RBPMail 3.04, April 1997
Real Beer Page Mail (RBPMail) began as a modest update to craft-brew events on the WWW. It evolved into a news digest and sometimes editorial forum. We present its contents here much as they were emailed to subscribers. Often, links you will see are out of date, and businesses referred to may also be long gone.
In this issue:
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FATHER OF LIGHT BEER SOUNDS OFF
Joe Owades, the father of light beer and consultant on recipes for Petes, Sam Adams, Wit beers and others, has 35 years of brewing experience informing sharp-tongued observations ready for debate: "There's nothing mystic about (water). The Rocky Mountains don't do anything the Sierra Nevadas don't do." The difference between mainstream beers and microbeers is the difference "between white bread and toast." "In this country, you can call anything an 'ale."' "No microbrewer in his right mind should make wheat beer. Five years from now it will be dead (as a commercial product)." "Brewpubs should make a light beer, but they don't know how. It isn't in the books." "Zima - a great idea. A beer that doesn't taste like beer, for people who don't like beer." "Alcohol prolongs your life. No one should be without a couple of beers a day." A biochemist by profession, Owades got his start working for Fleischmann's yeast, then went to work for a laboratory consulting the beer industry. "I discovered how fascinating beer could be. God makes wine; we make beer." He was a brewer for 10 years at Rheingold where he came up with a unique process that purged beer of its calories but kept the alcohol. He called it "light beer." It was a marketing disaster. "It had lousy advertising, lousy packaging and it was ahead of its time." After an early attempt fell to a swift death, Owades gave the formula to a friend at Chicago's Meister Brau Brewery, which eventually was bought by Miller Brewing, which promptly had a huge success with Miller Lite in 1976. Owades conducts his 18th annual "All About Beer" seminar this month in San Francisco. (Source: Dick Kreck, Denver Post, March 26, Wednesday, Food; Pg. E-04)
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HEINEKEN BRINGS 2 MORE AMSTELS INTO U.S.
Heineken USA, will introduce two Amstel beers in early May to the U.S. The Amstel brand already has presence in this country with Amstel Light, introduced in 1981. The new brews being imported into the U.S. are regular Amstel and Amstel 1870, both sold overseas. Regular Amstel, which dates to 1870 and is named after a river in Amsterdam, is a top seller in Europe. Amstel 1870 is a commemorative brew. Imports in 1996 increased to a 6.5% market share of the total U.S. beer business, from 6% the previous year. The market was estimated at 193 million barrels by trade journal Beer Marketer's Insights. The Heineken brand in the U.S. last year probably sold 2.8 million barrels, while Amstel Light was around 375,000 barrels. All specialty brews last year represented a shade less than 3% of the overall market. (Source: George Lazarus, The Chicago Tribune, March 26, Wednesday, Business; Pg. 2)
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UPDATE FROM YAKIMA
Burt Grant has sold out, in a business sense. Yakima Brewing is now controlled by Stimson Lane Vineyards and Estates, part of a huge corporate chain topped by UST Inc., the parent company of U.S. Tobacco. But Grant, who continues as brewmaster, says he's still making quality beers "to please the most demanding palate I have ever encountered: my own." The Scottish-born, Canadian-bred Grant, 68, began honing that palate at age 16, when he went to work for Canadian Breweries Ltd. (now Carling). His brewing career led to jobs in the hops supply business, which brought him to the heart of Washington's hop country in Yakima, where he opened a tiny brewery in 1982. "The brewery was doing well, but not spectacularly," Grant says. "All the stuff I liked doing - product development, quality control - was being diluted horribly by all the worries about financing and marketing." Stimson Lane "came to us out of the clear blue sky, with an offer we couldn't refuse." Grant has been able to double his production capacity, to an annual 40,000 barrels. And he's talking about building breweries in other parts of the country to expand his market, as Seattle's Redhook and Pyramid have done. (Source: Rick Bonino The Spokesman-Review, Spokane, WA, March 12, Wednesday, In Food, Pg. D1)
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SOUTH AFRICAN BUILDS PUB IN BAOBAB TREE
Doug van Heerden of Duiweskloof, in the Northern province has built a pub inside a 152 foot girth baobab tree. "It has a bar, beer on tap, a sound system, seating for 15, standing room for many more and a wine cellar." Hugh Glen, of the Tree Society of South Africa, says the baobab trees bark can be used for making tea and beer, "but you have to be desperate to drink either." At a recent birthday party, "We had 57 people dancing inside the tree," said Mr. van Heerden. The hollow in the tree, which has existed for centuries, was enlarged somewhat when workers started a fire inside to drive off snakes. Mr van Heerden squared off the entrance with a chain saw, shoveled out centuries of bat guano, installed a tile floor, electricity, plumbing, and lighting. He rents out the tree for $55/night for parties and weddings, and opens the tree to the public now and then. The hardest part of the renovation was to drill the 7 foot thick walls. This took 2 days. This apparently hasn't harmed the tree, which is in full bloom, and has new shoots growing from the interior walls. (Source: Wall Street Journal: March 20)
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********** LEGISLATIVE WATCH **********
MS BEER STAMP REPEAL IS CLOSE;
