Tag: liquor sales

Craft Brewers Combine

Last month news broke that FX Matt, a Utica NY based contract brewer, would acquire Flying Dog Brewery based in Frederick MD. FX Matt is the 14th largest craft brewery in the country, producing 183,200 barrels in 2021. Besides providing brewing capacity for other brewers including Flying Dog, FX Matt’s own beer line includes Saranac and Utica club. It is the 4th oldest family-owned brewery in the United States, dating from 1888.

Flying Dog, the country’s 34th largest craft brewery, is much younger. It began as a brew pub in Aspen CO in 1990. In 2006 the company purchased Frederick Brewing Company and is now based solely in Maryland. In 2009 both the Michigan and Colorado liquor commissions banned the labels connected with the brewery’s Raging Bitch beer. Flying Dog sued, winning both cases and used its $6 million settlement to create the First Amendment society. It is not clear if FX Matt will continue Flying Dog’s controversial advertising approach. I personally find such a name and its’ connected labeling misogynistic and salacious. I am, however, free not to buy the beer.

Flying Dog produced 81,231 barrels in 2021. Once the two breweries have combined, their output would make them a top ten craft brewery, according to the Brewers Association’s definition. Although the deal between the two companies will produce one larger brewery, the projected production level of at least 264,000 barrels is miniscule compared to the 495 million barrels Anheuser-Busch produced in 2021.

Shelton Brothers

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.

 

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

 

 

Methylated Spirits Revisited

On Sunday my site got 155 views. On Monday  121. That is a lot more views than I usually get. Most of them were to read my post on methylated spirits which is almost seven years old. I don’t really get it since when you google “methylated spirits” my post doesn’t come up.

I was going to tweet about this, but since Twitter still won’t let me tweet my URL, I decided to write a short post about it instead. The problem with Twitter is over 2 years old. I don’t think it will ever get fixed.

I am little afraid that the sudden increase in views  was some kind of hack, but everything seems okay. If anyone knows why there would suddenly be so much interest in methylated spirits, please let me know.

Denatured alcohol

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.

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!

Maine Beer

I recently read an article about Maine beer. The state is second, after Vermont, in the number of breweries per capita. Maine has over 80 breweries.[1]  Maine’s love of beer is a recent development. Here is an explanation from Brewing Battles.

“In Jacksonian America, the various states regulated the retail sale of alcohol, placing license fees on dealers as a minimal control on consumption. The growing temperance movement attacked the license system as inadequate and advocated new legislation. By 1850 reformers had moved from local control of liquor sales to statewide prohibition.[2] In every northern state except New Jersey and Pennsylvania legislators enacted or popular referenda passed “inclusive prohibitory or constitutional measures.”[3]

“In the 1850s, no state had the police capacity to enforce the provisions of this legislation, known as the Maine Law. As a result, advocates of the legislation created extra-legal groups, ostensibly to gather evidence and swear out complaints. Unfortunately, the “leagues” often overstepped these boundaries, generating violence. Both retailers and drinkers refused to accept the legitimacy of prohibition legislation. Liquor sellers organized to fight the Maine Law and the extra-legal enforcement “leagues,” and German and Irish immigrants opposed the law for cultural and economic reasons. The working class as a whole also resisted state intrusion into customary behavior.”[4]

Maine was the first state to pass such a law. Most states repealed the legislation by the 1860s. Maine repealed its law temporarily but reinstated it in 1857 and didn’t repeal it until 1934.[5]

Today, however, Maine is a poor state and beer is a source of reliable revenue. You can go on a Maine Beer trail and visit some of the over 80 breweries. We will be in Maine in August and I plan to visit at least of few of the breweries on the trail. I’ll let you know about the results.

 

[1] https://www.craftbrewingbusiness.com/news/infographic-what-states-have-the-most-breweries-per-resident/

[2] Tyrrell, Sobering Up, 226.

[3]; The Cyclopaedia of Temperance and Prohibition, (New York, 1891), 275–361.

[4] Tyrrell, Sobering Up, 290–307.

[5] William L. Downard, Dictionary of the History of the American Brewing and Distilling Industries (Westport, CT: Greenwood Press, 1980), 17.

Happy July 4th

In honor of the Fourth of July, here is an article about the top twenty-five beers in America, according to home brewers. I haven’t drunk many of them so the article has given me a goal.

Apparently today is  “National Independent Beer Run Day”; a day that the Brewers Association made up to get consumers to buy  independent, that is not macro beer, for the holiday. Marketing schemes like this are not new.

After Repeal, brewers attempted various campaigns The most prominent one was for bock beer in the spring. Here is another post from my pre-WordPress blog. It was for the Session, which was a blog carnival, which stopped publishing in 2018.

July 4, 2008


The Session #17: Going Against the Grain: Drinking Anti-Seasonally 

In my book, Brewing Battles,I explored the attempts of the immediate post-Prohibition brewers to develop a marketing strategy that would cover all seasons. The centerpiece was bock beer; for the journal, Modern Brewery Age,  this beer was the epitome of spring.

