St. John's Wort Beery Musings And Amusing Beers

Monthly Archives: December 2012

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Set up a brewery in Kingston, already!

Although I grew up in Toronto, I spent a year after university living in Kingston. I like Kingston, but I never really felt as though I understood it. The downtown is laid out as a sort of Triangle, and the bar scene at the time was more or less based on the fact that Queen’s students enjoy cheap beer. The pleasant limestone construction can impose itself on your imagination as you make your way through streets blasted by winter wind. I am comparatively pleased that I wasn’t there for the Ice Storm, since I have seen the six foot icicles that hang off those roofs during the best of winters.

I don’t mean to hold forth on the character of the city overmuch, as that is clearly the bailiwick of Alan McLeod. I will content myself with having my column appear periodically in the Kingston Whig-Standard.

One of the things that always struck me is that this is a city of over a hundred thousand, halfway between Toronto and Ottawa and that no one has seen fit to build a brewery there. It’s more or less ripe for the picking, but without some investment of time or effort, there will not be a brewery there. I think that a proper brewery in Kingston is something of an inevitability.

I’m not entirely discounting the presence of the Kingston Brewing Company, which has a very nice pub, but I’m of the opinion that the shot they took at Ontario market might not work in the current climate. The Dragon’s Breath Pale Ale was a well made and thoroughly satisfying beer back at the turn of the century, but I can’t see anyone with the space to bring it back as a contract brew as Hart Brewing once did. It is still a nice place to spend a couple of hours.

The fact of the matter is that Kingston has incredible potential for a craft brewery, and not just for the reason that there is an annual influx of student loan money and enthusiasm for going out on a Friday night. The city has changed somewhat in terms of appreciating what’s around from a culinary perspective. It can lay claim to some of the best charcuterie in the country in the forms of Luke’s Gastronomy and Seed To Sausage (Up Highway 38 near Sharbot Lake). There’s some very nice cheese being made in Wilton. There are some excellent dairies and organic vegetable farms. This is a city where it’s now possible to buy local everything if you know where to shop.

In addition, the pubs that I remember are not the pubs that people are talking about. There was the Tir Na N’og, which benefited massively from the influx of Belgian beers under the Oland company in the mid 90’s. There was the Toucan, which was where bartenders would call their orders in from other pubs when it was time to close down.

It’s something of an amazement to me that less than a decade on, there are a number of pretty decent places serving craft beers, but no brewery.

As a for instance, there’s The Alibi, which, judging by their facebook presence, may as well be in Toronto. They have Spearhead and Boneshaker and even had a Great Lakes one-off in the form of Audrey Hopburn just before Christmas. Of course there are the more locally based breweries in the form of Barley Days and Church Key. This looks to me to be a step in the right direction.

There’s the Iron Duke, which had Muskoka Mad Tom last time I visited. There’s Sir John’s Public House, which is decorated in the manner of an early 19th century public house replete with haggis fritters (I believe it to be a city by-law that there must be at least one drinking establishment in Kingston which features the likeness of Sir John A. MacDonald. Unlike in America where it is “Washington slept here,” in Kingston it’s “MacDonald drank a fifth of gin, passed out, fell down the stairs, got up without a scratch on him and proceeded to debate a portrait of Thomas D’arcy McGee.”) Sir John’s is a marked improvement on the previous incarnation, Johnny Mac’s, which is now a bridal shop.

The place I had heard the most good things about was The Red House. Before I went to Kingston for Christmas, I found that they had a cask of Pinot Noir barrel aged imperial stout from Nickel Brook. Apparently Ryan Morrow visits the area occasionally and brings beer. I wanted to try it because their Bourbon Barrel Aged Imperial Stout “Kentucky Bastard” is a freakin’ monster.

By the time I got to The Red House on Boxing Day, they had run out of that beer, but that turned out to be something of a blessing in disguise. It’s hard to enjoy your dinner if you start out with the imperial stout. Their tap lineup was suffering somewhat as a result of it being the Christmas season. They were even out of Pilsner Urquell, which is something you don’t see much. I take this to mean that patrons are blowing through good beer in Kingston at a decent clip. Encouraging.

This is more or less what I want. Quality and simplicity, rather than a wider variety.

This is more or less what I want. Quality and simplicity, rather than a wider variety.

Not as encouraging as the food. It’s the sort of upscale down home cooking that makes any beer you order better.  My Brother had the leek, potato and bacon soup and the fried chicken sandwich. I had the burger and Caesar salad. We split a side of lentils because… well, how often do you see a side of lentils? (They were delicious if a tad dijon mustard heavy.)

Skipping dessert, we had the charcuterie platter, which the menu doesn’t really do justice to. In addition to what’s described, there was pepperoncini and marinated artichoke and what I think must have been eggplant. It came with local cheese and meat, which must have come from within a hundred kilometers.

All of this was reasonably priced, especially when you consider the effort the care that has gone into creating the menu. The most expensive thing on there is the cassoulet, and I bet it’s excellent. McLeod, who I mentioned earlier, reported having to restrain himself from licking a plate on one visit. If that’s not an overwhelming endorsement, I don’t know what is. If they had more uniform access to really good beer, this would potentially be one of the best pubs in the country.

