Small, the New Big – and beer

The cover story of February’s Inc. magazine tells us “Small is the New Big,” a phrase that’s been batted around for the last year, meaning small can be part of a successful business model.

Given the recent success of small-batch breweries versus larger mainstream brewers it would seem that idea extends to beer.

Sure enough, the Inc. article is adapted from the book Small Giants, and one of 14 businesses featured in the book is Anchor Brewing. In the sidebar, author Bo Burlingham writes:

With another capacity crisis looming in the early 1990s, (founder Fritz) Maytag made plans to raise capital for expansion by taking the company public, but he pulled back at the last moment. “I realized we were doing the IPO out of desperation – because we thought we had to grow,” Maytag recalls.

“It occurred to me that you could have a small prestigious, profitable business, and it would be all right. Like a restaurant. Just because it’s the best around doesn’t mean you have to franchise or even expand. You can stay as you are and have a business that’s profitable and rewarding and a source of great pride. So we made a decision not to grow. This was not going to be a giant company – not on my watch.”

As a bit of background, here’s more about Small is the new big.

When it comes to beer there are practical reasons to wonder about small and big. Fred Eckhardt wrote a wonderful column for All About Beer magazine about 10 years ago where he asked “What is craft beer?”

Among the answers was one from author-brewpub pioneer Greg Noonan of Vermont Pub & Brewery:

“Craft brewed (should) mean pure, natural beer brewed in a nonautomated brewery of less than 50-barrel brew length, using traditional methods and premium, whole, natural ingredients, and no flavor- lessening adjuncts or extracts, additives or preservatives.”

Is that true today?

Schlenkerla Helles Lagerbier

The Potable Curmudgeon Roger Baylor gives us more than one beer to think about when he posts on Schlenkerla Helles Lagerbier.

The beer – just now available in the United States and not well known outside of its Bamberg home – is a delight, brimming with flavor beyond what you’d expect in a 4.3% abv beer, in part because of a sly smoky notes.

Matthias TrumMatthais Trum (pictured here giving a tour of the brewery) points out that the lager contains none of the smoked malt that Schlenkerla uses in its the Aecht Schlenkerla Rauchbier-Märzen or the Urbock, but hints of smoke because it is fermented in the same old copper kettles and fermented with the same yeast.

Quite frankly, you might find it more of a hint of smoke, perhaps because of its underlying rustic character – a plus, I think – and just he right dose of local hops. It is a particularly versatile food beer. It would go quite nicely with something as simple as a tossed salad topped with bits of smoked bacon. Perhaps halibut on the grill, marinaded with a curry and coconut sauce. Or something bold like salmon with in a chipotle barbecue sauce.

But back to a bigger point that Baylor makes:

Franconian beers aren’t always as squeaky clean and technically flawless as similar styles brewed elsewhere in Bavaria. This is not intended as an insult, and it is not to imply that they are deficient or flawed.

Rather, it is to suggest that they bear the delightfully quirky imprint of their geographical origins.

In a region where the countryside is never far away from the heart of the largest city, and a hundred breweries, most of them small, operate within a morning’s leisurely drive of Bamberg, the aromas and flavors experienced in a half-liter of solid Franconian lager can be redolent of all things pre-industrial – woodsy and full, smoky and firm, hoppy and dry, sometimes crisp like the lazy autumn evenings imbibing outdoors, and other times mellow and cool as the summer mornings right after opening time when the town elders gather at the Stammtisch to begin another day’s session.

That’s beer in context.

Arrogant Bastard: Well, it’s not wine

“Water into Wino” is one of about 20 wine blogs I’m currently subscribed to via my newsreader.

Imagine my surprise to find a tasting note today for Arrogant Bastard Ale. For starters the commentary reminds us that most people have never seen the label, let alone tried the beer. Those of us who’ve been drinking this beer for 10 years may no longer notice the words (even when sober) but those just getting to know the Bastard sure do.

With a label and name that would alienate most wine buyers in a flash, this beer seduced my playful side immediately. As if the name wasn’t bold enough, the words “You’re Not Worthy” adds to this cocky marketing strategy. The bottle also reads “It is quite doubtful that you have the taste or sophistication to be able to appreciate an ale of this quality and depth.” Having read so much wine media lately, seeing this written as a selling point in such plain terms is refreshing, rather than that message being relayed in a passive aggressive way as I sometimes notice in wine branding. Turns out it’s not just a gimmicky beer, it’s a tasty one too that lives up to its claims of complexity.

Go ahead and read the tasting note for yourself.

Miller beer disappears from truck

News item:

A semi-trailer loaded with Miller beer has disappeared from a trucking company in Washington County, Wis.

A load with nearly 2,000 cans and bottles of Genuine Draft, MGD and Miller Lite vanished from Millis Transfer in Richfield, Wisc.

Think they should search a developing country for somebody trading up?

(See previous post if you are confused.)

Where’s the up in trading up?

Trading up is in the eye of the beholder.

(What’s trading up? More on that at the bottom.)

SABMiller’s CEO this week told the press that emerging markets are the key to continued growth as consumers there trade up to higher value brands and increase overall beer consumption as an “aspirational” alternative. The report:

In a presentation to the Consumer Analyst Group of New York conference, SABMiller Chief Executive Graham Mackay said his company’s “broad exposure to the global beer industry will underpin future growth.”

He said there is “far greater” opportunity in the developing world as consumers trade up from lower quality, cheap beer, into modernized mainstream products and then on into what it refers to as “worthmore” brands.

Consumers are also moving into beer as an “aspirational mainstream alternative to cheap spirits, or other types of local indigenous alcohol,” Mackay said.

The problem that Miller and other industrial brewers have in the United States is that consumers are trading up from their products rather than to their beers.

That’s one of the reasons behind various efforts to improve beer’s image that Anheuser-Busch entusiastically supports (and Miller doesn’t put money behind).

The notion of trading up received considerable attention two years ago, from Fast Company to Business Week after publication of “Trading Up: The New American Luxury” by Michael Silverstein and Neil Fiske.

One of the premises of “Trading Up” is that consumer spending is polarizing. In order to trade up in a category she really cares about, an avid cyclists might save money by trading down in some that don’t matter to her — like her brand of toothpaste or beer. That’s why Costco is the No. 1 wine vendor in the country – we’re not talking the stuff that comes in jugs – while also selling generic paper towels in bulk.

Trading up isn’t about simply moving from beer that costs $2.99 a six-pack to $7.99 craft beer.

“The competition includes all mood elevators,” Silverstein said. “Quality vodka substitutes for better beer more than it does for Bud. The beer companies need to deliver innovation on taste, nutrition, health, energy, and celebration.”

So if you can’t compete with [fill in the name of your favorite small-batch brewer] then I guess to find a Third World brewer you can compete with . . . for now.