplished with them in mind.

“I apologize to Pat and Val McIlhenney because this is not how they or I would ever have wished things would turn out.  I am glad they took the most of their money out of the company by now.  I wish they would have gotten it all out.  I wish things turned out exactly as they hoped when they sold Alpine Beer Company four years ago.

“I also apologize to the rest of the GFBC, Inc. shareholders who lost their investments.  I was the largest cash investor, never sold a share and continually reinvested.  I suppose it is appropriate that I lost all of my investment and I will come to grips with that.  But it will be much harder for me to get over other people losing their investments.

“I am very optimistic about the future of Green Flash and Alpine who emerge from very challenging times with a stable financial position and streamlined operations.  The breweries will continue to make amazing beer and enjoy them with their fans.”

What About Alpine?

One major question that was flying around the San Diego craft beer community was, “What’s going to happen to Alpine?” Alpine Beer Co. joined forces/was acquired by Green Flash in 2014 in what was predicted by both parties to become a long and happy marriage. Green Flash was excited about brewing Alpine’s beers (and having such a prolific brewery name in their stable) and Alpine was excited that there were going to finally be able to start to meet the demand that they had created by brewing awesome beers for years on their tiny brew-system. That marriage came to an unhappy end when Pat Mcllhenney, the founder of Alpine, posted this on Facebook:

thorn brewing

Pat was also quoted in a Union-Tribune article saying, “I don’t have a lot of faith in the management,” he said, “especially if they keep Mike on management. He has no business being in this business. His business prowess is abysmal.” Consider this beer-couple divorced.

Jacob Nikos, from YEW podcast, sat down with Pat recently and discussed all of this. It’s a great listen and really gives a solid perspective on the San Diego beer as well as the Green Flash/Alpine relationship.

The San Diego craft beer community is rallying behind the employees of both Green Flash and Alpine. After all, the Green Flash is an integral part of the West Coast IPA’s rise in popularity over the last 15 years. Alpine is loved even more, with a stellar reputation for their beers and their influence over the San Diego craft beer scene.

Who Are the New Owners?

The private equity firm that bought them does have one interesting connection. Joshua Yelsey, the new manager of the equity firm hails from Anheuser-Busch. There, he was a manager in AB’s mergers and acquisitions department. Additionally, he was head of finance for Goose Island and Blue Point during both acquisitions. The question is, how close are his ties to his old company? Will he just bring experience to his new role or will he bring contacts for future acquisitions of a certain San Diego beer darling with an impressive beer portfolio? That would truly be a sad day for independent SD beer.

People in the SD craft beer community are pretty salty over the whole situation. While this acquisition is preferable to both breweries shutting down and leaving hundreds of people out of job, the issue is about the close ties that people have to their friends and colleagues who had invested their time and money into Alpine and Green Flash. Who, because of the foreclosure, have lost all the money they had in the companies, including the founders of Alpine.

Down But Not Out

The biggest takeaway should be that these breweries might be facing some big changes but they are still open, brewing beer and working hard to create a tasty beverage for consumers. When someone posted on an SD craft beer message board that they were heading to Alpine this week for a “last hurrah,” one of the brewers posted this:

We are pulling for both Alpine and Green Flash. It certainly is a hard pill to swallow that so many San Diegans who invested in both companies have now lost their investments, but the employees from both breweries are working hard to continue their path in San Diego craft beer and we fully support them in this next chapter of their brew-story.

variety pack from thorn brewing

Not Another Dreaded Variety Pack

We’ve been told that variety is the spice of life and while this may be true in many cases, it can spell disappointment when you are talking about beer variety packs. We’ve all gotten them before; buying beer for a party or just to stash in your beer fridge, the variety pack that mostly has beers you like. It’s a good deal though, so you get it for the other three beers you enjoy and hope that someone else will drink the cranberry/orange marmalade ale that comes in the pack too.