At some point, there’ll be a brewery in Kingston to take advantage of this new crop of pubs. The stage exists and only needs an actor to make it work. Then again, I thought more or less the same thing three years ago and nothing has happened yet. Eventually, some second year bio-chem student will take up a hobby. There is definitely room to expand your brewery in Kingston. Probably for cheap.

Craft Vs. Crafty

For a long time now, I’ve been thinking about the craft beer vs. crafty beer problem. While it has really only sprung up as a discourse over the last week, you would have to have been blind not to see the issue coming.

The problem here is that large breweries are putting together craft brands like Ten and Blake and Six Pints and they’re making beer that falls pretty solidly in the craft category. It puts people in an odd position where they have to ask questions about authenticity and it makes everyone involved in the discussion look like ridiculous scenesters quibbling over detail.

The problem is that this debate about whether something is a craft beer is more or less inevitable. Look at something like Goose Island or Granville Island. The people who founded the breweries wanted to go and do other things and they sold their companies. On some level it must have been heartbreaking to do. You put your entire career into building something and then at the end you have all of this capital and time sunk into something that has been helped along by a community that enjoys your product. You have to sell it in order to retire.

The odd part is semantic. Say it was a potato chip factory instead of a brewery. You’d never blame a potato chip magnate for selling out. Beer has taken on some kind of emotional significance to a portion of the population and this kind of thing feels enough like betrayal to promote angry messages on internet forums.

I find myself wondering whether the problem is essentially economic. Until the 1980’s there weren’t many small breweries. Since prohibition, large breweries had simply consolidated breweries that they purchased and reduced the number of brands available in order to become more profitable. Brewing is a business, never forget, and that model is a really good model. Not for beer drinkers, necessarily, but if you’re a huge corporation and you want to maximize profit, being the only game in town is a good way to go about it.

The craft breweries are a response as much to a global business model as they are a response to bland macro beer. In the face of huge multinational brands like Budweiser, which represent a global trend towards a single monolithic product, craft beers made locally are a response to unsated demand. Not only do they promote local business, provide employment and a sense of place, they reinforce the idea that manufacture is not dead within North America. If you look at the 2000 microbreweries in the US and the 150-200 in Canada, there is a lot of tertiary economic activity that surrounds them. You need equipment and chemicals and packaging and design and social media and advertising and…. Well, you get the idea.

There’s an economic theory that states that the health of an economy can be determined by the flow of capital through the marketplace. Given the pressures of the 2008 recession and peoples’ fondness for a refreshing beverage during hard times, this probably explains why the craft brewing industry has done relatively well during the last few years.  It’s very difficult to know where your money would end up if you bought a case of Budweiser. When you buy a craft beer, you know that you’re supporting a locally owned business. Craft beer supports local economies.

(It would be disingenuous to say that macro beer doesn’t support local economies. Imagine what would happen if the plant in Golden, Colorado shut down. If the Molson Downsview plant shut down there would be a lot of people out of work. What I’m suggesting is that not ALL of the purchase price of a macro brew goes to support local economies. There are huge parent companies to be considered.)

“Crafty” beer is the price that Craft Beer inevitably pays for its success. It is, however, at a significant disadvantage. It frequently does not have a sense of place associated with it. It almost never has a face associated with the brand.

The thing that I am continually baffled by is that people are drawing a line in the sand based on some aesthetic or intangible principle as to what craft beer is. This is an inefficient and, to be honest, downright silly way of going about the problem. Consider THIS letter from the August Schell brewery to the Brewers Association. I can certainly appreciate that the BA guidelines are fairly stringent when it comes to the use of adjunct in brewing. However, given the larger atmosphere at the moment, a situation in which “crafty” beers are going to continue coming down the pipe inexorably, there are other angles to be considered.

The problem here is that with multinationally owned brewers attempting to produce “crafty” beers that consumers may not be educated enough to differentiate from their Brewer’s Association approved “craft” counterparts, the delineation between the two products based on flavour ceases to be a reliable indicator of authenticity.

If you look at Yuengling or August Schell or say, Moosehead, these are all independently owned breweries that contribute massively to their local economies. They have a sense of place. They have representative faces and visibility and every single one of them is branching out into more interesting products. Aside from the adjunct issue, they fulfill basically every requirement for craft breweries. Perhaps most importantly, they contribute to the local or national economy in a nearly identical way to a craft brewery.

I would venture that the real battle here is not flavour based, but rather a struggle between economic forces and corporations that are globally relevant and locally relevant respectively. People like the idea that their beer is identifiably brewed by someone; that it supports the local economy in a demonstrable and tangible way.

The simple fact of the matter is that eventually, large multinational breweries and their subsidiaries will be able to produce beer that tastes like craft beer. They cannot, however, reproduce independent ownership. If this is the battle line that is currently being drawn, would the Brewer’s Association not re-examine their guidelines and allow large regional brewers like Yuengling a place within their ranks?

It seems to me that an alliance of independent brewers rather than craft brewers within a single nation has one very definite strength: We can discuss for hours the various nuances of what makes something craft. Ownership resides indelibly on a balance sheet.