The stamp of "MS" or "Mississippi" required on every can or bottle of beer brought into the state is considered a hassle by brewers. Stamping can be costly, makers said, and difficult to keep up with. The beer destined for Mississippi must receive a special stamp in the factory, then be stored separately awaiting orders from the state. Now, the decades-old mandate may end after some ardent lobbying at the Legislature. The MS Senate passed a label bill with three votes to spare. Some of the state-based beer distributors fear the change will prompt more bootlegging. Opponents said Mississippi needs a system to guarantee only legitimate beer is sold at bars and stores. Some lawmakers from border counties argued store owners could easily cross state lines to get cheaper beer. Tennessee and Louisiana have lower beer taxes than Mississippi. The bill was introduced by House Speaker Tim Ford (D-Tupelo), who also filed a proposal Anheuser-Busch wanted requiring beermakers to include on their label the place a beer was brewed. That bill died in a Senate committee. The bill goes back to the House for consideration of adding stiff penalties on stores caught selling illegal beer. Ricky Brown, executive director of the Mississippi Malt Beverage Association, said the crown dates back to the 1930s. The fight against it has waged in recent years, he said, and "the breweries were able to put some pressure on some of the members and get them to change their minds." (Source: The Commercial Appeal, Memphis, TN, March 13, Thursday, Metro, Pg. B2)
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CA BILLS PENDING TO STIFFEN UNDERAGE SALES PENALTIES
Several alcohol sales bills will come before the state California Legislature in April. The law now provides a maximum 15-day suspension but allows license holders to reduce the length of the suspension by paying a fine based on revenues. The Assembly's governmental organization committee, which reviews legislation pertaining to alcohol policy, is scheduled to consider bills to stiffen the minimum penalty both for merchants caught selling to minors and for minors who attempt to buy booze. Valerie Brown's (D-Kenwood Sonoma) bill (AB 783) would make a 15-day suspension mandatory and prohibit any payments to reduce it. "You oughtn't to be able to buy off that suspension," said Brown, head of the committee. Her bill would also strengthen a 1995 law authorizing the ABC to revoke the license of any merchant caught selling to a minor three times within a three-year period. Brown's bill would make the three-strikes revocation mandatory instead of leaving the decision to the ABC. "The hope is that the store operators only have one 15-day suspension and they don't get to the second or third offense." Brown wants to increase the penalty for teenage booze buyers from a fine of up to $100 for the first offense and a $250 fine and a sentence of up to 36 hours of community service for subsequent violations. Brown's bill would provide up to 24 hours of community service for the first violation.
Other bills receiving consideration are: AB 1002 by Bruce Thompson (R-Fallbrook) would increase the fine for a first violation to $500 with up to 50 hours of community service and the fine for subsequent violations to $1,000. It would also add a fine of $250 and up to 32 hours of community service for possession of alcohol by a minor. Clerks who sell to minors would get a fine of $250 and up to 32 hours of community service.
AB 849 by Mike Sweeney (D-Hayward) would indefinitely extend an expiring three-year moratorium on new beer and wine licenses in communities where they are in high concentrations.
AB 1177 by Luis Caldera (D-Los Angeles) would authorize local governments to enact ordinances regulating the sale of alcohol to minors and to assess business fees for enforcement. (Source: Doug Smith, Los Angeles Times, March 30, Sunday, Part A; Page 3)
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BAN BEER & OUTLAWS START BREWING
Strict controls designed to curb alcohol consumption in Sweden are coming under attack. The European Court of Justice's Advocate-General Michael Elmer said he would recommend that the court order Sweden to end its monopoly and a recent survey showed two out of three citizens want to end state alcohol control. Swedes are tired of queuing at monopoly Systembolaget's stores during business hours and paying 204 crowns ($27) for the cheapest bottle of whisky in the store. But Swedes are finding their own ways to beat booze prices by smuggling and home brewing. "It would clean the air if the government would admit it has lost control of the alcohol market," said Kjell-Olof Feldt, former finance minister and chairman of a wine and spirits association. The climate has changed since Sweden joined the European Union in January 1995. Other EU members can bring 110 litres of beer, 90 litres of wine and 10 litres of spirits home from their trips abroad, but Swedes are allowed only 15 litres of beer and the choice of five litres of table wine and one litre of spirits, or three litres of strong wine and no spirits. Illegal alcohol is flooding into the country in trucks and railway carriages from other EU countries which do not require travelers to show documents at the border with Sweden. "It is a bit of a Klondike now with the free movement of goods," Egon Jacobsson, the head of state-owned alcohol wholesaler Vin & Sprit. He estimates that roughly half of all the alcohol sold in Sweden is illegal. "My personal estimate is that total consumption increases when there is such easy access to alcohol on the illegal market, which is open 24 hours a day," Jacobsson said. (Source: Birgitta Forsberg, Rueters News Service, March 15)
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RBPMail, which you are reading, arrives free the first week of each month, were as BEERWeek costs $50/year and arrives weekly. The following are news headlines from the last month.
