BEER WITH A SOCIALIST: Three closely related and completely unrelated news items about craft beer growth -- or not.

The first sentence in a Brewbound report from the recent Craft Brewers Conference strikes me as accurate. At some point, "slower growth and increased competition" simply had to become new norms. With 7,000 American breweries in existence and 2,500 more in the planning stages, it would seem the time is now. Obviously, preconceived notions on the part of beer sales strategists are the first to be mangled.

CBC: Slowing Growth in 2018 was ‘Not a Blip’, by Justin Kendall (Brewbound)

Slower growth and increased competition are the “new normal,” Brewers Association (BA) leaders hammered home on the second day of the trade group’s annual Craft Brewers Conference (CBC).

“This is not a blip,” BA chief economist Bart Watson said during Wednesday’s State of the Industry presentation. “This is the new normal.”

Watson and senior vice president of the professional brewing division Paul Gatza took a deeper dive into craft beer growth numbers released earlier this month. According to Watson, craft’s 4 percent volume growth — about 1 million barrels — last year was the lowest per brewer growth rate since the late 1990s and early 2000s.

“This is where the pain point really is,” he said. “That’s not a lot of growth and many companies built brands and business models that built in the idea that there would be more growth than this.”

Watson suggested that brewery owners look beyond craft’s existing 13 percent share of the market to capture the other 87 percent of non-craft consumers. If they don’t, the per brewer growth rate will continue to decline, he added.

“If we can get 1 million new craft drinkers to drink one pint a week, that’s 200,000 incremental barrels,” he added. “Five million new drinkers drinking just one pint a week of small and independent brewed beer is a million barrels.”

Future growth is likely to be sliced up even more thinly as an increasing number of breweries open up shop. Last year, 1,049 breweries opened and an estimated 2,500 breweries are in planning, Watson said.

“This is a trend that’s not going away,” he said. “It’s a reality that everyone should be prepared for.”

Nevertheless, the 219 brewery closures in 2018 were an all-time high, Watson said. However, the three percent closure rate is still “shockingly low,” even if the number of closures are expected to rise as the industry becomes more competitive and new breweries open.

Over the last three years, 3,194 new breweries have opened. Much of craft’s growth is coming from those breweries that opened between 2015 and 2018. Last year, those companies grew by a collective 872,000 barrels.

As for breweries that opened in 2014 or earlier, those companies grew by just 105,000 barrels, Watson said.

Microbreweries (breweries making fewer than 15,000 barrels) continued to be the fastest growing set of breweries, Watson said. Those companies increased production 16 percent last year, to more than 5.8 million barrels. Meanwhile, brewpubs have maintained steady growth, increasing production 13 percent, to 1.6 million barrels.

The BA’s newly created taproom brewery class (companies that sell more than 25 percent of their volume on-site and do not offer significant food service) grew 40.2 percent — to 809,000 barrels in 2018 — and represented 24 percent of total craft growth.

Growth was flat for regional breweries (companies producing more than 15,000 barrels) last year, as those companies produced more than 18.1 million barrels. Watson called 2018 the “slowest growth for distribution of craft in a long time,” which he attributed to retailers not expanding shelf space and bars and restaurants not adding tap handles.

According to Watson, established brewers need to think about building “flagships of today and tomorrow, not of yesterday” in an effort to meet consumer desires ...

The more breweries there are, the less sensible for them to try selling beer via the clogged three-tier distribution system, itself a concept mutating rapidly amid brewery self-distribution and tap room sales models.

In short, it quickly gets weird, because previously absent regulatory pushback begins emanating from the lobbies representing other alcohol sales venues.

In this article, a "craft beer store" franchise is beset with charges and countercharges. Is it a faulty franchise setup? Inept franchisee performance? Backlash against lesbian corporate ownership?

Maybe its the ongoing three-tier mutation itself. Recall that a century ago, blacksmithing no longer was a growth industry.

First, the introduction.

