subscribe » advertise » wholesale » contact us
It's Was the Best of Times, It Was the Worst of Times

It was the best of times; it was the worst of times. What the Dickens am I talking about? Just our beloved craft beer industry, that’s all. When the Celebrator started 30 years ago, we covered all 20 of the then-existing “microbreweries” in California. The pervasiveness of craft beer in the state, and indeed, the country, has grown astronomically in recent years.

After hitting a downturn in the mid-nineties, the craft beer scene continued on an amazing growth surge that made this portion of the adult beverage industry the envy of wineries and distilleries around the country, which celebrated a 2 or 3 percent rise in sales. Those quaint craft brewers were regularly knocking down double digits in growth each year for over a decade. Real, sustainable growth.

American craft brewers reported cooling volume growth in 2016, but it was not because beer lovers had lost their desire for real beer. The Brewers Association, a Boulder, Colo., trade group that represents the nation’s craft brewers, reported recently that growth was slowing to a still respectable 6 percent for 2016. That represents 24.6 million barrels of craft beer production. Volume had increased by 13 percent in 2015 and 18 percent in the preceding two years, but the BA admitted those heady days were likely in the past.

Meanwhile, some ominous rumblings from the street suggested that not every brewery had the magic combination of great beer and a loyal following to sustain its business in the new, highly competitive environment. Since approximately 2005, opening a brewery has been a pretty solid business decision. Even as the total number of breweries in the U.S. climbed toward the highest it’s ever been, the failure rate of new brewing operations was still near zero. Entrepreneur magazine even suggested in 2015 that the small brewing enterprise was about as fail-safe a project as you could get in a small business.

The data on recent brewery closures is telling and terrifying. In 2016, nearly a hundred craft brewers shut down, often leaving buildings and equipment, along with hopes and dreams, to creditors and investors. To give some perspective, the number of closures in 2015 was 78, and 75 the year before. What’s going on here?

It’s one thing when marginal start-ups pull the plug, but quite another when venerable brewing stars — places that shaped the tastes of generations — throw in the mash paddle. A huge shocker in the Sacramento region was the abrupt closing of iconic Rubicon Brewing after 30 years of defining West Coast IPA, still the most popular style of beer by far, and serving as exhibit one in how a successful brewpub is done.

On its heels in the Oakland area, 30-year veteran Pacific Coast Brewing announced it was closing. Former regional powerhouse Widmer Brothers in Portland just closed its Gasthaus and laid off staff as it rethinks the retail part of its massive operation. Both Widmer and Redhook, the breweries that were key to the Craft Brew Alliance group, have suffered declining sales and market share in recent years. Kona Brewing, a distribution partner for many years, was finally purchased outright and now is the sales leader keeping the CBA going.

Portland continues to be a hotbed of craft beer but recently said goodbye to craft cognoscenti darling The Commons Brewery in a shocking development.

“The era of an 18 percent growth rate is probably over,” Bart Watson, chief economist of the Brewers Association, said during a media presentation. “The industry is a maturing industry. Having those growth rates in an industry of this size is impossible going forward.”

Increased competition no doubt contributes to this loss of financial support. With 750 breweries in California alone and over 5,400 breweries around the country, the bloom seems to be off the craft beer rose, and beer enthusiasts have too many choices among the producers. The result is intense competition for brewery sales, for retail shelf space for those packaging, and for bar tap handles for those selling kegs.

Much of the growth in the craft beer segment today is found in the smaller, local breweries rather than among the bigger craft players that have national recognition, such as Sam Adams, Sierra Nevada and New Belgium. Catering to their local fan base, the smaller brewers have more direct input from consumers and can more easily respond to changing tastes.
Large regional and legacy brewers seem to be taking the brunt of this sales slowdown. BridgePort Brewing and the Craft Brew Alliance in Portland, along with the iconic Stone Brewing in San Diego, recently announced staff reductions. Speakeasy Ales & Lagers, a longtime San Francisco brewing fixture, abruptly shut down but reopened shortly after under new management.

