The National Beer Wholesalers Association (a.k.a. the NBWA) held their annual convention in San Francisco from September 14-17. The NBWA is a trade organization for beer wholesalers and distributors. After Prohibition, the three-tier system was created and has been an integral part of the beer industry ever since. I don’t normally attend the convention, but since it was in my back yard, I decided I couldn’t miss it this year. I’m glad I went. There were a lot of people there I knew and there was a lot of buzz in the air over some big things happening in the industry.

Some NBWA luminaries at the NBWA welcome reception. From left, Jamie Jurado (with Gambrinus), Lucy Saunders (the Beer Cook), Charlie Papazian (President of the Brewers Association), Kim Jordan (from New Belgium Brewing) and Tom Dalldorf (from the Celebrator Beer News).

For more photos from the first day of this year’s NBWA Convention in San Francisco, visit the photo gallery.
 

The Brewers Association, of course, has a board of directors made up of brewery owners. The current chairman, Rich Doyle, owns Harpoon Brewing in Massachusetts. In a recent article in the Patriot Ledger, Doyle ruminates on what the InBev takeover of Anheuser-Busch will mean for smaller brewers. (And I’m going to adopt Harry Schuhmacher’s “ABIB” to refer to the new company.)

Like me, Doyle doesn’t think the ABIB merger will do small brewers any favors. “When you read in the paper that 80 percent of the beer sold in the United States is now controlled by two companies, that’s a pretty sobering fact.”

From the Patriot-Ledger article:

Doyle said most independent beer distributors in the U.S. have a contractual arrangement with one of the big brewing companies. He said that as those companies gain clout, small craft brewers worry they could be squeezed out by the big conglomerates if they provide financial incentives to the distributors to focus on their big-name beers.

“The small brewers are concerned that these contracts will be even more constraining on the somewhat independent wholesalers to be able to handle products like ours,” Doyle said. “Ultimately, this is about the consumer having access to the brands they want and the choice they want.”

The article goes on to quote Jim Koch, founder of the Boston Beer Co. (who makes Samuel Adams beers) as not being nearly as concerned. Of course, Boston Beer is the largest craft brewer in the country and is already well-established in virtually every market. But I continue to believe that for smaller, newer and less middle-of-the-road brewers, the challenges in getting their beer to market will only increase.
 

Rich Doyle, leading a toast after giving the keynote address at the Craft Brewers Conference in San Diego earlier this year.

Anheuser-Busch’s “100% share of mind” program is legendary. It started ten years ago, when A-B began offering incentives to their distributors so they’d care only about A-B products. Though I assume they never said so — wink, wink — they encouraged distributors to drop non-A-B brands and concentrate on only the important brands. And at that time, such was A-B’s market strength that many distributors did in fact tow the line. But lately as domestic sales have been static or slipping, distributors are adding non-Bud brands to their portfolios to stay at the same level of profitability. The Associated Press had an article last week about this recent phenomenon called Beer Distributors Want More Than One Best Bud.

As the article points out:

For consumers, it means greater choice at their local bars and liquor stores. Wall Street analysts say the movement signals a weakening of the St. Louis brewer’s clout in the marketplace, as small-batch “craft” beers and imports, as well as wine and spirits, wrest market share from mass-market brews like Budweiser.

Many of the 560 nationwide A-B distributors realized that as craft beer is increasingly in demand, that their competitors were having the last laugh, because they were free to pick up whatever brands they wanted and believed they could be successful selling.

While IRI general manager Bump Williams described the program as a “great business model,” not everybody was convinced that it was fair. The DOJ launched an investigation into anti-trust violations, but later abandoned it. Naturally, A-B continues to push the program with such statements as “[w]e want their efforts and focus aligned with ours.” Well, who wouldn’t? But that isn’t how the world works nor is it how it should work. It’s schemes like this one that gave A-B its reputation as a bully. And it appears that they still have that mindset. Again, from the AP article.

Still, Anheuser wasn’t happy with the way it learned of the Tennessee distributors’ decision. “We found out later (in their decision-making process) than we would have liked,” says Mr. Peacock. “When we don’t get early communication, it rubs us wrong.”

Now why would one business be rubbed the wrong way if another, supposedly separate and independent company, didn’t consult with them before making a business decision? The best illustration of this mindset comes from more than a decade ago, with the former head of A-B, August Busch III, sitting around a conference table at their Hawaiian distributor petulantly throwing bottles of craft beer against the wall, smashing them to bits, to show his displeasure with a separate business having the unmitigated gall to sell something he can’t profit from. It’s that arrogance, borne of being the market leader for such a long time, that leads a company to believe that whatever is in their best interest is in everyone else’s best interests, too.