For some Craft Beer Cellar franchisees, it’s a bitter taste after jumping in, by Janelle Nanos (Boston Globe)

For nearly a decade, the Craft Beer Cellar in Belmont has been a beer lover’s paradise. Its founders, Suzanne Schalow and Kate Baker, placed a shrewd bet on craft beer just as it hit the mainstream and set about creating the country’s first national chain of specialty beer stores. They now boast 30 locations across the country.

“Our trinity,” Schalow said, is “amazing beer, hospitality, and education.”

But that early business acumen hasn’t translated into success for many of the franchise owners who were persuaded to buy into their brand. A number of franchisees say they raised money from friends and family, gave up a job, or sold a house to cover the costs of opening their own stores — only to now find themselves facing mounting financial pressures that may cause them to fail.

Aggravated relationships between the founders and some of their franchisees have boiled over into sharply worded e-mails and online screeds. The aggrieved franchisees accuse the owners of providing them with overly rosy financial projections, and of belittling them instead of offering guidance when the numbers didn’t pan out.

Last spring, the owners went so far as to sue 20 unnamed franchisees in US District Court for defamation for posting anonymous complaints on the website Glassdoor.

“The best advice I can give prospective franchise owners is to run,” said one of the postings, according to the federal court filing. “Most franchises are not profitable, and the majority wish they had never signed on.”

The Glassdoor lawsuit was dismissed, and in December, after a second attempt in court to stop franchisees from criticizing them online, Schalow and Baker, who are married, asked members of the Massachusetts Brewers Guild to contribute to a GoFundMe campaign to raise a $125,000 legal fund. Their request implied that some of their detractors were motivated by homophobia ...

Then the passage that strikes me as most relevant.

“Bottle shops may be somewhat a victim of craft’s broader success,” said Bart Watson, chief economist of the Brewers Association.

Grocery stores now carry pallets of craft brews, and brewery taprooms are siphoning off bottle sales.

“Taprooms are changing the beer industry in an enormous way right now,” Schalow said. “Between breweries and taprooms, how does a store survive?”

At times it gets even weirder.

I'd missed the following controversy at Schlafly (thanks, J), but as usual Bryan Roth has it covered. It seems that the guy from the venture capital company that bought controlling interest in Schlafly melted down, went rogue and began distributing a paper newsletter maligning fellow brewers.

Old school paper, but new school slimy.

I'm told that original owner Tom Schlafly is putting together a package of investment to regain control of the brewery. He's a classy man and I wish him well.

In keeping with the theme of preceding thoughts, perhaps the major factor in the Schlafly episode is stress: more expense, less volume.

So, why is this happening now? Things have not been good for Schlalfy, which had declines in barrel production of 13% in both 2016 and 2017, according to estimates by the Brewers Association. After reaching a high of 60,000 barrels three years ago, it was down to 45,000 last year. In fact, 2018 will be a third straight year of declines in IRI-tracked off-premise sales for the brewery. Through Nov. 25, Schlalfy had sold only 73% of the volume it moved in all of 2017.

Brewing always was a business. For a few years, we pretended it wasn't. This column wouldn't be called BEER WITH A SOCIALIST if not for the author's classic disclaimer: "I'm a reluctant capitalist at best."

It's not a bad thing to wake up one morning and find yourself older, with something approximating perspective, and harboring far less pure adrenalin. More power and good luck to those of you still in the trenches, but I've no regrets for pole-vaulting out of them.

Schlafly’s Parent Company Apologizes After Executive Attempts to Sabotage 4 Hands, by Bryan Roth (Good Beer Hunting; December 9, 2018)

THE GIST

In a surprise announcement late Friday, The Saint Louis Brewery—the parent company that produces the Schlafly line of beers—issued a public apology to fellow St. Louis business 4 Hands Brewing. The apology was released in a press release that also revealed a former Schlafly executive made secretive attempts to sabotage the reputation of 4 Hands.

While not confirmed as the specific source of a print newsletter called Brew IQ in the Lou, James Pendegraft resigned as CEO on Wednesday, two days before the apology was issued. In a statement to the St. Louis Post-Dispatch, the company confirmed Pendegraft’s departure, but offered no additional information. In its public apology, Saint Louis Brewery wrote that the executive responsible had resigned, but didn’t name the person.