BEERWeek of March 3 - 10, 1997
- Rhino Chasers Lives!
Pyramid Breweries Inc. Buys Back Thomas Kemper Sodas
Boston Beer Company Tops 1.2 Million Barrels in 1996
Pete's 1996 and Q4 Reports - Drops Plans to Build Brewery
Big Rock Brewery 1996 Report
Some Setbacks in Canadian Microbrew Industry
Beer Prices Go Up in Mexico
Nevada City Brewery Set to Re-Open
Loan Pulled Out of Hat in Vermont
Harpoon Harpoons A Good Year
BEERWeek of March 10 - 17, 1997
- Georgia Legislature Considers "Kentucky Bill"
Alcohol Beverage Producers Appeal to Young on Cyberspace?
It's Sam's Brewery in Cincinnati!
Celebrator Beer News Voted Top Brewspaper
AHA Unveils New Look
New Parade for Pasadena by Guinness
Bill Owens Sued by Former Employees
Czech Beer Prices Rise - Sort of...
BEERWeek of March 17 - 24, 1997
- Pyramid Pops For Kemper
Augustus Busch's Annual Income
Craft Brewing Industry Makes Ad Age
Guinness in the Green in the U.S.
Guinness Barely in Black in UK
No Treat for Dutch Brewers
Columbia's Hottest Investment Not What You Think
Molson's Most Excellent New Invention
BEERWeek of March 24 - 31, 1997
- Keystone State to Sell State Liquor Stores?
Pennsylvania Brewery Hit by Walkout
CA Firm Acquires TX BP
Golden Pacific Now Open in Berkeley, CA
Tommyknocker Expansion Plans
Canada's Sleeman Does Well
Plans at Canadian Brewery
Heinekens Sketches Slow Past, Paints Rosy Future
Ad Promotion Nominations for Breweries
New Ad Agency for Pete's
BEERWeek is the subscription-based newsletter delivered by email each Monday for the industry professional or serious beer enthusiast who needs it regularly. To subscribe, go to
http://www.beerweek.com and get it now.
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********** AD WATCH **********
MILLER WITH BURNETT FOR MEDIA BUYS
Miller Brewing Co. announced that it will consolidate media planning and buying with Leo Burnett Co. Inc. in Chicago. With the move, most of Miller's media activities, estimated to cost $300 million to $350 million a year, will be centralized at Burnett. "Our primary marketing objective for 1997 is to sharpen the focus on our core brands. Since realigning most of our media planning and buying with Burnett three months ago, we've been exploring ways to gain efficiencies for our brands," said Jack Rooney, Miller's newly appointed vice president of marketing. This portion of Miller's media had previously been handled by the Televest, D'Arcy, Masius, Benton & Bowles media buying unit in New York. The move does not affect Marti Flores & Prieto, which plans and buys for Miller in the Hispanic media, Henderson said. (Source: James E. Causey, Milwaukee Journal Sentinel, March 25, Tuesday, Business Pg. 2)
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COORS PROMOTES VP TO LATINO MARKET
Coors Brewing Company announced a television advertising campaign directed at Hispanic consumers featuring company Vice President Hugo Patino. Three 30-second, Spanish-language TV spots feature Patino speaking about Coors beer and the subjects of heritage, tradition, immigration, and product quality. The ads were produced for Coors by Casanova-Pendrill Publicidad, Irvine, Calif. Patino, vice president of R&D, is responsible for all of Coors Brewing Company's brewmasters and the brewing processes, as well as tasting panels and sensory research, quality assurance, chemical analytical labs, brewing materials and international brewing. Patino has been with Coors since 1984. Born Oct. 1, 1952, in Monterrey, Mexico, he became a United States citizen in 1988. He holds a bachelor's degree in ChemE from Monterrey Institute of Technology in Mexico, and a master's and doctorate in ChemE from the University of Waterloo in Canada. Patino is a member of a Mexican family with three generations of brewing history. His father was a sales director for a Monterey brewery, and his grandfather owned one of the brewery's first distributorships. Patino began his brewing career in Mexico before emigrating to the United States. (Source: March 21, Press Release. Contact: Lissa McCann, 972-751-5535, or Dave Taylor, 303-277-3347)
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A-B AGREES TO CALL OFF SAM ATTACK