But as the market changes, that’s becoming less and less tenable. Distributors are realizing that to remain successful, they have to stock brands that their customers want, regardless of who makes them. That only makes good business sense. Some industry analysts, like my friend Harry Schuhmacher who runs Beer Business Daily, are surprised that it has taken so long for this to begin happening. As he puts it. “It really hasn’t been a widespread national jailbreak.” But that’s the hold that A-B has traditionally had over its distributors. Now that it’s finally beginning to erode, it will be interesting to see what percentage share of mind Bud is left with.

Austin to Host Conference on Craft Beer

Boulder, Colo. • In mid-April Austin will be flooded with flavorful craft beer and the brewers who make it. That’s when the Brewers Association, the not-for-profit trade association for America’s small brewers, will hold its annual professional conference. Craft brewers from across the country will pour into Austin to attend the Craft Brewers Conference, the brewing industry’s largest gathering in North America. Attendance is expected to exceed 1,600.

Austinites will benefit from this surge of beer culture with public events at local venues featuring special beers on tap, craft beer-paired dinners and good elbow-rubbing time with the royalty of craft brewers. “Austin is a city rich in craft beer culture and we look forward to bringing the industry together in such a beer-friendly town,” said Cindy Jones, Marketing Director for the Brewers Association.

Today, sales of craft beers — beer made by small, independent and traditional brewers — are at an all-time high. 2006 marked an 11.7% increase for the category totaling a retail sales figure of $4.2 billion and 3.2% share by volume of the beer market with over 6.65 million taxable production in barrels. America’s craft beers are now a world-class brand being emulated and talked about globally.

“Having the Craft Brewers Conference come to Austin is a fantastic opportunity for the local brewers to showcase our beers,” says Chip McElroy of Live Oak Brewing Co. “We Austinites are proud of our town and the local things we have produced — especially music and beer. We just had the SXSW music conference in town, now bring on the brewers!”
 

Events open to the public include:
 

Event: American Homebrewers Association Rally
Presented by: Independence Brewing Company
Date/Time: Sunday, April 15, 3-6 pm
Location: 3913 Todd Lane #607, Austin, TX
Contact: 303-447-0816 x 123
Cost: Free for American Homebrewers Association (AHA) members or $33 for non-members– which includes a 1 year membership to the AHA!
To kick off the Craft Brewers Conference and support the American Homebrewers Association, Independence is hosting a rally. There will be special guest speakers, brewery tours, raffle prizes, complimentary beer tasting…and to top it all off, they’ll be pouring an experimental beer they’ve been working on. Visit the website for more details. www.independencebrewing.com
 

Event: American Beer Feast
Presented by: Alamo Drafthouse Lakecreek
Date/Time: Thursday, April 19 @ 7:30 p.m.
Location: 13729 Research Blvd., Austin
Contact: 512-219-8135
Showing of “American Beer”, the movie, with director Paul Kermizian and many other special guests. Ticket price includes pre-show appetizers and a three-course craft beer meal (many great beers) to accompany the film.
Cost: Admission is $65 and includes entrance, meal and beer. Guaranteed to be a special evening. Visit the website for more details. www.drafthouse.com/lakecreek/frames.asp
 

Event: Zax Pints and Plates Beer Dinner
Presented by: Zax Pints and Plates
Date/Time: Thursday, April 19 @ 7:00 p.m.
Location: 312 Barton Springs, Austin
Contact: 512-481-0100
Join your friends at Zax Pints and Plates for a 4 course beer and food pairing featuring fine ales and lagers from Victory Brewing Company. Space is limited so make reservations early.
Cost: Open to the public. Admission is $45.
Call 512-481-0100 for more information and reservations. www.zaxaustin.com
 

Event: John Langford Live and in effect!
Presented by: Opal Divines Austin Grill (Penn Field)
Date/Time: Friday, April 20 @ 7:00 p.m.
Location: 3601 South Congress Street. Austin
Contact: 512- 707-0237
A free concert and short film featuring the music of John Langford and featuring Dogfish Head Craft brewed ales.
 

Be sure and visit craft beer hotspots in the Austin area open year-round: Blue Star Brewing, Draught House Pub and Brewery, Fredericksburg Brewing Co, Independence Brewing, Live Oak Brewing, Lovejoys Taproom and Brewery, North by Northwest Restaurant and Brewery, Real Ale Brewing Co. Visit beertown.org for a complete list of breweries by state and city.