Craft beer lovers vote with their wallets and need to continue to be ecumenical in their beer choices. The next few years will be, ahem, interesting.
What a Long, Strange Sip It's Been

As the Celebrator’s 30th anniversary approaches, the state of our beloved craft beer industry is in, let’s be real here, a bit of a panic. Crafts beer’s phenomenal growth has had its challenges over the years. The mid-nineties saw what some called a “realignment,” while others described it as a “shakeout.” Many larger regional operations without devoted fan support succumbed to the pitiless realities of the marketplace. By the millennium, hundreds, indeed thousands, of new breweries came along, providing fresh, innovative beers for local fans without dependence on mass-marketing and hard-nosed distribution efforts.

Although the beer fan base continued to grow, many of our top-tier craft brewers suffered a decline in flagship sales as beer enthusiasts continued to line up for new releases from much smaller breweries with much more enthusiastic and loyal consumers.

According to the Brewers Association, beer sales for four of the top five craft breweries — D. G. Yuengling & Son, Boston Beer Company, Sierra Nevada and The Gambrinus Company — declined last year. However, sales for New Belgium, the fourth-largest craft brewery, increased by 5 percent.

AB InBev, the multinational brewing behemoth that acquired over a dozen craft breweries in the past decade, has announced that it has all the craft breweries it needs and will not be buying any more. The company’s High End division recently announced that it fired 350 of its craft beer evangelist sales force in order to retain all the people it picked up in the brewery purchases. Awkward.

Craft beer’s stunning growth rate came to rather an abrupt end with the release of last year’s beer stats. Volumes grew in 2016, but half as quickly as in 2015. In the 13 weeks up to June 17, craft beer sales and volumes both dropped, by 0.7 percent and 1.5 percent, respectively. Has craft beer reached its natural limit?

We now have over 5,500 breweries operating in the U.S. and many more on the way. As we reach for that shiny new object in a glass, remember the great legacy beers that brought you to this dance in the first place. Enjoying the newest is important. Celebrating and appreciating the benchmark beers that the newer brewers strive to emulate and perhaps surpass is important too. It’s still a great time to be a beer lover.
LETTERS TO THE EDITOR (October/November 2017)

Dear Editor,
Per usual, you’re spot on [“Notes from the Publisher,” June/July 2017], especially your final paragraph and the Trumpian “Sad.” Dan Kopman told me that Jim Koch had told him that A-B (when it was still American and Miller wasn’t) filed a request with the TTB to require labels to show the nationality of the corporate owner of a brewery. He said Jim told him it had never been withdrawn. Can you put your journalistic sleuthing skills to work to confirm the truth of this urban legend?

Thomas F. Schlafly
St. Louis, Moissouri

Dear Thomas,
You’re the guy with the LexisNexis access. Tell us about this! All ears. — Ed.

Hello there, Mr. Editor,
My brother Ted and I took a trip to Tacoma, Wash., to watch a AAA All-Star Game. We left Stockton at 8 a.m. with the Celebrator magazine in hand and headed north on I-5. We stopped at Dunsmuir Brewery Works, had a little lunch, tried one of the beers, and then went to the Weed Alehouse Bistro and had a few of their beers. I met Vaughn, the owner, who is a really nice guy.

The next day we made it to Tacoma, and with Celebrator in hand, we checked out all the microbreweries that were listed. The best one on the list was the Pacific Brewing & Malting Co. All we can say is, when you hit the road, don’t leave that Celebrator magazine behind. It is a must-have.

Steve Hammond
Stockton, California

Hello there, Mr. Hammond,
Delighted that our magazine could have made your trip so enjoyable. Any updates on our increasingly out-of-date Hop Spots would be most appreciated. — Ed.
Brewers Association Introduces the Independent Craft Brewer Seal

The small brewing industry has grown from a few tiny breweries with cobbled-together equipment to thousands of breweries in every state in the union with sophisticated equipment, experienced brewers and knowledgeable patrons demanding the very best the brewer can produce.

It didn’t take long for the rapidly consolidating Big Beer folks to see that the future of beer lies with the quirky little guys brewing the latest and greatest to appeal to an ever-changing clientele, rather than an ocean of industrial light lager that was so easily produced and consumed without much thought given to style or food application. Beer was beer, right?
The new world of brewing has forced Big Beer to rethink its role in all of this. The diminishing sales of light lager could no longer be ignored. Although Big Beer tried its hand at making its own versions of world-famous beer styles — some of which were excellent brews — the results failed to move the needle on diminishing sales.

