3,000 breweries and counting: what will set limits to growth?

     Bellingham, pop. 80,000 or so, awaits the opening of our seventh and eighth breweries this winter. To those who wonder where the saturation point is, the optimists point us down to Bend, Ore., similar population, seventeen or eighteen breweries.  Why can't our town be the next Bend?
    Simple geography is one reason.  Bend sits in the middle of Oregon and its brewers can seek markets east, west, north and south.  Up here east is foreclosed half the year by snowed-in passes, west is the Pacific, and north is the 49th parallel, an insurmountable wall for beer sales to Canada. That leaves south, and a wee beer market called Seattle.
   Leaving our unique geography aside, the larger question is, how many breweries can any community/region support?  Are we headed for another shakeout?  That's the word historian Tom Acitelli used to describe what happened to U.S. craft brewing between 1996 and 2000.  In 1996 we had nearly 600 breweries operating; at the millenium that count was down to just over 400.
   In The Audacity of Hops (2013), ascribes the shakeout to "bad beer, tough times, and flighty newcomers"--the latter being those folks looking to turn a quick buck without having a passion for excellence in beer. Other factors he lists: a tv expose' of Sam Adams' contract brewing arrangements, Big Beer's "phantom crafts," and some noisy skirmishing over label content.  But at the end of that day, in 2000, we still had over 400 solid craft breweries and grounds for optimism.
    Fifteen years later, we hear of over 3,000 breweries nationwide, probably close to 400 just in Oregon and Washington.  Can most survive or is another shakeout coming?  A contraction on the scale of 1996-2000 would mean nearly a thousand breweries closing, and I can't see that happening.
   Lessons have been learned.  Bad beer gets outed pronto now, with all the consumer tasting sites online.  Most of the startups I have seen of late show that passion for brewing excellence, fueled much more by owner sweat equity than by quick-return-seeking investors.
   Distribution was a problem in the late 90s.  Budweiser distributors were admonished by August Busch III to prioritize their marketing efforts to his beers and away from competing products.  A-B has had craft-like products then and now (Shock Top) and significant minority stakes in regional breweries like Redhook and Widmer Brothers.  Miller and Coors, now merged but then rivals, also had craft-style offerings--Coors' Blue Moon Belgian-style beer has been out since 1995.
   Consolidation of the big brewers led to consolidation of the wholesaler sector as well. Towns once served by three or four beer distributors now saw just two: an A-B house and a Miller-Coors house. In addition to those main brands, they are apt to carry some of the best-known imports like Heineken and Corona, and some well-established craft beers. Last year, four of the major wholesalers in western Washington launched a joint venture called the Great Artisan Beverage Co., which now carries about fifty American craft brewers in at least some of their territories.  Most of these breweries are coming up on tenth or twentieth anniversaries, so they've been around a while.
   Middle-tier mergers have fostered the rise of the "indie" wholesaler, firms like Dickerson Distributing here and Click Wholesale in the Seattle area, who handle just craft and import beers.  A perusal of their published affiliations again shows few recent entrants.  The youngest in Dickerson's lineup are Odin Brewing (2009) and Emerald City Beer (2010).  Down at Click, they distribute a 2013 startup, Ecliptic Brewing from Portland, but that is the creation of a long-time head brewer at Full Sail.  A new brewery has to make a track record to interest any distributor.
    A distributor matters only if a brewer's business plan includes elements like packaging (bottles or cans) or draft accounts in taverns and other on-premise licensees outside one's own bailiwick.  There are plenty of brewers content to keep their own taproom supplied and a few draft accounts near enough for self-distributing to be feasible.  For those with more ambitious dreams, the first few years will be a challenge.























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New Hampshire's pride: Smuttynose

     New Hampshire has just a snippet of seacoast, about twenty miles' worth sandwiched between the long and storied coastlines of Massachusetts and Maine.  The major town in this bit of oceanfront is Portsmouth, a classic New England place with a great craft brewing history.    This was where Peter Egleston opened a seven-barrel brewery, the first in the state,back in 1991--doing so because Massachusetts law would not license him to build a second brewery there after he and his sister had started one in Northampton in 1987. The original plant, doing business as Portsmouth Brewing Co, is still in the same location downtown.  Egleston opened a larger production brewery in 1994, naming it Smuttynose after one of the small islands off the nearby coast.
     This summer, Smuttynose moved into elegant new quarters in Hampton, NH, a few miles outside Portsmouth.  The site was known  as the Towle Farm for over two centuries, i.e., back to the

Revolution.  The brewery itself is in a modern building, but done up with nice landscaping.  The pub is in one of the old farm buildings, refurbished for the new purpose, and another old building has been fixed up for concerts and special events.

