St. John's Wort Beery Musings And Amusing Beers

Category Archives: Accounting For Taste

The Ontario Problem

Since I started writing about beer about four and a half years ago, the Ontario situation has become more and more interesting. There are more breweries competing for market share and there’s increased media coverage of the beer retailing problem. Martin Regg Cohn, for instance, has been on fire of late pointing out the Beer Store’s lobbying practices. I’m not going to accuse anyone of peddling influence because I don’t have a lawyer on retainer. Instead, I’ve decided to see if I can recap the problem and explain why change is extremely likely to happen in the next couple of years.

The Beer Store was never intended to be for the benefit of customers. What Brewer’s Warehousing was designed to do from the start was to take beer retailing out of the hands of the province. Even in 1927 the idea was that it would take the necessity of warehousing out of the hands of the provincial government. This was a pretty good idea as long as it was a co-op. Breweries were getting larger and the fact that everyone had a hand in the distribution system was a good thing. It made it equitable.

E.P. Taylor exploited the obvious flaw in this system and started buying up breweries left, right and center. By the early 1980’s, there were very few breweries left. Allen Winn-Sneath’s Brewed in Canada suggests there were 40 breweries left in Canada in 1980 and only 8 were not owned by Molson, Labatt or Carling O’Keefe. In Ontario, this meant Amstel and Northern Breweries. I have put the plants on a map so you can visualize what that might have looked like. The vast majority of these plants are now gone. WatPL30858f

This was a pretty good deal for the large brewers. The Beer Store’s organization is such that it works in your favour if you are a very large company. The fact that your beer can only be sold in predetermined locations and that the organization that runs those locations stocks those stores from centralized warehouses means that you don’t have to pay for delivery, storage or a sales force. It’s a gigantic savings. The large breweries don’t generate profit from owning and running The Beer Store and this is something critics frequently fail to understand. The monopoly is not profitable for the owners because it extracts profit on sales. It is profitable for the owners because it saves a frankly ridiculous amount of money on outlay. Large brewers don’t have to pay for a labour force for sales and delivery in the way you might have to in a completely privatized market.

The problem is that the beer industry doesn’t work the way it did in 1980 and never will again. The breweries that operated in 1980 were all capable of producing well over 300,000HL of beer at once. The largest craft breweries in Ontario at the moment hover around 75,000HL for tax reasons. There are currently 220 craft breweries extant or in planning over on the Mom and Hops directory. If you would like to visualize what that looks like, here is a map that was put together for me by a talented young geographer named Kevin Roy. (He would like me to tell you that the brewery data came from the Mom n Hops Brewers Directory 4.0 in March, and the population data is calculated from Statscan’s 2011 Census of Canada.)

CraftBrewing wGraphicsCited

The high point for Canadian beer consumption was 1978. We drank 106.5 litres of beer each. We’re currently down to about 64 litres a piece. That’s about 42.5 litres of beer per person less. That volume loss did not hurt craft brewers. Many of them didn’t exist yet. The large brewers lost that volume. They have shut down plants in Barrie and Etobicoke and Edmonton and Halifax and bottling lines in Vancouver. They lost 40% of their volume in 36 years and that’s terrible.

The truth of the matter is that The Beer Store is losing. Look at this polling data that Lorne Bozinoff at Forum Research was good enough to run for me last spring. People under 45 are equally likely to buy beer at the LCBO and at The Beer Store. The LCBO didn’t really sell beer until the mid-1980’s when The Beer Store had a month long lockout and managed to alienate beer drinkers province wide. Since then they have lost 50% of their customer base in what is practically a monopoly.

Let me say that again. In about 30 years, the large brewers who own the beer store have lost approximately 40% of their volume in sales and 50% of their customer base despite sweetheart deals, lobbying and a practical monopoly. If it were a real company rather than a cost offsetting device operated for the benefit of the owners, a series of CEOs would have had to resign in disgrace.

In contrast, there are the small breweries. Every year we get statistics from the LCBO about how much the Craft Beer retail segment has grown. The number is usually something like 30%. The total number is 575% since 2006. In truth, we don’t know how much Ontario Craft Beer could have grown if there had been an equitable distribution system for it. It has grown as much as the LCBO has allowed it to grow, so the 30% average growth is sort of nonsensical. The number could probably have been much larger than that except that there are really significant problems.

If the 1980 version of the beer industry was built around monolithic brands, the current model is built around niche products. To extend the metaphor from a previous blog post, we’ve got a distribution system designed for Network TV but what people are increasingly interested in is Netflix.

If you are a small brewer, you have a couple of options for distributing your product. First of all, you can attempt to get into the LCBO. The LCBO is not designed for beer sales. It does not have anything like the shelf space required to stock all of the products submitted. The LCBO is not obligated to stock your product. In fact, the shelves are so crowded at the LCBO that it is a nightmare attempting to find anything in a store. Sometimes, instead of your product, they will stock Norwegian Barleywine for no discernable reason.

This one. This cack was on the shelves for nine months in some stores whle other products were sku'ed out.

This one. This cack was on the shelves for nine months in some stores whle other products were sku’ed out.

Any brewery can get into The Beer Store. All you have to do is pay a listing fee for each packaging iteration of your product and then pay a shelving fee for each store. It’s about $30,000 dollars for 100 stores for a single packaging format. If you’re a small brewery starting out, that’s an employee that you are going to have to forego. Additionally, since you are a small brewery, you probably make seasonal products. It would be ridiculous to pay $30,000 to shelve a beer for three months in a retail setting that discriminates against your product. Even Moosehead’s Hop City brand doesn’t do it and they have deep pockets. Barking Squirrel may be at the Beer Store but all the rest of their beers are LCBO only. (Next time you see an Oland brother making an argument in favour of The Beer Store feel free to ask him about this in a loud and vocal manner.)

If you’re a small brewery, there’s no guaranteed avenue of sales that doesn’t force you to pay your largest competitors. People have been making this argument for a very long time. It is not new information.

The difference is this: There are 220 small breweries out there already existing or in planning. There will be more. Each of these represents a business that is going to be someone’s life’s work. Even a very small brewery probably employs four or five people. If you look at the 2014 map from earlier, you’ll see they are everywhere. Until the last couple of years this wasn’t the case. Just about every city in Ontario now has a brewery. More than ever before, the public is identifying with the small brewers because they are their neighbours. The media coverage of the problem is not slowing down even a little and everyone is more aware of The Beer Store’s foreign owned monopoly than they were five years ago. The public is increasingly aware that small businesses owned by Ontarians are suffering at the hands of foreign owned companies.

Those are small businesses that probably employ a couple of thousand people directly and which are going to grow over the course of the next twenty to thirty years. They provide jobs upstream and downstream. More than that, they provide employment locally rather than in a central location. They provide a sense of local pride and let’s not forget those tourism dollars.

The large brewers, on the other hand, are shrinking. They are selling less volume and all you need to do is google Molson or Labatt and “layoffs” to see how they have been trying to achieve more with less over the last half decade.

If we don’t change the system in the near future we force the small businesses which have the potential to grow over the next twenty years and generate tax revenues and employment to stagnate by forcing them to compete in a business model that was outdated by the mid 1990’s. The large brewers will continue to shrink and as their size dwindles so will their ability to generate tax revenue for the province. Additionally, very large craft breweries from the United States who are not hampered by distribution as restrictive as we have here will be able to buy shelf space in The Beer Store eating away at both ends of the Ontario beer market from the middle. Sierra Nevada, New Belgium, Oskar Blues, Lagunitas, Stone are names that beer drinkers may welcome but which both Ontario’s brewers and government should fear.

If we do change the system in the near future, we have the prospect of the growth of small breweries over the next twenty years. We have the employment that they create and the revenue that they generate. We might have an export manufacturing industry. The American breweries are coming, but with Ontario’s small breweries freed up to compete, they will mostly take share away from the large brewers who are already losing.

Now, if I were a recently elected Premier of Ontario who had made it into office attached to a large scandal and it was being intimated by the Toronto Star (who recently brought Rob Ford and Jian Ghomeshi down and who do not ever seem to give up) that lobbying is the only reason The Beer Store continues to exist, I would think very seriously about pulling the trigger on The Beer Store’s situation. We are very nearly at the point where it would pay off as both a short term strategy for economic protectionism and as long term investment.