The result has been a bonanza of Big Beer acquisitions that have seen some great craft beer entities being absorbed by Big Beer via lucrative transactions. Goose Island, Blue Point, 10 Barrel, Elysian, Golden Road, Four Peaks, Breckenridge, Devils Backbone, Karbach and newly acquired beer-geek heartthrob Wicked Weed are now firmly in the AB InBev camp, and their owners and principals have been richly rewarded. Both Lagunitas and Ballast Point proved to be billion-dollar babies when acquired by Heineken and Constellation Brands, respectively.

The Brewers Association, based in Boulder, Colo., has created a symbol in an attempt to unify craft breweries around the country. This symbol, called the Independent Craft Brewer Seal, was created to give consumers and beer lovers an easy way to identify true small and independent craft brewers not affiliated with Big Beer.

“This seal lets beer drinkers know that the spirit of independence shines through in the incredible beers that small and independent craft breweries are making every day,” declared the brewers organization. While many brewers argue over the details, the question remains whether or not the BA product seal will have any impact on consumers looking to buy that next amazing six-pack of tasty brew.

Some of the former owners of now comfortably corporate breweries owned by AB InBev have suggested that such a seal is divisive to the industry. From a video called “Six Viewpoints from the High End,” released recently at a gathering of former craft brewery owners, came the following quote: “There are clear threats from wine and spirits out there; whether we are being willful and not noticing that or we are too busy fighting amongst ourselves, there is a clear and present danger,” said Andy Ingram, founder of Four Peaks Brewing in Tempe, Ariz., which was purchased by Anheuser-Busch in 2015.

The “clear and present danger from wine and spirits” seems to miss the point about a clear and present danger of consumers not knowing who really is independent and who is in the pocket of market dominance. Not to mention that AB InBev seems to have a spendy media group following around its newly minted coterie of Beer-illionare former owners making exculpatory videos. Be sure to check out the satirical response from Reaver Beach Brewing recently posted at Brilliant.

Others have recommended that the BA require date coding on products or make a statement on the quality of the products carrying the seal. Here’s where things get truly complicated. Date coding is, certainly in the case of hoppy beer, important but a huge expense for some breweries barely making payroll. Such a choice made by the very best of our craft breweries is to be applauded. To be made mandatory would be a hardship difficult to enforce.

A quality seal would likewise suggest some panel (the BA in Boulder?) taste-testing every release from over 5,000 breweries to give its seal of quality approval. Works for Chianti, but it’s unlikely to happen for craft beer anytime soon.

We think the Independent Craft Brewer Seal is a good first step. The responses from some of the former craft brewery owners suggest that they fear public exposure. Sad.
The Future of Craft Beer (According to Anheuser-Busch InBev)

Anheuser-Busch InBev, the multinational behemoth with 70 percent of the American beer market (after its buyout of SABMiller) and over a third of the world’s beer production (sales were over $14 billon in just the last quarter), has acquired nearly a dozen respected “craft” breweries and the nation’s largest homebrew supply operation. What’s the strategy?

AB InBev’s roots go back to the 1980s, when three Brazilian entrepreneurs bought Brahma, a struggling regional brewer. They merged with family-owned Belgian powerhouse Interbrew in 2004 to create InBev. That company launched a hostile takeover of America’s largest brewer, Anheuser-Busch, in 2008 for $52 billion. “Over my dead body,” said the apparently deceased August Busch IV. The company then acquired rival SABMiller for a head-spinning $103 billion.

Domestically, A-B has been losing market share for its core products for the last 15 years. The number of “craft” breweries in the U.S. just topped 5,300 — an astounding number, considering the growth in the same 15-year period. Naturally, A-B would like a part of this lucrative and growing segment of the beer business. It now owns 10 prestigious (formerly “craft”) breweries: Goose Island Beer, Blue Point Brewing, 10 Barrel Brewing, Elysian, Golden Road, Four Peaks, Breckenridge Brewery, Devils Backbone, Karbach Brewing and newly acquired Wicked Weed.

Profits from these recently acquired breweries won’t offset the loss in revenue with declining lager sales, but it helps. Mainly, A-B can now offer a diverse array of “crafty” brands for its beleaguered distributor network, which is reluctant to bring in craft brands not approved or owned by A-B. This also allows for the appearance of variety at multitap retailers while A-B still “owns” the entire tap lineup. AB InBev recently introduced an incentive to its distributors in which the company would refund 75 percent of a distributor’s required marketing spent on AB InBev brands if AB InBev beers made up 98 percent of that distributor’s sales. That’s slightly short of August Busch III’s infamous “100 percent share of mind” demand in the pre-InBev days.

