Tag Archives: Goose Island

As the big get bigger, what do the small get?

The potential acquisition of South African Breweries (SAB) by their larger rival Anheuser Busch Inbev (ABI) has got many commentators gasping for breath: not at the audacity of it – that was reserved for when InBev (as was) took down Anheuser Busch – but rather the implications of the sheer scale. The scale, both of the deal (the fourth biggest corporate takeover) and the ultimate beast it will become (who we shall call ABSAB).

Interestingly, a stock response of commentators is ‘Don’t Panic Mr Mainwaring!’ The deal, as these deals do, will create opportunities for smaller operators. Drinkers, reviled by the deal and the inevitable consolidation / loss of brands in the shake-up, will vote with their wallets and support the little guy. New market niches will open up, too small for a goliath like ABSAB to spot, yet alone exploit. David will win the day! Fleet of footedness, quick decision-making will out!

And there will be some of this. Of course there will. But on balance, it’s a romantic notion and one that, in truth, isn’t borne out by precedent.

The first issue is growth. In most western, mature consumer markets beer is flat-lining or declining. Drinkers are drinking less. This pressure rolls through to licensees: what to stock; how much space they can give to beer and ultimately what brands end up on the bar. What licensees want is a range of guaranteed strong sellers and a ‘something interesting’ selection. ABSAB (Stella, Peroni, Budweiser) can fulfil one side, craft can fulfil the other (in fact, increasingly, ABSAB can fulfil this other side too). In less mature markets, there is underlying growth in beer consumption – in central and South America for example – and that growth is driven by brands. Big brands; famous brands, foreign brands; often American or European: brands that are a status symbol. ABI and SAB are getting together because growth in their core markets is slowing (or has stopped). They’re getting together because in emerging markets it’s about brands. The deal allows more consumers to access their brands in more markets, efficiently and cost effectively. And most consumers won’t react negatively. They won’t even think about it.

The second issue is craft. Craft beer, however you define it, is exciting, interesting and inspiring. It’s been brilliant for beer in many markets. But craft beer is, what? At best 10 – 15% of market volume. Most of us, most consumers, simply aren’t in the franchise or drink it infrequently. Most of us, in short, drink the sorts of beers that ABI and SAB make.   Now, clearly there is growth and clearly craft is slowly, steadily impacting consumer perceptions of the market. But if we assume that the basis of the ‘Innovation-Adoption Curve’ is correct, then most of us are fairly unadventurous. We’ll follow. And what will this mean in terms of brands? It won’t mean opportunities for spontaneous fermented wild beers hitting the mainstream. It will mean the likes of Blue Moon, Goose Island, Meantime, Lagunitas, Kona becoming more widely available, and if we’re lucky the larger – independent – craft brewers – Sierra Nevada, Brooklyn, Boston Beer will be available too. But the real opportunity if for the crafty beers under the umbrella of brewers like ABSAB. They offer the rationale of differentiated choice, with the convenience of a single and efficient point of supply.

What ABSAB appreciate is that currently global brewing is over-supplied. There are two responses. One, consolidate to ensure supply over time reduces and is done cost effectively. Two, build brands. This deal does both and will be successful.

For smaller brewers, given that they can’t consolidate to the same level, the real opportunity is the second option. To build brands. Take the UK beer market. There are now 1,700 breweries. The UK is the most breweried-per-head country in the world. Yet the beer market has been declining at about 4% a year since 2005. Per capita consumption of beer is falling, despite the noise of craft. There will be a fall out, even with the UK Government’s small brewer duty relief (perhaps because of it). Now is the time to build brands not supply product. Look at Camden Town, only three years old, but already widely available throughout the capital. Why? Good beers (with broad appeal); tremendous branding. Look at Beavertown. Good beers (with more challenge to them), impactful branding.

No, the opportunities presented by ABSAB getting together are twofold. For consumers, it’s in the truly niche operators, who make more complex, highly differentiated and challenging beer styles that they can supply effectively to the market. For small brewers who don’t, the real opportunity is to build your brand. And the real money is to be made when the likes of ABSAB buy them from you.

My Kind Of Town

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The Goosey Geese Tap Handles of Goose Island.