  The previous brewing system capped out at 43,000 barrels a year.  The new plant features an 85-barrel system with fifteen fermenting tanks capable of holding 200 barrels or more. Sales are projected to hit 63,000 barrels this year and the system could go over the hundred-thousand-barrel line without stress.

   The tour guide, the much younger person in the picture, told us that the bottling line has a fill rate of 300 bottles per minute.  Much faster than Ron, a college classmate from long ago, can fill his homemade wine in Claremont, Calif.
   Smuttynose is now sold in 23 states, in the east and midwest with a bit shipped to California, the guide said. The longest-established brand is their Shoals Pale Ale, but the best seller is the IPA (hopheads are everywhere, it seems).



(Visited 6/14/14)

Snohomish brewing scene adds two more (Middleton, DK's MLT)

 1.  When Jeff Middleton opened his Middleton Brewing on the south side of Everett (near the mall and Lazy Boy Brewing) last August, he cast around for an angle, something to make his beers stand out in a crowd. He settled on flouting the old Bavarian purity law with unusual fruits, etc. to known beer styles.

Check out his taplist on a recent August day.  Tangerines in the IPA.  Ginger in the red ale.  Strawberries in the wheat ale.  Oatmeal stout is already a Reinheitsgebot violation; chocolate and coffee just compound it.
Working with a one-barrel system and a couple of fermenters, Middleton can brew enough for the taproom and some growler fills, but other retail outlets will be an aspiration rather than a current happening.
If the extra ingredients don't come across sufficiently in the regular brewing process, Jeff has another thing going on every Friday.

He runs one selected beer through a Randall (the hop infuser invented at Dogfish Head).  He can load the plastic cylinder with more hops and/or more exotic ingredients and pour a pint or pitcher with even more of the above.
Here is one former homebrewer who wants to live his dream in the stream of commerce, and I hope he gets the fan base every brewery needs.  It will liven up the Everett brewing scene.





2.  Diamond Knot hits the Terrace.  Diamond Knot Brewing, based in the middle of Snohomish County in Mukilteo, has for some years run an outpost restaurant on Camano Island, just over the north county line. Since April, they have also marked their territory near the southern county line, in Mountlake Terrace.  This one has some brewing capacity, too; small but functional.

The taps appear, for the most part, to be pouring DK's well-established favorites like Industrial IPA.  The server said one or two taps would be set aside for beers made on site.











(Visited August, '14)

Sierra Nevada: Happy campers, great tour, good book

     Driving down I-5 to the Bay Area recently, I diverted in the valley to Chico, Calif. to check out the Sierra Nevada plant. The last tour of the day was forming up and our guide started out with good news: we would begin in the tasting room, where brewery tours typically end.  The reason, she explained, was that she had extra duties that evening, setting up for the opening day of the traveling beer camp.
     Lollapalooza!  Sierra had just opened their east coast plant, near Asheville, N.C., and was celebrating with a dozen excellent collaborations with top-tier brewers around the country, from Oregon (Ninkasi) to Florida (Cigar City), from San Diego (Stone, Ballast Point) to Maine (Allagash). The opening party, in a

couple of days, would showcase Sierra's collaborations with Ninkasi and Russian River. To the left, I took a picture of the 12-pack I bought at the swag store after the tour.  My tasting room highlights: Can-fusion, the collaboration with Oskar Blues, a tasty rye bock (7.2%, 45 IBU, in the silver can on the right), and Mallard's Odyssey, made with Bell's of Kalamazoo, a chocolate-y imperial dark ale (8.5%, 40 IBU), made with ten different malts. The Mallards is the only bottle with the cap still on, and I am about to pop the cap and revisit the bliss after I publish this post.

     Tour time.  Our guide had other chores but she gave us a fine experience all the same,  In a large room dominated by the upper parts of a 200-bbl brew kettle.  A small pitcher of wort, drawn from the mash tun, was poured into sampling cups so we could taste the sweetish brown liquid that will meet hops and yeast and become our ambrosia.