A trendy bar offering Goose Island, Elysian, Golden Road and now Wicked Weed taps along with the usual Bud, Bud Light and Stella Artois looks like amazing variety, but all these beers now come from company-owned breweries. And many of the top-selling beers, like Goose Island 312 and IPA and Elysian Space Dust IPA, are being made at several of A-B’s 12 production breweries around the country. Ricardo Melo, the company’s vice president of sales strategy, told The Wall Street Journal the plan will improve AB InBev’s offerings for consumers and better equip wholesalers to compete. A consequence of this is the greatly reduced opportunity for non–A-B craft breweries to gain access to market through the A-B distribution network.

Another consequence of this crafty consolidation is enforcement of liquor control rules regarding a brewery cutting deals with a retailer to offer only its own beers. Daniel Person, writing in the Seattle Weekly, detailed a recent law enforcement action at a local heavy metal bar called the Showbox. The bar had a tap lineup that included Goose Island from Chicago, 10 Barrel from Bend, Elysian from down the street and, for the less adventurous, Bud and Bud Light. Undercover officers for the Washington State Liquor and Cannabis Board were looking into allegations from a small brewer that accused A-B of cutting a deal with the music venue to gain exclusive access to its bar, thus cutting off small competitors from a lucrative market. While a bar serving only one brewery’s products is not in itself illegal, the state is charging that A-B, working through a third-party distributor, entered into sponsorship contracts at three Seattle venues to achieve a monopoly position, which does run afoul of regulations. Based on its findings, the state has fined A-B $150,000.

Massachusetts regulators recently accused A-B of giving away nearly $1 million worth of beer equipment to hundreds of bars and package stores as part of an illegal inducement campaign to push sales of Budweiser and its other products while stifling those of competitors. The charges lend credence to complaints by small breweries that anticompetitive tactics are pervasive in the beer industry as large brewers and their distributors try to stop the bleeding of sales to the growing craft beer movement. A-B faces a hearing over the alleged scheme that could result in the suspension or revocation of the company’s liquor license. Serious stuff.

If A-B was slow to grasp the significance of the American craft beer revolution, it is driving the narrative internationally. And there is no bigger potential market for craft beer than in China, with its $80 billion beer thirst, the biggest in the world, expanding exponentially. AB Inbev, along with Heineken (which just bought the other half of Lagunitas) and Constellation Brands (with its brand powerhouse Ballast Point), is poised for vast expansion worldwide.

And the rules of engagement offshore are vastly different from those in the United States. Scott Cendrowski, writing in Fortune magazine, pointed out that China’s weak regulatory climate allows a well-funded player like AB InBev to muscle into the market in ways that wouldn’t pass muster in the U.S. His research points to situations where A-B leaned on distributors to keep them from carrying other craft beers. “It has given bars incentives to promote Goose Island while shoving other beers off the taps — deals that would be illegal in the States. It’s offering lavish salaries to poach local brewing talent,” said Cendrowski.

The article suggests that, since early 2016, the Belgian-Brazilian beer conglomerate has inundated Beijing and Shanghai with Goose Island, the Chicago-based brand it acquired in 2011. Goose Island brews exotic beers and has the kind of cute animal logo that can turn heads, and tastes, in China. “The campaign is central to AB InBev’s strategy of promoting pricier beer to China’s growing ranks of wealthier young hipster consumers. While competitors (including Heineken and Duvel) are importing their own craft beers, none have moved with the same gusto [as A-B],” wrote Cendrowski.

Chris Herron, an industry veteran with many years in management at Miller and Diageo, wrote a brilliant piece called “Watch the Hands, Not the Cards — The Magic of Megabrew.” He suggests that paying attention to business fundamentals will reveal a lot more about a big brewer’s concerns in today’s corporate climate. How many small brewers are concerned with factors like brand equity, goodwill and impairment charges?

AB InBev’s 2016 balance sheet, according to Herron, shows that its “goodwill” represents nearly 53 percent of its assets, approximately $136.5 billion (yes, billion). That brand value ties to consumer perception, which is why AB InBev cares so much about how you perceive its brands.

