Barley Mowat 

Archive for March, 2012

The Path To Glory

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Every few months the LDB publishes their Quarterly Market Review, and every few months you see a few stories appear in the paper about how liquor sales are effectively flat year-over-year, except for craft beer, which has shown a 20% annaul growth for years on end. This article invariably makes the rounds of the beer blogs, is discussion with great pleasure at bars and at house parties by people with large beards, glasses, or both. And then we forget all about it.

Seeing that March is done, we can expect another such report shortly and another good round of “feeling-good-about-craft-beer-itis.” Yes, craft beer growth at 20% is a good thing, even I can’t argue with that, but that’s not what the report actually says. It says that breweries producing less than 150,000 hl are growing at ~20% annually. 150,000 hecto-litres is 15,000 kilolitres, or 15 mega-litres. That’s a shit-tonne of beer.

As previously discussed here, that number includes an awful lot of larger breweries you wouldn’t normally let in the same room with the word craft (for instances, Granville Island makes 7 mega-litres, so they absolutely qualify). There’s a good chance that a large amount of the growth is concentrated on the uppper end. We just don’t know, but I have a strongly biased pre-formed opinion, and that qualifies as objective journalism around these parts.

But let’s assume the little guys are doing just as well. Heck, on my recent tour of Victoria it seemed like every brewer I talked to had plans to knock out a wall and take over a recently vacated neighbouring spot. Add to that the fact that a brand new brewery operating in the area was seen as positive thing rather than more comptetition and we are painting the picture of a rapidly growing sub-industry.

We’re also painting a picture of a string of bankrupt businesses near breweries. Please.

But what does 20% actually look like? A 20% increase in sub 150,000 hl domestically made beer sold in BC means 7,000,000 litres more produced, per year. Granted, that’s production across Canada, but that’s not too shabby. That’s the equivalent of a whole new Granville Island Brewery per year.

Of course, compared to the big boys it’s nothing. The Molson’s and Labatt’s of the world are looking at a 5% year over year growth. Or about 9,500,000 litres. Yup, even with growth that most people consider “stagnant”, they’re growing faster in terms of sheer volume than the little guys. And sheer volume means people. For every 7 new people that reached for a (potentially) craft beer these past 12 months, 9.5 new people reached for a mass market brew (or maybe 8 normal people and 1 pregnant woman?) Of course, these numbers could also mean that 9.5 macro drinkers are now drinking twice as much. It’s hard to say with any certainty.

What is certain is that people just love their light beers. Macro beer outsells micro 6:1, and a good chunk of that :1 is lighter beers like lagers, pilsners, honey lagers and… uh… honey pilsners? I guess?

This creates an interesting dilemma for brewers. Imagine you’re setting up a new brewery. Do you brew the beer you want to drink but won’t sell, or do you brew the beer you can’t stand but will pay the bills as the mouth breathing masses consume it out of funnels after bouncing ping pong balls into it?

True ladies squat to funnel. And don’t wear pants.

I know which one the bank wants them to do. And the company president. And the LDB, who seem rather irked by this whole “good beer” thing and rather hope it would just go away already.

Brewers manage to make this more acceptable to bear by compromising. “Fine,” they say, “I’ll brew idiot juice for the masses, but I’m going to do it my way. Quality malt, interesting yeast, and maybe some slick hop blends.” And thus is born the best boring beer you can imagine.

The beer goes out, it sells well, and profits come in. The business guys in charge of the brewery look at this, smile, and instruct you to take this new money and… brew even more of the same shit. You, of course, want to branch out and try something new, perhaps something weird that appeals to a smaller, more select audience.

The MBA running the place, though, just hears you spewing insane nonsense. Your bold new business plan is to not brew the product with a proven customer base, brand recognition, and solid profit margins. Instead, you want to do something totally new that may or may not actually sell. This goes against everything the MBA learnt in business school.

I thought that idea sounded familiar.

Even Driftwood isn’t above this. Their launch line-up included an amber ale, a pale ale, and a wheat ale. Yes, I know they’re very good examples of those styles, but that’s sorta my point. Only after they’d established a fan base and gotten a steady revenue stream did Jason start fucking around with new (to BC) styles like barrel-aged stouts and barley wines. And that’s in a brewery RUN BY A BREWER.

If it took that much effort for Driftwood to make solidly interesting beer, imagine how hard it must have been for places like Lighthouse, Phillips and Russell to start pushing out interesting one-offs. It requires some serious balls to take the profit from one pallet of hot-selling insipid beer and use it to create anything but another pallet of the same old stuff, but they’re doing it. And holy shit, these weird new beers selling. And not just to me.

Every brewery that produces a specialty line of one-off beers makes it easier for the brewing crew at the next brewery to convince management it’s a good idea. And every release that we, the beer drinking public, consume with manic fervour only fuels that fire.

Together we’re creating a mature market for high end beer, and demonstrating the profitability of competing in that market. The market is mature enough that Driftwood is contemplating ditching some of their lower-end beers to free up space to pursue the high-end. Crooked Coast and Driftwood Ale, we hardly knew ye.

So there you have it. The best way to fill the shelves with a broad selection of beer of increasingly complexity is to make it profitable to do so by going out and drinking what’s out there now. We’ve finally reached the point where every beer you take off that shelf will be replaced by something better, and I’m game for leading the charge to perfection.

Written by chuck

March 31st, 2012 at 1:58 pm

Posted in Breweries

I shouldn’t be surprised. And I’m not.