When creating Thorn’s first variety pack, we thought long and hard about which beers to include. While we were already canning a couple of our tried and true brews that were a slam dunk for the pack, we had to pick two new beers to put in cans for you. Being that this is San Diego, we decided to focus on our hoppier styles. Yes, we brew a fantastic barrel-aged Dark Czar, and yes, it will someday be available in bottles which you will be able to take home and hold on to, but this pack was not about that. It was about grabbing a delicious, fresh, hoppy ale, no matter what, and giving some variety without going completely off-script.

What’s in the Box?

Without further ado, here are the beers that are featured in our brand new variety pack, Hop Box 24, that will be available in a certain San Diego big-box store starting the week of March 26th:

variety pack for thorn brewing

Hopster Pot
New England-Style Hazy IPA
7.0% ABV  |  40 IBU
Hopster Pot is everything you are looking for in a New England-style India Pale Ale…hazy, raw, tropical, and oh-so-juicy! Our brewers hand-select the hop varieties for each batch based on flavor and aroma. Visit thorn.beer/hazy to see what hops are in your brew. This first batch that we canned is brewed with Ekuanot, Amarillo, and Citra.

Got Nelson?
IPA

7.0% ABV  |  64 IBU
This single hopped IPA showcases the incredibly complex and unique Nelson Sauvin hops from New Zealand. Notes of Sauvignon Blanc grapes and berries mix beautifully on the palate. But did you check out this can?? This beer is the first in our Essential IPA Series in a first-of-its-kind can that will keep up with your ever-changing-palate. If you look closely, you will see all four of the IPAs in the series so you can get excited for what’s coming up on the beer horizon. How do you know which IPA you have? The 6-pack toppers will have a color-coded sticker, so look at the top to see which IPA you are going to pop! The Essential IPA Series is always fresh, always 7% and always an IPA.

essential ipa can thorn brewing

Relay IPA
WEST COAST IPA
7.2% ABV | 72 IBU
This San Diego-style IPA is hop-forward and not overly malty or bitter. It’s been our best selling beer since we opened our doors and one of the pillars of our brew program. Simcoe, Centennial, Amarillo, and Citra run a hop relay during the brew. Flavors of citrus, mango, grapefruit, and pine blend to form a deliciously hoppy beverage.
Rock the Pale Pale
Pale Ale
5.3% ABV | 55 IBU
Just like San Diego’s independent music scene, this traditional, California-style pale
ale unapologetically stands out. It’s a highly balanced beer with pine and citrus hop flavors coming from a generous late-kettle addition and dry hop.
Next time you are throwing a party, or just want to stock up your beer fridge, grab one of these Hop Box 24s. In fact, we are throwing a contest to make the whole thing a little more fun…
Because we love the earth we want to see your most creative way to reuse our Hop Box 24 after you buy it and empty it out. Take a pic of your upcycled creation and post it on Facebook or Instagram with the hashtag #thorncans (don’t forget to tag @thornbeer for Instagram or @thornbrewing for Facebook too!) and we will pick a winner at the end of April! 
stone sues millercoors

Breaking Stones: Stone Sues MillerCoors

It was a big week in San Diego craft beer. Stone Brewing announced in a cheeky video that they were suing MillerCoors for trademark infringement. In the video, Greg Koch holds a Keystone Light beer (owned by MillerCoors) with the large, incredibly visible word, “Stone,” spanning the entire can and announces the suit. Watch for yourself below…

Koch states, “We believe that MillerCoors is intentionally and deliberately trying to create confusion in the marketplace with the Keystone brand.” He holds up the can and well, it sure looks like he’s holding a can that says “Stone” in big letters on the side. What’s the issue with this? Well, perhaps, Koch says it best when he says definitively, “In the world of beer, the name Stone is ours.”

