Beerlog

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Brewing Pioneers to Brew for Charity
FILED FEBRUARY 17, 2010

Sierra Nevada Brewing Company is celebrating its 30th anniversary this year. Founder Ken Grossman, a brewer for whom I have a lot admiration (and our second Beer Business Daily Maverick Award Winner), came up with the idea of gathering some craft brewer/home brewer pioneers and creating four new commemorative beers to celebrate this milestone, while giving to charity along the way. He told me of his plans over Shiner Bocks and BBQ on the Riverwalk in San Antonio a few months ago -- and I thought it was a damn good idea -- both the choice of BBQ that evening and the collaboration of pioneering brewers. The website can be found at www.sierra30.com.

The pioneers include Fred Eckhardt, Fritz Maytag, Jack McAuliffe and Charlie Papazian.

Some Thoughts on Jeff Becker
FILED JANUARY 13, 2010
Some Thoughts on Jeff Becker

I was unfortunately out of the country when the news of Beer Institute president Jeff Becker's untimely passing reached me. On the day of his funeral today, I feel compelled to reflect on Jeff. I first met Jeff Becker about ten years ago, and even while I was a little scrub of a beer reporter, Jeff always took the time to help me understand the complex national issues that faced the U.S. brewing industry. For that I will always be eternally grateful. But what I most enjoyed about Jeff was his sense of humor and optimistic outlook. Jeff could always find the humor in every situation, even his own sickness, and he will be remembered for his joie de vivre. I sat next to Jeff at a particularly dull meeting a few months ago, when he had lost so much weight that he looked like his suit would drown him. He looked tired, and I said, "Jeff, what in tarnation are you doing here? You should be at home resting." He shot back, "Thanks, Mom, for your concern. But I didn't want to miss all this excitement." Eying my corpulent gut, he told me about this great new diet plan he discovered that I should try. "It's called chemotherapy."

The truth is that while Jeff didn't take himself too seriously, he took his job very seriously, and no matter how badly he felt, he worked until the end. He was also passionate about the industry. If he read something he didn't like in this space, he wasted no time dialing me up and hollering something fierce, burning up the phone line from DC to San Antonio. Jeff was the rarest of political animals in Washington: he had integrity and passion and you always knew where you stood with him. And I honor him for it.

I last spoke with Jeff a few days before Christmas as he was recovering at home from a particularly harsh treatment. He answered the phone with, "Hi Harry, I'm still here!" I could almost see that sardonic smile on the other end of the line. Washington was in the grip of a snow storm that day and the city had ground to a halt, but Jeff still made the trip to the doctor's office. "The cancer apparently doesn't give a damn about the weather," was his wry reply. Despite feeling terrible, Jeff still took my call and patiently answered my questions. He truly loved the beer industry, and wasn't going to let a little thing like cancer keep him from the game. I am told he was at his desk the day before he died. I will miss Jeff terribly, as will the rest of the industry.

Top 9 Reasons to Attend the Beer Summit 2010
FILED NOVEMBER 1, 2009

1. So you can get your bearings before Summer starts. You will first acquaint yourself with the brand performance landscape, and who has the magic mojo and who doesn't. We'll have Dan Wandel of IRI show us the very latest numbers at a crucial period of time: right before the Summer selling season. Dan digs deep into his database to show us which brands and categories have that crucial momentum in each channel, and which are not, and why. Dan knows the off-premise, and he'll show you where to fish.

Also, this year we are featuring somebody you've never seen before -- Jim Rund of Catalina Marketing. Jim also has a database at the consumer level through their retail couponing and loyalty programs, and Jim can not only show you exactly who is buying which beers, but how interactive each brand and category are with other specific goods in the basket, along with many other variables which predict purchase intent. I'm excited about this presentation because it will be the first time anybody at a beer conference has had access to these insights.

2. To learn what is driving craft beer growth, if it will continue, and where crafts go from here. Some distributors sell craft beer brands according to style (as in, here is our book of Pale Ales), and some sell them by brand and brewer. This has been a bone of contention within the industry for several years. For the first time, we put Steve Hindy of Brooklyn Brewery (who likes the "sell by brand" method) and Jim Schembre of World Class Beverages (the craft distributor who favors "sell by style") on the same stage to duke it out on this topic and several other topics. Moderated by category management pro Tom Fox, the panel also includes craft-in-a-can visionary Dale Katechis of Oskar Blues, who will describe the helter-skelter world of growing a brewery from scratch to a significant barrelage in his irreverent style. Yes, I like it in the can, and Dale always delivers.