In the years before beer marketing was national and also before wide spread air-conditioning, the summer months usually saw an up surge in beer sales. However today it is not clear if increased beer drinking is so synonymous with warm weather.

Brewers vary in their focus on bock beer as a harbinger of spring. On a personal level when it is very warm I prefer a lighter beer such as a heifenweizen with a lemon. I also like a shandy or panache but I have been told that brewers dislike such combinations.

The Session is a blog carnival originated by Stan Hieronymus at Appellation Beer.  For a summary of the Sessions thus far, check out Brookston’s handy guide

 

 

New Jersey Brewing

New Jersey is tied with Kentucky as the states which have experienced the greatest growth in the craft brewing industry. You can read the article about this here.  What follows are a few excerpts from Brewing Battles about three prominent New Jersey brewers.

Gottfired Krueger Brewing Company

Beginning in 1935, brewers produced canned beer.[1] The American Can Company had developed a viable beer can prior to Repeal. The company lined the can with enamel, thus earning the designation “keg-lined.” In 1933, the Gottfried Krueger Brewing Company of Newark, New Jersey engaged American Can to produce cans. The can company produced a trial run of two thousand Krueger Special Beer cans which contained 3.2 percent beer, the alcoholic content allowed by the modification of the Volstead Act. The test market approved of the taste of beer in cans, and Krueger went on to produce a line of canned beer which the company put on sale in Richmond, Virginia on January 24, 1935.[2]

The Gottfried Krueger Brewing Company dated from 1852. Its original name was Braun & Laible. By 1865 the name had changed to Hill & Krueger; Gottfried Krueger took over in 1875. In 1889, the brewery became part of the U.S. Brewing Company, Ltd of New York, a British brewing syndicate. After Repeal, Krueger reopened. A regional brewery, despite its’ brief moment of fame for canned beer, Krueger’s closed in 1960. Narragansett purchased the brand; when Falstaff purchased Narragansett, Krueger became one of its products.[3]

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

 

Feigenspan Brewing Company of Newark

During the early years of Prohibition, Christian Feigenspan headed the Brewers Association Feigenspan was the head of a Newark, New Jersey brewery bearing his name. Prior to Prohibition the company had gained control of the Dobler Brewing Company, Albany, New York and a New Haven brewery, the Yale Brewery. The company resumed brewing following Repeal. Ballantine bought the firm in 1944; Dobler beer was produced into the 1960s. .[4]

Peter Ballantine & Sons

One of the country’s most long lived ale brewers also had its origins in the antebellum period. Peter Ballantine, an immigrant from Scotland founded Ballantine Ale in Newark, New Jersey in 1833. By 1877, it was the nation’s fourth largest brewer and the only one that brewed ale exclusively.[5]

Prohibition had led to the closing of many breweries; during Repeal, the industry experienced growth and decline simultaneously. Some established brewers started up again, new breweries formed, and others attempted to reopen but failed. P. Ballantine and Son, New Jersey’s largest brewer in 1914 and one of the nation’s few English ale brewers, faced this fate. Although the company had planned to open following Repeal, the stockholders ultimately decide to sell their interests. Carl and Otto Badehausen bought the company and retained the name. Ballantine continued as a successful post-Prohibition brewery until the 1960s. Falstaff purchased the brand names in 1972.[6]

Falstaff Brewing was seventh in 1950. In 1972, Falstaff purchased Ballantine which also gave the company the brands of the Christian Feigenspan brewery of Newark, New Jersey. The main brand was Munich. Feigenspan headed the USBA during Repeal. In 1975, Paul Kalmanovitz, head of General Brewing (S & P Corp) gained the controlling interest in Falstaff Beer. Falstaff Beer continued as a corporate entity with its own breweries until 1990 when the last brewery in Ft. Wayne closed. It is now an apartment complex. By that time S & P also owned Pabst. Small amounts of Falstaff beer were available for sale until 2000. The shield trademark was over one hundred years old.[7]

 

Falstaff Brewing Corporation, Logo from 1933–1940. Photo courtesy of Pabst Brewing Company.

 

 

[1] Stanley Baron, Brewed In America: A History of Beer and Ale in the United States (Boston: Little, Brown and Company, 1962) 323.

[2] Downard, Dictionary 64; “Beer Can History: The World’s First Beer Can,” Brewery Collectibles Club of America, www.bcca.com (accessed  July 17, 2007).

[3] Downard, Dictionary, 105.

[4] Downard, Dictionary, 74.

[5] “Ballantine Ale,” Falstaff Brewing Corporation, http://www.falstaffbrewing.com/index.htm (accessed January 13, 2006).

[6] Modern Brewery, July 1933, 73; Downard, Dictionary, 15.

[7] “The History of Falstaff Brewing,” www.falstaffbrewing.com (accessed January 24, 2007).