The anonymous newsletter was mailed to an unknown number of bars and restaurants and also included “deceptive online postings and a phone survey to local bars and restaurants in the first half of the year,” according to the statement.

In a column that has been identified by media outlets as specifically meant to call out 4 Hands, an anonymous Brew IQ writer tries to connect the brewery to the Me Too movement in a derogatory way, claiming with no evidence that “a certain large brewery’s dilemma of how to reposition itself continues to grow” because “[n]aming your brewery after a sex act provided at a massage parlor no longer feels as good.” It also claims that a beer made by the then-mystery company, now recognized as 4 Hands, was named “after the lube needed for such a service.”

“Leave glamorizing a pimp's wad of dollars to The Deuce,” the column reads, referencing the hit HBO series. “Maybe it was all that gin? The ladies are becoming woke and are starting to ask questions. We'd like to give them a hand, but think the four are proving to be too many.”

These kinds of innuendos are not new to the beer industry, but still present an unfortunate side that is continuously being addressed by the Brewers Association and private companies alike.

“We were embarrassed to learn of these actions and sincerely apologize to 4 Hands Brewing Company,” Tom Schlafly, chairman of Saint Louis Brewery, said in a statement. “Such actions are inconsistent with the core values on which we were founded and which have defined Schlafly for 27 years. The craft brewing industry in St. Louis was built by a closely-knit group of breweries that mutually respect one another. There’s no question that 4 Hands has earned its reputation for community involvement, civic pride, corporate responsibility, and inclusiveness” ...

THE BEER BEAT: "How Jared Williamson Found Love — and a Head Brewing Job — at Schlafly."

I raided the Instagram account of Jared Williamson for this photo from his recent visit to Germany.

Uwe Schulz, the brilliant brewmaster from Spalter Bier. Blending tradition and innovation in a fascinating way in a village that is ~1200 years old.

In an effort to keep this simple: I'm delighted at Jared's career path in brewing, honored to have played a small part in encouraging it, and thrilled that he was able to go to Germany for a taste of what has inspired me for so long.

This blog post catches us up with Jared's world at present. Click through to read the entire piece. You'll love it.

How Jared Williamson Found Love — and a Head Brewing Job — at Schlafly, by Cheryl Baehr (Riverfront Times Blog)

Sitting at the top of one of Munich's tallest buildings with a beer in hand, Jared Williamson of Schlafly (2100 Locust Street, 314-241-2337) can't help but look back with amazement at how he got here.

"I started working with beer about fifteen years ago, and I was introduced to Spaten early in my beer education," Williamson recalls. "And here I am at the source. It's a culmination, like I'm circling back to where it all began."

Williamson's job as head brewer at Schlafly has led him to Munich, where he is embarking on a tour of Germany's hop fields. But his beginnings were much more humble. A native of Indiana — the part of the state just outside of Louisville, Kentucky — Williamson was introduced to beer while working at New Albanian Brewing Company, an establishment that was the first in the area to add lesser-known brews to its taps. In the late 1990s, seeing beers like Spaten, Guinness and Sierra Nevada Pale Ale was not all that common in the Midwest. The novelty, as well as the quality of these beers, piqued his interest.

Though his job was to work on the brewpub's guest tap and bottle program, Williamson could not keep himself from wandering into the brewery. He found himself drawn in to the beer-making side of the operation. "I'm a musician, so I was drawn to the creative aspect, but I'm also a science nerd. The combination of the two is what really appealed to me," Williamson explains. "Eventually, the original brewer left and they handed me and another guy the keys. The world was our oyster, and we got to make the best beer we could — and make some mistakes too."

THE BEER BEAT: Odds and ends from the month of May. I can't remember anything before that.

Why on earth did I keep the empty bottle?

Roughly a year ago, 18th Street's Sex and Candy was a very big deal. First, the backdrop.

(1 of 4) 18th Street's Sex and Candy, but first, the story of 18th Street Brewery.

(2 of 4) 18th Street's Sex and Candy, and how the "Twitter Fight Over Racy Indiana Beer Label Highlights Industry Sexism Concerns."