The majority of the public is in favour of getting rid of it and it can actually be spun as a long term economic strategy. What a PR coup it would be to be seen to be investing in the future of Ontario instead of maintaining a status quo which provides dwindling benefit and does not exist to serve consumers! The best part is that there is no reason not to go ahead with Ed Clark’s plan to bleed The Beer Store for a hundred million a year while reforming the system outside The Beer Store. If they complain of unfair treatment, remind them that they had 30 years to change their model and that they spent that time replacing dusty bottles with an iPad.

For the first time since I started writing, I’m actually optimistic that we’re within about 12 months of significant change.

Why Budweiser Lost

(Ed. Note: Periodically, I’m called upon to do an interview on the radio or in print about Craft Beer. The question that comes up most frequently is really two questions: “Why Craft Beer? Why now?” I do not think that I have ever been able to properly answer that question to my satisfaction, but I’ve got an analogy that I feel will explain a lot.)

If you are my age, you will probably have heard from one or other of your parents about seeing The Beatles on Ed Sullivan in February, 1964. Everybody watched Ed Sullivan. 73 million people in the United States saw that show. This is because there were three national broadcasters that produced content. Sure, you had a regional affiliate station that might have had its own material during the day or just before the test pattern aired, but they carried popular programming. ABC, NBC, CBS.

"Right here, on our very big show, right after Topo Gigio we'll have the Flying Zambezi Tribesmen and the World's Biggest Nun."

“Right here, on our very big show, right after Topo Gigio we’ll have the Flying Zambezi Tribesmen and the World’s Biggest Nun.”

Watching TV was a passive act. The total extent of your choice was between three content providers.

After Prohibition in the United States there were not a lot of breweries left. You have probably seen the chart from the Brewer’s Association. In fact, here it is.18qfbm2tf864mjpg

The number of breweries dwindled and dwindled, but what was really happening was that you were left with three breweries that counted on a national scale. Oh, sure, there were regional brewers that produced beer, but for the most part people drank the national brands right up until they saw the test pattern and heard the national anthem. Bud, Miller, Coors.

Drinking beer was a passive act. You had a little more choice than you had with TV stations, but probably less in terms of content. It was going to be pretty standard lager.

In 1976, Ted Turner started the first Cable TV channel. Suddenly Americans all over the country could get programming from Atlanta. Jack McAuliffe started one of the first modern era microbreweries in the form of the New Albion Brewery. Both of these events alerted people to the possibilities and alternatives that were available.

By 1982, there had been a small shakeup in the beer industry. 1977 saw the advent of Miller Lite and by 1982 Budweiser had responded with Bud Light. The competition had provided what would be the peak years for alcohol consumption in the United States. In 1981, Americans consumed 2.8 gallons of ethanol per capita. The 1982-83 TV season set a record as well. On February 28th, 1983, 121.6 million people tuned in to watch Goodbye, Farewell and Amen, the final episode of MASH. When that episode aired, better than half of the people in the country watched it.

When you have success like that, you don’t forget it. Both beer and television became obsessed with the high water mark.

Not only was this acceptable in the 1980's, I knew middle schoolers who had this poster. This is no longer acceptable, even for craft brewers

Not only was this acceptable in the 1980’s, I knew middle schoolers who had this poster. This is no longer acceptable, even for craft brewers

There was a statistic released the other day in the Atlantic Monthly that states that 44% of people aged between 21 and 27 have never tried Budweiser. If you’re 27, you were born at the peak of Budweiser’s sales. In 1988, between Budweiser and Bud Light, they shipped 61 million barrels of beer. Everyone seems genuinely shocked by the loss of market share for the Budweiser brand, but they shouldn’t be.

The curse of network TV is the fact that it is a top down non participative media. It broadcasts, but it doesn’t involve the audience. Any system of that kind must by default believe the following about the content they produce and about the audience watching at home: “They will watch it because it is on.” Because of the practical cultural monopoly network TV had before the advent of cable, there was a period of time where they were right to think that. It was the reality. The sheer number of eyes watching the screen deluded networks into thinking that they were making a quality product, but prime time was never about quality. Prime time was about number of viewers watching. It was about the medium and not the message.

Take a look at this ad from Budweiser in 1995 that ran during the Superbowl. It involves three frogs each mouthing a syllable of the name of the beer. They are performing this unnatural behaviour because they are facing a giant neon sign for Budweiser. People complained because they said the frogs appealed to children. In truth, they should have complained because the advertisement is an exercise in recursion. The subtext here is that we are the frogs and that we will buy Budweiser because we are staring at the giant neon sign. At no point is beer shown. At no point is the quality of the beer mentioned. At no point are we told anything about the product. We are merely told that when faced with advertising for Budweiser, we will become obsessed with it and purchase some Budweiser. It is a complete abstraction. This was considered by many to be the high point for advertising, by the way.

Network TV was selling the idea that on Thursday at 8:00 PM there is a show that everyone will want to see. It will define your life. It will be talked about at the office the next day by the water cooler. You better not miss that show if you want to be perceived as normal by your colleagues. The original shows that you had to see in the 1993 lineup? Wings and Mad About You, for God’s sake. The important thing wasn’t the content. It was that you were watching

.

They were promoting normalcy as a standard in an era of increasing complexity. It’s one of the reasons that so much of the advertising around beer was done during the Superbowl. It has the largest audience of any annual televised event. Consider this 2000 ad campaign for Budweiser. Within the context of the ad there is an unspoken tautology: If you are watching the game you must be having a Bud. What is a game without a Bud? It is apparently not a Whassupable moment. The role of the beer drinker in the commercial is that of an automaton programmed for consumption.

“What up B?”

“Watching the game, having a Bud.”

“True.”

It is the jargon of the group, but it’s also a binary evaluation of a statement. It does not matter that the beer is any good. It only matters that there is beer and that the beer is Bud. Normalcy is achieved by the meeting of these criteria.

Craft Beer and Cable TV were busy in the 1980’s. We got Sierra Nevada and the Boston Beer Company out of the microbrewery movement and we got MTV, FOX, UPN, A&E out of Cable TV. In a sense everything done by Craft Beer and Cable TV is alternative programming. Their larger counterparts were able to be dismissive of them.

Consider a major network’s view of MTV. It was started by that guy from the Monkees who wore a toque! We tried Mike Naismith on TV and he didn’t work. We can safely ignore MTV. It’s practically the same with Sierra Nevada. They’re brewing a Pale Ale! We tried Cascade hops in our beer and it didn’t work. We can safely avoid Sierra Nevada.

One of the failings of a major network is that it is locked into the power structure that brought it to the dance. NBC must compete with ABC and CBS. Not only does the network have to fill the programming, but they’ve got to compete against the other networks. If NBC has Friends, you’d better believe ABC and CBS are looking for an equivalent. If CBS has a procedural police drama, NBC and ABC are going to look for something with even more blacklight. At some point in TV history some executive said the following sentences: “What? They’ve got Scott Baio as a babysitter/housekeeper? Get me Billy Connolly!” Eventually, what you end up with a series of television properties that have nothing in common except for the fact that they all somehow involve Richard Belzer as detective Munch.

Here’s a short list of the properties that Budweiser launched between 1982 and 2014. The other brewing companies had equivalent properties or quickly struggled to find them.

1982 Bud Light
1989 Bud Dry
1994 Bud Ice
1994 Bud Ice Light
2004 Bud Extra
2005 Budweiser Select
2008 Bud Chelada
2008 Bud Light Chelada
2008 Bud Light Lime
2008 Budweiser American Ale
2009 Bud Light Golden Wheat
2012 Bud Light Platinum
2012 Bud Light Lime-A-Rita
2013 Budweiser Black Crown
2013 Bud Light Straw-Ber-Rita
2014 Bud Light Raz-Ber-Rita
2014 Bud Light Mang-O-Rita

 

If you’re a major network, you’re not allowed to care that Fox has The Simpsons. The Simpsons is the only thing keeping Fox afloat in their early days. They may as well be UHF except for The Simpsons. Remember Herman’s Head? You’re not allowed to compete against the little guys because the portion of the market that they’re going for is so small.

Would you believe Disney is basically rebooting Herman's Head? They are. It's ridiculous.

Would you believe Disney is basically rebooting Herman’s Head? They are. It’s ridiculous.

The problem is that the portion of the market that the little guys control tends to grow over time. By the time that Budweiser is broadcasting the Whassup commercials during the Superbowl in 2000, two really important things have happened. First of all, people’s trust in mainstream news is replaced by their trust in Jon Stewart’s daily show. Secondly, HBO has started broadcasting The Sopranos.