Every Six Months…

It seems like every six months we get a spate of articles about privatization of liquor, wine and beer sales in Ontario. Currently, it’s in the press again because Tim Hudak is theoretically in favour of selling off the LCBO. Now, personally, I think that privatization of sales is a shiny bauble that gets waved in front of the electorate. There are so many factors that would go into privatization that simply mentioning it is never going to accomplish anything. I don’t believe that it will happen in the short term, and that a number of stars would have to align in order to make it happen in the long term.

The reason that the discussion is frustrating is that the status quo for the organizations that would be involved in the discussion never seem to change sufficiently in a six month period to bring any new information to bear on the situation.

It’s like a campus demonstration on social equality. The actual rate at which change takes place on a societal level is glacial. It’s the result of many small changes over a lengthy period. Sure, having placards and megaphones for an afternoon is cathartic, but it accomplishes relatively little. It also promotes a cognitive dissonance between people who think that change ought to be instantaneous and the reality of the situation. Small vocal groups tend not to represent the majority.

When these articles are written, they tend towards being somewhat exploratory while ignoring the fact that there was a similar article in the recent past. Personally, I hate this because the situation exists on a continuum and not as a single instance of reporting as you would be led to believe.

Rather than looking at it from the perspective of the consumer, you have to look at it from the point of view of the revenue stream for the province. The consumer wants change because they can’t find a certain variety of sherry or port, or because the craft beer selection is not expanding quickly enough. The consumer essentially wants to be satisfied on a basic, short term level. I have some sympathy for this, since “more good beer” is probably not a bad thing.

The problem is that that desire simply doesn’t exist in a vacuum. If you’ve read an article on the subject in the last year or so, you know that the LCBO generated a dividend of about 1.55 billion dollars for the province in the 2010-2011 period and about 1.63 billion in the 2011-2012 period. Keep in mind that the total amount of revenue for the province of Ontario in 2011-2012 is about 109.25 billion dollars.

This means that the LCBO dividend to the province is worth approximately 1% of the total provincial revenue. It will be slightly higher than that in coming years due to the sale of the LCBO headquarters and adjacent properties. Also, the dividend has been ticking steadily up for the last decade, meaning that there is some significant optimization of profitability going on.

The difficulty is that privatization is not an overnight process. It’s fine to spitball the concept that tax revenue might remain the same or even increase were sales of liquor, beer and wine permitted in convenience and grocery stores. The issue is that this is not magic. There are transitions to be made in order to allow for that situation.

Folks point at Alberta as a shining beacon of privatization. Sherbrooke Liquor, with its thousand beer selection gets mentioned a lot as the kind of thing that might appeal. The thing that tends not to get discussed in re Sherbrooke Liquor is that Alberta was privatized in 1993, meaning that it has taken approximately 20 years to get to the point where there are a thousand beers on the shelf.

I think one of two conditions has to be met amongst the players in the market before privatization can be considered anything more than a pipe dream.

In the case of political will, I suspect that it is unlikely that we will see privatization prior to a year in which there is a budget surplus in the province of Ontario. Ontario’s economic recovery plan suggests  that this will not happen until 2017-18 barring any catastrophe. Until such a time, it would be folly to play with the LCBO dividend that results in 1% of the provincial revenue stream. I would like to think that politicians of all stripes recognize that a guaranteed amount of income in a period of financial hardship is a better choice than an unproven alternative. Once there is money to play around with, you might see change.

The other possibility in the situation has to do with market share. There’s the possibility that the large brewers who own The Beer Store might be quite interested in privatized sales. While they currently control a de facto monopoly on 80% of beer sales within the province, the market share for their products is eroding at a relatively slow drip. This is a bad thing for large brewers, and you can see how there might be some resentment of the fact that they are forced to provide logistics and shelf space (however minimal) for their competition.

I mean, they’re not quite as resentful as the small brewers who are forced to pay for listings and shelf space, but they are probably mildly resentful.

The question of privatization may well hinge on whether the large brewers are willing to forego a sales monopoly in order to take advantage of wider distribution through supermarkets and convenience stores. After all, they are in an advantageous position in terms of economy of scale. Small breweries don’t have the ability to leverage deals with large chains. Large breweries do.

The difficulty is the additional outlay required to make this happen. This requires sales and negotiation, distribution, lobbying, additional and possibly alternative packaging for various chains. It requires more labour. It is an expensive proposition, and a strategy which would not see immediate profit due to the capital expenditure required to make it work.

Should large brewers see a series of poor financial quarters, this might begin to look appealing to them. It assumes, however, that the additional convenience provided to the consumer would result in the growth of the market. Given overall trends we’ve seen for sales of large brewers’ products, this is probably more risk than they are willing to sign on for at the moment.

What might well occur is a concatenation of circumstances whereby a provincial budget surplus and a shrinking market share pronounced enough for large brewers to take such a risk exist at the same time. Say, about… 2016-17.

In the meantime, I think Tim Hudak is performing the time tested political trick of “being seen to be looking into,” which probably doesn’t hurt.