For more information about the conference visit www.CraftBrewersConference.com. The Craft Brewers Conference is open to brewing industry professionals and media only.

Last Thursday afternoon I attended a Glass Bottle Workshop put on by the California Small Brewers Association. It was held at and hosted by Lagunitas Brewing in Petaluma, California. A few dozen brewers, suppliers and one journalist packed in the party balcony at Lagunitas to talk about beer bottles. First, some interesting facts about the beer bottle industry today.

In 1985, there were 110 glass plants in the United States. Today, that number has dropped to less than half, or 49 remaining glass plants. Of those, 42 of them (or about 84%) are owned by the three largest companies; Owens-Illinris oe O-I (19 plants), Saint-Gobain (14) and Anchor (8). Seven companies own the remaining eight, with Gujarat Glass International owning two and the rest operating a single plant each. Like most modern industries today, consolidation has whittled the landscape of glass manufacturers down to a few giants with a handful of small players hanging on for dear life. Typically, that’s good news if you’re a big consumer of glass but not so good if you’re a small player. Part of the reason for the shakeup in glass makers ocurred in 1992-94, when there was a huge decline in the market, caused primarily when most soft drink companies converted from glass to plastic bottles. Longnecks far outsell the shorter Heritage bottle and twist-offs currenty outsell non-twist off.

The breakdown of glass bottles is currently as follows:

1. 85% Beer
2. 17% Food
3. 9% Beverages
4. 5% Non-Food Jars
5. 5% Wine
6. 3% Spirits
7. 3% FAB (Flavored Alcoholic Beverages)

Tony Magee (from Lagunitas) and Mark House (from Pyramid) led a round table panel discussion about issues facing small brewers regarding bottles.

Later Magee led a tour of Lagunitas’ new bottling line, installed last January, by the Italian company Sympak.

After some supplier presentations and an open discussion, the afternoon ended with a beer social. Here Dan Del Grande from Bison Brewing enjoys a pint from Lagunitas.

And here’s a story about an O-I plant in Colorado entitled the House of Glass from the Scripps Howard News Service.

Down near the bottom of the left sidebar on this website there’s a little box for donations to the beer bulletin. It’s been up for at least a few weeks now, and while I didn’t expect to be showered with money, I figured it couldn’t hurt to ask. I put it out of the way on purpose because I didn’t want to be too obvious about it. But I spend a lot of time on the bulletin and many people seem to enjoy it, so I figured perhaps some of them might want to put something in the tip jar, so to speak. Happily, I’ve gotten a couple of donations, mostly from friends. But a few days ago I got my first donation from a perfect stranger and I wanted to reward their generosity by pimping their business. They didn’t ask me to do so, and that’s precisely why I want to. It was a selfless gesture. So Bob, thank you very much for your donation. It was much appreciated and brightened my day considerably.

Kustom Koozies makes those insulated foam things that keep the beer in your can or bottle at a cool temperature. And they can customize them with your logo or event for a pretty low price. They carry both the fat ones and also the thinner ones that can be folded. They have a large variety of colors available, too. And best if all, there’s a minimum of only 12. Of course, the more you order, the lower the price.

As cans get more popular for craft beer, this may be a good way for those breweries to spread their name by putting their logo on a koozie. But be sure to use the koozie to keep your beer cold just until you pour it into the glass, unless of course you’re at an outdoor event where glass isn’t permitted.

When Rick Courcy retired, he wanted to get out of the city and so moved his family from Masschusetts to Oxford County, Maine, known as the “Gemstone Capital of Maine.” He settled on a 90-acre farm in Paris, with a view of Mount Washington.

Mount Washington (along with Mount Madison) seen from the Appalachian Trail.

Courcy was whiling away his time watching television while still trying to figure out what unique crop to grow when he saw a beer ad and was hit by inspiration. So he hopped up and planted organic hops, built the requisite trellises and has spoken to area brewers who are interested in using locally grown hops. He’s called his hop farm Paris View Farm. According to John Harker from Maine’s Department of Agriculture, Courcy is now the only commercial hop grower in the state.

Now that’s great news. I don’t think I realized hops would grow in Maine’s climate but according to Harker, “hops used to be grown in nearly every farmer’s backyard.” I always thought the reason spruce and other plants were common as a hop substitute throughout New England was because hops wouldn’t easily grow there. Oh well, maybe it’s global warming.

UPDATE 7/25: Brendan from Beerdata.org did a really nice more in-depth piece on this story last week.