The strength of craft beer and also cable TV is the fact that it is not a dictatorial medium. Network TV like Big Beer assumed that you would purchase whatever they put out. It’s a good assumption because there was no competing content. As soon as there is competing content that you have the option to engage with, you’re faced with choice. Choice means that you are engaged in a dialogue with the producer. In order for you to choose alternative content, it has to be either of higher quality or fill some kind of specialty niche. Cable TV and Craft Beer frequently perform both of those tasks. You are still paying for a product, but the product is far more likely to conform to your taste than to attempt to dictate it.

What eventually happened to TV is practically the same as with Beer. Instead of remaining a broadcast medium where one product is available at a time, we’ve reached a point where most of the content that was ever made is now available if you know where to look. In the same way that you can get classic TV shows on Netflix, the back catalogue of beer made in the 20th century is largely available and it exists alongside new products that are being released into the market.

If you released this as a beer in 1984, people would have thought you had brain problems. Now it is one of about 58 beers on ratebeer with the word "Zombie" in the name.

If you released this as a beer in 1984, people would have thought you had brain problems. Now it is one of about 58 beers on ratebeer with the word “Zombie” in the name.

This requires a phenomenal amount of choice on the part of the consumer. If you recall the Budweiser advertisement with the frogs where they were held captive by the giant neon sign, that model is no longer really relevant. Currently, the frogs have abandoned monosyllables and are suggesting content they enjoy to each other. In a very real sense we have become both advertiser and consumer of these products.

I’ll prove it to you. When you watched The Wire, you probably did so because your friends were talking about it. Sure it was on HBO, but it was probably on season three by the time you started watching it. You binge watched it. You probably got the box set or watched it on Netflix. Same with True Detective. And Archer. And Downton Abbey. The result is a landscape of people who are building a referential language and bringing more people to these shows.

You come at the King of Beers, you best not miss.

You come at the King of Beers, you best not miss.

We talk about Craft Beer the same way as we talk about shows on Netflix. “Have you tried” and “Is that any good” and, kind of similar to when an actor is in something else “I liked that other beer they did.” We have actually become a distributed advertising model for craft beer because we have self-selected the content and we want to share things we like.

When Budweiser acts surprised that 44% of people 21-27 have never tried Bud, they’d do well to remember those people were born between 1988 and 1994. The eldest of them might be old enough to remember the frogs. The youngest of them might have been coached by their parents to say “whassup” for comic effect at family gatherings. As adults, they have only been able to drink since 2009 in the United States but they’ve been subject to the internet’s media distribution model since they were in middle school. This is a generation for which unidirectional advertising is more or less moot. They grew up fast forwarding through it on their DVRs.

The result for Network TV is that the ratings are never going to be what they were. The networks sometimes try to capture what they think the audience looks like. The Big Bang Theory, for instance, is a broad caricature of the mainstreaming nerd culture that online media portals might have been viewed as. The shows will always lack something because 30 years on the Networks are still worried about filling the 9:00 slot on Thursday. The focus is still on getting the largest audience rather than creating a quality show.

The result for big beer is that sales and market share are never going to be what they were in North America. People are drinking less overall and their attention is split amongst 3000 US and 450 Canadian breweries. Something like Budweiser Black Crown, for instance, is a broad caricature of what craft brewers are doing and it lacks authenticity because the goal is sales rather than quality. Craft beer has succeeded to the extent that it has because people have got used to curating their own experience out of a practically impossible to navigate landscape of options. In that situation quality products tend to win out.

On Malt Lightening and the Beer Style Continuum

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As far as I can tell, every single brewery is issued one of these when they get their license. I’ve never been in a brewery that doesn’t have one kicking around. Look at it sometime and note the visible difference in malt colour. A good rule of thumb is that the lighter the malt, the later it was developed.

Last time we talked about German Beer and Food (scroll down a couple of posts) we had established some pretty basic truths about the situation in Germany prior to the advent of Oktoberfest. We talked about how the flavours in German landrace hops more or less matched the flavours in the herbs and spices available in Germany. We talked about Oktoberfest as an expression of the modernization of the German agricultural system. I know that it isn’t Oktoberfest anymore, but sometimes these things take a while to percolate.

A lot of the styles that you think of as German beer didn’t exist at the beginning of the 19th century. Altbier existed in Dusseldorf in a broad sense although it would have been different from the versions we get today. Bock had been around for quite a while, with the town of Einbeck claiming its advent in 1351. Dopplebock had been brewed by the Pauline monks from the mid 18th century. By 1798, the Bavarian branch of the Wittelsbach family had decided to allow their monopoly on Weissbier to lapse, giving license to several entities to produce a similar product. In Munich, the prevailing style was Dunkel. People were also making things like Kellerbier and Zwickelbier with bottom fermenting yeast[i], especially in the northern bits of Baden-Wurttemberg and Franconia, but they would have been darker in colour than we are accustomed to.

The thing that these beers have in common is that they are uniformly pretty dark in colour. The Weissbier is the exception that proves the rule. In order to make a beer that was much lighter than 15-20 SRM in the late 18th century in Germany, over 50% of your grist had to be wheat.

The early 19th century created a sort of renaissance for brewing in Europe due mostly to technological advancement. Beer Styles as we now think of them, catalogued by Michael Jackson, are thought of usually as entirely separate entities, but their development exists on a temporal continuum. Usually the development of a new style is influenced by an old style and a new ingredient, process or cultural influence. At the moment, we’ve got hops in a wider variety than has ever existed and that’s due to technology, genetic manipulation and cross breeding.

You’ll recall that there were really only four varieties of German hops. They didn’t have a roadmap for genetic inheritance. There was only one kind of yeast and they didn’t really understand how it worked yet. The water was however it was. The single most important discovery in the entire history of brewing, the one that caused brewers all over Europe to suddenly create new beers, was the ability to reliably heat a kiln to a specific temperature.

A direct fired kiln is not bad for pottery, but it’s terrible for malting. For one thing, it’s extremely inefficient. You’ve got to fire the kiln and then wait for it to get to about the right temperature. You’re more or less guessing about what the temperature is and where it will be over a long period. You’d develop a knack for that eventually, but there’s only so much you can do with it. The lack of precision means that your malt is going to turn out darker than you want and it’s going to take on some flavour from whatever fuel you’re using to heat the malt. If you’re in a place where you’ve got to use wood or peat for fuel that means wood smoke. That’s a geographical problem. If you’re in Upper Canada in 1820 and you’re making your own malt, you probably don’t have access to coke or coal. You were probably using wood or charcoal because there’s lots of it. Slight smoke flavour.

Another way that it’s inefficient is that darker malt is going to tend to have less diastatic power. In order to get the beer to the strength that you want it to be as a finished product, you’re going to have to use more malt. More malt is going to result in the darker beer styles that we’ve already mentioned. It’s quite expensive because you need more barley to make the same amount of beer.

Gabriel Sedlmayr's Spaten Brewery. Munich Lager changed irrevocably with the adoption of (and improvement on) English malting techniques

Gabriel Sedlmayr’s Spaten Brewery. Munich Lager changed irrevocably with the adoption of (and improvement on) English malting techniques

By the time that Anton Dreher was a brewing apprentice in the 1830’s, he was touring England to see what techniques they were using. This was pretty common practice amongst brewers in the 19th century. Because no one was in direct competition with each other internationally, trade secrets weren’t particularly highly guarded. By 1836, he had brought English malting techniques back to Schwechat near Vienna. It wasn’t exactly Pale Malt. It was darker than that. It was closer to a light Crystal Malt roast and that’s what’s become known as Vienna Malt.

Informational exchange within the region happened almost immediately because Dreher was friends with the brewmaster at the Spaten Brewery in Munich, Gabriel Sedlmayr. Dreher borrowed Sedlmayr’s yeast and Sedlmayr borrowed Dreher’s malting technique. Informational exchange drives progress in any field, but the string of events these two brewers would put in motion would last until the 1950’s on another continent.

Artistry and refinement happen in German beer as a direct result of modernization of agriculture and industry. You can’t have barley to malt without increased yield and you can’t malt it to any degree of precision with shoddy tools. The hops, yeast and water did not change substantially. The lightening of malt leads to the lightening of beer. The styles exist as a basic continuum because they all result from the previous change. Because of the prevalence of rail and the ability to transport goods, each style inspires the next. They don’t exist in a vacuum.

