Magic Hat

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

 

 

Black is Beautiful

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.

 

 

 

 

 

 

 

 

 

Belgian Beer

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.

Brussels, 2017

The Liquor Industry and COVID-19

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.

I hope everyone is safe and stays well.

Mexican Beer

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.

 

 

Stoudt’s Brewery Closing

There are not that many women in the brewing industry. Carol Stoudt was one of the pioneers, opening Stoudt’s in the 1980’s. This week she has announced that she is retiring and the brewery is closing. You can read more about this here and here. You can also hear an interview with her here.

In 2009, while spending a month in Manhattan, I went to a panel discussion on women in brewing. Carol Stoudt was one of the speakers. I wrote two post about the evening. You can read the  first here.  I am reposting the second one, from September 17, 2009, below.

Women in the Beer Industry: Part Two

The panel discussion on Tuesday was very engaging and went past two hours. Each of the speakers provided details about how they got into the industry. Carol Stoudt was an educator but got interested in beer through her husband who loved good beer. They travelled to Germany. On their return, Carol wondered why they could not have the same quality of beer at their restaurant in Adamstown, PA. She does not feel that being a woman hindered her career in brewing and credits two men, Karl Strauss and Greg Noonan, with helping her.

Carol, along with the other panelists, felt that it was mainly a myth that women do not like beer as much as men and that they liked to drink “fruity” beers more often. She blamed much of this perception on marketing and media. Carol also believes that women brewing beer has long historical roots and that there are now many places in the world where women are returning to this practice. In particular, she mentioned Ethiopia.

Jennifer Schwertman, the bartender, felt it was a matter of educating women about beer and having better bartenders to help with this process. She believes it is a partnership between brewers and the community palate. Jen loves the community around craft brewing as much as she loves the beer.

Sarah Beach is from Belgium and has worked for Duvel Moorgat/Ommegang for four years. She is in sales and said when she goes into a retail establishment for the first time they often asked her if she is old enough to drink beer. I thought it was interesting that she was included on the panel since Ommegang is a craft brewery that a larger company owns.

Susan Greene, from Global Brewers Guild, is involved in sales and marketing and has worked for the company for over six years. Prior to her working in the beer industry, she was involved with restaurants. Susan feels that although New York has numerous excellent restaurants, the establishments often have poor beer lists.  In this area, she feels other cities are better.

A common theme among many of the panelists was that the craft beer scene is more vibrant in other parts of the country, particularly the Pacific Northwest. All are committed to making craft beers a thriving presence in New York City.

Debbie Boening stated that her family company had been involved, along with the Van Munching’s in importing and distributing Heineken in America. When Heineken took back distribution, it left a big gap in  Boening’s portfolio. It was at this point that she started looking at craft beers. In the early 1980s, Jin Koch (Boston Beer) had to make several repeat visits before she would agree to sell Sam Adams.

One of her sales reps was in the audience and told of going to various stores and bars saying, “I have Stoudt’s for you.” The other person would reply, “We have Guinness.” Sales Rep:  “It’s Carol Stoudt.” “You want me to buy a woman’s beer?” However, the distinctiveness of a woman making Stoudt’s did provide entry. Debbie said that, despite having many excellent craft beers in her portfolio, Colt 45 was still her top seller.

None of the panelists really felt that being a woman in the beer industry had made their path more difficult. All felt that the craft beer industry is very welcoming and supportive. The audience was overwhelmingly female so there may be a completely new group of women anxious to enter the industry.

Prohibition, 100 Years Later

On January 17, it will be 100 years since Prohibition went into effect. Because of the current political climate  around immigration, I  am posting an excerpt  from Brewing Battles that describes the treatment some German-American brewers received  during the enactment of Prohibition.

The brewing industry was overwhelmingly German; most German-Americans drank beer as did many other Americans. Although German-Americans maintained many ties to Germany, the vast majority were second or third generation Americans. The founders of most breweries had immigrated to America in the 1840s and 1850s. World War I generated a tremendous amount of public hostility against Germans and German-Americans. For brewers and their fellow ethnic citizens, the war period was a test of their dual identities.

