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The economics of Widhook, and a book review

The U.S. Brewing IndustryPatrick Emerson has been kind enough to the work of Vic and Carol Tremblay in analyzing the merge of Widmer Brothers Brewing and Redhook Ale Brewery, giving me an excuse to mention that and also offer something of a review of their book, The U.S. Brewing Industry: Data and Economic Analysis .

Please start by reading his post at The Oregon Economics Blog as well as Jeff Alworth’s response (which is what got me to the Economics Blog). Emerson brings up quite valid concerns, particularly the ongoing competitive landscape.

I’m not going to repeat what he said about minimum efficient scale (MES), but expand on it a bit. From the end of Prohibition until the late 1950s the minimum production a brewery needed to reach scale efficiency and be competitive was 100,000 barrels per year. A-B was the largest brewery in the country, producing 8.4 million barrels per year, and Miller was 10th at 2.4 million. (Visit BeerHistory.com for more.) It wasn’t 1880, when we had more than 2,500 breweries, but regional breweries were a competitive force.

MES began to rise dramatically in the 1960s and was 4.5 million by 1973. Now it’s 23 millions barrels, which only Anheuser-Busch, Miller and Coors achieve. And the latter two plan to merge U.S. operations.

With that in mind, although it will still produce only a fraction of that Widhook (as those in the Northwest are already calling this “new” brewery) makes sense. Drawing on Tremblay and Tremblay, Emerson writes: “These are the cold, hard facts: economies of scale exist in beer brewing, they can be quite large and thus the economic incentive is to grow bigger and become more profitable and/or more competitive.”

So what about the fourteen-hundred-and-however-many other breweries in the country?

I’m reminded of what Eric Wallace of Left Hand Brewing said more than 10 years ago: “The large brewers are not tooled to do what we do. They’ll have to build less-than-efficient breweries to make beer like we do.”

And as beer drinkers we need to remember that. Less efficient means more expensive. I won’t climb on on that soap box today, because I promised something of a review of The U.S. Brewing Industry.

You don’t need the book if you are looking for the best Czech lagers, are wondering what kind of glass to pour a particular beer into, or want to read entertaining essays in the manner of Pete Brown.

You might enjoy the book if you’re deep enough into American beer history to wonder how and why the beer industry changed from 1950 to 2000. It fits quite nicely with Maureen Ogle’s Ambitious Brew: The Story of American Beer, although it’s not quite the breezy read. It’s an economics book.

You really should own the book if you want to sell beer in America. Robert Weinberg, who made part of his company’s extensive brewing data base available to the Tremblays, explains why in the foreword:

“The Professors Temblay have hit a home run. In a single volume they provide the theorist with more than adequate basic knowledge of the fundamental operating dynamics of the brewing industry. At the same time, they provide brewing industry executives with an excellent demonstration of how the tools of economic analysis can improve even the most pragmatic managers’ understanding of the environment in which they operate.”

Book review: Beer & Philosophy

Beer & PhilosophyWould you trust a philosopher with your beer?

Is that in itself a philosophical question?

To tell the truth, even though I was careful to bite off portions of the book in small chunks, after reading Beer and Philosophy: The Unexamined Beer Isn’t Worth Drinking I’m not exactly sure about either. I seem to have reached philosophy overload.

Which is not to say I didn’t enjoy myself throughout.

This is a great collection for a book club to tackle. Read a chapter a week and discuss at the local pub. After after finishing this book the club could move onto to the other two in this “Epicurean Trilogy,” Food & Philosophy and Wine & Philosophy. I’d suggest discussions continue at the local pub rather than moving on to a wine bar.

And after that? Southpark & Philosophy and 24 & Philosophy should be out. Really. It seems publisher Wiley-Blackwell has quite a franchise going here.

Philosophers who have a certain affection for beer wrote most of the essays. There’s also Alan McLeod from A Good Beer Blog representing the blogosphere, as well as philosophical brewers Sam Calagione and Garrett Oliver.

The topics include many — quality, pricing, authenticity, etc. — that pop up here. Also some you don’t see in your basic beer blog. Such as an inspection of Immanuel Kant’s transcendental idealism through beer goggles.

I particularly liked editor Steven D. Hales contribution. He uses the philosophy of John Stuart Mill to examine this question: If you had $30 to spend on beer, would you be better off spending it on a single case of Pilsner Urquell or two cases of Miller Lite? Don Russell recently covered this in nice detail. Take a look and come back. Carefully consider Hale’s argument that quality is the density of pleasure. Could be a New Beer Rule.