   After the wort, we went into the hops room. Our guide invited each of us to take a pinch of one or more loose hops leaves and rub them between our fingers to experience the differing aromas.  Note these were baled leaves: the whole-cone hopping that SN boasts of on its signature Pale Ale is evidently not the only hopping process used here.
Still, this was a fine experience, and to have it in a brewery nearing a million barrels a year in sales made it even better.  Bitter and better.
     The last stop on the tour was to the bottoms of the huge 800-bbl fermenters.  The purchase of these monsters bought Sierra a bit more time before ever-increasing demand stretched this plant to its full capacity (977,00 bbls last year). I learned this by buying and reading Beyond the Pale (2013) by Ken Grossman, who started this brewery in 1980 (medieval time in craft brewing history).  Grossman writes that he was inspired to write this business and personal autobiography in part after Sam Calagione published his Brewing Up a Business, about how he began Dogfish Head Brewing in 1995.  Now, having read both books, here is my take:  Calagione has written a wonderfully entertaining book in the how to succeed in business category, his business happens to be beer.  You know those titles in airport bookstores, using 6-sigma to take your company to the next level? Sam C. tries to write general truths that will work for a scissors manufacturer as well as a beer maker.  Ken G., on the other hand, has written a beer book, plain and simple.  A reader can learn a lot about brewing processes, dealing with distributors, hop and barley growers, and all the rest.
   These two men are among the most successful craft brewers today, and they sound like friends,  Each has chosen to tell his story in his own way: Calagione shows his passion for unusual beers as intellectual curiosity, while Grossman just lays his heart on the table and lets the reader watch it beat.  The excruciating pain of buying out his original partner. the guilt he keeps alluding to about the neglect of his family life, the agony of when to spend money he didn't have, in the early days, this makes a gripping story. Later, with a successful business, his chapters get a little dull, like the CEO's message in a corporate annual report.  But to have started in 1980, 35 years ago, and to be where his company is today, is worth a salute from all who love good beer.
(Visited 7/17/14)

Oregon Brewers Festival: victim of success

     Took in the Oregon Brewers Festival, on the riverfront park in downtown Portland, this weekend. This is the 27th rendition of an event first launched in 1988 by Bridgeport Brewing, Widmer Brothers, and Portland Brewing, at that time, along with McMenamins,  the only four breweries in the city, with three more in the rest of the state.  How things have grown since then!  The event now takes place over five full days and 86 U.S. craft brewers, over a third from other states, participate, including ten from Washington.

Many thousands of beer fans attend, and this is what they encounter:  volunteers pouring three-ounce samples out of pitchers, which are constantly being refilled from kegs tapped in the refrigerated trailers behind them. The volunteers are local folk for the most part, who most likely have no knowledge of the breweries whose products they are pouring.  That meet-the-brewer contact, so much a part of the experience at smaller festivals, doesn't happen here.  Brewers march in a parade on the opening day and attend a dinner the night before, to which the hoi polloi can buy tickets, but that's it for direct contact.  

   The lady in the picture to the right was pouring Boundary Bay's Double Dry Hopped Mosaic Pale Ale.  I asked her if she had ever been to Bellingham; she said no.  The woman pouring Paradise Creek's Huckleberry Pucker had never been to Pullman. And so it went.  The volunteers were all beer enthusiasts, to be sure, but any information about your three ounces of brew had to be gleaned from the program.  

     There are a lot of festivals in the summer and fall, and attending many of them can stretch the staff of a small brewery pretty thin.  I can't fault the festival sponsors for organizing things this way; suffice it to say that the smaller festivals, drawing from a more local base, like Untapped Blues and Brews in Kennewick or our April Brews Day here in Bellingham, are more apt to afford one the chance to meet and talk to the folks who are making your beverage.

A pair of long white tents sheltered the tables and chairs for the fans, and were decorated with some great banners of brewers past and present.  This picure features banners from Thos. Kemper Brewing in Poulsbo, one of Will and Mari Kemper's earlier enterprises before they launched Chuckanut here, and Hale's Ales when they were in Kirkland in the 1980's, before Mike Hale settled in Seattle's Ballard district.  

    Samples were a dollar a pop with one exception: a special area had been set aside for a dozen  breweries, and their samples went for two tokens, two bucks per.  I tried something from Brouwerij Rodenburg in Utrecht, the Netherlands, called Terra Incognita.  It was billed as a Belgian Strong Ale, more on the golden side of the color scale. and with a nice balance of bitterness at the beginning.  

   The rest of my tokens went for Team USA's beers, and I put the most stars by Sierra Nevada's Double Latte Coffee Milk Stout.  This is a collaboration project with Ninkasi Brewing, one of the dozen collaborations SN has rolled out this month.  This is part of their coast-to-coast Beer Camp USA to celebrate the opening of their east coast brewery in Asheville, NC.  The milk stout is just fabulous, 7.6% abv and the creamiest mouthfeel you'll ever get from a beer.