(3 of 4) 18th Street's Sex and Candy, and wondering, "What ... the Brewers Association (Is) Doing to Address Gender and Race?"

(4 of 4) 18th Street's Sex and Candy: "Your Sexism is Predictable and Boring, 18th Street Brewery."

Fast forward to a resolution of sorts.

18th Street Brewery Redesigns Sex & Candy Label, Calls for Progressive Dialogue Going Forward, by Dave Eisenberg (Good Beer Hunting)

Company founder and head brewer Drew Fox says the new artwork is not open to misreading. “We want to be part of something positive and not part of something that people see as negative or derogatory,” Fox says. “We know that the [new] imagery would not lead to any interpretation of being a sexist label or objectifying women.”

It's good by me. Any effective strategy for dealing with sexism in "craft" beer is likely to be incremental. We're talking attitudes, and these take time. Speaking of time, I'm a history nut, and "extinct" styles fascinate me.

A few beers no longer lost nor forgotten, by Stan Hieronymus (Appellation Beer)

 ... “Why do I want to taste extinct styles? On one level it’s purely from curiosity: how did it taste, what did it look like, how did it drink? All the things you can only really learn about a beer by having one in a glass in front of you. That simple need to know could be satisfied by a pint or two,” he says.

“But then there’s the cultural aspect. Beer styles—and especially those associated with a specific place—have a wider significance than just being a drink. Because every beer style is a unique cultural item. When one disappears, the culture it came from is diminished.”

Heaven knows for a time, we tried. Back in 2012, NABC's Ben Minton did a damned fine Grätzer/Grodziskie.

Grätzer/Grodziskie ... oak-smoked wheat session ale, coming soon to NABC.

Ben Minton will be brewing another new historical re-creation session beer this week. We recently acquired a small quantity of oak (eiche) smoked wheat malt for this beer. The beer will be 100% wheat, something we've never done here, and it will be a very hard beer to brew. If you see Ben pulling out his hair, this is why.

Ben's task may have been extreme, but the ale he produced was delicious. These are the things I miss, as well as not-quite-extinct lagers like Zwickelbier.

BEER OF THE MOMENT: SCHLAFLY WHITE LAGER, by Ken Weaver (All about Beer)

The Saint Louis Brewery
Schlafly White Lager
St. Louis, Missouri
Style: German-Style Zwickelbier
ABV: 5.5%

As the weather warms up and we’re assessing our go-to summer options, it’s our latest Beer of the Moment: a deftly structured German-style lager with firm hops and a hint of mint.

But why "White Lager"? Modern marketing sets the teeth to grinding, but then again, I'm old. At this juncture, it's always worth a few minutes of refreshing as to the fermentation dichotomy.

LAGERS VERSUS ALES, by Randy Mosher (All About Beer Magazine)

It is common to slice the beer world into two irreconcilable sectors. Lagers are the yin: cooling, clean and constrained; ales are the bold, brash, ebullient yang. When it comes to pairing with food, some have even made an analogy between white or red wines and lagers or ales. The mind seeks simplicity, so a trope like this may be useful for getting a grip on the bewilderingly diverse world of beer, but is there any truth to it?

From the joys of stylistic awareness, I close this installment with the messiness of sausage-making.

Lawmakers to pore over Indiana's 'archaic' alcohol laws this summer, by Kaitlin L Lange (C-J, Indy Star)

Indiana lawmakers will spend their summer poring over the state's complicated mixture of alcohol laws, following a heated legislative session debate this spring over which retailers should be allowed to sell cold beer.

Let the record show this column complete, with time to walk down to Floyd County Brewing Company for a nice, civilized holiday weekend Sunday beer.

Jared's going to work for Schlafly, and we're damned proud of him.

The Publican now steps aside as NABC's brewmaster, Jared Williamson, does the writing and tells you about love, serendipity, and his impending move to St. Louis. I still believe I should have held out for a Stephen Hale kilt to be named later ... but to be truthful, words fail me when it comes to thanking Jared and wishing him the best at Schlafly. We're sending a brewer out into the world!