The National Advertising Division (NAD) of the Council of Better Business Bureaus, Inc. announced that Anheuser-Busch, Inc. has agreed to discontinue advertising claims about Samuel Adams beer found to be unsupported. Boston Beer Company, brewer of Samuel Adams beers, challenged the truthfulness and accuracy of A-B's print, radio, and bar-card advertising that included: "Why does Sam Adams pretend to come from New England when the truth is, it's brewed and bottled by contract breweries all around the country?" and "Time to stop tricking beer drinkers, Jim." (Referring to Jim Koch, President & Spokesman of Boston Beer). Boston Beer did not run a counter campaign calling A-B the largest contract brewer in the world (per the April Fools section above). While NAD recognized the fact that Samuel Adams beers are brewed and bottled by contract and Boston Beer breweries outside New England, NAD has requested that any future statements about that made by A-B not imply that Boston Beer does not control the brewing of its beers at the contract breweries. NAD's inquiry was resolved in 60 business days. Contact: Lynne Collins of NAD, 212-705-0122
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A-B CHALLENGES FRANCE IN SOCCER MATCHES
Anheuser-Busch, is on collision course with the French government over a proposed ban on drinks advertising at next year's football World Cup finals, to be held in France. A-B is one of the sponsors for the money-spinning event, which regularly beats all world records for television-viewing figures. But the right to promote Budweiser is being threatened by French health laws that forbid TV advertising of alcohol products, or televised sponsorship by drinks companies under the country's "loi Evin". According to drinks-industry executives, the American company has had top-level discussions with the French authorities in the hope of reaching a compromise. One plan being considered is to make the stadiums hosting the matches the equivalent of "duty-free zones" for the duration of the competition. Some experts believe this would allow the French to argue that their ban has not been breached. But A-B is prepared to take firmer action if the French refuse to negotiate. It has already taken its case to the European commission, and could, as a last resort, pull out of the sponsorship deal with FIFA, the governing body for world football, and encourage other companies to do likewise. The World Cup is the latest sporting event to fall victim to French anti-drink advertising laws. Newcastle United had to drop its traditional shirt sponsor, the Newcastle Brown beer brand, in favour of a non-drinks logo owned by the same company, Scottish & Newcastle, when the team played Monaco in France. (Source: Frank Kane, Sunday Times, March 23, Sunday, Business)
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********** WEB WATCH **********
BEER SITES TO SURF:
NEW WEBSITE FOR THE PROFESSIONAL BREWER!
On March 23 at the Craft Brewer's Conference in Seattle, Real Beer, Inc. launched a comprehensive community-based Web site for professional brewers. The ProBrewer page includes: the BrewingTechniques Market Guide database of industry resources, fully searchable by industry, products, location, etc.; message boards; classifieds with employment and used equipment exchanges; a library including technical papers from Siebel Institute, WWW marketing orientation articles and thousands of magazine articles that are fully searchable; tools for conversions and measurements; legislative information for each state (being reviewed by brewers in each state); market research; links and more! If you're a professional brewer or aspire to be, welcome to the ProBrewer pages:
Make sure you surf the Classifieds for a GREAT deal on a 10-barrel turn-key brew house and 12-oz bottling line posted this week!
A special thanks to Nancy Johnson and all the folks at the Association of Brewers for an excellent show and organization. Visit them at
Beer Master's Tasting Society is hosting a contest for Limerick's. They don't have to be original creations, but creating your own can score bonus points. Those of you from rugby or football clubs should be able to clean up (perhaps not the best choice of words considering the topic) from the old drinking songs. Prizes will be drawn from the Beer Master's merchandise catalog which includes some spiffy new designs -- personal favorite at Real Beer is the "Goat Sucker" Tee Shirt.
We're so inspired we slapped together the following nonsense to get you going.
Real Beer is made for the lass
given to language so crass
she'd say to a Bud
"save your sad suds,
you north of a south-facing ass."
Real Beer is made for the masses
Who enjoy craft-beer in clear glasses.
To Beer that is Bland
They'd kindly expand,
"I'd rather smell gas that you passes."