And if you don’t have a book club to share thoughts with? Jeff Alworth has suggested this book will provide blogging fodder for quite a while. I have to agree.

Perhaps that’s what Michael Jackson was predicting in the foreword (a delightful surprise to find at the outset) when he wrote: “When I grow up, I want to be a philosopher.”

As Hales points out in his introduction it all comes down to Plato — degrees Plato or the guy who keeps popping up in this book.

Book review: Best of American Beer & Food

The Best of American Beer & FoodOnce a good ol’ beer person, always a good ol’ beer person.

Lucy Saunders can’t help herself. She’s a beer person, and that shows up on every page of The Best of American Beer & Food: Pairing & Cooking with Craft Beer.

(Disclaimer: Lucy has been a friend of my wife and I for 15 years, and we both had a small hand in this book. Now I’ll go back to calling her Saunders.)

This is the book you’d expect from someone whose preparation included working as a line cook in top flight restaurants where beer is treated with respect, but also the book you’d expect from somebody who has gone to brewing school. A beer person. Somebody who can talk to us about the pleasures of food and drink without being fussy.

She isn’t pedantic when she writes about finding the right beer for a particular dish, nor when it comes to executing a recipe. She’s friendly, as you’d expect of a beer person.

So what’s in the book?

– Primers for enjoying the decadent side of beer, with separate chapters on beer and cheese, then beer and chocolate.
– An affirmation of what’s going on across the country, with interviews from every region.
– Recipes, of course, six or seven dozen of them, many made with beer and all intended to be enjoyed with beer.
– Food porn. Full-page, color pictures worth at least a thousand words apiece.

Who should own the book?

– It helps if you can cook — some of the recipes are challenging.
– Anybody looking for pleasures to enjoy with friends. Be ready to be inspired to prepare multi-course meals served with a wide range of beers.
– Anybody looking for simple pleasures. You can pick a single dish, a simple one, and stick to one beer.
– Food lovers who are ready to be surprised. I fully expect cooking types to find a recipe that looks too good to pass on, discover it is prepared or served with a beer style new to them . . . and have a new favorite beer.

No, this isn’t totally groundbreaking. Brewers Publications, the publishing arm of the Brewers Association and producer of this book, also put out Candy Schermerhorn’s Great American Beer Cookbook in 1993. There have been several outstanding books since (and soon I’ll get to reviewing Great Food Great Beer, also brand new) and you may want to buy one or more of them as well.

What I appreciate about The Best of American Beer & Food is the combination of how and what. Saunders’ approach elevates beer, in no small part because dishes that take a little more effort to prepare might just deserve beer with a little more flavor.

In the foreward, Randy Mosher writes, “But all too often in the world of fine food, wine swaggers into the dining room like it owns the joint, while beer is left to skitter in the shadows from crumb to crumb.”

In this book Saunders doesn’t swagger, but she sure does own the joint.

A prediction nobody would have made in 1962

Holy Beer!What if the American beer clock had stopped in 1962?

(It’s a silly notion, because there’s that time marches on thing always happening. But stick with me.)

Anheuser-Busch was the largest brewing company in the country, but not by much (it commanded less than 10% of the market). Next were Jos. Schlitz Brewing, Falstaff Brewing, Carling Brewing, Pabst Brewing, Ballantine & Sons, Hamm’s Brewing, F & M Schaefer Brewing and Liebmann Brewing.

The 10 largest brewing companies controlled 38% of the market, pretty much comparable to the percentage of the craft market the 10 largest craft producers have today (39%).

Whatever small breweries there were operated under the radar. This question came to me when I was looking something up in Stanley Barron’s Brewed in America. This is a terrific history of American beer, except it stops in 1962 (when the book was published).

In it Baron describes how hard (almost impossible) it was is for a brewery with capacity of less than 100,000 barrels to compete. He writes, “Probably the smallest of all commercial breweries in the United States is the Earnest Fleckenstein Brewing Co. of Fairbault, Minnesota, with a capacity of around 20,000.” Of course, Anchor Brewing was probably smaller – by the time Fritz Maytag’s investment in 1965 kept Anchor from closing the company brewed only about 600 barrels a year.