One city is the United States in microcosm. New York is amazing: soaring, spiky, spectacular. It’s almost a caricature of itself though; too showy; too extreme. San Francisco on the other hand is happening, boho, liberal, supremely geeky – so much so that it could never be described as typical, wonderful though it is.  No, that microcosm is Chicago; a city that for me encapsulates a little of everything you imagine heralds from the States, a little of everything the States is great at. There’s the architecture (Skyscrapers, Frank Lloyd Wright), the music (the blues, the jazz, gospel), the sport (the Cubs, the Giants, the Bears), the weather (+35°C Summer, -27°C Winter anyone?), the industry (head offices of Kraft, McDonald’s, Boeing)… all this and more. Yet there’s something else, something more elusive.  First, there’s the setting.  Most US cities have height in their downtown, but Chicago flies. It’s a city that simply rockets upwards, out of the Plains like the vision of ‘Metropolis’ imagined in early science fiction.  Although not the tallest skyscraper, the Hancock tower provides the best view as undisturbed, you can look out east over Lake Michigan, eyes straining to see the curvature of the Earth, or north as the city drops away, tracing the lake coast as it falls block by block, gradually descending like a city built from Lego, until it is just the shoreline heading into the horizon.  Then, there’s the food and drink culture.  Oh, this may be the Mid West; this may be Six Pack Joe central, but make no mistake, this is a great food city and what’s more, an amazing beer city too.

Twin Anchors rack of ribs: “Like an orchestral Xylophone being brought in sidew

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Take two pizzas. Stack one on top of other. Invert. Add more cheese and tomato. Bake.

I first went to Chicago in the late 1990’s. To be honest, I hadn’t really genned up on the place as the days beforehand had been stupidly hectic, but it didn’t take long to be astounded by the native Chicagoan foods – and the vast quantities served.  It was also the first time I had witnessed Starbuckisation in action.  We stayed in a pretty basic hotel, a Days Inn located perfectly just north of downtown for the bars, business and eateries and bang next door to the Lake Michigan shoreline over Lincoln Park. In no more than 100 yards of us in each direction were 6 coffee shops, 4 of which were Starbucks – easily within sight of one another. Anyway, that first week was business, and as a group we investigated Chicago’s dining and drinking scene. There was deep dish aplenty, a Gino’s East pizza restaurant not far from the Museum of Contemporary Art was my first experience of the famous upside down, inch thick pizza; there were others but Lord knows how we made room for them. Sandwiches too, bagels for breakfast of course, and downtown somewhere just below the Loop tube train, we had a two-inch thick Italian beef sandwiches soaked in gravy and served with whole heads of roasted garlic. Then there were the ribs: the most memorable assaulted us in the Twin Anchors chophouse where I went with my brother the night before Halloween. We were overawed, and not just by the skull decorations – there’s no other word to describe the speechlessness you get when a rack of ribs the size of an orchestral xylophone drenched in pungent BBQ sauce has to be squeezed out sideways through the kitchen door to the diner’s table. We shared a half rack (kids portion?) and were still fit to burst.

IMG_0766 IMG_0765The leitmotif of the trip though was the beer. The bar in our hotel was a bit like a ground floor ‘Cheers’.  It was not just frequented by guests but locals too, office workers mainly, popping in for a swift beer and bite before they headed off home.  Horseshoe shaped, with the barman seemingly at the centre of every conversation, many sat there at the bar for a few hours, making conversation with anyone who would listen.  As a group of Limeys we were, I’d like to think, entertaining as much as entertainment. Beers? Well, there was the normal selection – Miller, predominant, this being Chicago –  Michelob, Bud and Coors too, even Schlitz which you’ll hardly see now.  But none of these stood out nearly as much as the tap handles of Goose Island – my first encounter with the brewery and its beers. US bars can look like an array of wobbly wickets at the best of times so the Geese of the Goose Island hissed and honked like no others.  And the beers stood out too. At the time I hadn’t realised that we were only two blocks away from the island in the Chicago river that gives the brewery its name. With the passage of time, I can’t remember exactly which beers were on sale apart from two – both still parts of the Goose Island range today. The first, Honkers.  I mean, with the name alone you have to try it. And what a delight – a beautiful lustrous copper colour and fruity aroma with malty bitterness assisting drinkability.  And India Pale Ale, the beer that nowadays you can easily buy over here.  It’s simply an incredible beer: incredible when you consider it’s a fairly basic infusion mash off a single malt base and extensively hopped both with American and English hops. Yet for such a punchy, full on beer it remains well balanced – so its both one to savour and one to drink. My kind of beer; my kind of town.