Some of the nation’s most prominent brewers faced these issues of loyalty and cultural identification as soon as America entered the war. One of New York’s most prominent brewers was George Ehret, Sr., the nation’s largest brewer in 1877. In 1914, Ehret, an American citizen, returned to Germany to live. In 1918 his son, George Ehret, Jr., turned over the family property with a value of $40 million to the federal government. A. Mitchell Palmer, who was then the Alien Property Custodian, found Ehret, Sr. to be “of enemy character.” Ehret had not broken any laws but appeared to be friendly with and under the protection of “powerful men.” He had also given large amounts of money to the German Red Cross since 1914. Palmer stated that Ehret, who was 83, could get his property back if he returned to America. He would then lose “his enemy character.” The Ehret family’s status as influential New Yorkers and wealthy Americans apparently did not mean as much as his German affiliations.[1]

Lily Busch, widow of Adolphus Busch, suffered similar problems. The Buschs, if not the country’s wealthiest brewing family then certainly its most ostentatious, owned several estates including a castle on the Rhine in Germany. Adolphus died in 1913; estimates of the value of his wealth ranged from $30 to $60 million.[2] Both Adolphus and Lily were born in Germany; Lily had become a naturalized citizen of the United States. When World War I broke out she made her German home a war hospital and served as a nurse. The German government took her property because she was an American citizen; the United States viewed her as enemy alien since she was in Germany. When she returned to the United States in 1918 the government seized her property and placed her under a form of house arrest. She died in 1928.[3]

The prosecution, if not persecution, of these prominent brewers and their families indicated the deep unease Americans felt about the presence of Germans in their country. The rhetoric of the Prohibition movement for most of its existence had been positive, extolling the virtues that removing alcohol from society would bring. . . . The final push that brought Prohibition, the Eighteenth Amendment, and the Volstead Act into being became negative and played on people’s fears as American faced a world that was unfamiliar and rapidly changing.

Jacob Rupert, owner of the New York Yankees and Jacob Rupert Brewery with Miss Harwood, 1921. Photo courtesy of Library of Congress, Prints and Photographs Division.

 

[1] “Nation Gets Ehret Property,” New York Times, May 14, 1918, 1.

[2] “Adolphus Busch Dies In Prussia” New York Times, October 11, 1913, 15.

[3]; “Mrs. Lily Busch of St. Louis Dies,” New York Times, February 26, 1928, 27.

© All Rights Reserved Amy Mittelman 2020.

Molson Coors

At the end of last month, Molson Coors announced that it was restructuring and closing its offices in Denver and other places. This change could save the company up to 150 million dollars. Molson Coors is the parent company of Miller Coors. Although the company is laying off 500 workers, the restructuring will create some new white collar jobs in Milwaukee. Finance, human resources and other support services will consolidate and be based in Milwaukee. Milwaukee is the historic home of Miller beer.

Although some aspects of brewing will be in Milwaukee, the name Miller Coors will cease to exist. Instead it will become part of the North American division, headquartered in Chicago. Beside consolidating services and offices, the restructuring is part of a plan by Molson Coors Brewing to become Molson Coors Beverage company with a greater focus on products other than beer. Hard seltzer is on of the “new” company’s targets.

The loser in this plan is Denver. Coors has been a presence in Colorado for almost  150 years. The closing of the corporate offices will lead to 300 people losing their jobs. Colorado is facing this significant job loss as well as a loss of its corporate identity. The state remains second in craft brewing; California is first.

As the brewing industry seeks continued tax relief, perhaps  federal legislators will call Molson Coors to task for laying off 500 people. If you want more information on  Molson Coors, read here and here.

Beer Days

October 27,  Sunday, was National American Beer Day. I will confess that I had not idea such a day existed. I read about it here.  According to the  website, National Today American Beer Day is a day to “celebrate distinctly domestic lagers and ales brewed across the country.” The site also describes three other days that one can celebrate beer.

There is International Beer Day which occurs on the first Friday in August and is a “global celebration of beer, taking place in pubs, breweries, and backyards all over the world. It’s a day for beer lovers everywhere to raise a toast to our brewers and bartenders and rejoice in the greatness of beer!”

National Beer Day is on April 7th and commemorates the day that beer became legal again after 13 years of Repeal. Upon signing the legislation, FDR apparently remarked, “I think this would be a good time for a beer.”

