Stan Hieronymus

Consolidation started long before Prohibition

Here’s what the beginning of brewery consolidation looks like.

Last week I dug up a bunch of figures about the number of breweries and how much beer they made more than 100 years ago. Mike asked for a little perspective. So this chart starts in 1870 (the number of breweries peaked in 1873) and includes how much beer each brewery produced, on average, as well as per capita consumption by a growing population.

It tracks until 1920, the year Prohibition went into effect and picks up in 1935, a couple of years after repeal. The number of breweries steadily declined after 1935, while per capita consumption eventually surpassed 1910, peaking at 23.8 gallons a head in 1981. By 2000, of course, the three largest breweries produced more than 80 percent of American beer.

Year     Breweries    Barrels    BBL/Brewery    Per capita
1870       3,286 6.6 million       2,089 5.3 gallons
1875       2,783 9.1 million       3,414 6.6
1880       2,741 13.3 million       4,852 8.2
1885       2,230 19.2 million       8,610 10.5
1890       2,156 27.6 million       12,801 13.6
1895       1,771 33.6 million       18,972 15
1900       1,816 39.5 million       21,751 16
1905       1,847 49.5 million       26,800 18.3
1910       1,568 59.5 million       38,010 20
1915       1,345 59.8 million       44,461 18.7
1920       478 9.2 million       19,312 2.7
1935       776 45.2 million       59,008 10.3

Data from the History of the Brewing Industry and Brewing Science in America and the U.S. Brewers Association.

Session #43 announced: The new kids

The SessionThe Beer Babe has announced the topic of The Session #43 (Sept. 3) and “Welcoming The New Kids” challenges bloggers “to seek out a new brewery and think about ways in which they could be welcomed into the existing beer community.”

How does their beer compare to the craft beer scene in your area? Are they doing anything in a new/exciting way? What advice, as a beer consumer, would you give to these new breweries?

Take this opportunity to say hello to the new neighbors in your area. Maybe its a nanobrewery that came to a festival for the first time that you vowed to “check out” later. Maybe it’s a new local beer on a shelf on the corner store that you hadn’t seen before. Dig deeper and tell us a story about the “new kids on the block.” I look forward to welcoming them to the neighborhood!

All bloggers are welcome to participate. Just leave a link below The Beer Babe’s announcement.

What the heck is a Nano Brewery?

I was tempted to type the headline, add (eom) and see what happened . . .

I understand the concept of nano brewery (or nanobrewery). But if we are going to have a rule about when a brewery is too big to be called micro shouldn’t there be one for nano?

I ask because the Green Dragon in Portland, Ore., is sponsoring its second Nano Beer Festival next week — “25+ nano breweries and food from Portland’s food cart scene.” Referred to as Nano Food Carts (a nice touch) on this poster.

If you give the poster a good look you’ll notice Upright among the breweries. We visited Upright last year and there’s a 10-barrel brewhouse at the heart of that system. The guys at Berkshire Brewing in Massachusetts cranked out 6,000 barrels one year on their seven-barrel system. Granted, they had to be crazy, and microbrewery has been defined on the basis of production rather than size of each batch, but nano generally refers to something very, or even extremely, small.

A nanosecond is a billionth of a second. Feel free to check my math (because it is probably wrong), but the amounts get too small if we try this with billionths. Start with a 700-barrel brewhouse — mega breweries make even bigger batches but consider of the Anheuser-Busch plant outside of Fort Collins, Colo., which is gigantic. Divide 700 by 1,000,000, then multiply by 31 (that’s how many gallons are in a barrel). Multiply that by 128 (ounces in gallon) and we’re at a batch size of less than 3 ounces. That’s a millionth of 700 barrels. Divide that by 1,000 for a billionth.

Screw it. Let’s just call them breweries. Much more concise.

A good brewery museum is worth supporting

The Christian Science Monitor’s feature “5 famous pork projects: Beer museum and more” includes, as you might have guessed, funding for the National Brewery Museum in Potosi, Wis.

In 2004, The Potosi Brewery Complex restoration project received a $449,574 grant from the Federal Highway Administration’s National Scenic Byways Program to help renovate the building in order to attract tourism. Straddling the Mississippi River in Wisconsin, the renovated brewery became home to the National Brewery Museum, the Potosi Brewing Company Transportation Museum, a Great River Road Interpretive Center, and a micro brewery.