(Visited 7/24/14)

The Sly Fox jumped over the 15,000-barrel sales level

   A few miles west of Valley Forge, in southeast Pennsylvania farm country, I encountered the Sly Fox Brewery and Restaurant. Their tap list featured more lagers then one typically sees in this region--a Helles golden lager and an Alt, in addition to a pilsner, and I put them all on my dance card of small samples.
A saison and a pale ale rounded out the flight.
    Everything was full of flavor.  Sly Fox had been prominent during the Philly Beer Week just ended, and enjoyed a good rep with local beer writers.  It was founded in 1995 by the Giannopolous family -- the mid-90s were a boom time for craft beer startups all over, many of them coming up on twentieth anniversaries.

While Sly Fox has not taken off the way Dogfish has in that same time span, they have gone over the 15,000-barrel mark in annual sales, more than all but three or four Washington brewers.  It helps if you have something like thirty million people living in a hundred mile radius of your brewery.
  The brewpub here has a fifteen-barrel system shown behind the bar.  Sly Fox recently opened what they call a 50-hectoliter brewery (that's 42.5 barrels for all us non-Canadians) a few miles away.



The pub was doing a decent business on a Wednesday, a fair number of growler fills.  That was probably

due to their special price that day.  They knocked a couple of bucks off the price of a half gallon in your jug--from $8 for their regular non-imperial beers to SIX DOLLARS!  And they do it on a state-of-the-art growler filler from the Alfred Gruber Co. in Austria (the same firm Kulshan here in Bellingham ordered their new machine from).  Here's Britta the bartender filling my growler with Sticke Bishop Alt.

Sly Fox has been canning for a few years now.  Here's what their Helles lager looks like in cans.  Note the detachable lid, the wide-mouth design, and the six-ring plastic carrier.  Some of these choices are not the sort brewers are making in the Northwest.  In some states, regulations may bar the pop-top; even where legal, they seem to have fallen out of favor here.
Sly Fox says the wide mouth allows the consumer to better savor the aroma and flavor when there are no glasses in which to pour the beer; a good point.  As to the lid, well, they liken it to the cap on a bottle of beer.  Responsible drinkers will see that either gets proper disposal.  The six-ring carrier: it's both recyclable and photodegradable: the latter attribute was lacking on the old kind.

Every brewery has something new -- Sly Fox has plenty!

(Visited 6/11/14)

What's in a (beer) name?

   Craft brewers hassled by lawyers over trademark issues: it happens all over the country.  Whether the issue is the name of a beer (Foggy Noggin's "12th Man Skittles IPA" changed to "Cease and Desist Ale", Georgetown's "9-pound Hammer" changed to something that didn't infringe on a Vermont brewer's trademarked "No. 9") or the name of the business (Spokane's Northern Lights now No-Li), our corner of the country has seen its share of such squabbles.
   A beer scribe with the Mid-Atlantic Brewing News, Alexander Mitchell, has written up a collection of similar stories from Maryland.  He recounts the experience of the Baltimore brewer forced to rename its Ozzy Ale when sued by rocker Ozzy Osbourne; another Baltimore brewer, DuClaw, taking Left Hand Brewing to court when the Colorado brewer began selling Sawtooth Ale and Black Jack Porter in Maryland; and Ocean City brewer Danny Robinson, who had to change the name of his operation from Shorebilly Brewing to Backshore Brewing when a beach apparel maker asserted trademark rights over the Shorebilly name.  Danny couldn't even use Robinson Brewing; some other Robinson got there first.
   As plaintiffs like Texas A and M, which-incredible as it seems--owns the trademark to 12th Man, Ozzy Osbourne, and Shorebilly beach togs all illustrate, challenges can come from anywhere, not just from other brewers.  Indeed, beer name overlap among brewers can sometimes come to a friendly resolution.  A highlight of the recent Philly Beer Week was a keg of "Collaboration, Not Litigation", a Belgian strong dark ale.  It was jointly brewed by California's Russian River and Colorado's Avery brewing companies after each realized that they were bringing ales called "Salvation" out around the same time.
   Talking it over is one solution.  Another is asking permission and maybe paying a bit for it.  That's what the Seahawks did, paying Texas A and M for a license to use the 12th Man name.  In this google-fied age, it's easy enough to run a search on any given phrase and see where else it pops up.  For a draft-only beer,especially a one-off like Foggy Noggin's, it's hard to imagine any craft brewer acting like the Aggies down in Texas.  The brewery that is thinking about bottling or canning something, designing a label and submitting it to the TTB and state regulators, that's a brewery that needs to be careful.  Label review by the TTB does not look into whether anyone else is using a particular name; that falls under the US Patent and Trademark Office (USPTO).  What they do is a whole 'nother story, which I will write on in a later post.