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Love and Serendipity

Where do I begin … let’s go back a few years.

At some point in the spring of 2005, when it became known that NABC’s original brewer Michael Borchers would be leaving, I turned to the now Brewery Representative/sales guru Richard Atnip, who then was a server and myself a kitchen worker/guest beer grunt, and said these now fabled words: “We should take over the brewery.”

Since then, well, a lot of serendipitous things have happened. Six years later, NABC has grown from two fermenters and a few house beers on tap amongst our world renowned beer bar, using online clip art for our signs, to a two brewery regional power, featuring one of the best graphic artists in the business, with a new bottling program primed to take serious flight. The journey has been arduous and exhilarating; wrought with discoveries, defeats, and triumphs. I could write many pages detailing the journey, but this letter has a different purpose.

In 2008, NABC was invited to attend and pour our beers at Schlafly’s Repeal of Prohibition festival, where each year they invite breweries from a different state to attend. Our salesman at that time, John Campbell, had previously worked for Schlafly and due to this connection, NABC was one of the four Indiana breweries invited. We traveled to St Louis and did what we normally do: Pour samples of our awesome beers, sell some t-shirts, educate people about NABC, and wow the taste buds. But something else happened that weekend that I was not planning on, and that is how serendipity works.

The stars aligned that weekend and I met the love of my life, Kelsey, and my life hasn’t been the same since. It’s taken several years for us to sort out the details, but ultimately we have worked towards both of us being together, living and working happily in the same community. And that my friends, is the reason for this letter:

I am leaving my post as NABC Brewmaster and joining the team of brewers at Schlafly in July.

Over the last few years, St Louis has been my second home and now it will simply be home. I am struggling to find the words to properly convey my emotions but the simple truth is the timing and opportunity are here, and I need to embrace this next phase of my life.

I cannot thank Amy, Kate and Roger enough for the opportunity they gave me years ago and I hope their trust has been repaid through my work for the company. I love The New Albanian Brewing Company, without them who knows what I would be doing today. A huge part of my soul, creativity and determination will always be with NABC, and I will keep a keen eye on all things NABC from St Louis. I hope to one day see our 22oz bombers on shelves there, and will probably weep with joy if and when I see them.

I want to thank all the current and former employees of the company, and those we have lost way too young, who all have played a role in some way in my life. You guys are dear to me and I will miss seeing you, laughing with you, and raising pints with you. I want to thank our loyal customers, without your contributions none of this would have been possible. I have proudly brewed for all of you these years and in turn all of you have graciously lifted me up.

I am so proud of how far we have come as a company, and so excited for the future of NABC. It’s as strong a company as it has ever been and this next phase of growth will see NABC up the revolution to heights that just a few years back seemed like a dream. David Pierce and the rest of the brewery team are poised for fantastic growth at Bank Street, and some lucky brewer will get to take the post at our R&D brewery and live the dream that I have, and will always cherish. I will proudly trumpet the name and beers of NABC where ever I roam, and am proud to be the first NABC brewer to move on to continue my brewing career.

I hope to visit often, and those of you that know me well, know that I am a road warrior. The four hour drive from STL to NABC is quite easy, and I know the way all too well. I also hope to come back and guest brew here again when the timing is right, and will be back often to see so many of my friends and family that live here as well. I was not born in Indiana – Iowa, for those who wonder – but I have spent the majority of my life here and my roots are deep. I haven’t even touched on my music roots here, and honestly, that is a book unto itself.

So you see, my tale is full of love and serendipity, and I wouldn’t want it any other way. My becoming a brewer was serendipitous, and my love for brewing continues to grow as the years pass by. My meeting Kelsey was serendipitous due to my love of brewing, and now it is time to start the next chapter in this journey we call life. I could ramble on for hours, perhaps days, about how everything has lead to this moment. But instead I will finish with this quote from a good friend of mine:

“Parting is sweet sorrow, and the battle rages on”

Cheers

Jared Williamson

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Final note: Stay tuned for more about how we're going to fill the position. Notice I didn't use the word "replace," because that simply isn't possible.