3. To find out where all the Latinos have gone? And to find out why the ones who are still here aren't buying as much beer. And more importantly, what's the future of the entire Latino landscape as it pertains to beer? Not to put too fine a point on it, but Latino beer drinkers are going to be THE MOST IMPORTANT component of beer growth in the next decade. Getting this right is crucial, my friends. So we brought back blond firecracker Kelly McDonald of McDonald Marketing, the fave Summit speaker back in 2005. Kelly specializes in cracking the Hispanic marketing code with many diverse blue chip companies, from Sprint to Denny's to Anheuser-Busch and MillerCoors. And here's a bonus: She's a great speaker. A marketing consultant who'se not boring -- only at the Beer Summit, folks.

4. To know why five of the top six mega-brands are in free-fall, and what the big brewers/importers are going to do about it. We've got the big names -- Dave Peacock of Anheuser-Busch, Ed McBrien and Tom Cardella of MillerCoors, and we're darn close to signing a big importer exec. Instead of canned speeches, we've changed the format into a round table, where your editor will joust and parry with The Bigs about getting our largest brands, the ones that keep the lights on and the trucks rolling, back on track. Plus, we'll talk about getting that crucial brewer-distributor relationship back into that warm-and-fuzzy place, the future of three-tier, consolidation, and more.

5. To learn more about how Pabst Blue Ribbon, Yuengling, Magic Hat and others have used the hottest (and cheapest) marketing strategy today to generate crazy growth: Word-of-mouth. We gathered the two best-known pros in the word-of-mouth marketing field in beverages, Ted Wright of Fizz and Darrell Jursa of Dig, to sit on a panel and talk about how this marketing method can be used by brewers and distributors to ignite sales of beer brands. Moderated by MillerCoors communications consultant Pete Marino, this panel will provide actionable ideas for your market that will pay for your Summit registration many times over.

6. To know what the heck's happened to distributor consolidation lately? Distributor consolidation has virtually hit a wall. Is that wall made of paper or bricks? We bring back the man who has closed more beer distributorship acquisitions than any other -- Joe Thompson at IBG -- to talk in his entertaining and candid style about where we are in the consolidation cycle and where we need to go. Joe will show how volume and margin trends affect distributorship prices, and give valuable tips on how to best position yourself as a buyer or a seller.

7. To get a gauge of what's top-of-mind with the top chain retailers. Chain retailers are a cagey lot. They have lots of secret insider info and are closest to the consumers but are loath to share. Well, we have coaxed a few Top Gun retailers to step up to the mic and give us the skinny. Consultant Bump Williams has lined up a group of retailer chains to talk about how beer fits in their assortment, what SKUs are selling and why, and how consumers are reacting to price increases, among other issues. It's often tough to get chain buyers to speak in public forums, but Bump has a first-class group lined up for you.

8. To rub elbows with the top brass in the beer industry. This is often cited as the best part of our Beer Summits -- and it's the fun part. I can't tell you how many times people have told me, "Harry, I never would have gotten such-in-such hot brand if I hadn't met so-in-so at your Summit." The Beer Summit is where crucial connections are made. We cap registration at 400, so you have the opportunity to talk to nearly everybody there if you are so inclined. We have two beer receptions where you can drink and eat tasty appetizers on the unlimited BBD Platinum Amex card, ample breaks, an open-seating buffet lunch, and a resort in the middle of the desert where nobody can escape. Look, it's important what you know, but it may be more important who you know, and the Summit delivers both for the price of a pair of slightly used hand trucks.

9. To not be bored. I know that seems like a low bar to set, a standard that should be a given. But I've sat through many a presentation where I was just about to bite down on the glass cyanide tablet I keep in my cheek at all conventions for such eventualities when the blessed ending applause came. While I can't promise that every presentation and panel will be as entertaining as eight baboons ridden by clowns jumping through flaming hoops, I can say with strong conviction that most will be even better than that. In fact, our feedback forms say the Beer Summit is one of the most entertaining and evocative symposiums out there. Our Summits usually reveal important news later reported in national publications like Reuters and Bloomberg (last year's presentation by Credit Suisse's Carlos Laboy is still being talked about). And we choose our speakers and panels to get the most bang for the buck. We've been planning Summits for seven years now, and I believe we've gotten better each year with regard to picking speakers and discerning the right questions to ask them.