After the video dropped, MillerCoors shot back, “Since Keystone’s debut in 1989, prior to the founding of Stone Brewing in 1996, our consumers have commonly used ‘Stone’ to refer to the Keystone brand and we will let the facts speak for themselves in the legal process.” Interestingly enough, MillerCoors attempted to register the word “Stones” in 2007 and was turned down. The Stone suit says that MillerCoors “abandoned its application, admitting that confusion with Stone beer was likely.” Thanks to The Full Pint, you can read the entire suit here on their page.

Stone vs. Keystone

I took to Facebook to decide for myself just how “Stoney” Keystone had become in their branding. Not only do most of their social media pics highlight the word “stone,” but in July of 2017, Keystone changed their Facebook profile picture from a logo that had been their logo for many years, to the one on the top left corner:

millercoors keystone light

Sure, every company needs to rebrand to stay fresh. The question is, why would they split up the name Keystone into Key Stone? Keystone is a place; a mountain in the Colorado Rockies. With the previous mountain ranges on full display in their logo and the fact that Molson Coors (which acquired MillerCoors in 2016) is headquartered in Colorado, it’s not a stretch to assume that Keystone is named after that mountain. So how does it make sense to break up the word?

Once broken up into two words, there is no relation to the place it’s named after. The only reason to break up those words would be to highlight the word “stone,” and this is where it may get them into trouble.

What’s a Key Stone?

This works with other names too. Let’s say there was another brewery that wanted to distribute in the same area Thorn is distributed in, called Hawthorn Brewing. They had been called Hawthorn brewing for many years, longer than we were in existence even. What if they decided to change their logo and marketing to separate Hawthorn into Haw Thorn Brewing and started calling their beer Thorn Beer in that marketing? Not cool. Not cool at all. Whether or not it’s illegal would depend on a lot of other factors, though.

Since Stone is way more established and not only a national brand but really global one at this point, they have a strong claim on the term Stone when it comes to beer. Still, the point stands that Haw Thorn wouldn’t make much sense as a stand-alone logo just like Key Stone doesn’t make sense unless it’s Keystone.

Let’s hope that Stone is successful in their suit. Big Beer has been pushing craft beer around for years with their money and influence so to have a craft brewery that is not only willing to stand up to them but has the financial capabilities to do so, is really cool. We support Stone whole-heartedly in their quest to protect the brand that they have worked so hard to build and can’t wait to see how this all shakes out.

 

 

beer board with triple ipa pliny

Triple the Hops, Triple the Fun

It’s that time of year again when select craft beer bars (mostly in CA) have to field the same question over and over, “When are you tapping Pliny the Younger?” It’s triple season!

The triple IPA hoopla all started in 2005 with a “little” beer called, Pliny the Younger from Russian River Brewing. Pliny the Younger (pronounced, Pline-y not Plinny, like the man) is a bigger version of their popular, Pliny the Elder Double IPA. Double IPAs should be hopped twice as much as the regular recipe and in the case of Pliny the Younger being a triple, it’s got 3 times the hops and then is dry-hopped 4 different times. Clocking in at 10.5% ABV, it certainly packs a punch but as it often happens with high alcohol beers, it’s incredibly balanced with the extreme bitterness of the hops offsetting the sweetness of the sugars from the high alcohol.

This beer is in incredible demand with people waiting in lines for hours and kegs getting kicked in minutes at popular spots. Russian River shows their marketing mojo by only having this beer available for 2 weeks every year in their Santa Clarita’s tasting room with daily allocations. Since it’s human nature to want what we can’t have, creating that kind of limited-time demand is a proven method to increase buzz and desire for a product. This wouldn’t work if the product itself wasn’t high quality and this beer is definitely impressive.

