The life cycle of beer innovation

A quick exchange of comments here Monday provoked this thought from Boak & Bailey about what happens to even the most dominant of breweries over time:

Our suspicion is that, of the current wave of new brewers (1970s to now) some will inevitably become the new Whitbreads and Watneys.

We don’t see, say, Sierra Nevada going into the Lite Lager business any time soon, but we can imagine, in thirty years time, a business which seems complacent and arrogant, and of which people will say: “They’re so dominant that no-one else can get into the market, and all they produce is that bland, dumbed-down, sub-6% pale ale crap …”

If that does happen, there will be plenty of brewers waiting to challenge them, and the cycle will continue.

Of course change is inevitable, but is complacency? The number of “breweries in planning” illustrates there are already plenty of pesky competitors nipping at the heals of the largest of the small breweries (otherwise known as “big craft” or just “craft”), and projects like Sierra Nevada’s “Beer Camp Across America” sure indicate somebody’s not punching out at 4:59.

No arguing that the crazy growth of beers with IPA somewhere in their name suggest that a few brewers might do a little more thinking on their own, but together IPAs, PAs and “seasonals” still don’t account for half of sales. That’s a lot more diversity than the days when the choices were pale lager and light pale lager.

Twenty years ago, when Sierra Nevada sold about one-fifth of what it does now, it seemed like almost every new brewer talked in glowing terms about how great Sierra Nevada Pale Ale tastes, then added “but I want to make something different.” Think about when Stone Brewing opened in 1996. “When I brewed at Pyramid (in Washington) we made a Cascade pale ale, and I was a little sensitive about doing what we’d done at Pyramid,” co-founder Steve Wager explained. He and Greg Koch decided not to use Cascade hops (also a signature for Sierra Nevada Pale Ale) in any of their beers, and made a big deal out of it. “We had some fun,” he said.

Five days ago, August Schell Brewing Company, established in 1860 and the second oldest brewery in the country, won two medals at the World Beer Cup. It earned gold for Schell’s Firebrick, a Vienna-style lager. File that under traditional. It took a bronze for Schell’s Framboise du Nord, made by adding a boatload of raspberries to Star of the North, a Berliner Weisse, and refermenting that for an additional four months. This all happens in Schell’s original 1936 cypress wood lagering tanks.

Some tradition in there, for sure, but also something else. Definitely, 154 years in, not complacency.

15 thoughts on “The life cycle of beer innovation”

  1. Why would you take that to be complacency in brewing styles? Its not my point but their point was market domination. I see that already in a way. The certainty of the intra-state grocery store brewery. Sure they make a few pretty good beers but Lactancia makes pretty good dairy, too. With the advent of multi-brewery craft brands, the choice has been made to by definition abandon “local” in any meaningful way. Arrogant? That’s not what I see. Irrelevant? Maybe.

    • Just to be clear, whose point is market domination?

      I might admire a brewery that chooses to distribute to a limited area – ala New Glarus, which brews multiple brands, BTW – but it seems to me that it is to the consumer to decide to what extent she wants to support local.

      Some people (most?) want beer at a relatively low price point, and that price is reduced by production at scale. “Beer from a place,” local, to an extent flavor, are secondary.

      • But BB’s point on domination is predicated by the idea of thirty years from now. Me, I see it happening earlier should a deep pocketed EP Taylor come to the market. Having done the business research now, I am relieved of much of the notion that the consumer decides given the well discussed positioning that comes before they arrive at the store or pub.

        • OK, I get it. Given that we disagree that there will be a Big Six emerged in the US, is there something else to discuss?

          • Only that we don’t disagree as neither of us know the future. We are just doing “on the one hand, but on the other…”

    • Wasn’t Stan’s point that so far among the brewers that seem to fit B&B’s description, there _isn’t_ evidence of complacency?

  2. Interesting comparison with Stone not wanting to follow trends by bucking Cascade hops, and Schell being innovative and traditional at the same time. Yet Schell has brewed a “light pale lager” for a long time and have recently announced jumping on the IPL bandwagon.

    It’s my view that complacency and trend-following become close cousins when a brewery starts bowing to sales reports.

    Charlie Finkel introduced me to Schell’s beers back in the 80s, and I’ve loved their German-style beers tremendously ever since (the Firebrick deserves its awards). Even some of their experiments with the styles such as the Chimney Sweep smoked Schwarzbier stand head and shoulders above many “new” beers on shelves, but I hate to see a brewery start following a trend just because (IMO) everyone else is doing it.

    • Steve – What if a brewer (a specific person) wants to explore new avenues, as Jace Marti is with Berliner Weisse and also the IPLs?

      • I honestly have no problem with exploration, it’s probably just the new IPL craze that rubs me wrong. One more way to disguise an IPA in my view — and everyone seems to be doing it — except maybe Stone. 😉

        As said, I think Schell’s Chimney Sweep, a sort of experimentation — especially for a US brewery, is an outstanding beer.

    • Point of clarification — Cascade is no longer verboten in Stone beers! And something to consider: I’m not sure we can tell when a brewery is brewing something to follow market trends and when they do it because they think they can do something better than their competitors.

      It’s been a while since I’ve read the SEC docs filed by Boston Beer, but for years, they gave their competitors as the large imported brews. Such competitors don’t yet have any traction in the US with IPAs. I don’t want to disagree with the Lagunitas guy who says distributors told him Boston Beer was gunning for him with Rebel IPA — though why he’d accept their word and repeat it to the world is beyond me — but unless Boston Beer is no longer listing Heineken, Corona, etc. as their chief competitors and is instead listing Lagunitas, Sierra Nevada, New Belgium, etc., then if there was a “market trend” decision in making Rebel IPA, I’d bet it was more towards offering something that their “premium import” competitors don’t offer more than smacking down the US large craft upstarts.

      • At this point, Samuel Adams beers compete with just about everybody on the market. For many years, Jim Koch did not pull any punches about not caring for “catty” American hops. But not long ago he admitted “American hops improved faster than I realized.”

        So two things happen. They make an IPA because that’s what people are buying. They make one that is much different than Sierra Nevada Torpedo and Lagunitas IPA (the best 2 sellers), giving drinkers one more choice.

  3. I suppose the point we really wanted to make, amongst all that distracting talk of the Big Six and Watney’s, is that it seems hard for businesses to retain idealism and enthusiasm once they gets big and get old.

    • Agreed. And it will be interesting to see what Boston Beer, Sierra Nevada, Stone, Lagunitas, and whoever else (maybe a brewery not even operating yet) are like in 30 years. I’ve been asking the how big is too big question for a long time and seem to be no closer to an answer.

  4. I think Boston Beer Company is already too big solely because of their decision to compete with Sierra Nevada with the Rebel IPA. That’s an expansion move, and it has resulted in a poor, unoriginal beer.

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