Imports Down -2.5% in November

FILED JANUARY 14, 2011

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But they're up nearly 5% year-to-date, according to Lester Jones at the Beer Institute. That's not so bad. As usual in 2010, there were wild swings in shipments. Mexican imports down nearly 15% in November, Ireland up 22%, Netherlands up 5%. What's up with Ireland? Well, year-to-date the country's imports are up 2%, which is in tune with Diageo's trends for Guinness, which make up the lion's share of Ireland imports. Timing of shipments, for everybody this year, tended to swing widely month by month. But in the end they tend to smooth out. One country that seems to steadily ship out growing shipments: Belgium, up 14%. Stella, baby.

GUINNESS NOT FOR SALE, SAYS MANAGEMENT

My friend Guy Smith, who is evp of Diageo NA and with whom I've travelled to Iraq in a war zone, told BBD that despite the speculation about Diageo selling Guinness to SABMiller, "Diageo is a house of iconic brands. One of the most iconic is Guinness. We will continue to be a house of iconic brands, and Guinness will continue to have a favored spot in our house."

New DGUSA chief Sheila Stanziale, in a memo to employees obtained by BBD, put it more bluntly: "Today's Beer Business Daily reports on speculation about the sale of Guinness to SABMiller. These reports are completely false....there have been recent announcements about our intent to grow in beer, both in mature and emerging markets. This strategic objective would not be well served by selling the world's most iconic beer."

We did note that this report out of the UK fulfilled one of our predictions in 2011: that Guinness would be rumored to be for sale. This rumor comes out of Europe every two years since Diageo was created by the merger of Guinness and Grand Met. Methinks it's analysts' wishful thinking, so that it will free up cash for Diageo to buy up the stake in Moet Hennessy that they don't own, (where margins are much larger), which is apparently a strategic match made in heaven. But I think Diageo, honestly, can rustle up the cash from their balance sheet for Moet Hennessy without selling St. James Gate et al. And after having endured 15 years of Diageo denying rumors of Guinness' sale, I'm starting to believe them.

So take all that with a grain of salt. But still, nothing is impossible -- that's one thing I've learned in the beer business in the last three years: Everything's for sale, at a price. And SABMiller would love to have that iconic brand in Africa and the UK.
START THE SCRAMBLE FOR ORGANIC HOPS

Due to a law change, certified organic beers must actually employ truly organic hops come Jan. 1, 2013. Now comes the mad dash for existing and aspiring organic title producers to secure the gems. Trust me, organic hops are hard to come by, and now doubly so. The BA's Chris Swersey has characterized the organic craft market in particular as one that appears to enjoy slow growth.

The stipulation seems like a no-brainer, but the American Organic Hop Grower Association had to lobby to change the former pertinent loophole borne of scarce organic hops. In December, the AOHG successfully convinced the USDA National Organic Standards Board to nix the exception due to "significant growth in the availability of organic hops."

AOHGA chief Meghan Quinn didn't return calls to describe the origin of the crop's increased availability. But the nonprofit's January market report did supply current and projected U.S. Certified Organic Hop acreage for years 2010 - 2012: In 2010 there were 127 certified acres under production, while 106 certified acres laid idle and 110 were in transition to grow organic plants. By 2012, 362 acres of certified organic hop acreage will be available for production.

To help member growers allocate that acreage in time for brewers' 2013 compliance, the association has created a brewer survey to help them understand demand. The form is not a contract. It's due Jan. 31.

But whether the projected increased acreage and grower outreach will lead to better access and prices for organic hops remains to be seen. The BA's Chris says the solicitation is a great step in improving communications, though no guarantee in synched production or anything else.


MOVIE THEATERS: ON-PREMISE ACCOUNTS TO WATCH

Distributors and brewers may find movie theaters increasingly profitable accounts. National Association of Theater owners' research guru Patrick Corocan told BBD that more large theater chains are getting into restaurant and alcohol service. They've been primarily centered in Texas and the Northeast, but have recently expanded nationally "a lot more, anecdotally," he says. He estimates that 300 out of about 5,700 theater locations currently now offer alcohol, a minute but growing percentage, compared to previous numbers.

ESPECIALLY HOT FOR CRAFT ARE smaller, art-house outlets, like Texas' Alamo Drafthouse. It makes sense. Their demographics are similar: young, with disposable income, and a taste for the artisan and independent. Drafthouse founder Tim League says the chain has always been beer-centric but that beer sales have indeed increased in with growth of the industry. The system has since focused more on marketing beer organically, blogging more about brew (like this reflective roundup of bestsellers at the South Lamar Austin location) and encouraging creative events like the upcoming collaboration with Dogfish Head: the Off-Centered Film Fest slated for April. Tim believes this iteration of the film contest-collaboration will be the biggest ever. He's also threatening another several-market, brew-centric event for the summer.