submit your limericks at: http://beermasters.com/events.php
GET LUCKY IN A KILLER NEW ONLINE GAME
Labatt Blue has combined state-of-the-art interactivity and great fun in a new online interactive hockey game called "Lucky's Teeth." The game's central character, other than you, is the biting, hard-edged Lucky, the last hockey goalie to eschew the use of a mask. Michael "Lucky" Ploufe is considered to be the greatest goalie of all time. He began playing at the remarkable young age of three on frozen ponds and lakes in his hometown of Sorel, Quebec. You can read more about Lucky when you load the game. Apparently, playing in the real world bores Lucky, so he seeks new victims/opponents on the Web to taunt and humiliate. Game play includes earning bonus points by taking out Lucky's teeth with a slapshot. Tip - aim high and shoot hard. Lucky's Teeth is best played with your monitor set to display 256 colors (8-bit). You will need 16 Mb. of RAM, and a Shockwave compatible browser such as Netscape 3.0 or Internet Explorer 3.0. Best of all, top monthly scores win prizes and winners are posted on the Web. Take your best shot at:
PORTLAND BREWING WEBSITE REDESIGN
If you're the proud owner of some Portland Brewing stocks, you know that you are entitled to a pint a day on premise. But did you know you can also get up to date information on your investment online? And visitors to Portland can get up to the minute event information for either pub, discover the beers, pick-up some great merchandise, learn about Portland and more. See the new re-design and updated content at:
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****************** Real Beer Picks ******************
BIG ROCK ROCKS
The Oscars are old news now, right? So check out the Eddies, fondly named after big Rock's founder Ed McNally. It's a contest for amateur and professional film makers to showcase their talent by making a big Rock commercial, while simultaneously winning recognition and prizes. Grand prize selection will receive $3,000.00 with the second place winner receiving $2,000.00 and the third place winner, $1,000.00. And while you're checking out the Eddies, take a look at the big Rock Brewery annual report, online merchandise, and -- oh yeah -- their rocking beer portfolio.
BLACK STAR BEER/GREAT NORTHERN BREWING CO.
One of the best-designed brand sites we've seen this year, Black Star brings you the best of Whitefish Montana and Beer on the Web. Cool downloads, 3-D brewery views, Web-postcards and solid navigation give you the technopops and ease of use that tells you you're in the hands of a good designer. Then you get to meet Kate -- we recommend going to site especially to meet Kate -- and the rest of the gang, and you know it's a great design because it comes from people who just dig what they're doing. There's an impressive, growing portfolio of beers and a contest some one just won to fly out there and taste them. Bookmark:
CANADIAN BEER EMBASSY COMES ONLINE, EH
Labatt Blue, Canada's best selling beer, invites you out (pronounced "oouut") to roam the halls of their Canadian Beer Embassy and enjoy a taste of authentic Canadian beer, eh. You'll find information on the brand in the Currency Exchange, beered news and links in the Beer Bureau and lots of links to all things Canadian. It's a gateway to Canadian beer and a short travel to the Embassy at:
IN NEED OF A HOME BREW KIT?
Coopers Brewery is now the world's largest producer and exporter of Home Brew Beer Kits. Coopers' brewing background ensures that their Home Brew Kits produce high quality beer. The product range has altered and expanded during the past year, bringing to six the beer, ales and stouts under the Coopers Brewery label. Consolidated Beverages America, Inc. is their North American distributor and is offering all the details at:
QUICKIE EMAIL SURVEY
Thanks to all who have been replying to our Quickie Surveys. Odds of winning a prize are better than winning the lotto. We've got a great award to offer as well: Michael Jackson's The Great Beers of Belgium distributed by Vanberg & DeWulf (http://www.BelgianExperts.com).
RESULTS FROM LAST MONTH'S SURVEY:
We'll have to conclude that during college years, when you're not drinking beer, you're hitting the books. 85% earned 3.0 or better GPAs and 57% of respondents earned 3.5-4.0 GPAs. Here is the breakdown:
4.0 - 18%
3.5 - 39%
3.0 - 28%
2.5 or below - 12%
mind your own business - 3%
Last's months Quickie Survey winner is Mark R. Cervarich.
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****************** Brewed Fresh For You! ******************
The Real Beer Page announces a diverse group of brew websites to check out:
Bear Republic http://www.bearrepublic.com/
Brewery Atlantis http://www.breweryatlantis.com
Baltimore Brewing Co http://www.degroens.com
Grant's Ales http://www.grants.com/
Havana Fine Cigars http://havanascigars.com/
Infinity Neon http://infinityneon.com
Mission Ale House http://missionalehouse.com/
Molokai Brewing http://www.MolokaiBrewing.com/
Reccow Brewing http://www.Reccow.com
SLO Brewing http://www.slobrew.com/
Sprinkman Equipment http://www.execpc.com/~bsprink/
Toronto Beer Fest http://realbeer.com/torfestbeer/
World of Beer http://www.WorldOfBeer.com
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Those who joined us at our Cigar Hospitality at the Craft-Brewer's Conference in Seattle had the pleasure of meeting and riding with our new friends at Brew Hops Tours. Your hosts, John Vrilakas and Kacey Montgomery, will take you on a 3-hour tour of some of Seattle's finest breweries. The tours begin at 12pm and 4pm, Tuesday - Saturday, taking you to Red Hook, Pyramid, and Pike's Pub and Brewery. Each brewery offers a full tour that includes a tasting guide, souvenir logo pint glass, coupons for discounted merchandise, and a sampling of 15 freshly brewed beers. Brew Hops Tours are also an excellent way to see some of the greatest sites around Seattle! Hotel pick-up and drop-off can be arranged. For more information, please contact:
Brew Hops Tours
2403 Dexter Ave. North, Ste. 3
Seattle, WA 98109
Take a quick spin at Pyramid's web site at: http://www.PyramidBrew.com
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********** APRIL FOOLS SEND-UPS **********
On April 1 our email floweth overed with wild and whacky messages from fellow craft-beer enthusiasts sharing their warped versions of the news. The following are in the spirit of April Fools:
REAL BEER AWARDED $23 MILLION FROM COORS CASE
Real Beer, Inc., Internet publishers of The Real Beer Page, RBPMail, BEERWeek and the ProBrewer, was rewarded by unanimous decision an unprecedented $23 Million from Coors. The case involved Coors' abuse of the term "Real Beer" in its advertising and promotions. The prosecution's case rested following a passionate entreaty to keep the brewing-industrial complex from appropriating those hard-earned attributions of the craft-beer movement. Jurors polled following the decision said that the most persuasive evidence was a product taste panel conducted by the prosecution. Publishers at Real Beer commented, "This is a great day for Real Beer drinkers -- we're going to throw one helluva an online party for those with valid I.D.s -- and for us -- we can finally take a salary out of this thing."