There's little doubt that 2010 is going to be a challenging year. The economic salad days don't look like they're going to suddenly reappear anytime soon. You've got two options: hole up in your office looking at Jim Cramer screaming at you in his shirt sleeves on CNBC about how the sky is falling, or get out there and find out what others are doing to grow their toplines in this unique environment. Come get the best-practices and brightest ideas from the experts, come network within the industry, and position yourself and your company to prosper into the future.

I'm optimistic about our industry. We are an industry of optimists. And I'd like to invite fellow optimists to join me and Lulu and the entire Beer Business Daily team in Phoenix on Sunday, February 28 to start the dialog about how we keep the industry's prosperity going strong into 2010 and beyond (and by the way, feel free to bring your spouse or date to both receptions, free of charge. Anything to help you folks keep the significant other happy).

Look, we can't control the economy, but we can control lots of variables in our little corner of the economy: the U.S. beer business. We can learn to improve the things we can control from each other while simultaneously drinking beer with each other. And the Beer Summit provides the perfect setting for both. At the Beer Summit, we serve beer all day. Why? Because breakthroughs are made in such ways.

But you can't be a part of it unless you register and get a badge. So click the link and let's get on with it.

Click Here to Register

Thanks for your consideration, and I am,

Sincerely Yours,

Harry

In Defense of the Trade Press
FILED OCTOBER 18, 2009

I was having a beer with a government affairs executive recently, talking about the recent brewer-distributor tensions which have been churning under the surface of the beer industry for the past six months. The tensions arose out of the failure of the big brewers, craft brewers, and distributors to negotiate the language of a theoretical federal bill which would have helped out wholesalers on a particular point. This failure to reach consensus, while not catastrophic or even unamicable, has nevertheless lead to other misunderstandings, misgivings, and percieved breaches of trust between the players, which culminated last week with the Marin Institute's bombshell kook-fest of a report, which the brewers suspect the distributors had a hand in writing or at least promoting.

I have spoken candidly with more people on more occasions on more angles on this particular issue than probably anybody else. I know this issue frontwards and backwards, and perhaps more importantly, I know what each stakeholder THINKS about this issue frontwards and backwards. And what has struck me are the amount of assumptions each party has about the other that either aren't true or at least aren't completely true. Even though the BI, BA, and NBWA have communicated more this year than any before it, there's still a lot of "If I had known he thought this, I wouldn't have said that" sort of thing. Like in all relationships, communication is key. It's always darkest before the dawn, and I think the players in this game are starting to communicate more frequently at the top and dispelling untruths. That's good, because all three groups need each other.

So in talking with this guv affairs exec, an idea suddenly struck me like a bolt of lightening that at once rings completely true but at the same time is incredibly self-serving: That having an independent trade press is a crucial element to having a healthy unified industry. Yes, to quote my high school tennis coach: We is the key.

Not everybody believes this. In fact, I can name the people in each brewery or distributorship who wish we didn't have a trade press at all. It would be much easier not to have to deal with us, I admit. Their natural reaction when the press calls is to circle the wagons and hide behind the PR people. I don't blame them. If I wasn't a journalist, I would probably do the same thing. But I believe this is counterproductive to a transparent, communicating, healthy, open industry. There are others in the beer business who understand the Fourth Estate's role in keeping everybody honest and therefore keeping things in balance. Sometimes you may have something come to light that you wish had remained in the dark, but that's the price we pay for a healthy, honest industry.

Example: The brewer-distributor negotiations mentioned above were one of the few times in this industry where the proceedings were kept strictly confidential. Maybe that's why talks broke down. Nobody was accountable to their constituents, because their constituents had no idea what was going on. I truly believe that if we had been invited to attend those meetings and freely write about them, maybe, just maybe, all of the parties would have come to some accord, and we'd have language today that is acceptable to everyone. The press breeds compromise. Ronald Reagan and Ted Kennedy both understood that, which is why they were both such successful legislative leaders. But maybe I'm wrong -- maybe we would have created such a circus that nothing would have gotten done. But I don't think so.