Viennas
Beer Style Creator Date Avg Bus Avg SRM AVG ABV
Vienna/Marzen Anton Dreher 1841 24 13 5
Marzen/Oktoberfest Gabe Sedlmayr 1872 24 10.5 5.25

 

This is the prime example. Functionally there may not be a difference between Marzen and Oktoberfest beer. However, in practice, Oktoberfest beer was introduced by Spaten in 1872 and the primary difference was the fact that they had developed a new malting technique. Instead of Vienna Malt there was Munich Malt. The lightening is only two and a half points on the SRM scale, but that requires a level of precision. How dark can you make the malt and still have diastatic power needed to convert starch to fermentable sugar?

Lagers
Beer Style Creator Date Avg Bus Avg SRM AVG ABV
Schwarzbier Kostritzer 1543 27 23.5 4.9
Dunkel Munich 1800 23 21 5.05
Pilsner Plzen 1842 40 4.75 4.8
Dortmund Kronen 1871 26.5 5 5.4
Northern German Pilsner Radeberg 1872 35 3.5 4.8
Munich Helles Spaten 1894 19 4 5.05

 

If you start with Black Lager and move through Munich Dunkel which is formalized as a style by 1800, the departure once Dreher imports English malting techniques is pretty staggering. I’d put it to you that while people will talk about soft water and saaz hops, the defining characteristic of Pilsner is that it was nearly 10 SRM lighter than the other beers available during the 1840’s. Yes, it’s hoppy, but it’s also light gold in colour. That’s a huge departure. Northern German Pilsner is lighter and less hoppy. Dortumunder is significantly less hoppy and about the same colour.

That's light enough, mein freund. Put the rake down and step away from the floor maltings.

That’s light enough, mein freund. Put the rake down and step away from the floor maltings.

The brewers in Munich actually had some difficulty with Helles. Spaten created it and took a great deal of criticism from the other brewers for doing so. They thought that it was too light! They thought that it didn’t have enough character! That’s as light as German beer styles ever went.

As I’ve shown in the previous posts in this series, because German beer and food contain essentially the same seasoning agents as a result of the landrace hops and locally available herbs and spices, we can assume that we’re dealing exclusively with complementary pairings when we look at Oktoberfest food. Ultimately, the result of the beer getting lighter is that the food also gets lighter. The food needs less fat and can stand being less heavily seasoned. Weisswurst, for instance, is invented in 1857. Additionally, because industrialization has provided more quantity of food, the individual meals do not need to be as substantial. More people are working in cities. In point of fact, a lot of people are emigrating; they are Emigrating to America.

To this day, the largest ancestral group in the USA is German. It’s about 17.1%. From about the time of the revolutions in 1848, there was a huge wave of immigration to the United States. You’ll notice that by that time there was already Pilsner and Vienna Lager in Germany. It was fairly widespread and these people would have had context for that. They had seen the lightening of beer. The largest wave of immigrants came later on and they had seen even lighter beers in Germany. By 1900, Milwaukee, Cincinatti, and Cleveland were all at least 40% German. Every large town in the Midwest would have been at least 25-30% German. We’ve heard the names: Anheuser, Busch, Blatz, Schlitz, Pabst, Yeungling.

This map will explain more about America's brewing history than any other image I can show you.

This map will explain more about America’s brewing history than any other image I can show you.

When you have a population concentration like that, immigrants bring their ideas with them. In this case, they brought their progressively lighter beers along for the ride. If the defining concept of German beer in the 19th century has to do with making a beer that’s lighter in colour, the restraining factor had been how light the colour could be made with malt. Without the restriction of the Reinheitsgebot, these German brewers could pursue making even lighter beers with adjunct grains like corn and rice.

People claim that prohibition was the factor that created light flavourless commoditized beer, that people had gotten used to soft drinks. Really the blame lies with the fascination of making the beer lighter. It’s a construct that depends on industrial production. It was a good idea that got out of hand.  In Munich, they had the sense to stop at Helles. In America it spiraled out of control.

By the 1950’s we had light beer and America had thoroughly adapted the German feasting culture that is Oktoberfest. Bratwurst had become hot dogs. Frikkedellen had become hamburgers. What is a chicken finger but an unflattened chicken schnitzel? The commonality between the food and the beer is that they have been reduced to their least flavourful form in order to appeal to the largest number of people. There’s an idea that beer and food pairing is difficult, but it’s the foundation of American popular cuisine. America was a feasting culture, but without flavour and without joy.

Whether you believe it or not, this is German food.

Whether you believe it or not, this is German food.

We talk about the 3000 brewery mark in terms of craft beer. There’s an idea that it is important that we have reached the number of breweries that existed before prohibition in North America. The fact is though that the makeup of those breweries is significantly different than it would have been before prohibition. The majority of brewers would have been German and would have made lager. It might be time for Craft Beer to attempt to reclaim that heritage, additional ferment times be damned.

[i] A word on yeast: Throughout my career writing about beer, I’ve run into people who are a little confused about bottom fermenting yeast. I have met professionals who think that lager didn’t exist before 1840. Bottom fermenting yeast had been around and in use for a few hundred years before Emil Hansen managed to separate out a pure strain at the Carlsberg labs. I suspect that these are people who are using “lager” and “pilsner” as interchangeable terms.

The real question is how there was suddenly bottom fermenting yeast in the mid 1500’s. I have an elaborate theory involving Saccharomyces Bayanus, Dutch trading ships and the Rhine as a primary trade route to Bavaria. It’s as good as anyone else’s guess.

 

Advent Calendars – But What If You’re In Ontario

This week in the column, I talked about the growing trend for breweries to produce advent calendars. It’s a fun idea and one that I can get behind. With the short days and cold weather, you want to treat yourself nicely and a single high quality beer a day is not a bad way to do that. It may only give you ten or fifteen minutes enjoyment, but it’s a nicely ritualized thing. It’s an Agent Cooper approved strategy for coping with a seasonal lack of esprit de corps.

You’ll notice that there are no craft beer advent calendars in Ontario. The LCBO isn’t allowed to stock packages over six bottles because of an agreement with the Beer Store. It’s an agreement that they’re threatening to rescind. The Beer Store isn’t a good option for stocking something like an advent calendar because they charge the same for listing whether you’re offering a product year round or as a seasonal option. Even when Andrew Oland from Moosehead says that The Beer Store is doing a great job, you’ll notice that his Hop City and Sam Adams Seasonal products only show up in the LCBO. If The Beer Store is so great, why aren’t they carried exclusively by The Beer Store, huh?

Incidentally, you’d think this would be a great opportunity for the Beer Store to score a PR point and maybe make way for something like that “because Christmas” what with them having been visited by the ghost of Christmas future in the form of Ed Clark. They seem to have decided to cover their ears and reap the whirlwind of public opinion.

Let’s not be scrooges. For the moment, let’s be Fezziwigs.

If you’re in Ontario, you might want to put together an advent calendar of your own. The good news is that it’s pretty easy to do that with the beer that’s available at the LCBO. I notice that the  Craft Beer Advent Calendar out on the West Coast is somewhere between $129 and $145. In Newfoundland, more like $188. If you like rare stuff, that’s probably a good deal. The Phillips and Central City/Parallel 49 packs tended to come in somewhere between $65 and $85 depending on the store stocking them. That seems a little more in line with what I’m willing to spend.

The goal I therefore put together was to create advent calendars that you can use. I wanted them to be affordable and fairly specific. The ones that I have put together will run you approximately $75-$80 bucks and they’re suitable for different beer drinkers. I didn’t put together a Canadian Craft Beer version because that’s really easy. You can do it entirely with canned beer and it requires no imagination. I’ve come up with an English Version and a Belgian Version instead.

The “Full English” is actually 25 beers. You can drink the extra Hobgoblin while you put the calendar together for whomever the recipient might be.