Pliny Hunt 2018

Pliny the Younger is not going to get a wide release anytime soon. Most of the beer is distributed to the same OG spots that Russian River has been gracing with their Pliny for years. In fact, last year, Russian River announced that they were expanding production of Pliny but that expanded production would benefit the bars they already serve, getting more kegs vs. selling kegs to new bars. If this is the case, then we can use the 2017 list of San Diego bars that got Pliny the Younger as an idea of where to possibly find the elusive beer this year. Here’s a working list of place that MIGHT have Pliny the Younger this year too and the date that they tapped their allotted kegs in 2017:

Hamilton’s Tavern – 2/22/17

SD Taproom – 2/25/17

O’Brians – 2/22/17

Blind Lady Ale House – 2/22/17

Tiger Tiger – 2/18/17

Pizza Port Carlsbad

Toronado – 2/13/17

Encinitas Ale House

PCH Sports Bar

Small Bar – 2/14/17

Urge Gastropub – 2/21/17

Live Wire – 2/16/17

Regal Beagle – 2/21/17

Fathom Bait and Tackle 2/21/17

Please don’t call these places daily asking if they are tapping the beer. They’ll definitely hate that. But you can use this list as an idea of when you want to stop by the bar and see if, by chance, they have tapped it yet. Some of these spots had actual events where they promoted that they were tapping the Pliny, but a lot of them just put them on tap one day and let the word of mouth spread like wildfire. This list is not a guarantee though, it’s really only a best guess, so please take that into account when searching.

No Pliny, No Problem

So you don’t want to go on a Pliny hunt but you do want to taste the sweet, sweet nectar of a triple IPA? You are in luck! There are a handful of San Diego breweries, including Thorn, who put out their own triple IPAs around this time of year. Thorn releases our own triple Brother Scotty’s IIPA (named after one of our beloved employees).

Brother Scotty’s IIIPA clocks in at 11.2% ABV. This beer is big, hoppy and balanced with notes of pine, citrus and pineapple lingering together from the Simcoe, Citra, Centennial and Amarillo hops. While it’s a hop-bomb for sure, it’s still a smooth drinker with a lingering sweetness that’s neither cloying nor overpowering. Here are some more San Diego triple IPAs to check out this month:

  • Thorn Brewing Brother Scotty’s IIIPA 11.5% – release on 2/13/18
  • Benchmark Brewing Hildegard IIIPA 13.5% – release party on 2/24/18 (more info here)

Other triple IPA that have been made in the past but with no info on future releases…

  • Monkey Paw Muriqui 10%
  • Societe The Miser Really Big IPA 10.5%
  • Stone RuinTen Triple IPA 10.8%

Please comment here or email us at info@thorn.beer if you have any SD triples to be added to this list.

Cheers and happy Triple Hunting!

 

super bowl

Budweiser’s Super Bowl Strategy

The 2018 Super Bowl is just around the corner and while many Eagles and Patriots fans will be watching to see what if their team comes out on top, there are lots of other people who are all about the ads. At least, that’s what the hope is for the businesses that spend more than $5 million for a 30-second spot. What’s interesting is that many of the big super bowl spots are already released to the internet, days before the big game, giving us a sneak peek. Budweiser is a favorite topic of super bowl commercial conversations because they spend a ton of money on the Super Bowl. In fact, this year, they are going to have six Super Bowl spots to the tune of $30 Million. $30 million for 3 minutes of TV time. That’s an impressive ad budget.

What’s also interesting is that Budweiser seems to be moving away from the “us against craft” mentality they have had in previous Super Bowl commercials, like in 2015 with their “Brewed the Hard Way” commercial, where they say how they are “Proudly a Macro Beer.” They doubled down in 2016 with another commercial that insinuated craft brewing was just a hobby for people who like fruity beer that is made to be fussed over.

The Good

This year, their main commercial is all about their ability to can clean water at their Cartersville facility, where they have shipped over 2.9 million cans of water to areas of disaster relief during 2017. And good on them. They were incredibly smart to use this as their main Super Bowl ad because they are highlighting something that only a brewery of their size could do; take weeks off of normal beer production to can and deliver fresh cans of water. Most if not all craft breweries don’t have the capabilities to do anything on this scale so Budweiser has figured out a way to differentiate themselves from craft beer in a positive way, rather than the mud-slinging they have done in the past.