I don’t understand why this is a bad thing. As far as government projects go a half million dollars isn’t much. Efforts to create a national museum have failed elsewhere. Beyond the fact the museum houses rotating exhibits of items on loan from members of the American Breweriana Association there’s the Research Library. What could be more important?

A few photos from when we visited a couple of years ago:

Big breweries, small batches – been there, done that?

So MillerCoors has launched a separate company to manage its portfolio of (existential warning) craft beers and imports, calling it “Tenth and Blake Beer Company.”

Is this different than what America’s megabreweries breweries tried in the mid 1990s? On the surface, but maybe not that different. Will Tenth & Blake prove more successful? We’d be guessing, wouldn’t we? Before you do, consider a bit of history.

1995. “We are behind the curve, no question about it. We need to learn about specialty beer,” Scott Barnum, then general manager of Miller American Specialty Craft Beer Co., told All About Beer magazine. That’s the year that Miller bought a stake in the Celis Brewery and Shipyard Brewing. Leinenkugel and Miller Reserve were the other key brands in the ASCBC portfolio. “We have people in here helping us train our palates and our noses, working with our sensory development. We listen to guys tell us how they built their microbrewing businesses, about investment, capital. We talk to entrepreneurs. We are immersing ourselves in this world.”

Anheuser-Busch formed what it called the Specialty Group of Anheuser-Busch. “We are trying to think differently,” said Jeff Jones, who was senior product manager for the group. “That’s the whole thought process of the specialty beer business. I do have a passion for beer. We have to think differently from a large brewer, and that was the purpose for separating out our group.”

Coors established its own specialty group, Unibev, much earlier than the others, and in 1995 its star was Killian’s. The year before bock, Oktoberfest and wheat beers all flunked various trials. However, Unibev managing director Tex McCarthy said that a new brand, Blue Moon, wouldn’t carry the Coors name. “We want them to be disassociated from the Coors family. . . . If people see a major brewer’s name on a micro it loses some of the cachet that makes the beer interesting to begin with.”

You know the rest. It didn’t happen over night and it didn’t happen because Coors threw a bunch of advertising money behind the brand but Blue Moon Belgian White became the best selling wheat beer in America ever.

1997. Miller remained focused on working with regional partners rather than brewing specialty beers (the Reserve line had been axed by then). “We’ve said before that this is a regional business,” Barnum said. “More and more, you will see people contracting, narrowing their focus.”

That didn’t exactly work out. Miller ended up buying out Pierre Celis and his family and by 2000 had closed the Celis Brewery. Miller sold its stake in Shipyard back to Alan Pugsley and Fred Forsley and that company has thrived.

Forsley explained what happened a few years after he and Pugsley regained full control of their brewery: “I think initially the plan was well conceived, where Miller was focusing on portfolio selling. The whole Miller network was designed so their sales force could come in and sell their whole portfolio of beer. American Specialty Craft Beer had a relationship on the sales side with Molson, the imports, Asahi, and so on. That way a salesman was responsible not only for Shipyard but Molson. They had a variety of resources to pull from. When it changed from being a portfolio sale to a priority sale, as acknowledged by everybody in the organization, the goal became to make Miller’s main brands their focus. That really caused major problems for us. Up until then the sales efforts were working very well.”

A press release from MillerCoors indicates Tenth & Blake “will own the strategic business drivers — marketing, trade marketing and an independent sales organization dedicated to the craft and imports business.” That’s the something different. But it’s not all it takes.

“We didn’t really fit into the Coors distribution system until about five years ago,” Keith Villa, who wrote the recipe for Blue Moon White, said last year when I visited Coors while doing the research for Brewing with Wheat. A sales force is not what made that beer. Many readers here feel obliged to beat up on Blue Moon White, and yes it has became hip, a badge even. But Villa put a beer in the glass that drinkers who are willing to pay more want to drink.

Fifteen years, and more, after the people working at the nation’s largest breweries said they were ready to think like smaller breweries how many successes similar to Blue Moon can you point to? Maybe it’s not a matter of training. Maybe it’s company DNA.