The Full English
Package Beers Included Price
Marston’s Classic Ales Brakspear Bitter $18.95
Hobgoblin
Banks Bitter
Cockerhoop
English Pale Ale
Ringwood Fortyniner
Wychwood Beers of Character Hobgoblin $12.95
Goliath
Wychcraft
Scarecrow
Duchy Originals $3.05
Young’s Double Chocolate Stout $2.95
Abott Ale $2.25
Fuller’s London Pride $2.95
Lancaster Bomber $2.65
Bombardier $2.25
Fuller’s London Pride $2.95
Belhaven Best $2.15
Historic Ales from Scotland Heather $9.95
Elderberries
Gooseberries
Spruce
Samuel Smith’s Winter Welcome $3.90
St. Peter’s Winter Ale $4.00
Samuel Smith’s Oatmeal Stout $4.25
$75.20

The Belgian Pack actually came in under budget because the leverage the LCBO has over the Belgians is insane. It’s crazy. I included a Dupont Saison for Christmas day which brings it in three dollars over budget. Whoever you give it to will be just that much happier. Because of the darkness of the short days and the prevalence of St. Bernardus products, I’ve taken to calling it “Bleak End at Bernie’s.”

St. Bernardus Pack St. Bernardus Wit $18.95
St. Bernardus Pater 6
St. Bernardus Tripel
Watou Tripel
St. Bernardus Abt 12
St. Bernardus Prior 12
Belgian Beer Pack Piraat $18.95
Gulden Draak
L’Eute Bokbier
Augustjin Blonde
Augustjin Donker
Augustjin Grand Cru
Pauwel Kwak $3.00
Chimay White $3.25
Rochefort 8 $3.25
Chimay Blue $3.55
Rochefort 10 $3.85
Mort Subite Framboise $3.95
Saison Dupont $7.75
Unibroue 6 Blanche de Chambly $12.95
Don De Dieu
Ephemere Apple
La Fin du Monde
Maudite
Trois Pistoles
$79.45

I’m not going to claim that either of these packages is going to be absolutely unique. I will say that at least wrapping them is pretty simple: Take two wine boxes from the LCBO, arrange beers at random in them and slap a bow on that sucker. Wrapping paper optional, but available at dollar stores for cheap.

Two historical beers you should try at Cask Days

Cask Days is this weekend and for Toronto beer drinkers, that’s an event that is more or less Christmas. This year’s specialties are from California, with nearly 40 beers to choose from. There are also 22 beers from England. As if that were somehow not enough, there are 22 ciders on offer. Also, nearly 250 other beers. It’s the 10th anniversary and they’re going big. There’s not any point in planning for the event at this point. The best you can do is bring about a hundred bucks in cash for food and snacks and pace yourself.

I am pleased to say that I have beers on offer at Cask Days. I make up approximately 2/339ths of the selection, or just over one half of one percent of the beer to be served. Both of the beers that I’ll be serving on Saturday have historical precedent, which befits the recent level of activity over here at St. John’s Wort. As you may know, I’ve written two books this year. It should have been obvious given the links to those books directly to the right of this article and the sheer amount of publicity I’ve been trying to get out for them. They are Ontario Beer: A Heady History of Brewing from the Great Lakes to the Hudson Bay and Lost Breweries of Toronto. I wrote the first one with Alan McLeod from A Good Beer Blog. The second one was my first solo book.

Both of them are relevant to the beers on offer on at Cask Days.

The first beer was brewed with Jason Tremblay from Shacklands and is called Rouille after Fort Rouille in Toronto. You may have been to the Toronto Festival of Beer and posed on top of the cannon. (Yes, it’s funny. It looks like you have a giant cannon for a penis.) What you didn’t know is that that cannon represents the placement of a French fort and trading settlement from the 1750’s.

Spruce Beer was a fundamental part of the growth of Upper Canada. Even in a place without citrus, you are usually able to grow food that contains vitamin C. That doesn’t work very well in Toronto in the winter. We know that Fort York imported real beer from Kingston, being as it was from a later era. Fort Rouille probably made some manner of Spruce Beer.

The verifiable historical recipes for Spruce Beer are just awful. The purpose of spruce beer was not to taste good. It was to hydrate you in a way that would prevent you from having to drink the water and contracting Giardia, a parasite which will cause the contents of your digestive tract to seek escape in as violent and explosive a manner as possible. Spruce Beer would also prevent you from getting scurvy and having your teeth fall out. If Spruce could prevent those two horrible things from happening, you’d gladly suck on a branch.

Traditionally, the recipe for Spruce Beer contained five quarts of molasses per 36 Gallon Barrel. Having done the calculation, I can tell you that it would have barely been alcoholic. If you were extremely lucky and you had an active yeast strain that would chew through fermentables, you might have gotten 1.5% alcohol out of that.

We decided not to make that beer. We decided instead to go with a historically inspired Spruce Beer. We used mostly Maris Otter and a small amount of Wheat in addition to the traditional Molasses. We used Spruce Extract, since neither of us are mighty woodsmen and tips were out of season. Since Jason seems to have a solid grip on the funky stuff, we used nearly a gallon of lactobacillus culture in the boil and used two yeast strains in fermentation, finishing it with Brettanomyces. It’s not your great great great great great grandfather’s spruce beer, is what I’m saying to you.

The second beer on offer is called Helliwell 1832 and it’s a collaboration between myself and Jon Downing from Niagara College. You’ll notice, if you’re observant, that it’s not listed on the Cask Days list. All I know is that it has been delivered to Cask Days. I imagine that it will be available (although, apologies are probably necessary to Tomas Morana for being a logistical omnishambles.)

The Helliwell Brewery was located at Todmorden Mill. I have been given an idea of where we’ll be serving the beers in the Brickworks and I can tell you that we’ll be approximately 385 meters and 182 years from where this beer was brewed. I managed to piece together a large amount of information from the Helliwell Diaries about their brewery and the kind of beer that they would have made.08051

It was difficult because they used an outdated standard of measurement called the Dring and Fage Saccharometer that didn’t use Brix or Plato or even Specific Gravity. It used something called Beer Gravity which represents pounds of extract per barrel. We know they were using it because William Helliwell went to the manufacturer when he was in London in 1832. Using google image search I was able to find a photograph of the slide rule they used for calculation as part of the Saccharometer’s set and found out that the beer would have been somewhere around 9.0%. It’s a sort of unaged Barley Wine. The Helliwells were from Yorkshire, so they didn’t trifle with wheat in the grist.

The Helliwells brought in barley to their own maltings (part of which I’m told still stands, across the river from the brickworks) and kilned it themselves. During the 1820’s and 1830’s they owned nearly a thousand acres and were clearing wood from it to make properties in the area north of the Danforth saleable. They actually had a hop yard on the Don River’s flood plain that I’ve estimated at being about 8-10 acres based on the number of poles they commissioned for it.

I assume that they were using that wood to fire the kiln and we’ve accounted for that with just enough smoked malt to give it a kiss. I also know that the open fermenters that they were using were simply converted puncheons (although he did not adopt this strategy until later) and that being made of wood they would have taken on some souring bacteria. We have lowered the PH of the beer with a hint of acidulated malt. We used Brown Malt and some dark Crystal to replicate the crispy burnt edges you’d get from a single inconsistently kilned malt. We used Golding hops because that’s about the only English variety that existed at the time.

I don’t claim that Helliwell 1832 is an exact replica of the beer that would have been produced in the Don Valley. It’s as close as we’re ever going to get, though, and it’s definitely worth a try. I’ll be pouring both beers myself on Saturday during the day. Stop by and chat. It will also be the first time that Lost Breweries of Toronto will be available for purchase by the public.

German Beer and Food Part 2: Terrines, Terpenes and Terroir

Last week (just scroll down a little), we ended up by talking about Oktoberfest and how it’s a sort of benchmark for the modernization of the Bavarian agrarian system. The impressive thing about Oktoberfest is not that it has been going on for 204 years. The impressive thing is how quickly it was adopted in other parts of the country. While Bavaria may have been out in front, Wurttemberg eventually launched a festival in Stuttgart.

The Canstatter Volksfest started in 1818. This is because the winter was so bad in 1816 that it negated any attempt at growing crops that year. The people of Wurttemberg were starving because there had been snow on the ground until May. The King was basically dependent on grain deliveries from his brother in law in Russia to prevent starvation, riots and uprising. In 1817, they decided that there should be a harvest festival. There should also be a new Agricultural University. These were Monarchs prolonging their reign by making concessions to science and rationality. An educated populous is notoriously bad for a Monarchy, however, one makes concessions when faced with an unruly mob with pitchforks and torches.

This period of privation, incidentally, was one of the reasons for German settlement in Kitchener and Waterloo in the 1820’s. It’s one of the reasons Ontario looks the way it does. In fact, it’s why the second largest Oktoberfest in the world takes place there.