 

 

 

 

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Mergers

Yesterday, Mammoth Brewing Company announces that it will acquire Great Basin Brewing Company. The sale will be final  some time this summer.  Great Basin is the oldest and largest craft brewery in Nevada while Mammoth is the oldest in Eastern Sierra. Both are fairly small breweries; the sale will enable the new company to brew 40,000 barrels. Previously each produced about 15,000. You can read more about this merger here.

In the 1950’s and 60’s small and medium size breweries sought mergers and combinations to better compete against  Anheuser-Busch and the other large brewers. Here is a an excerpt from Brewing Battles about the various mergers.

From 1950 to 1980 there was much movement among the top ten producers of beer as the industry continued its trend towards greater concentration.

Liebmann Bros owned and brewed Rheingold Beer, which was sixth in 1950. After Repeal, the company expanded through acquisitions, but Pepsi Cola United Bottlers purchased it in 1964. At that time, only the Brooklyn and New Jersey plants remained in operation. Chock Full O’Nuts, the coffee company, bought Rheingold in 1974 and closed the Brooklyn brewery in 1976. In 1977 C. Schmidt and Company, tenth in 1980, bought the brand.[1]

In the 1990s, and again in 2003, the owners of Rheingold Brewing Company attempted to revive both the company and its famous Miss Rheingold contest. In 2005, Drinks America bought the brand; the company also distributes Willie Nelson’s Old Whiskey River Bourbon and Trump Super Premium Vodka.[2]

Although in 1953 Schlitz lost its number one ranking due to a Milwaukee strike, the brewery continued to expand, purchasing four breweries that all went out of business between 1949 and 1964. The biggest acquisition was, in 1961, Burgemeister, located in San Francisco and the third largest brewer in California. In 1964 Schlitz also purchased a thirty-four per cent share of Labatt of Canada which controlled General Brewing Company, San Francisco. Burgemeister and General were responsible for twenty-seven per cent of the California beer market.

Following Schlitz’s purchases in the early sixties, the federal government filed an anti-trust suit against the brewery. At the same time the government was also suing Pabst for its acquisition of Blatz in 1958, Falstaff for purchasing Narragansett, and Rheingold for buying Jacob Ruppert.[3] In the 1950s the government had pursued anti-trust action against Anheuser–Busch for its purchase of the Miami Regal Brewery.[4] In 1965, Norman Klug, president of both the USBA and Miller Brewing testified at the Schlitz trial that the company’s acquisition of Burgemeister had adversely affected Miller’s sales. In 1966 United States District Judge Stanley A. Weigel ruled that Schlitz had to divest itself of Burgemeister and could not acquire any new United States plants for ten years.[5]

In 1958 Pabst bought Blatz Brewing, which was the country’s eighteenth largest at the time. The company had been ninth in 1950; Schenley Distilling owned it. Because both Pabst and Blatz were Milwaukee brewers, the federal government sued under anti-trust laws, seeing their combination as monopolistic. Pabst denied the government’s claim, stating in its defense that the company was “a failing firm at the time of the acquisition and that therefore, there was no adverse effect on competition.”[6]

Although the combination of Blatz and Pabst would have created a concentration of brewers in Milwaukee and the surrounding states, it would have also created a larger company to compete with Anheuser–Busch and enabled Pabst to stay more competitive on a national level. Over ten years later, Pabst sold Blatz to Heileman following completion of litigation. Pabst Brewing currently owns the brand; Miller brews the beer under contract. It is for sale in Wisconsin, Michigan, Illinois, Indiana, Ohio, Pennsylvania, and Minnesota. Blatz was one of the big three of Milwaukee brewers in the nineteenth century and was the first to go national.[7]

Blatz Beer. Photo courtesy of Pabst Brewing Company.

[1] Downard, Dictionary, 159; Will Anderson, The Breweries of Brooklyn: An Informal History of a Great Industry in a Great City (New York: Anderson, 1976), 100-111.

[2] Patricia Winters Lauro, “Advertising,” New York Times, February 2, 2003, C8; “Rheingold Beer,” http://www.drinksamericas.com/brands/rhein.htm. (accessed January 24, 2007).

[3] Leonard Sloane, “Problems Are Brewing in Beer Industry,” New York Times, December 14, 1966, F1; Tremblay, Brewing Industry, 86.

[4] Anheuser-Busch Companies. Annual Report (St. Louis, Mo: Anheuser-Busch Companies, Inc, 1958).

[5] “Sales Cut Cited,” New York Times August 18, 1965, 45;”Schlitz Ordered to Drop Holdings,” New York Times, March 25, 1966, 59.

[6] “Pabst Suit Revived By Court,” New York Times, June 14, 1966, 65.

[7]; “Advertising: Blatz Goes to Campbell-Mithun,” New York Times, August 18, 1969, 52; www.pabst.com  Pabst Brewing Company, (accessed January 1, 2007); Downard, Dictionary, 23.

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