South Lamar Drafthouse beer chief Jim Hughes told BBD draft sales have really snowballed since 2007, with a roughly 40% increase in sales that year, and a similar year-over increase in 2008. Since then, growth has been between 5 and 10%. The most popular draft at his location is the local Live Oak HefeWeizen, while Lone Star, Miller Light, and Dos Equis continue to dominate bottle sales.

Just FYI, a trend to keep an eye on. Expanding beer drinking occasions is a big thing, because it's the easiest way to expand share of ethanol.


BEER BRIEFS:

OREGON BREWERS Tonya Cornett of Bend Brewing Company and Jimmy Seifert of Deschutes have been tapped to join 10 Barrel Brewery in Bend, Oregon. Brewery chief Garrett Wales said the two will help 10 Barrel make beers that "defy categorization." After the brewery's planned expansion to a 50-barrel system (up from 10), the brand is looking to cover more Northwestern territory, saturating Oregon, and then Washington, Idaho and possibly even Northern California.

OSKAR BLUES' 'GORDON' IS NOW G'KNIGHT, since Tennessee-based Gordon Biersch issued the Boulder-based brewery a cease and desist notice. The beer, one of its four year-round staples, was named after a local firefighter who died attempting to put out a fire via helicopter in 2002, according to Westword.


IT IS MY REGRET to report that a beer industry good-guy succumbed on Wednesday. I often report the deaths of beer industry legends in this space, often sent by their sons and daughters who work in the business. But I had no idea it would be so soon to report my own father's demise.

Henry Schuhmacher, former owner of Apache Beverage Co., passed on Wednesday night. He was 69. Throughout the 60 and 70s, Dad was the Lone Star distributor in Texas, selling the stuff in Houston and Baytown and, for awhile, in San Antonio. Remember the movie Urban Cowboy? Yes, Apache Beverage was there, with a young son in tow, to deliver beer to the set and to meet John Travolta and Debra Winger. When the Houston Rodeo came around, it was my father who rode a steer around with a flag that said, "Hi Harry" on it. When it came time for me to graduate from college, he promptly sold his company. But he put me in touch with Joe Huggins at Houston Distributing Co. and -- even though I worked every summer at Apache Beverage -- that's how I got my real start in this business.

I'm proud to say that Apache Beverage was among the first beer distributors to have a computerized route accounting system. My father bought an IBM System 36 and hired some kid to program it. It was rough, but it worked. And it was the reason he was able to convert most of his routes to pre-sales when it was unheard of at the time (he had too many SKUs.... he was among the first multi-supplier wholesalers in the late 1970s early 1980s, and by necessity he couldn't fit all those SKUs on peddle sell routes. So he was forced to go to pre-sales, reluctantly I add, because presales was and is an expensive way to sell beer).

He also was the former importer of Stella Artois lager from Belgium and Mamba Ale from Africa, and was a lifetime vice president of the Houston Livestock Show and Rodeo.

Never conventional, when it came time to sell his company, he sold it piecemeal to the five different distributors in town, bidding one against another on the brands. That's common practice now, but at the time it was considered rude. But afterward he maintained friendships with those competitors, most importantly the late Joe Huggins and Don Faust, Sr., whom he considered his best friends. He also kept up with his former lieutenants who ran his company because he wasn't suited for it: Willard Mercier, Jimmy Gibson, and Manny Sanchez, who have both gone on to have distinguished careers in the beer business.

In later years he spent his time amongst his horses on his ranchero in San Miguel de Allende, Mexico. Every few days he would wander down to a cantina near his home that had WiFi internet and he would read several BBD issues in a row and send me the most hilarious responses ... sadly most of which I couldn't reprint, although some did make it in.

But most of all, my father was a gentleman and a beerman, in that order, and that's all I hope for myself.

And so I dedicate this issue to him, and I humbly ask my readers that, if you happen to be drinking a beer tonight, as I know many of you will be, I would consider it a favor if you would raise one glass in honor of my dear father, Henry Schuhmacher. Slainte.


Until tomorrow, Harry

- Join us at the Fontainebleau Hotel in Miami on March 6 - 7, 2011 for our annual beer industry confab. More info here: http://www.beernet.com/beer_summit.php

"We may not imagine how our lives could be more frustrating and complex--but Congress can."

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