Agricultural science takes a long time to propagate, or at least it did in the early 19th century. Gregor Mendel would not actually establish genetic heredity for another forty years. For the time being German Brewing was like German Cuisine: Taking advantage of scientific modernization, improved technique and vastly improved production to make strides ahead. Another similarity is that for the time being they were largely stuck with “landrace” ingredients.

In an age like we are in with GMO products basically everywhere and Monsanto issuing patents on their designs for plants, it’s a good idea to explain the concept of landrace. Landrace more or less means that the plant or animal variety that you’re using has been there since time immemorial; since before records were kept. There was a time when it wasn’t so easy to transplant crops around and grow them in greenhouse polytubes and glasshouse nurseries. There was a time when you were more or less stuck with what there was on the land when you got there.

Germany had landrace hops. They were actually spoiled for choice on the landrace hops. There are four basic varieties that we’re going to look at: Spalt, Tettnang, Hallertau and Saaz.

(I know what you’re going to say! Isn’t Saaz a Czech hop? It is named after a Czech town called Zatec, but Saaz is the German name for that town. Plzen, which is where you find a lot of all Saaz beers is less than 300 kilometers from Munich. One of the developments they enjoyed was trains. Let it go.)

Hop Variety % Humulene % Myrcene % Caryophyllene % Farnese % Alpha Acids
Spalt 21.5 20.0 12.5 12.5 3-5.5
Tettnang 22.5 22.5 8.0 14.0 3-5
Hallertau 40.0 32.0 11.0 0 2.5-5.0
Saaz 42.5 22.5 11.0 13.0 2.5-4.5

 

Don’t worry. You’re not going to be forced to do math.

In terms of the hops that were landraces in Germany, there are a few things we can tell from this information. The Alpha Acids are pretty low. These days, if you want a bitter beer, you put hops with high alpha acids in at the start of the boil. The Germans would have had difficulty making really bitter beer (by modern standards, anyway) without using a ton of whole leaf hops. The historical hopping rate for Pilsner Urquell was apparently 400-460 grams per hectoliter. That is before hop pellets. That’s a lot of trub at the bottom of the kettle. The beer in the region didn’t really get more bitter than 40 IBU, 45 tops.

If bitterness comes from Alpha Acids, then aroma comes from the oils in the hops. Those are the four columns in the middle. Now, typically aroma doesn’t survive when you add hops early in the boil. The byproducts of Myrcene in particular tend to disappear in a flash when added to the boil. When you dry hop or add hops at flame-out, you get a better result. Think of it like making a stew. If you add fresh herbs at the beginning, they’re going to get overpowered and cooked down. If you add fresh herbs at the end, you can actually taste the freshness of the herbs.

Myrcene’s byproducts are things like menthol, citral, citronellol, geraniol and linalool. More importantly, they are responsible for all of the aromas in your favorite American dry hopped beers. Modern hop varieties have been brew to extract specific byproducts from Myrcene. Take Citra, for example: Grapefruit, Lemon, Lime, Passion Fruit, Lychee. 65% Myrcene!

You’ll notice that the hops in the chart don’t have a lot of Myrcene. Every single one of the German landrace hops are higher in Humulene than Myrcene. The things that you tend to get out of Humulene’s byproducts are earthy, woody, or spicy. Humulene occurs in things like Bay Leaves and Tobacco and other kinds of herbs. Knee level forest floor stuff.

It’s also good to mention Caryophyllene. It mostly comes across as dry wood, spice and pepper. Some new varieties that you will have tried have bred it out completely. Galaxy and Nelson Sauvin are good examples of hops that don’t have Caryophyllene in any reasonable quantity.

What all this means is that the hops that German brewers had access to at the beginning of the 19th century were herbal, spicy, woody, peppery and potentially a little bit floral. It would have been more or less impossible to make a beer that tasted like an orange without adding some oranges. Landrace hops meant that they were stuck with these four varieties of hops.

That is a good thing because all of the other ingredients in Bavaria were also landrace ingredients. Everything that the peasants were using in their food and everything that would be adopted into the idealized festhallen fare we recognize as German food today was suited to the same terroir as the hops.

Let’s think about the herbs that German cuisine used for flavouring at the beginning of the 19th century:  parsley, thyme, bay leaves, juniper and caraway seeds. They also had salt and pepper.

Herb Aromatic and Flavour Components
Parsley Phellandrene, Myristicin, Myrcene, Menthatriene
Thyme Pinene, Cymene, Linalool, Myrcene, Thymol
Bay Leaves Cineole, Pinene, Linalool, Methyl Eugenol, Humulene
Juniper Pinene, Sabinene, Myrcene,
Caraway Seeds Limonene, Pinene, Caryophyllene
Black Pepper Sabinene, Pinene, Limonene, Caryophyllene, Piperene

 

From a beer and food pairing point of view, this explains just a huge amount about how German beer and food culture develops. For the most part, the beer that they’re making is going to be a complement to the food because the hops contain all of the same flavor components as the food from the region.

The brewers and beer drinkers did not know about hydrocarbons and terpenoids and aromatic compounds. At least, they didn’t have those words for them. They knew that what they liked and which things tasted good and that certain things went together. Most of these people would never have travelled much more than 100 miles from their homes. They would not have had context for other cuisines. What they would do over the course of the next century is refine the beer being made based on technological innovation to make the beer and food work better together.

We’ll talk about the refinement and development next time.

Wibbly-Wobbly Timey-Wimey Stuff

One of the things I don’t see people taking into account frequently when they talk about beer is time.

I don’t mean that you should drink a hoppy beer when it is fresh (you absolutely should) or that a 2008 Thomas Hardy is probably still too young to drink (it is apparently still tasting sort of young) or even that you should probably take a while to linger over a beer (you get more sensory information that way, plus this stuff is getting expensive).

If you’re a craft beer nerd, you’re constantly re-ordering your mental model of what beer is whether you know it or not. Breweries like to refer to the creation of new beers and new styles as innovation. The innovation is not really theirs to claim. The number of ingredients that exist is constantly expanding. Different strains of hops and different kiln treatments of barley and the inclusion of other ingredients like fruits and spices and (yes) pumpkin create a larger number of permutative possibilities. You can think of a brewer like a mathematical function that develops probability.

I mean, don’t walk up to a brewer and tell him he’s an abstract system into which you put ingredients and beer comes out. Most brewers put beer into their systems and hate doing math much beyond brewhouse calculations. Accountants become brewers so they don’t have to do math.

My point is that if you think of beer as a kind of mathematical function in which a brewer’s individual taste acts on a kind factorial permutation, you would not be terribly far off of understanding what innovation looks like. Oh, sure, people would look at you funny when you try to explain that at parties, but deep down in your soul, you’d know you were right.

My point is that ingredients increase over time. Before 1855, we didn’t have Fuggles; Only Goldings. In 1855, English beer got twice as exciting. Before 1971, we didn’t have Cascade. Actually, if you take Wikipedia at face value, no one used Cascade commercially until 1976. The number of distinct hop varieties that have sprung into being in the last thirty years certainly outstrips all hop developments in world history up to that point.

More ingredients means more complexity and that is a function that increases over time.

The shorthand that we have developed for this is the concept of beer styles. Michael Jackson wandered around cataloguing things like some entomologist with a butterfly net, pinning down the different beers that he encountered into different boxes, displaying their colorful labels for the world to see. It’s a useful mode of thought and he did a lot of useful work, probably while having a really nice time.

To borrow from Bill Cosby, “I told you that story so I could tell you this one.”

Sometimes, the function of an entomologist is to discover a butterfly encased in amber. You will sometimes run into beers that were designed at a specific point in time for a specific purpose. There were only so many ingredients available at that time, so the beer is markedly of that time.

On Friday night I drank about a third of a bottle of Foothills Seeing Double IPA. Foothills is in Winston-Salem, North Carolina. The family vacation caravan was passing through Asheville, North Carolina and offered to bring be beer if I’d provide a list. I hopped on Ratebeer and came up with the kind of kid at Christmas list you come up with in that situation.

Foothills Seeing Double IPA is a 9.4% Double IPA that clocks in at 126 IBU’s. Foothills is a well-respected brewery that makes some pretty highly thought of stuff. It wasn’t that it was a bad beer, exactly. It was overly hoppy, sure, but I remembered drinking big hoppy beers around the time when I got into beer around 2006 and liking them just fine. Avery’s Maharajah made an early impression. I remember having Moylan’s Hopsickle at Volo. I couldn’t figure out why I didn’t like Seeing Double.