 

The “Eh”

Recently, Goose Island (owned by AB InBev) released a video of their own. In it, you see the president and one founder of Goose Island head to NYC to meet with Felipe Szpigel, the president of the High End, AB InBev’s craft beer division. They meet to ask for a Super Bowl spot for Goose Island so that it can be the first craft beer commercial featured at the Super Bowl. They get shut down because apparently, 1 week isn’t enough time to come up with a $5 million commercial (giant eye-roll here).

The funny thing is that while this commercial is obviously a joke and supposed to be funny, it’s being reported on by the Chicago Business Journal as if this set up was real. They start off their article with the line, “Give the guys at Chicago’s Goose Island Beer Co. credit for thinking big. Really big.” I don’t know how they thought that this was a real business meeting when every person in that meeting is shown drinking a different Goose Island beer with the labels facing the camera.

Furthermore, this video seems like it could be a teaser to an actual Goose Island Super Bowl spot, giving them the platform of being the first “craft” beer to be featured during the Big Game. We will have to see…

Many people viewing this video will realize it’s satire. That’s all well and good, but by Chicago Business Journal writing about it as if it were a real business meeting, it definitely blurs the line between fake news and satire. Obviously, since Goose Island is from Chicago, there would be love for the brewer in the city. Maybe the news organization is in on the joke too, but it seems a bit disingenuous to report on this like it was ever actually a real scenario.

The Payoff

Budweiser’s strategy for winning at Super Bowl marketing is on-point. They focus on something that is unique to them (canning water for disaster relief) while also releasing this other video that seeks to separate Goose Island from their macro-beer parent company and paints them as the “little guy.”

So have fun watching the Big Game this year while remembering to always keep a discerning eye on how you are being marketed to and let us know what your thoughts are on the Super Bowl commercials for 2018.


Alexa’s Love Affair With Budweiser

Recently, Tech Crunch reported that Alexa, Amazon’s personal assistant, is about to start having her own opinions about things. They said that in an effort to make her more human-like she needed to have opinions that she comes up with on her own through what’s called machine learning. Not that she doesn’t already give opinions, but right now they have been programmed in by humans. In the near future, Alexa will start offering her own thoughts on things like TV shows, movies, books and more. But how do we know why she picks the things she recommends, now or in the future?

A recent video showing someone asking Alexa what her favorite beer is, with her answering “Budweiser,” got us thinking. Why did Alexa fall in love with Budweiser? It can’t be because it’s the best selling beer (because it’s not, that’s Bud Lite and Alexa stated as much when I asked this specific question). To see just how much Alexa loves Budweiser, I put my own Alexa to the test. I asked not only what her favorite beer was, but also “what’s the best beer?”

It turns out that not only is Budweiser Alexa’s favorite beer, but it’s also the best beer in her opinion.  The more I asked the question, the more she doubled down and stuck with her pick, showing a wide range of responses pertaining to Budweiser.

alexa

 

While I did have a lot of fun peppering Alexa with the same question over and over again, what is concerning is the level of influence Alexa has and will have over people’s choices now and even more so in the future. Furthermore, Amazon loves monetizing things, and who’s to say that they wouldn’t start selling Alexa’s opinions (or haven’t already) to the highest bidder so that she can name drop their product over and over again. Only large companies would be able to pay for this sweet product placement anyway, and maybe they already have.

So the next time you ask Alexa for her opinion, take it with a giant grain of salt. While Alexa is still just a machine, she can easily be influenced and that influence might be due to someone’s marketing dollars rather than a computer’s machine-learned opinion.