RED DOG ARRESTED FOR SEXUAL HARASSMENT
Miller Brewing Company's Red Dog brand mascot was apprehended by animal control personnel following "one leg humping too many," according to a spokesperson at Miller. Other lewd behavior included drooling, crotch-sniffing and "showing the lipstick." Officials at the shelter holding red dog were unavailable for comment. When pressed about future of the canine and its implications on the brand, an insider said, "The brand's dying, not the dog."
A-B WINS CONTRACT BREWER OF THE UNIVERSE AWARD
In a ceremony attended by few but enjoyed by many, Anhueser- Busch received the distinction of Contract Brewer of the Universe at the Contract Recognition Awards Program (CRAP). The association includes the contract brewers Barley Boys, Friends/Hellenbock, Petes, Sam Adams, Wild Boar and more. "We figured after all the attack ads they've leveled at us, it was time to give a little CRAP back," Said Jim Koch. The award recognizes the contribution of breweries like Labatt, Kirin and many others that brew the Budwieser product outside of the U.S. "We want to make it perfectly clear that the labeling issue is not about consumer advocacy, but about A-B trying to kill second-line brewers such as Strohs; create confusion in a class they can afford to dump and run on if they want; and attacking those that have successfully earned mind and heart-share at the consumer, retail and distribution levels." stated the CRAP press release.
A police officer was assigned to stake out the parking lot of a rowdy bar and watch for possible violations of drunk-driving laws. Watching from his car, the cop saw a patron stumble out of the bar, trip on the curb, then try to open the doors of a dozen cars before finding his own car and collapsing in the front seat, where he remained immobile. And where he continued to remain immobile as the evening progressed and others left the bar, started up their cars, and drove away. Finally, with the parking lot all but empty, the patron pulled himself to an upright position, started the car, and attempted to pull out of the lot. Immediately the cop pounced, pulled the motorist from the car, and administered an on-the-spot Breathalyzer test. The result: 0.0% blood alcohol content. When the cop asked the motorist to explain the disparity between what he witnessed and the test, the driver said. "Tonight I'm the designated decoy." As related by New York Times writer Lawrence Van Gelder in his "On the Job" column:
MILLER GENUINE BOTTLED
We received a spoof advertisement offering "bottled beer taste in a keg" -- a natural extension of the "draft taste in a bottle" promotions. The new patented "clearline" process of kegging beer delivers beer to the keg through clear glass pipes under full fluorescent light, reproducing on draught that special "light struck" quality of the famous clear-bottled Miller Genuine Draft. "Just ask for MGB" says the ad.
COORS CREATES NEW MARKET
This "conspiracy theory" send-up comes from a Real Beer patron that goes by the handle: "Johnny_Socko_and_His_Giant_Flying_Robot:" Following the successful cloning of an adult sheep in Scotland, researchers in far reaching fields began in earnest applying the novel methods in their laboratories. The Coors R&D lab has produced the first human clones with a low threshold for flavor in an attempt to create a market for Coors products. Socko & his robot appeal to other Real Beer viewers to help put a stop to this abominable project.
BEER MADE FROM YEAST FOUND IN MARTIAN METEORS
Another discovery on the science front found its way to our April Fools email box: the meteors from Mars in which life-forms were discovered also produced yeast. When pitched in a "red" ale with some active English ale yeast -- said to be interested in intercourse with nearly any species -- a veritable orgy occurred. The beer fermented in hours and is said to be extremely quaffable, but not for the timid. While traditional hangover affects are avoided by this new yeast, there have been occasions when chests split open and small creatures spring forth.