© Beer Tinted Spectacles, 2013

The thorny issue of ‘craft’

Over a quiet beer or two, I have been wrestling with a dilemma.  Actually, no, that’s not right, as a dilemma is something you can’t satisfactorily resolve.  Rather, a thorny issue:  when is craft craft or not craft?  To stretch it further, are big brewers who sell ‘craft’ beer simply responding well to the drinker trends in the market, or are they being just plain crafty?

The Motley Fool (www.fool.co.uk) – a network of bloggers offering advice and gossip on companies and share performance – recently penned an article on US craft beer sales. It made for interesting reading:  although craft beer is only 6% of the market place, they are growing strongly, up 14% in the last year according the American Brewers’ Association – in an overall market where per capita consumption is declining.  Interestingly, the big brewers’ performance within this was marked. Miller Coors’ Blue Moon brand grew by 50% between 2009 and 2011, and Leinenkugel’s grew by 20%.  Anheuser Busch is also a player. They have bought Goose Island and also launched their own craft brand, Shock Top, the latter growing 70% year to date*. In comparison, more established players – the genuine craft brewers it is argued – are growing much more slowly.

Raspberry WheatWe drank Shock Top Raspberry Wheat in the Salty Dog in Sarasota – with no idea it was an ABI beer. Inspired marketing or a confidence trick?

There are two really interesting dynamics going on here.

First, that there is a debate going on about ‘craft’ at all.  Big companies get big for a whole host of reasons – luck, daring acquisitions, market expansion, exploitation… and brand building skill.  If they spot an opportunity to sell brands to drinkers, they’ll do it, and endeavour to do it with scale.  As far as I’m concerned, if a drinker is happy that a beer is a craft beer, then whether we agree on principle or not becomes purely academic: it is. Get over it, and start competing.

Second is the debate about what constitutes craft?  The answers are invariably couched in a hotchpotch of measures: volume brewed; use of adjuncts purely for taste, independence.     This is missing the point – a point bigger than beer. What manifests itself in beer as ‘craft’, is a slew of market trends impacting right across food and drink products: national, regional, local, provenance, authenticity, passionate producers, natural ingredients, interesting tastes & textures, original recipes – I could go on.  It’s popping up in tea, coffee, wines & spirits, across all foods from fresh meat and veg to ready meals and snack foods.

So what’s the connection?  These trends are tapping into our desire to emotionally connect in some way to our roots – however we define them as individuals.  This could show itself as national pride or local knowledge; it can show itself as truly authentic or re-interpreting the past, but importantly it doesn’t define itself by scale.  Look at Rachel’s Organic or Yeo Valley – organic, touchy-feely, yes. Niche – no. Or Tyrell’s Crisps, Red Sky or Kettle Chips.  Made from potatoes (not substitutes), interesting natural flavours, lovingly fried in kettles, yes. Niche – no. Or Sam Adams, Blue Moon, London Pride, Doom Bar – interesting, unusual, brewed with care? Of course.  Niche – no.

It’s good news all round for brewers, but as it’s about more than just the beer – it’s great news for brewers great and small.

*Clearly, that’s in the year to the date of their earnings release, not the year to date this year.  Mind you, January sales up 70% would be no mean feat.

© Beer Tinted Spectacles, February 2013

Staffordshire Mountain Time

Jens and I had just arrived in from a long haul schlep from Heathrow to Denver – seven hours time difference between Greenwich and my favourite time zone of all – ‘Mountain Time’.  Wouldn’t that be great? If all mountains shared the same time zone? From the Himalaya to the Andes, from the Urals to the Lakeland Fells, whenever you climb above 1500m you equalise with Denver, Colorado.  That way, we could drive up to the Lakes or the Highlands and drink beer simultaneously with the Great American Beer Festival, although perhaps in the dark…  On this occasion, sticking with current conventions, we had flown a quarter of the way around the world for this particular bout of jet lag, and we weren’t going to waste it on sleep.  The tactic of course: immediately assimilate yourself by going to a bar.