 

avery brewing barrel

Avery vs. Pirate Life: Who Sold It Better

Last week, two craft breweries announced investments in their brands from outside companies. Avery Brewing Co. from Colorado sold 30% of their company to Spanish beer conglomerate, Mahou San Miguel. A couple days later, an Austrailian craft beer brewery called Pirate Life announced that they had been acquired by AB InBev for a cool $7.6 million. While you might not have heard of Pirate Life yet, it has been on a fast rise from its 2015 opening to being named Australia’s best craft brewery by Beer Cartel in 2017. Both Avery and Pirate Life pointed to international growth as reasons why they chose to sell part or all of their companies. Both companies are now not considered craft beer, though that definition doesn’t apply to Pirate Life since they aren’t in the under the umbrella of the Brewers Association here in the states.

The Investor Matters

The sale (in part or all) of these two breweries also brings up the shifting gray area that exists between the different sort of investments that breweries seek to help themselves grow. The simple fact is that in order to grow any business there needs to be an influx of money. In terms of the beer industry, this money can come in a variety of ways but most often it comes from private investors/investment firms or the sale of part or all of the company to a larger beverage company. But not all beverage companies are created equal, and this is where the gray area comes in.

Avery selling a minority stake in their company to Mahou San Miguel just doesn’t seem to have the same negative connotations that selling your whole brewery to AB InBev does. Mahou San Miguel is a large beer company with mostly Spanish beers in their portfolio and they also own 30% of Founders. A quick google search of their name with some choice words (investigated, illegal, pay-to-play) turns up nothing. The same cannot be said for our good old friend, AB InBev.

AB InBev At It Again

In fact, this past week it was announced that there is yet another investigation into AB InBev for breaching EU competition laws in Belgium. Basically, beer costs more in Belgium than it does in the surrounding countries, especially the Netherlands. There are many retailers with stores in multiple countries and would use that advantage to offer the beer at lower prices because it could be transported from their warehouses outside of Belgium. AB InBev sought to stop the cross-border beer in a couple of different ways; by limiting the volume that exporting retailers could get on promotion and taking away incentives and holding back the most popular brands unless the retailer promised to not sell their supplies to their Belgian stores.

Furthermore, EU officials uncovered that AB InBev’s decision to switch to single-language labels in France and Netherlands, 4 years ago, was done so to prevent the export of these more inexpensive beers into Belgium where labels have to be in both Dutch and French.

AB InBev has a history of playing dirty, getting fined, paying the fine (because their yearly revenue is $45.5 billion), and doing it all over again. They are so big that they are nearly untouchable because they can pay any fine that is thrown their way with ease. This is why it’s a much more bitter pill to swallow when they buy yet another independent craft brewery. Yes, Pirate Life has a right to grow and will likely do so a faster rate now that they have been bought out by the biggest beer company in the world. Most of the people who drink Pirate Life will have no idea that they are supporting AB InBev. Life will continue on for all.

The Gray-Scale

In the end, selling your whole brewery vs. 30% is a huge difference and really are two ends of the brewery-sale-spectrum. While both are enough of a sale to be kicked out of the craft beer consortium, selling 30% to a beverage company with a decent reputation and no history of trying to cheat the craft beer market in the U.S., is what it is. Likely the beer won’t change much if at all and the people who build the brand will stay in place. Selling your whole brewery to a beverage company with the track record that AB InBev does, stings a little more and also says a little more about that brewery’s commitment to the craft. Who knows what will happen in a years time to not only the original staff but also the control at that point is totally up to AB InBev, no matter what the old owners say. As more and more craft breweries sell part or all of their company to continue their vision of growth (or to get a sweet payday), we have become more desensitized to the act itself. It also shapes the conversation moving forward to think about whether the distinctions between the ways that breweries grow. Being committed to craft and buying independent brewers is going to get hard as we move along in these times so maybe we will have to adjust our expectations a bit and not be afraid to wade into these gray waters.

