Earlier this month, the big news in craft brewing was the closing of beer importers, Shelton Bros. The company existed for twenty-four years and were early importers of craft beers. They introduced America to different beer styles, such as sour beer. The company’s bank pushed them into liquidation; a victim of COVID-19 and the recession. You can read more about the closing of Shelton Bros. here.
I found this news interesting because of a personal connection to the firm. One of the Shelton brothers is Will. He is the dad of Zach and Max who are among my son Alan’s best friends. I have known Will for over twenty years.
For a while he owned a brewery in Western Massachusetts, High and Mighty, which made great beer. I gave a book talk about Brewing Battles at the Jones Library and we served Will’s beer. The brewery only lasted a few years and then Will moved to California. There, for a while, he worked with Pete Slosberg from Pete’s Wicked Ale. He then started a new brewery, Concrete Jungle. Will is now back in Massachusetts.
The demise of Shelton Bros. reflect changes in the brewing industry. The country has over 7,000 breweries. Many of them are very local and supply farm to table restaurants. American brewers now make many of the unusual and exotic styles that Shelton Bros imported, making them less competitive. You can read more about Shelton Bros, in an article from 2017 by Andy Crouch.
Friday and Saturday evenings I attended, virtually, the Great American Beer Festival. The first event on Friday was the Awards Ceremony. This was the session that had the greatest attendance; over three hundred people watched. It was open to the public and available on YouTube. All of the other events required you to spend $20 and get a GABF Passport.
There seemed to be an endless number of awards with many specific categories. Obviously the fewer contestants in a category gave an individual brewer a greater chance of winning. The Juicy or Hazy India Pale Ale category had the most entries; 377. Spellbinder, Wren House Brewing Co., Phoenix, Arizona won the gold medal. You can read more about this style of beer here. I don’t think I have ever had it.
The Brewers Association sponsors the GABF. Justin Crossley, from the Brewing Network, was the host for all the session except the Awards Ceremony. Most of the events had around 150 viewers. That doesn’t seem like a large audience. I don’t know how many people usually attend the GABF but I assume it is more than 150.
Attending the GABF virtually meant the presenters were on Zoom or a similar platform. That meant there were various technological problems which led to poor production quality in some of the sessions. There were several interesting panels which I will discuss in separate posts in the coming weeks.
Here are some articles about beer that I thought were interesting.
“September 9 Day of Action Planned to Urge Passage of Craft Beverage Modernization and Tax Reform Act.” The Brewers Association and other allied trade associations such as American Mead Makers Association are spending today lobbying for passage of the Craft Beverage Modernization and Tax Reform Act, S.362/H.R. 1175. The bill would make the temporary tax benefits that brewers, distillers, and other actors in the liquor industry received from Trump’s tax cuts of 2017 permanent Those tax cuts flowed mainly to very rich people and corporations while poor and working-class people received little benefit. Brewers did not complain since they were also beneficiaries of the law.
The liquor industry like other businesses has suffered during the pandemic. If the tax cuts go away, it could worsen their economic situation. This article reports that two breweries with beer gardens and beer-to-go in Everett Massachusetts have closed because a customer went bar hopping while awaiting the results of a COVID-19 test.
The Great American Beer Festival has been held for thirty-nine years. This year it will be virtual. I have always wanted to go but I haven’t made it out to Denver yet. The upside of everything being virtual during the pandemic is that you can attend events that in real life you might not have been able to go to. It runs October 16–17. On the 17th Marcus Baskerville, Weathered Souls Brewing Co. , will be speaking about the Black is Beautiful brewing project that I wrote about here.
Last month, the owners of Vermont’s Magic Hat Brewery, FIFCO USA, a subsidiary of Florida Ice and Farm Co. announced it was moving all Magic Hat production to the Genesee Brewing headquarters in Rochester, N.Y. This move, during COVID-19, meant that forty-three people lost their jobs. Magic Hat had employed forty-six people in Vermont.