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A-B DISTRIBUTOR BATTLE IN FL
Anheuser-Busch Inc. halted beer supplies to its Gainesville wholesaler on Thursday, ending 30 years of business with the family of the late New York Yankees home-run king Roger Maris. Mike Brooks, a sales vice president at Anheuser-Busch's St. Louis headquarters, said fraudulent conduct by Maris Distributing Co. prompted the brewery to terminate the wholesaler agreement. Anheuser-Busch plans to sell its brands temporarily through two other suppliers. Maris Distributing's sales in the Gainesville-Ocala area total about $50 million a year. Members of the Maris family could not be reached for comment. In January, Maris Distributing sued Anheuser-Busch for breach of contract, restraint of trade, defamation and interfering with business. The civil suit accused brewery officials of trying to bully the family into selling Maris Distributing to Anheuser-Busch. The situation is similar to a 1995 dispute between the brewery and its Jacksonville wholesaler. After both parties sued each other, Anheuser-Busch took control of the business and the matter was settled out of court. (Source: Suzy Hagstrom, The Orlando Sentinel, March 21, Friday, Business; Pg. C4)
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MICROBREWS TO MINI-SODAS
With predictions of a packaged-beer shakeout, Randy Sprecher plans to be one of the survivors -- even if that means selling more root beer than real beer. "The squeeze play is beginning," says Sprecher, president and owner of Milwaukee's biggest little brewery. The flood of beers hitting the market combined with continued pressure from mega-brewers in the distribution channel are causing worries industry-wide. Sprecher Brewery, located in a renovated elevator car factory north of Milwaukee, is preparing to ride out the rough times by offering a variety of beverages. The brewery is building a reputation among soda drinkers. Randy Sprecher admits the two product lines have led to a bit of confusion. But he's quick to point out that many breweries switched over to bottling soda during the Prohibition Era of the 1930s. "We're a brewery that also makes soda," says Sprecher, 50, a native of Oregon and northern CA who moved to WI in 1980 to take a job as a brewing supervisor at Pabst. Sprecher produced 18,000 barrels of soda in 1996 compared with 6,600 barrels of real beer. And Sprecher sees plenty of room for growth in the soda area. The brewery has introduced a "Grand Cola" to go with its root beer and "Cream City" cream soda. It is also selling root beer in concentrated form, where retailers can add the water themselves. The newest venture is artesian spring water, with Sprecher purchasing a 2,200-foot-deep well near Big Bend, WI. (Source: Mike Ivey, The Capital Times, Madison, WI, March 19, Wednesday, Business Today, Pg. 1C)
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HOW THEY GOT THE NICKNAME "BUD-HOOK" - EDITORIAL
On March 24, Paul Shipman performed the keynote speech to kick off the central craft-beer industry gathering, the 1997 Craft-Brewer's Conference in Seattle, put together by the Association of Brewers. Shipman seemed like an excellent candidate as president of pioneer, Seattle-based microbrewer Red Hook: his company has evolved from the ultra-micro to a regional brewer backed by the resources of the world's largest brewer, Anhueser-Busch. The excerpts below support my conclusion that this early minuteman has marching orders from St. Louis, and that even in the Craft-Brewer's own forum, A-B seeks to control the debate.
Shipman began his address with some historical anecdotes and amusing stories of the mishaps and adventures of growth; providing some roots-equity and positioning himself as one of the audience. Shipman drew a self-portrait of a visionary positioned and operating with the future in mind. He pointed out several "firsts"/innovations that Red Hook undertook in that spirit: Five times capacity growth over a previous brewery at one point in their growth; upscaled Laboratory and Automation. And in 1993, he looked ahead in the distribution arena as well by inviting A-B into his business. Red Hook grew 40% /year for 15 years. But there will be a consolidation to slow that rate of growth, and if Shipman had his way, the consolidation would come at the hands of Second-Tier industrial brewers.
And this is where the address lost points for credibility -- Shipman posited that it was the existence of contract brewers and second-tier brewers that were to blame for the tightening of the distribution and loss of integrity in the segment.
"I believe that there will be big breweries and specialty breweries and not much in the middle. I think that would be a good course. There are a few breweries still stuck in the middle [Strohs, Debuque, Schell, etc. - ed.], but I think that they are doomed. I don't think that they fulfill a positive roll, and in fact I think it's just as well for them to quietly go out of business which would be the natural course."
Shipman suggested that where contract brewing is strong, the brew-it-yourself market lags. His argument follows that brew-it-yourself brewers support infrastructure -- equipment industry and bottling manufactures, etc. -- who in turn support the Craft-Brewer's Conference. Contract brewers are the cause of many industry problems according to Shipman -- Consumer level confusion caused by noise; Consumer confidence undermined by brewers attacks on each other; Price Pointing and Discounting which undermine specialty product perception; Retailer-level friction though expectations of Advertising and Discounts; and Wholesalers - not soliciting brands anymore.