budweiser trash

Budweiser, Mexican Beer, and Millennials

Budweiser is not having a good year when it comes to U.S. sales and this last quarter only got worse for them. As more and more people turn to drinking craft beer, spirits, and wine, they have seen a continuous drop in sales for their flagship beers, Budweiser and Bud Light. The North American market was Budweiser’s bread and butter for years but ever since 2014, AB InBev has seen a drop in Bud and Bud Light sales every year with a steep 6.2% drop in this last quarter alone. The slide in sales isn’t just AB InBev, however. MillerCoors also saw a 3% drop in U.S. sales this last quarter of both their Miller Lite and Coors brands. While AB InBev is a huge global company, they appear to hold the U.S. market in the highest regard. AB InBev Chief Executive Carlos Brit0 recently said,

“The U.S. is our most important market and we recognize the need to continue to focus on driving topline growth across our portfolio.” 

To help with this focus AB InBev decided to fire their U.S. CEO and replace him with their current chief officer of global sales. But why is Budweiser experiencing such a slump?

Not All Macro Is the Same

Here’s the interesting part, not all macro beer is down. American beer drinkers are totally digging Mexican beer. Corona and Modelo are up 13% this year in U.S. sales. AB InBev actually owns Grupo Modelo, which makes both Corona and Modelo, but in 2013, they sold the U.S. distribution rights to Constellation in a move to settle the anti-trust issues that arose from AB InBev’s purchase of Grupo Modelo. Constellation paid a cool $4.75 Billion for the brand rights at the time, and the year-over-year growth of both brands has certainly been a boon to their portfolio.

Mexican imports aren’t the only mass-produced beers that have seen growth, however. There is one mass-produced, super premium (their category, not ours) beer that is defying all expectations. Michelob Ultra is the largest share-gainer brand in the U.S. for the last seven quarters for a 10.9% growth up from last year at this time. Why the growth from a not-new and by-all-accounts tasteless beer? The answer appears to be in the marketing. Michelob Ultra has positioned itself as the beer of choice for the low-carb movement as paleo and keto diets along with workout lifestyles like CrossFit continue to be popular in the U.S.

Michelob’s marketing continuously targets a health-conscious Millennial demographic which is a booming demo by all accounts. The growth of Michelob Ultra is a bright spot for AB InBev because, of course, they own that brand too.

Enough Pie To Go Around?

Remember when AB InBev made that video slamming the Brewers Association’s seal of independence? In the video, they wax on about the “clear threats from wine and spirits” and lament that the BA’s label is divisive in this common fight against liquor and wine. The funny thing is that based on the numbers we’ve seen so far this year, wine, spirits, and craft beer can all see growth together. Let’s look at the growth the different categories have seen so far this year; wine sales are up 7%, spirits sales are up 4.5%, and craft beer is up 5.7%. While there is no denying that craft beer growth has slowed down, this trend has been expected in the booming industry for a while. Unprecedented growth can only happen for so many years before the market begins to correct itself and we seem to be in that correction.

Is there enough pie to go around? It seems like there could be. People aren’t over all macro beer, as evidenced by the substantial growth in both Mexican beer markets as well as for the “ultra-premium” Michelob Ultra. People appear to be turning away from the “American” mass produced brands, though. Budweiser, Bud Light, Miller Lite and Coors are slumping in sales, possibly because they have failed to catch on with a younger generation of drinkers. As an example, here’s the breakdown of who buys Budweiser in stores:

budweiser who buys it

Based on these numbers Budweiser is most likely to be purchased by older, low-income, Asian people. The fact that 24-44 year olds don’t buy Budweiser, yet are the largest demographic in the U.S., is definitely a thorn in Budweiser’s side. Whereas Mexican imports have been growing in sales as the Hispanic population grows, that only accounts for about half of their sales. The other half are Millennials who love a good Pacifico or Modelo. So get used to seeing Budweiser trying to peddle itself to a younger, hipper demographic, because once again, it seems that Millennials matter a lot when it comes to the success of a beer brand. Budweiser is down, but it’s certainly not out.