Bob Johnson, the original brewer, and Alan Newman co-founded the brewery in 1994. Newman sold the company to North American Breweries in 2010. He feels that was the end of Magic Hat as an innovating craft brewery. KPS Capital Partners formed North American Breweries to manage its beer investments.
Companies like KPS buy breweries as an investment; they do not really have any interest in running the company or building the business. They cut expenses, which usually involves cutting jobs, extract value and then sell the company. That is what happened to Magic Hat. In 2012, Magic Hat and the brewing investments were sold to FIFCO for $388 million dollars.
In 1994, at the time of Magic Hat’s founding, there were only a few other breweries and a few brew pubs in the state. Greg Noonan founded Vermont’s first brewpub in 1988. Today, Vermont has 61 breweries. In 2018, Vermont breweries produced 350,000 barrels (61 gallons per barrel) which had a value of $362 million dollars.
Magic Hat’s story of being a pioneer in craft brewing, seeking to expand and then being sold for investment value could be the tale of many of the country’s over 7,000 brewers as they faced the economic consequences of COVID-19.
For more information about Magic Hat’s move, click here
Since George Floyd’s murder and the ensuing demonstrations, industry has responded with statements of support, many stating Black Lives Matter. The craft beer industry, at least its trade organization, the Brewers Association, has been an exception.
The BA’s website has no formal statement about police brutality and systemic racism. It does have a link to a project, Black is Beautiful, that Weathered Souls Brewery initiated. The black-owned brewery created a stout base and is encouraging other brewers to produce a beer from it.
Over 800 breweries are participating, from all fifty states and fifteen countries. According to the BA, there are over eight thousand brewers in the United States. Weathered Souls Brewery is asking the brewers who participate in the Black is Beautiful initiative to do three things:
Donate 100% of the beer’s proceeds to local foundations that support police brutality reform and legal defenses for those who have been wronged
Choose their own entity to donate to local organizations that support equality and inclusion
Commit to the long-term work of equality
The brewery, as part of its fundraising efforts, is also sponsoring a virtual 5k.
The craft beer industry is overwhelmingly white and male. Lees than one percent of brewers are black. Craft brewers market their product as authentic, local, and having roots in the community. The lack of diversity in the industry belies that claim.
Black is Beautiful is a project worth supporting. I plan to drink one of the beers produced if I can find it. I can’t run a 5k, but I can walk three miles and Weathered Souls gets the $35 either way.
For more information on this topic, you can read this and this.
A few years ago, we visited both Bruges and Brussels in Belgium. When I started seeing some articles about Belgian brewing and Covid-19 I was interested.
During this pandemic, things have changed quickly. A good example is the Belgian brewers. When Corona first hit and businesses closed, Belgian craft brewers were doing well. Later, the situation changed.
In April, about month into the pandemic, the New York Post had an article about Belgian brewers developing a delivery process because all the bars were closed. It highlighted one craft brewer whose business was expanding due to delivery sales. At this point the picture might have looked rosy.
By May, the situation ad changed. The Belgian Brewers Federation announced that production of beer had dropped 50 percent in April. The drop in production affected small brewers the most and one third of brewers had ceased producing any beer.
At the beginning of the pandemic, Eoghan Walsh who has a blog, Brussels Beer City, stated a podcast, Cabin Fever. On the podcast where he and other people involved in aspects of the craft brewing industry talk about what they are doing during the pandemic and what they are drinking. I have enjoyed listening to it because it is an easy going way to learn about how the pandemic is affecting the beer industry.
At the beginning of the year, thing were looking pretty good for all segments of the brewing industry. Local and state municipalities see craft beer as an important economic driver, That’s why a tax cut was part of Trump’s disastrous tax bill and why this year the industry got an one year extension for that tax reduction. Then COVID-19 happened.
Most states have closed bars and prevented restaurants from providing in house service. They are allowed to provide grab and go service. How has this affected brewers and distillers?
Here is a roundup of articles about how the liquor industry is faring during the pandemic. Like everything else in our society, regulations surrounding certain practices are being loosened or abandoned. When this is over, many thing will be different.
Deschutes Brewery has laid off over 300 workers and is not presently offering any to-go services.