Then it dawned on me: I’m old!

I researched Foothills Seeing Double the next day and found out that it was designed in 2005. It’s like a time capsule from a period when people were seeing how many IBUs they could jam directly into your sinus cavity. The criteria in 2005 was “does this beer make your tonsils recoil in horror? does your jaw tingle like Peter Parker’s senses at a villain convention?” 126 IBUs is full quarter above the human taste threshold. It means that no matter how long they keep making that beer at Foothills, it’s going to be 2005 at Foothills. I don’t mean them any ill will. It happens other places too.

I left an unfinished pint of New Belgium’s Fat Tire at the Belgian Beer Lounge at Edmonton Airport. There was nothing wrong with the beer. There was nothing wrong with the taps. There was absolutely nothing wrong with the service. Actually, the ability to order a Rochefort 10 before your flight is sort of delightful. Well done, Edmonton!

Fat Tire was first brewed commercially in 1991, but I feel like the thought process that went into it stretches back before that. Apparently the brewer first thought about it in 1989. The Edmonton Airport was the first time I’d tried it, so it was new to me. To say that it was something of a chore is an understatement. This was a beer from before Stone Temple Pilots roamed the earth. It is an Amber Ale, so it was probably never going to curl my toes and make my hair stand up; however, when you consider that it carried New Belgium and is responsible for much of the success over there, it’s just underwhelming to experience. “Is that it?” was my thinking.

The number of ingredients and the amount of thought about them has expanded exponentially since 1991. It must really be the sign of a great beer to survive as an exemplar; as the sort of evolutionary offshoot that worked. As time goes by new styles are probably inevitable, but feel free to wait on them. The strong will survive as exemplars. The weak will display their age. In ten years you’ll be drinking a 4.1% session IPA with flavours of mango and passionfruit and making pop cultural jokes about One Direction and Skrillex.

Speaking of age, one sure sign of it is when you realize you don’t have to drink the entire beer.

Stone’s Indiegogo Campaign is Cynical and Exploitative

One of the things that I find frustrating in writing about beer is the insistence by people that brewing is not first and foremost a business. I have written two histories now and I can claim to understand from its outset the development of brewing in North America. At no point before 2008 was anyone under the misapprehension that brewing was not a business to be embarked on as a money making venture.

I suspect that the reason for this is that craft brewing in North America is a rebellion against globalization. We don’t have a whole lot of production capacity on this continent anymore for manufacture and it has become a service economy. People like brewing because it provides the ability to create something special and unique. Each brewer has a different fist and while there is a certain amount of sameness between products and always will be, you can make the case that compared to something like Budweiser or Heineken, craft beer is art. It’s small batch analog production.

But, and this is really really important, it is and has always been and will always be a business first.

The modern development of craft beer mirrors almost exactly the development of brewing in the 19th century in North America. Small companies starting up to service local areas. Craft beer has filled in the vacuum left behind by mergers and acquisitions. It has taken advantage of market opportunities presented by Global brands that are too large to care about the vacuum they created. The thought process for the global brands is not “we could open a brewery in Brooklyn.” The thought process is “let’s take over the entire Peruvian beer market.”

The problem is that the concept of craft beer as art comes with baggage because of the way art is perceived in North America; that the important thing about craft beer is that it is a community or that it is a culture or that it should be supported by viewers like you in the manner of a PBS pledge drive. The difficulty is that it is already supported by you. The business model is as follows: You like the beer, you buy more of that beer.

There is no additional business model. That has been the business model since Alewives put out boards and since bread was soaked in pots in Egypt. If the product is good, the product sells. If the brewery sells enough beer, the brewery expands. (There is a corollary here that suggests that upon sufficient expansion the brewery will become beholden to its shareholders and start cutting corners to increase profit. Happens damned near every time. You see it in action in the current market daily.)

To switch gears for a moment, let me tell you how much I hate Kickstarter and Indiegogo.

Kickstarter and Indiegogo exist for the purpose of crowdsourcing funds to start a project. Famously, one wag has recently used it to acquire funds to make some potato salad. Some aspiring brewers have been attempting to make use of the site to fund their start-up projects.

Let’s say that you’ve got a hankering to open a brewery and you don’t have enough money to do it on your own. You don’t have your own capital and you can’t get a loan from the bank. You have decided that you must start your brewery now and that the best way to do that is micro-donations. Personally, I feel that the decision to do that marks you as impatient, narcissistic and entitled. I will judge you negatively for doing it. It is not a business plan, by the way. If you don’t get to the goal, you don’t get the money and your alternative is what, “oh, I didn’t want to do it anyway?”

The thing about brewing is that it if you enter into it on a whim, you’re more or less screwed before you start. If you want to own your own brewery and be successful, you’re doing it for life. You want to make enough to retire. Kickstarter and Indiegogo reek like hell of the trend bandwagon to me. Having said that, there are cases where it might be the only way forward and if you truly believe you want to brew as a career and it’s the only path to that, it’s probably excusable. You will almost certainly deal with not being taken seriously for a lengthy period of time, but you can overcome that.

When a really large brewery creates a Kickstarter it’s absolutely inexcusable. Stone’s current Indiegogo campaign is shockingly exploitative and cynical. Worse than that, it is actively evil.

Let me explain: Stone Brewing is, according to their website, one of the 5000 fastest growing private companies for the last seven years in a row. They are averaging 43% year to year growth over the last 15 years. They are the tenth largest brewery in the United States with a 2013 production of 213, 277 barrels. Greg Koch was named Ernst & Young’s Entrepreneur of the Year in 2011. He is a millionaire many times over. Stone’s annual revenue in 2012 was just over a hundred million dollars. The figure that I have seen for last year is $137 million although I cannot substantiate that number.

Stone has been rumoured for years to start up a brewery in Berlin. I first heard the rumour about three years ago. It is not a new plan. They have been thinking about it for quite some time. They have had years to acquire the funding for this project through traditional sources. It is my belief that they have the money on hand or that they could easily acquire it. Their Indiegogo is asking for you to help pay for their facility in Berlin because it’s “a fun way to do it.”

This is a project that will make Stone a brewing multinational. It will be a Global business. I cannot tell you how advantageous from a production standpoint having an established craft brewery located in the heart of Europe would be to Stone, but I can state with some degree of confidence that it is a license to print money. It might eventually double their production globally. I should imagine that properly managed the Stone Berlin plant will recoup investment in fairly short order. It is slated to cost something like $25 million dollars. The Indiegogo campaign is asking for a paltry million dollars.

Stone does not need to crowd source a million dollars. They have already funded the Berlin plant and one in the Eastern United States. They just want your money so they can do it faster. In order to get your money they are saying “Stone Brewing Co. was founded with the mission of joining the fight to return the art of brewing to the noble stature it enjoyed before industrialization and subsequent commoditization diminished its luster.”

Firstly, Stone is attempting to become a global industrial company and secondly beer has always been a commodity. If you don’t think it is a commodity, why is it that you think we pay for it? They are fundamentally misrepresenting themselves and I begin to wonder whether they even see the hypocrisy in their position. The Indiegogo campaign is a perversion in this case of the basic business model which I mentioned earlier. They want you to pay money now so that you can have beer later so that they can build a plant that will make them tens of millions of dollars over the next decade. They are essentially panhandling as part of their marketing strategy. Say what you will about MolsonCoors or Anheuser-Busch or SAB Miller, but they don’t expect you to pay them to advertise to you.

Stone’s Indiegogo campaign is actively evil because they are exploiting secondary ideas around the brewery business model like art and community in order to get you to pay them money to do something they are going to do anyway. My suggestion to you is that there are 3000 other breweries in the United States and maybe 400 in Canada and many of them will gladly accept your money without exploiting your sense of belonging to a culture.

On Mediocrity

In undergrad, a friend of mine adopted a principle that allowed him to spend more time playing cards than doing coursework. While he was very interested in doing his best when it came to the courses pertaining to his major, he viewed elective courses as something of an intrusion into his spare time. As a result he would aim for a balance between the highest mark that he could possibly get and the lowest amount of effort that would allow him a respectable grade. He called it “The Gentleman’s C.”

I am not sure that it served him well subsequently, but we always had a fourth for euchre.

