Nashville's Yazoo beer, craft brewers featured in Forbes

[TNbourbon]

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http://www.forbes.com/investmentguide/forbes/2006/0605/194.html

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Money on Tap.pdf

[Gillman]

Tim, I saw the origins of the microbrewery movement, it started on the West Coast in the late 1970's (early ventures were De Bakker and Albion Brewing in CA) and moved east slowly - Colorado has always been a stronghold. It took inspiration from Anchor Steam Brewery in San Francisco, maker's of America's only indigenous beer style, steam beer. Anchor was a micro-like operation revived in the 1960's by Fritz Maytag of the Maytag washing machine family. The developing craft winery scene in CA was also an influence on early small-scale beer pioneers. (Maytag later branched into spirits in a small way, and on this board is perhaps better known in that capacity than as the reviver of steam beer and kickstarter of the micro beer phenomenon). At the same time as micros took root and (some) grew, e.g., Sierra Nevada, the Samuel Adams beers, Brooklyn Brewery, etc., imports became more popular. Nationwide I'd estimate imports and microbrews have about a 5%-6% market share, higher in some areas. That's after 30 years of trying.

The big brewers have consolidated further in that time and at first barely gave the phenomenon any notice. Their business changed in that some big brewers were taken over by foreign makers (e.g. SAB Miller) and some released some craft-like products (e.g. Blue Moon from A/B) and also expanded themselves into foreign markets (Anheuser Busch again, Coors) in a big way.

30 years ago just as the quality beer movement got started I'd have thought it would be bigger, today, a generation later, than it is. (This is not to say there aren't numerous individual success stories and more power to these companies). There are some superb beers made in America today but their appeal seems still relatively restricted. As to why, that is a good question, I believe, and one of which I would like to read an informed analysis. I have my own theory, which is that it is not easy to brew a beer with mass appeal that has a pronounced taste. It is not that people don't like taste (think e.g. of Coke) but the trick is to get the right taste.

Gary

[gr8erdane]

Gary, I think that for the most part microbrews are still considered luxury items by the vast majority of beer drinkers. The drinkers that made AB and Miller and Coors so big did so because they could buy quantities with their hard earned dollars. Most really good imports and microbrews cost for a six pack is what you can get a Bud Light, Lite or Coors Light twelve pack for. If they could afford to buy an Anchor Steam 12 pack for the price of Bud Light, you bet they'd take the taste upgrade (if you could get past the brand loyalty thing of course). But the economies of scale will not allow that and therefore, the same drinker will occasionally try a microbrew when they have a special event (or someone else is buying), and even if they LOVE the taste, the vast majority of their purchases will still be the mass produced beers because that's what they can afford in the quantities they want. Been there myself in days past but I will NEVER EVER buy the BEAST (Milwaukee's Best) again in this lifetime as I did when I went back to college. As for those of us here that enjoy quality beer, what percentage of our monthy beverage intake is beer and what is everything else? We don't even put a dent in the percentages.

[Gillman]

Good points Dane. I was thinking of our market where beer prices are controlled by the government (in Ontario there is a minimum price on beer). There has been no significant difference between the prices of micro and the (non-discount) macro beer, yet people still drink mostly the products of the big brewers. Also, the prices in the bars for the drafts of both are basically the same. In the bigger cities there is more experimentation, but the market is still pretty conservative. Our import prices are pretty reasonable too, and I've been surprised at some of the import prices I've seen in the U.S. I'll check again on the differentials here (I have to buy more beer soon) and will give specifics, maybe the spread here is bigger than I thought.

It is probably a case of "all the above", i.e., the pricing factor plus no one taste (even Anchor Steam ,which is good) from a small producer capturing wide attention. Also until recently (and as you were saying) the distribution of some of these craft makers was limited. But A/B was small at one time, too. Budweiser is actually a well-made product though, many think it is interchangeable with other mass market beers but I don't think that's true, it has its own profile and certainly was always considered better than the price beers you were referring to. We have our version of price beers here, brewed with high adjunct levels generally, and they sell in Ontario for $24.00 for 24 - that is legally the least you can pay for beer in this Province, there is a floor price (to discourage excess consumption).

Gary

[JeffRenner]

early ventures were De Bakker and Albion Brewing in CA

Actually it was New Albion , the name Sir Francis Drake gave to California (Albion was the Roman name for England, named for its white cliffs).

Nationwide I'd estimate imports and microbrews have about a 5%-6% market share, higher in some areas. That's after 30 years of trying.

I assume you mean nationwide in the US, not Canada. If so, it's still a little less than that, 3.42% last year. But when combined with imports, sales of "high-price beer" were 15.85% last year, up from 14.7% the year before. Craft-brewed and imports are the only parts of domestic beer sales that are increasing. Domestic beer sales (other than craft-brewed) were down 1.15%.

(Lots of other interesting statistics at the link above).

These statistics are from the Brewers Association, which is the umbrella organization that includes craft brewers, the American Homebrewers Association (on whose Governing Committee I sit), Brewers Publications, the Great American Beer Fest, and maybe some other divisions I can't think of just now.

I have my own theory, which is that it is not easy to brew a beer with mass appeal that has a pronounced taste.

Part of it is also (aside from cost as addressed by Dane and you in other posts) that modern American beers, and especially Lite beers, can be drunk in greater quantity (the "less filling" claim is accurate, even if "tastes great" is not). Even aside from the fact than many craft-brewed beers are higher than the typical 4.5-5.0% of standard American "yellow" beers, and are more satiating; you just tend to drink them more slowly and savor the taste, including the finish.

This was discovered by American breweries, especially post-WWII. As they dropped the hopping levels and increased the adjunct (corn, rice or corn syrup) levels, their sales increased.

Jeff

[Gillman]

Thanks Jeff for these corrections and additional details. I never sampled New Albion, it had closed not long before my first visit to the Bay Area. However I did sample later the offerings of Mendocino Brewing (I believe is the name), its successor. I didn't realise imports were as high in share as you indicated but micros are still tiny and import sales won't help domestic craft brewers (not directly). You are right I think about the satiating aspect. I still think though that someone could invent the "magic" micro taste, it just hasn't happened yet.

Gary

[CrispyCritter]

The big brewers have consolidated further in that time and at first barely gave the phenomenon any notice. Their business changed in that some big brewers were taken over by foreign makers (e.g. SAB Miller) and some released some craft-like products (e.g. Blue Moon from A/B) and also expanded themselves into foreign markets (Anheuser Busch again, Coors) in a big way.

Very recently, A-B bought a stake (not majority control, thankfully) in Chicago's Goose Island brewery, which makes some very nice beers. I've had their Honkers Ale, and their Summertime (a Kölsch-style ale)... scrumptious.