National Today also describes National Beer Can Appreciation Day which is January 24th.  January 24, 1934, the Krueger Brewing Company produce the first beer in cans. I posted about the history of beer cans in 2011.

Krueger can. Photo courtesy of Brewery Collectibles Club of America.

Besides these days, there is also Repeal Day which is Dec. 5 and represents the day in 1933 that all alcoholic beverages became legal again.  Most, if not all, of these days seem like marketing ploys. The days that commemorate actual historical events have more legitimacy, but, in the end, all of these celebrations exist to convince you to buy and drink more beer.

Mark your calendars and let the drinking commence!

Barley and Beer

A recent article looked at the relationship between barley and beer and the economic implications for both Alabama farmers and brewers. Nationally barley production is down; farmers less often use it as feed. One remaining use for barley is in brewing.

Alabama has never been a major producer of barley. Despite the national downturn there has been an increase in barley production in the state. There are over forty brewers in Alabama, and this may be a factor in the increase in barley production.

However, beer requires a higher quality barley than that needed for feed. This combined with the fact that there are not really any maltsters in the state has made barley production more of an aspiration for Alabama farmers than a reality. Brewers used roasted barley or malt in beer production, requiring maltsers to undertake this part of the process. The closest maltster for Alabama brewers is in North Carolina.

Here are some excerpts from Brewing Battles about a prominent patriot who was also a maltster, Sam Adams.

Henry Adams, the great-great grandfather of both John Adams, the second president, and Samuel Adams, noted patriot, emigrated from Somerset County, England with his wife Edith to Mount Wollaston, now Braintree, in the Puritan colony of Massachusetts, around 1636. Henry’s arrival in the New World was twenty-seven years after the Mayflower and seven years after the founding of the Massachusetts Bay Company. He was a farmer.[1]

Henry Adams immigrated to the Massachusetts Bay Colony with his wife, eight sons, and a daughter. The youngest son, Joseph, was born in 1626. As an adult, Joseph pursued his economic livelihood by farming and malting, preparing barley for its use in fermentation and brewing.[2]

Joseph Adams’ malting operations seem to have passed down to Deacon Samuel Adams, father of his namesake, the patriot Sam Adams who was born in 1722. At the time of his birth, settlement in the New World was over one hundred years old and the production and consumption of alcoholic beverages, including beer, was thriving. His father’s malt house generated enough income to provide the family with a house, orchard, garden, and a few slaves.[3]

The Sugar Act brought Sam Adams to prominence as he wrote eloquently in opposition to the tax. Adams was concerned that the Sugar Act represented the first shot in a battle for a widespread taxation system. He argued for individual control over economic activity against the grasp of the British government. “If our trade may be taxed, why not our lands? Why not the produce of our lands and everything we possess or make use of?”[4]

Sam had inherited the malt house on Purchase Street in Boston from his father when he died in 1748. He had not shown any previous aptitude for business and had always been more interested in politics. By the 1760s Sam worked more often as a town tax collector than at the malt house. This position increased his political connections.[5]

The beer ration for revolutionary war soldiers reflected, in part, General George Washington’s fondness for beer. As hostilities heated up between the colonies and Britain prior to the Revolution, patriots such as Sam Adams and others encouraged Americans to “buy American.” Washington, who loved porter and often imported it from England, agreed wholeheartedly. In the 1790s Washington got his porter from Benjamin Morris, a member of the Morris and Perot brewing family.[6]

 

[1] “John Adams,” Dictionary of American Biography Base Set. American Council of Learned Societies, 1928-1936. Reproduced in Biography Resource Center, Farmington Hills, Michigan: Thomson Gale, 2006, http://galenet.galegroup.com/servlet/BioRC (accessed March 3, 2006); Benjamin H. Irwin, Samuel Adams, Son of Liberty, Father of Revolution (New York: Oxford University Press, USA, 2002), 6­­-9, 15.

[2] James Grant, John Adams, Party of One (New York: Farrar, Strauss and Giroux, 2005), 18.

[3] Irwin, Samuel Adams, 17.

[4] Quoted in Irvin, Samuel Adams, 47, 44-45; Baron, Brewed in America, 74-75.

[5] Irvin, Samuel Adams, 47, 44-45; Baron, Brewed in America, 74-75.

[6] Baron, Brewed in America, 113-117.