The governor of Rhode Island issued an executive order that allows limited sale of beer and wine when people are getting takeout from restaurants.
Last Saturday, some Milwaukee brewers had a pop-up brewery drive-through in a parking lot.
Before the virus, only twelve states allowed delivery of all kinds of liquor while thirty-one states allowed delivery of beer and wine. This article is arguing for a permanent change in these regulations.
Reminiscent of Prohibition, distilleries are producing hand sanitizer. The relief bill passed last week allows distilleries to do this without having to pay the excise tax.
Can you be a social drinker? I recently read an article in TheNew York Times that would suggest the answer was no. The article itself was interesting and the comments were even more interesting. The vociferousness of the comments that defended drinking indicates that drinking in America has been normalized. The recent Atlantic article that asked why there is no anti-alcohol movement explored some of the reasons for that normalization. When I was at my writing retreat this fall, one of the other attendees was a woman who has recently stopped drinking and has a blog about it.
Prior to Prohibition, the temperance movement saw drinking as being both a moral and societal issue. They sought a civil response to the problems of drinking. Although prohibitionists counseled individuals to have the moral and individual strength to stop drinking, the movement sought to remove drinking from society through political and legislative means.
Since Prohibition, the liquor industry has been very successful in framing drinking and the serious issues it can cause as an individual disease. There have been some moments where the public health analysis of alcohol and the society-wide problems it causes, have been in ascendance. Both the movement to decrease drunk driving and the 1991 tax increase on alcohol had public health components.
Today the liquor industry is completely in control and health information detailing problems with liquor go nowhere. On television you see public service announcements on tobacco and vaping. There are none about drinking.
Here is a picture of a cirrhotic liver as one example of the damage excessive drinking can do to your body and health.
The next two weeks I will be on vacation. Part of the time I will be in Mexico City. In honor of my trip here is a post about Mexican beer. I will resume regular posting on March 11.
Before 1910 most beer in Mexico was brewed by small brewers. In the 1890s big modern breweries developed and by 1899 five firms controlled sixty three percent of the market. By 1910 the major brewers distributed nationally. The companies were vertically integrated, holding monopolies in everything from bottles to the railroads.
Corona Extra is the sixth largest beer brand in America and the top import. Constellation Brands owns Corona and Modelo. Modelo is the seventh largest beer brand. An industry analysis of Constellation stated “Constellation’s story includes … a powerful demographic tailwind. Its core consumer base skews towards Hispanics, a sizable demographic whose primacy will only increase over the coming years. We find it fairly intuitive that Hispanics place a premium on Mexican beer, as it speaks in part to a shared culture and heritage, and in our view, these dynamics are at the heart of Constellation’s superb operating profile…” There are some stereotypical assumptions in this analysis. For the full analysis, click here.
In 2010 Heineken bought the Mexican brewer Femsa; its brands are Dos Equis and Tecate. The company had a 43 percent share of the Mexican beer market. Dos Equis is twentieth. A german brewer in Vera Cruz created it in the nineteenth century. Tecate is 29th; Since 2013 it has had a 35 percent decrease in shipments. For the full list of the top 31 brands, go here.
Mexico has a small craft brewing segment. These brewers produce ale; the majority of Mexicans drink lager. Most Mexican craft beer is exported since there is not really a market for it within Mexico. Mexico is third in global exports of beer, most of which goes to Canada and the United States.
To be honest, I was having trouble coming up with a post for this week because I am busy, and my computer is on the fritz. I started looking at some of my old posts and stumbled across one from almost eleven years ago that I found interesting.
At that time, the host for my website and blog was Network Solutions. On social media, I complained about something that was wrong with my site and their response was to ask me to write a post for a blog they had, Women Grow Business.
I wrote the post, questioning whether I could find define myself as a businesswoman. Click here to read the post. (The formatting is from Network Solutions). Reflecting on all the work I did to promote Brewing Battles, I am proud of what I accomplished. Although I do not make any money from this blog, I am also proud of the presence I have built on social media.