Industry unity is extremely important to me. Many people believe that trade publications like mine are just a bunch of shit-stirrers who create controversy to sell subscriptions. This is simply not true. Hot controversial news-breaking items, actually, always fail to drive many new subcriptions because usually they're just ripped off and passed around by those who don't subscribe. What sells subscriptions are the longer, thoughtful articles -- not hard news -- which seek to connect the dots and help readers to understand complex and long-running issues in the industry.

So in defense of the trade press, I believe we provide an invaluable service -- not just keeping folks in the industry informed -- but perhaps more importantly, greasing the rails of understanding between industry leaders. This seems self-important and maybe it is. I don't mean to inflate our relevance: We are a very small part of the discourse in the industry. But when it comes to industry communication, every little bit helps.

Change is Inevitable, Unfortunately
FILED SEPTEMBER 13, 2009

I have just arrived in St. Louis for a distributor meeting. It is a brilliant sunny Sunday afternoon in September -- which is good, because St. Loo is usually cloudy and humid this time of year.

I checked into the new Four Seasons Hotel which is adjacent to a casino, which hopefully I won't visit, and also adjacent to the Mississippi River, which I hope to visit in the form of a morning jog. But I know that after supper tonight I'll step inside for "just a hand or two" of blackjack and will end up staying late and not jogging along the river. Just being honest with myself. Some things never change.

I always have this weird feeling when I'm in St. Louis. I've been here many times before, and I always feel Anheuser-Busch's presence, like that feeling you get when you think somebody is watching you, or when a psychic says your dead grandfather's ghost is in the room, or when somebody breaks wind in an elevator: You may not see it, but you know it's out there, lurking. It's an electric feeling in the air -- a feeling of power, of fifty share, of being in the center of the beer universe.

But this time I don't have that feeling as much as before. Is St. Louis still ground zero for the beer industry? A-B announced it will be trading its ADRs on the New York Stock Exchange on Friday, just after it said more key employees will be based out of its mid-town New York offices, which are next to the Colgate-Palmolive building. Is A-B like Colgate-Palmolive, or Philip Morris? Will it become an international CPG behemoth based out of New York?

I certainly hope not. Beer, I've always maintained, isn't like other CPG goods. In beer, brands still matter, and location and geography still matter. We don't have the private label threat, yet, and that's a testiment to the value beer brands still command in the marketplace, value that not even Wal-Mart or Costco have been able to cheapen (I believe it's because of the three-tier system, but that's for another column). Beer is local, it doesn't travel well, and the brands are deeply personal badges. Soft drinks use to have this brand magic, but they pissed it away by leveraging the brands, making them ubiquitous and, to use a term my snob mother would use, common.

It seems like the chief executives of big public CPG companies, like P&G or Gillette or Coke, make money by either buying things or selling things off. Geoff Bible made a fortune at Philip Morris buying up competing tobacco brands and Miller Brewing and Kraft. Now the new CEO is no doubt making a fortune splitting it all up. Same with PepsiCo -- sold off its bottlers, now it's buying them back up. Nobody makes money on the status quo, so therefore it is always changing, even if it doesn't need to. Public company CPG CEOs make money by either consolidating or spinning off assets, and both are used as arguments for the stock to go up, the former through "synergies" and the latter through "unlocking value."

I hope A-B doesn't end up like Philip Morris, becoming a big global CPG company that gets into buying up soft drinks and food companies and its own distribution network, now that it has mastered the brewery market. But they probably will. Brito isn't paid to sit by and watch his tanks ferment. It's all about the delta. And New York is the center of that world.

As for me, I'm going to pop into the casino for a dish of beer and one or maybe two hands max of blackjack, just to see how hot the cards are. It's nice to know there are still a few constants in the universe.

ABI's Year of the Balance Sheet

FILED APRIL 18, 2014 UBS sees 2015 as "the year of the balance sheet" for ABI, per recent note...
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Brewers' Distribution Models

FILED APRIL 17, 2014 The comically titled "Go Deep or Go Wide" panel at last week's CBC offered some interesting insight as to how craft brewers plan their expansion...
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