We headed for Blake Street. Just one block from Coors Field (with the most excellent, but sadly closed, Sandlot Bar / Brewery) we knew there were a couple of excellent bars.  Falling Rock Tap House earned the honours of slaking mutual first pint syndrome – I had a Fat Tire from New Belgium – an oldie but goodie which I perversely enjoy for its barnyard (read: cow muck) aroma, Jens something much darker (What? Than cow muck?) and inevitably featuring ancient grains or triple truck loads of hops, or something. I think Nelson Sauvin featured but my beer notebook wasn’t working at the time.   More beers and a light pre-order of kickers featuring, from memory, a magical set of buffalo wings and enough ‘nar-chos’ to fatten up this week’s Christmas Turkey (Note: not ‘Natch-os’ as I requested, creating much confusion.  Fortunately I didn’t request the ‘Toe-mar-to Solsa’ so we managed to navigate that tricky spot.  And heaven forbid if they are ever served with ‘Tune-a’ in the footure).  Anyhoo, the conversation became more animated and a heated debate opened up regarding the Cascade hop and its train – the other ‘C’ hops).  In the Blue Corner – the hop heads, who appreciated when the hops were treated delicately but generally, were seeking vast quantity. In the Biney Green corner, were the Purists, appreciative of the energy and momentum created by U.S. craft brewers but a little scathing of the indelicacy of hop quantity that many craft beers boasted. ’They all taste the same – it’s just too much hop, hop, hop’ was the refrain.  I was a broadly neutral voice in the debate between brewers, but at the time holding a candle to the Purists’ view.  Too many glasses of beer had been unfinishable; too many face-puckeringly astringent as opposed to lime-suckingly sharp and refreshing.

Yet those who have visited these pages before will know that I appreciate American inventiveness, particularly in the sphere of Pale Ales and IPAs fed to me on the lean diet that we enjoy on these shores. Of Goose Island and Sierra Nevada Pale Ale, enough has been said (quite justifiably) so I shall say no more today. But what a find the other day – one of those pleasant, out-of-the-blue surprises, that lifts your heart. And with it a touch of annoyance too – in the form of more beers in Sainsbury’s ‘Taste the Difference’ range. A Pale Ale (imaginatively entitled ‘American Pale Ale’) and also ‘Tap Room Brewing Company IPA’.    It seems from the blogosphere that I was not alone in being surprised by these beers’ appearance and it was only serendipity that allowed me to spot them in store. In the midst of the big Christmas shop, with the trolley losing its agility under the weight of festive groceries, I had carefully slotted some Goose Island and Brooklyn Lager into crafty niches between the bottles of Belvoir Presses (get me!) and the once-a-year parsnips when I decided to pause awhile over the UK range (actually to see if a friend’s beer had been listed yet). My eye was drawn to two slim 330ml bottles amongst the sea of 500ml pseudo-pints.  Naturally, despite the mechanically challenged trolley, I managed to engineer space for two bottles of each – the Pale Ale described as having ‘citrus aromas and malty flavours’ (no shit!) and an ABV of 5.3%; the IPA a more bullish yet still drinkable 6.3% and billed as ‘bold with spicy hop notes’.  Come on down!

IMG_2454 IMG_2455Well, my! What a find.  The Pale Ale in particular is a little haughty starlet.  Enticing you from the moment you lever (TWIST!!) off the crown.  Citrus notes – sure, but also a spiciness, which I assume comes from the hops, and a body, befitting a mid 5s beer that is both delectably drinkable yet supported with chiselled broad-shoulders. The mash contains wheat as well as barley and the roundedness comes through in the mouthfeel.  And my sort of beer – a come-hither-young-man aroma, multi-dimensionsal on the first sip and a lingering after taste that rolls around the taste buds gently tinkling a fading percussive melody on your tonsils with its Xylophone beaters, until the next sip is called for and your hand unfailingly answers.  The IPA in comparison was a bit of a let down – a good beer, but not a great one.  For a bold strength it flattered to deceive a little, drinking under its weight and creating a stewards’ enquiry from Barry McGuigan’s corner.  But not a bad beer, with a bright orange colour and a dense, compact head that laced beautifully. Alas, no timpani on the tonsils this time round.

And it revived memories of the old debate in that Denver bar.  U.S. craft beers – all the same? All hops and no knickers?  Well not on the evidence here – the tantalising tastes enjoyed in Staffordshire of all places have me pining to go back Stateside to update the argument.

© David Preston, Beer Tinted Spectacles, December 2012