“While everyone thinks that AB InBev is truly interested in getting into craft and building these brands (which is a secondary goal at best), I submit that maybe buying craft breweries is more of a tool to devalue the craft category and increase the brand equity of their core legacy beers,” said Herron. “The impairment charges AB InBev could face are worth billions more than any craft brand they have purchased, and those purchases would be a small price to pay to save a legacy brand. These craft brands, whether they realize it or not, may just be pawns in the AB InBev game of chess. AB InBev is not a collaborator; they are a competitor, and a damn smart one. If one of these craft brands they buy is a successful long-term brand, great, but more important to AB InBev is the vital role they play in the short-term of ensuring that their premium brands retain long-term value.”

So, while we beer geeks discuss the fine points of Citra versus Mosaic, Big Beer is plotting our beer future…
The Craft Beverage Modernization and Tax Reform Act

Here’s something both Republicans and Democrats can agree on in Congress: Small brewing is good for the country and needs to be encouraged! Congresswoman Suzan DelBene (D-Wash.) is cosponsoring a bill that would cut in half the federal excise tax on a barrel of beer for small brewers.

The Craft Beverage Modernization and Tax Reform Act would lower the tax from $7.00 per barrel to $3.50. The break would also apply to small vintners, cider-makers and distillers. Some small brewers say the move would save their breweries about $8,000 per year. The tax break would help stabilize prices for beer drinkers as well.

The bill has strong bipartisan support and is currently in the House Committee on Ways and Means, where it awaits a hearing. A spokesperson for Rep. DelBene said she is hoping to get the bill rolled into a larger tax reform package.
We are a nation of beer drinkers, but the small “craft” style of beer is still well below 20 percent of all the beer brewed and consumed. Wine consumption is barely 9 percent of the beverage pie. By encouraging small brewers, we contribute to the appreciation of full-flavored craft beer — the beverage of moderation (beer has half the alcohol of wine and far less than spirits).

As we approach the 5,000 mark for craft breweries in the U.S., with over 800 in California alone, the growth of this small, entrepreneurial enterprise continues to contribute to a beer culture manifesting itself in urban renewal and rural renovation. The growing social aspects of the beer garden and community taproom bring a sense of shared interaction to otherwise disparate groups and individuals.

Let your Congressional representative know that you value and support the small brewers tax relief legislation.

Just received your new issue, and I have been in stiches for the past hour. You are too funny. With your permission, I want to get a sign made with a quote from the last line in the “Heard It Through the Hop Bine” to put up in our new brewery.

Bill Millar
Hollister, California

You are too kind, sir. Sure, to make it onto someone’s sign is the height of every writer’s aspirations. — Ed.

Reading your editorial in the latest issue, I remember all the early breweries you listed. I had discovered Lyons only a couple of years before it burned. What a bummer! I was happy when Judy [Ashworth] reopened in Dublin, and I went there many times. In fact, a buddy and I got up on stage with the band one night and sang “Rocky Raccoon.” Judy hugged us both and thanked us because that was the song that had played when she opened the new place. I also took brewing classes from Garith Helm from Stanislaus’s St. Stan’s. Like I said, I remember drinking beers from there and most of the other defunct and not-defunct breweries. Thanks for enabling my habit over the years!

Dennis Atkinson
(Via Internet)

Thanks for the comments on breweries in the “olden days.” Thanks also for your comments on our Hop Spots. There are now WAY too many places for us to list all of them. We’re adding places that carry the Celebrator. And yes, many breweries now have tasting rooms (where legal). I’ll see if we can’t add TR or something to denote such as we go forward. — Ed.

I had some time today to catch up on the August/September 2016 edition of your fine publication. Having just finished the article about Vijay Mallya’s current financial woes, I was prompted to compose this. I distinctly remember reading your original account of the 1999 interview in the February/March 2000 edition. At the time, I was totally taken aback by his attitude concerning the U.S. craft beer industry. Furthermore, I stopped drinking any and all Mendocino Brewing Company products. As a fan of Red Tail, Eye of the Hawk and others, I did not find this to be an easy decision.