"The contract brewers take away demand from those who brew it themselves and they can move much more elasticity on prices. They don't invest in the development of the infrastructure." They don't support the brew house and bottling line and tank manufacturers . "They have lead in the flooding of the market. Real Brewers who make their own beer are very reluctant to do line extensions because of brewing schedules..."
"I hope that you welcome us as a competitor at the local level," he said to the microbrewers. "We're there to help build the industry. We're not there to take away from the demand of the product from the small, local specialty brewer. The small local specialty brewer is the backbone and strength of the industry..."
Unfortunately the creativity of the craft movement will not fit into Shipman/A-B's model. Local brewers will realize that Red Hook DOES represent direct competition for craft SKUs/shelf-space, tap handles and distribution. And, unlike Petes and Sam Adams, Red Hook and A-B have NOT supported the communities in which they distribute through the investment in craft-beer culture. Shipman talks about industrial infrastructure, rather than consumer and pipeline infrastructure. Petes and Sam Adams both work exhaustively at consumer education. Plus they advertise in premium positions in regional beer magazines to support the organs that dispense beer education and culture -- as much to support those vehicles as to sell beer. Red Hook does not do this -- they call such advertising "preaching to the converted." Only recently did A-B begin placing ads in this medium as a way to position, not to support or educate.
Shipman's attack follows the Dateline piece that came right out of A-B's corporate offices. (See our editorial 11/97 at http://probrewer.com/library/1196ed.php for more about this). It is part of a corporate strategy that attacks contract brewers because they have strengthened the middle-tier and created excitement in the class. That excitement is stealing mind-share from A-B's portfolio. Indeed, it is A-B's efforts that is attempting to create consumer confusion in the segment by creating the labeling issue. Shipman would like us to believe that contract brewers are the boogie men, but if it were not for the contract brewers the segment and channel may not have been so evolved. If Sam Adams were not so prevalent in Miller and Coors houses, those distributors may also have been closed to other craft products.
To address the distribution point directly, for the last couple of years, A-B has been pressuring "Bud Houses" in the distribution channel to drop all non-A-B portfolio products. We've covered in previous editorials the displacement of brands from these Bud Houses. Earlier this year an A-B distributor in Memphis told me that in the spirit and compensation of "total share of mind" for A-B, they only had Bartles & James wine coolers left as non-A-B product and were working on getting rid of that. Since Bud houses represents by some estimates 30-40% of the distribution channel, the other distributors are understandably and prematurely glutted -- not by the presence of contract beers, but by the lack of service from the Bud Houses.
It's important to view the market tightening from a military strategy perspective because A-B is in a market-share war. As a matter of course, western expansion and by extension capitalism has forced competing groups into areas of limited resources. When successful, differing factions begin to compete with each other towards self annihilation. In the U.S., Australia and other countries, this is clear when studying the treatment of their indigenous people. The strategy continues today in U.S. inner cities. And now we see the strategy applied in the Craft-Beer class where microbrewers see each other as enemies. And Shipman/A-B would like to perpetuate that conflict.
Shipman uses a Darwinian argument to suggest that the middle-tier brewers should go out of business. It's always convenient to invoke Darwin when you're the one with the evolutionary equivalent of the opposing digit. The problem with this logic is that communities and economies can defy what analysts might consider Darwinian. The brewing commmunity has a way to taking care of its own. Common are stories of craft-brewers lending each other kegs, storage space and resources during tough times to help each other along and keep each employed. In fact, the middle tier has served the craft-beer industry and given consumers a step rather than a jump up the craft beers. The middle tier has already ushered in a new era for the craft-brew segment.
Small companies have always been the labs for big companies. Look at the growth of Microsoft, IBM and Cisco and you'll see companies that bolstered their strategic direction and business evolution through acquisition. There is no reason to expect the microbrewing industry will differ. But the Craft-Beer Conference was created for the small brewers and should represent debate on their behalf. Shipman's address should have been presented as "A-B's Position on Your Business," rather than as a Keynote Address labeled "Where Are We Now?" The context and message would have been more palatable. And the banner of integrity under which Shipman wished to stand would not have been lowered.
In the war that A-B is waging for market share, Shipman may simply be another casualty. I highly recommend purchasing/re-reading the book, "Sun Tzu and the Art of War." The strategies of disinformation, infiltration, appearances (when you are large, look small; when you are small, look large), straw-man/boogie man creation and confusion come right out of the Chinese Master's book.
As a personal note in closing, we provide marketing strategy and development analysis as a fascination, not an indictment of their vehicles. We're tough on issues, not on people. We dabble with the semiotics of a message, and find a need to deconstruct messages that seem too simplified. We're in awe of the forces that the beer industry's largest player has compiled and the measured accuracy in which they implement their Market Share War Strategies. We do not seek consensus or even action from these views but to expand the debate.