I’ve been thinking a lot about The Gentleman’s C in recent months because I’ve noticed something interesting: Given enough time, everything, regardless of its quality will end up with a mark somewhere between 3.25 and 3.75 on Untappd. For those of you who don’t know, Untappd is an application that lets you check in the beers that you are drinking and give them a score out of five. It’s generally fairly pointless and ultimately gameifies the consumption of alcohol by giving you badges. That’s very probably a bad thing in the long term.

I think that this has to do with the sheer quantity of beer being made across North America at the moment and the amount of enthusiasm that the market is seized with. In terms of criticism it’s difficult because there’s only so much meaningful output that any one person can create. In Ontario at the moment there are so many new breweries that I think it unlikely that anyone has eyes on all of them.

Understand this: As little as thirty years ago, it would certainly have been possible for a single critic to have tried every beer in production in North America. It would not even have taken all that long to do it. Possibly less than a year. It was not as though there were fourteen new kinds of session IPA hitting the market each week.

My numbers are bogus here, but follow me on the concept. There are something like 3000 breweries in Canada and the USA. I think we can safely give those breweries an average of five brands a piece, although in practice I suspect it to be higher than that. This means that there are something like 15,000 brands of beer being brewed in North America (excluding Mexico because I don’t know enough about that to wrap my head around it.)

At one beer a night that would take you 41 years. Even were you to dedicate your entire life the process and call it 8 three ounce samples a night, you’re never going to catch up with the growth forecasted and you’re going to zeno’s paradox yourself right into oblivion.

(edit: kudos to astute reader David Horatio Ort, who kindly pointed out that my bogus math was three times as bogus as it ought to have been.)

For that reason, there’s a significant tendency in criticism to focus on the absolute best of the best. It’s impossible to have context for everything, so why wouldn’t you focus on the things that you know you’re going to like and be able to review positively? If you try something you don’t like why would you waste your time reviewing it? Many people I’ve talked to are pleased to simply not write about things that they don’t like or things that are poorly made. I do it myself. I’ve got books to write and I’d prefer to recommend good things in the column than excoriate bad things.

With that huge and ever expanding number of beers out there, I think that we’re probably doing a disservice to people who read about beer by accentuating the positive when we should really be eliminating the negative with extreme prejudice. If a beer is simply not very good, then we should probably be telling the public that.

Untappd is a poor substitute for reality. Not everything is worth 3.5 stars out of 5. There’s some rough work being pulled at the fermenter and I’m seeing that increase rather than decrease. There are beers being launched into the world that are uninspired and really serve no purpose other than being something to market. There are some woeful mediocrities out there that deserve nothing but scorn. I don’t mean mass market brands from the big guys. I mean small craft beer producers who are more interested in a marketing strategy than a quality product. Brewers whose grasp has exceeded their reach.

The directory over at Mom n’ Hops is telling me that there are 184 breweries and brewing companies open or in planning in Ontario. When I started writing about beer in 2010, I think we had something like 35 in Ontario. For that reason, you wanted to be a bit gingerly. It was a big deal when someone got a new product on a shelf. You wanted to be a bit supportive even if the product was mediocre because at least it meant there was choice.

Choice is no longer a problem, but mediocrity is becoming one. Average is going to get you lost in the shuffle. Aim for something a little higher than a Gentleman’s C, folks. Just existing is for plankton.

Understanding The Beer Store

Since it is December, we are in that phase of the year when people talk idly about abolishing The Beer Store. You’ve got Martin Regg Cohn over at The Star doing a reprise of last year’s column. It’s a good party piece, but it’s unlikely to accomplish anything. Even Anindya Sen who released a number of studies and who is probably a very good economist seems not to have made an impact, although this might be due to the ease of dismissing a commissioned study.

I’ve taken a slightly different tack on the issue this year: I’ve actually talked to The Beer Store in an attempt to understand the problem. If you want to effect change, you’ve got to understand the motivations of all of the parties involved. It does you no good to vilify The Beer Store out of hand. It is not run by Darth Vader. If it were, the stores would feature more unsafe catwalks over giant pits.

Let’s put aside for a moment the shopping experience which has been famously awful. Let’s put aside the rhetoric that it is an outmoded eastern bloc style of organization.

Let’s instead have a look at the functions it actually performs.

The shopping experience tends to blind people to the fact that The Beer Store is actually a retail and distribution organization. Despite the insistence of studies to the contrary, it operates at a cost recovery basis. That is to say that it does not turn a profit. It makes enough money to pay for itself.

Please understand this: It does not make a profit. Intentionally. Anyone who is telling you different is flat out wrong.

This is not to say that the ideas of those people who are telling you it makes a profit are wrong. They’re absolutely right. If it were a retailer in a purely capitalist system, The Beer Store would be raking it in hand over fist. Anindya Sen claims that there are approximately 700 million dollars worth of incremental profits unaccounted for in The Beer Store’s operation. Let us account for them.

The Beer Store has more than 440 locations operating all over Ontario. Sure, there are a whole bunch in Toronto, but there’s one in Espanola and Wawa and Azilda and Coboconk. They’re everywhere. This is the retail component, which is customer facing.

Consider all of the stuff involved that does not face the customer.

There are the licensee sales. When you see the Brewer’s Retail truck out and about delivering kegs, that’s also The Beer Store. They have an online ordering system for licensees and people to staff it. They’ve got people driving those trucks. They’ve got administrative staff supervising those sets of employees.

There are the logistics of distribution to contend with. You can’t sell beer in Wawa and Coboconk unless you get the beer there in the first place. The Beer Store has six separate distribution centres which service the province. This means that beer intended for stores or licensees need only be shipped as far as the nearest distribution centre and The Beer Store will take care of the rest. Think of the logistical support needed for this.

There’s the bottle recycling program. I recall reading somewhere that your typical ISB bottle can be re-used between 18 and 20 times. The Beer Store controls the recycling of these bottles within Ontario. I forget exactly what the current consensus is on recycling beer bottles. It seems to change depending on the cost of cartage or freight. Anyway, it employs a number of people and The Beer Store has a really significant hand in it.

There’s also the Draught Services division which handles installations for licensees and line cleaning equipment.

What The Beer Store actually does is outsource services for the three extremely large companies that own it. I suspect that the only reason Sapporo is allowed 4% ownership is to keep it from becoming a subsidiary company of either Molson Coors or AB InBev based on shifts in market share.

Because these companies have contrived over several decades to own The Beer Store, they are able to outsource all of the following: Customer facing sales, licensee facing sales, draught equipment sales, distribution of their product to all corners of the province of Ontario, the ownership and maintenance of the physical buildings, the ownership and maintenance of the fleet of trucks required, the recycling of beer bottles for re-use predominantly by the owners of The Beer Store, the staffing and administration of the entire concern, insurance liability for the entire concern and the pensions of the entire concern.

Jeff Newton, a spokesperson for The Beer Store (and a dashed accommodating fellow), pointed out to me that smaller breweries could also take advantage of these benefits. The scale of the thing is prohibitive if we’re all going to be honest. There’s an initial investment involved that requires a lot of capital.

To be fair, I should point out the other thing that I learned. The LCBO has a markup which makes them a profit. Selling beer in The Beer Store seems to (once you recoup the initial investment) provide a greater profit margin for breweries. Sure, it’s a long term strategy, but it might work out eventually.

What all of this means is that all of the service fees that go into selling beer at The Beer Store essentially go into a pool which funds all of the above listed activities. There is a sliding scale of fees to have your products listed if you’re a smaller brewer, which is something of a concession. However, you’re still paying into a system which disproportionately benefits the large brewers in a substantial way.

The Beer Store doesn’t need to make a profit, which is why it doesn’t. Making a profit would be gilding the lily. The real benefit here is that the large brewers don’t have to perform many of the tasks I listed above. The Beer Store handles those for them. It also brings a certain amount of stability to the cold war like détente between AB InBev and Molson Coors in Ontario since they both benefit massively from their ownership and the status quo seems to be working.

This is what you’re contending with when you talk about privatization, incidentally. You’ve got a massively organized logistics and distribution company whose parent companies have some incredibly deep pockets and have contrived to create an oligopoly out of something intended to be a public service over the course of several decades. If you want privatization, you need a governmental figure willing to think further ahead than the next election.

Whether you like it or not the current structure of The Beer Store is absolutely brilliant. It’s actually genius. Just because it tends not benefit the consumer doesn’t change that.