My relationship with the two Michaels (Lovett and Laybourn) was casual at best (I met them here in Reno when I was involved in the Great Truckee River Beer Festival years ago), but what I perceived as Mr. Mallya’s total lack of respect for them, and for the industry in general, made my decision a bit easier. If things shake out the way it appears they might, maybe someday I’ll be able to revisit some fond old bottled friends.

Bob Durr
Reno, Nevada

Thanks for the comments on our article. Let’s hope someone can turn Mendo around. I remember the Great Truckee River Beer Festival years ago! Well done, sir. You now have some amazing choices for craft beer in the Reno area. Keep us posted. — Ed.
Beers and Cheers: 29 Years

When the Celebrator’s first issue hit the streets in January 1988, its mission was to cover and support all of the breweries then producing in California. It seems unbelievable now, but California, home to the first craft brewer (Anchor Brewing in 1965) and later home to the first purpose-built small brewery (New Albion in 1976), had only 20 breweries operating when a young beer-loving couple came down from Vancouver, British Columbia, to start America’s first “brewspaper,” a newspaper dedicated exclusively to covering the small brewing industry in the state that gave birth to what we call craft beer today.

Bret and Julie Nickels, who were given support and encouragement by legendary publican Judy Ashworth at her equally legendary Lyons Brewery Depot in Sunol, Calif., passionately covered and combed the state for any and all stories of good beer and brewing. Their reports served to connect beer lovers with the beers and beer venues they craved. It was a natural match that no doubt helped to stimulate the expansion of the early brewing industry.

The sad part of the story was that Judy’s iconic pub burned to the ground just before Christmas, so the Celebrator’s first issue (then called the California Celebrator) debuted at a fundraiser held at the Sunol Country Club to try to resurrect the lost beer mecca. Judy later reopened her pub in nearby Dublin, Calif. But the Celebrator was off and running.

Many of the breweries that were in the pages of our first issue not only have survived to this day, but some have done very well indeed. Included in our first issue and still brewing today are Anchor, Anderson Valley, Buffalo Bill’s, Calistoga Inn, Mendocino, Rubicon, Sierra Nevada, Tied House and Triple Rock.

Breweries that were covered in that first issue but are now just fond (or not-so-fond) memories for some veteran beer geeks include Devil Mountain, Golden Pacific, Hogshead, Humboldt, Local (SLO), Nevada City, Pasadena, San Francisco Brewing, Santa Cruz, Saxton, Stanislaus, Thousand Oaks, Truckee and Xcelsior. The pioneers are the ones most likely to catch all the arrows.

Our “brewspaper” continued to cover the good-beer story and expanded first to the Pacific Northwest and then eastward, trying to keep tabs on all of the brewing activity taking place around the country. The Great American Beer Festival in Denver brought the nation’s brewers and enthusiastic fans together each year to celebrate and drink the beers of the rapidly growing craft beer industry. The Craft Brewers Conference did the same for the brewing fraternity and helped enhance the camaraderie so characteristic of our contemporary small breweries.

Today, with over 700 breweries operating just in California and over 5,000 across the nation, the scope of this journal has greatly expanded as well. Our corps of veteran beer writers continues to bring the word of beer and brewing to our readers each issue. Many thanks on our 29th anniversary to them and to you, our readers, whose thirst for beer information and insight is our reason for finding that next beer story.

Beer and Travel

Stephen Beaumont, one of our earliest contributors and coauthor of The World Atlas of Beer, reviewed elsewhere in these pages, shares his motives, philosophy and experience on beer travel in his column, “Beaumont’s Journal.”

Bryan Jansing’s article on “Rome, Italy’s Beer Garden,” should get your taste buds oriented toward that Italian visit you’ve been contemplating.

Chuck Cook, no stranger to the ancient brewing traditions of Belgium (his travels and brewery visits are legendary), checks in with a timely piece on the cafes and beer venues of the lambic region of Belgium, home to the ancient art of spontaneously fermented beer. Mr. Cook also travels to three well-known American breweries that have embraced the magical arts of spontaneous fermentation in his article “Making Coolships Cool Again.”

That and so much more in this issue as we begin our 29th year. And thanks, dear reader, for your support of our efforts as we look forward to our 30th anniversary next year!



home » columns » reviews » features » regional » videos + » blogs » events » subscribe » advertise » wholesale » contact us

© Celebrator Beer News | Dalldorf Communications, Inc. All rights reserved. Hosting provided by RealBeer.