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Sometimes being a ticking time bomb of beer geek fury has its drawbacks. The continued preference of the general public for the insipid, watery crap that passes for beer in this country leads to anger, and that leads to broken glass.

So, when the guy who sells me replacement windows sent me a link to the results of this year’s Golden Plates Awards, I was just as shocked as he was that I felt… nothing. Nothing at all. Last year, I was a little bit taken back at the results. This year, meh.

Yeah, I guess things improved a bit, compared to last year:

Category 2011 2012
Best Canadian Beer Brewed Outside BC 1. Alexander Keith’s 1. Steam Whistle
Best BC Beer Brewed Outside Vancouver 2. OK Springs Pale Ale 2. Driftwood Fat Tug
Best Locally Brewed Beer 2. Stanley Park Amber 2. Red Racer IPA

And the private LRSs made some good showings, but overall the list still shows off the general public’s lack of anything even remotely resembling good taste. And I don’t care that much.

I mean, it’s the Straight. Asking questions of People Who Read The Straight about Popular Brands in BC. You take those ingredients, execute on that plan, and I just can’t be surprised at the outcome. We all saw it coming. Don’t act surprised or shocked when the inevitable happens.

Picture of Steve Irwin irresponsibly handling a venomous animal included for no reason.

Sorry to disappoint, folks, but there won’t be a rant here. I have been watching the daily traffic to my site rise slowly the day after the results were released, almost certainly in anticipation of an entertaining meltdown. But alas it’s not to be. People are still idiots. Oh well, at least there’s more good beer for me this way.

Written by chuck

March 23rd, 2012 at 7:29 pm

Posted in Beer and You

How Small Is Small Enough?

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Oh boy. THIS issue, eh? For those not attuned as keenly as I to the internal angst of the craft brewery business, the definition of “Microbrewery” is the subject of much intense debate. Some places (like BC), don’t even bother to officially define it, while others (like the US) have defined and re-defined it multiple times over the years.

What’s the fuss about? Ultimately, breweries are normally categorized by annual volume of production. As in, how much beer they make. This is measured in one of two amusing ways, both of them being pretty much unused outside of the brewing industry. These measures are either barrels (bbl) or hectoliters (hl).

No one seems quite sure which is the more appropriate measurement, so often you’ll see production values reported in both litres and barrels. Which itself is fairly silly because a beer barrel is roughly equivalent to a hectoliter. Seriously, 1 bbl = 1.15 hl by most definitions, although a “barrel” is about as well defined a term as a “pint” and we wind up with varying sizes from 96 litres all the way up to 160 litres, logically based upon what you’ve put in the barrel.

In this case it holds 1.
I tried for 2 but the cops were called.

And, of course, no barrel of any kind is defined in the Canadian Weights and Measures Act, meaning that if you try and sell stuff by the barrel, the Queen Herself will pop in, kick your ass then insist you remeasure that shit in litres.

But enough background. How much beer makes a microbrewery? The American Brewers Association uses the following definitions based on volume:

“Craft Brewery”: < 7,000,000 hl "Regional Brewery": < 2,300,000 hl "Micro Brewery": < 18,000 hl (Note, despite the name of the biggest category, all these types of breweries are considered "Craft Breweries" if they meet the criteria below) The value for Micro is even endorsed by CAMRA BC. To give some perspective to those numbers, if BC’s newest Craft Brewery (Hoyne) brewed a full batch in their brew kit every single day of the year (and lost nothing to spillage, bad batches, or steam), they’d hit about 9000 hl. So yeah, 18,000 hl is a lot of beer.

Volume alone isn’t the only requirement. To even start looking at those numbers above, breweries must also brew at least 50% of their volume in all malt beers (no cereal or corn), and only use adjuncts to enhance, rather than lighten the flavour (aka sugar is no good, but fruits are fine).

Then there’s the ownership question, a craft brewery must also not be more than 24% owned by another brewery who is not a craft brewery. Same for the owners, and so on, all the way up the chain. Basically you can’t be owned by Molson, or by a company that is owned by Molson, or by a company that is owned by a company who is owned by… etc.

So where am I going with this? I’m hopping the old #50 down to Granville Island with these definitions. Yup, Granville Island Brewing just can’t wait to tell you about what a wonderful MICROBREWERY they are, and boy, did you hear that they product CRAFT BEER? Seriously, go look at their website. You don’t make it very far before one of those two words is thrust in your face.

How do they measure up, now that we have some numbers? Well, I wouldn’t be talking about it if it was good. Take volume: Microbrewery: 18,000 hl or less. GIB: 60,000 hl (and boy that seems low for GIB). Surely they’re just a regional craft brewery then. What’s the big deal if they’ve exceeded the allow production cap… three times over? Well, let’s talk about dependance.

Yeah, they’re owned by Molson, who won’t admit to using non-malt cereals in their beer but also certainly won’t tell you what, exactly, IS in there (although they do admit to using corn in the low cal version). Also, they’re way over the absolute cap of 7 million hl. So GIB could shut down production tomorrow, then brew a single, tiny, can of shitty lager next year, and they still couldn’t claim to be a microbrewery. Except in BC, of course, where we don’t bother to define such terms.

We could give them credit if they made it so small it disappeared altogether, though, right?

Written by chuck

March 15th, 2012 at 8:17 pm

Posted in Beer and You,Breweries

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