Brewed in AmericaA quick aside: Beerbooks.com has reproduced Brewed in America, making life much easier than when I had to hunt through many used books stores before I found it. Those who chafed when Maureen Ogle left out 200 years of ale brewing history in Ambitious Brew – for perfectly logical reasons already discussed more than enough – will like this book better.

Like Ambitious Brew and Beer & Food, but long before, Baron nicely details how lager beer, then lighter lager beer became the American alcoholic beverage. Perhaps those of us who enjoy beer outside the mainstream wouldn’t consider the beer future as bright as he did, but that’s another matter.

His final words are particularly interesting:

“If any changes occur in the product it will be because they contribute either to swelling the sales total or slimming down the cost of manufacture without compromising the product.

“Curiously, one of the means by which beer sales have been pushed to record levels in recent times has been the successful campaign to bring beer back to its original social position: a universal beverage. It is no longer the workingman’s drink, it is no longer a German drink, it is no longer exclusively a man’s drink … most of those temporary labels have been removed by one method or another, and the acceptance of beer is closer than ever to where it was at the beginning. The kettle in the kitchen has given way to the tremendous factory cover several blacks, but the drink in the glass fills the same purpose it always has.”

That was 1962. Beer’s image took a beating, and it’s taken the work of mostly small brewers – now joined by Anheuser-Busch’s Here’s to Beer campaign – to begin to restore it.

But what if the clock had stopped? Baron knew it wouldn’t. In his introduction he writes of expecting without making real predictions:

“There is no telling what sort of beer will be most popular in 1975 (two years, it turns out, before Jack McAuliffe sold his first New Albion beer). Though imported lagers constitute only a tiny fraction of the American market, even that small popularity may indicate that a taste for more of the hop-flavor is reawakening. The rise in sales of ale may prove a significant factor. It has taken a hundred years to arrive at the beer most popular today, and it may take just as long to develop any noticeable difference. This is an industry which has never been given to tampering with its product and changes dictated by consumer preference have been cautious and slow.”

Seems like he was on to a few things there – but wrong about it taking 100 years.

That’s because of breweries smaller than anybody could imagine in 1962, and brewers who weren’t thinking first about “swelling the sales total or slimming down the cost of manufacture.”

Book review: Beer & Food

Beer & FoodSo would you call Beer & Food: An American History a cookbook or a history book? This question particularly matters to me because we own a few beer related books and I can waste a fair amount of time trying to figure out on which shelf I put whatever one I am looking for.

And I ask it because the cover promises that the book “includes over 90 beer-related recipes.” Many of these appear in the last chapter and come from modern day breweries. They put a punctuation mark on the statement craft breweries are trying to make that beer deserves a place as the table. They are also fun to compare to recipes, some from hundreds of years ago, that appear throughout the book.

That said, I’m sticking this on the shelf with other books related to beer history and the role of beer in American (and world) culture. Author Bob Skilnik – whose books include The Drink Beer, Get Thin Diet: A Low Carbohydrate Approach and Beer: A History of Brewing in Chicago – seeks to document when and how beer belonged in the home kitchen (and when and why it didn’t).

Readers disappointed that Maureen Ogle did not include America’s ale history in her book, Ambitious Brew, will be delighted to that those years receive considerable attention here. Skilnik, an alumnus of Chicago Siebel Institute of Technology, draws at times on the brewing school’s archives. So we get a little different detail on how adjuncts became to be used in – and eventually define – American beer (another sore subject with some readers of Ambitious Brew).

His description of the manufacture of malt extract is equally educational. He points out the popularity of the products and cookbooks that supported extract. As an aside, it has always amused me to flip through one of those recipe collections, such as from Blue Ribbon Malt Extract, and see all these recipes that called for one or two teaspoons from a three-pound can. Little wonder consumers had to find something else to do with that extract.

Skilnik leans heavily on old cookbooks and “receipts” to track what he calls a “culinary evolution.” There isn’t much about how restaurant chefs would once have used beer – and perhaps they didn’t – or discussions with modern day chefs about emerging trends in their kitchens.

Thus if you are looking for a book with more about the do’s and don’ts of cooking with beer you might want to seek out Lucy Saunders’ book with that title. If you want more on pairing beer with craft food, then Saunders’ upcoming book might better suit you.

But if you want to learn more about how American beer and food have evolved together then take a look at Beer & Food.

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