Timothy Sprinkle - True Beer: Inside the Small, Neighborhood Nanobreweries Changing the World of Craft Beer

Copyright 2016 by Timothy Sprinkle

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Library of Congress Cataloging-in-Publication Data

Names: Sprinkle, Timothy, author.

Title: True beer : inside the small, neighborhood nanobreweries changing the world of craft beer / Timothy Sprinkle.

Description: New York, NY : Skyhorse Publishing, [2016] | Includes bibliographical references.

Identifiers: LCCN 2016020597| ISBN 9781634506427 (pbk. : alk. paper) | ISBN 9781634506434 (Ebook)

Subjects: LCSH: MicrobreweriesUnited States. | Small businessUnited States. | BeerUnited States. | BrewingUnited States--Amateurs manuals

Classification: LCC TP577 .S67 2016 | DDC 663/.420973--dc23 LC record available at https://lccn.loc.gov/2016020597

Cover design by Laura Klynstra

Cover photo: iStockphoto

Printed in the United States of America

To all my drinking buddies, past, present, and future.

CONTENTS

INTRODUCTION

T hink the beer business is all fun and games? Think again. During the 2015 Super Bowl broadcast, Anheuser-Busch InBev ran an ad that came across as nothing short of a shot across the bow of the craft brewing industry and its customers.

Budweiser, proudly a macro beer, the spot announces. Its not brewed to be fussed over; its brewed for a crisp smooth finish. This is the only beer beechwood aged since 1876. Theres only one Budweiser. Its brewed for drinking, not dissecting. The people who drink our beer are people who like to drink beer. Brewed the hard way. Let them sip their pumpkin peach ale, well be brewing some golden suds. This is the famous Budweiser beer. This Buds for you.

Those were strong words in beer circles, and they upset many people in the craft side of the industry, including Larry Bell of Bells Brewery in Kalamazoo, Michigan, a craft brewer that produces about 250,000 barrels per year and has been around since 1983. He told the Detroit News that he just about jumped out of his chair when he saw the Super Bowl ad. So what was his response? The next day, Bell got to work on a limited edition run of his own Bells Pumpkin Peach Ale that he personally brewed on his pilot system and sold out of the Bells taproom shortly thereafter, the proceeds of which he donated to a local nonprofit.

Were starting to eat their lunch, Bell told the newspaper regarding the rise of craft beer in the industry as a whole. Budweiser sales have basically been plummeting but typically in the industry you dont go after somebody elses beer, you promote your own.

Sam Calagione, the founder of Dogfish Head Brewing Company, agreed, describing the incident with the ad as a great thing for craft beer in general.

It shows how confused and conflicted the worlds biggest brewery is about how to engage an American populous whose beer tastes are changing, he told Mens Journal at the time. The more they spite us for trying beer outside of the light lager juggernaut, the more were going to stand for something very separate from what theyre about. Then as they buy out the companies making the beers theyre making fun of, the hypocrisy is very apparent. Im sure theres a room full of MBAs and all they care about is the Budweiser brand. Thats what theyre paid to care about. They dont give a shit if promoting Bud means making fun of other brands in the A-B InBev network. It shows that true craft brewers are brewers first, businesspeople second. That company is run by nothing but businesspeople.

The ad even provoked strong reactions among the other macrobrewers. MillerCoors, for example, released a statement shortly after the spot aired, extolling its belief that all beers should be fussed over. Quality isnt something that belongs to a single style of beer or a single brewer, the company wrote. It belongs to all of the people who deliver on the promise of consistently brewing and distributing the highest-quality, best-tasting beers in the world.

Before the Super Bowl itself was even over, Budweiser was backpedaling: Were not anti-craft. Just pro-Bud, the company posted on its Twitter feed during the game.

The simple fact that consumer reactions to a multimillion-dollar Super Bowl advertisement created by a multinational beverage conglomerate generated this sort of ripple effect reaction in such a well-established, profitable industry is telling. In another example, craft beer blog Hopstories issued a video response on YouTube declaring: We will savor our hundreds of styles, you keep pushing your one. Such reactions show that the macros once insurmountable competitive advantage is shrinking. It shows that the products they have been producing for decades, largely unchanged, are no longer as popular or selling as well as they once were. And it shows that, as the beer-drinking publics tastes have changed and evolved, the traditional producers have not kept pace.

Whats more, the rise of craft beer is hitting the macrobrewers where it matters most: in their profit and loss statements. More proof of this can be found in the increased consolidation thats swept through the industry in recent years. As of 2015, according to a report from Bank of America Merrill Lynch, just four companiesAnheuser-Busch InBev, SABMiller, Heineken, and Carlsbergtogether brew about half the worlds beer under a long list of different brand names. Thats down from ten companies controlling just over 50 percent of the global market in 2004. Simply put, a strong and competitive market does not go through rapid consolidation like this. As much as anything, this is a sign of weakness across the board, of a circle-the-wagons mentality on the part of industry.

In short: craft brewing has been around for decades, but its time in the sun as a major part of the global beer industry is just beginning. This book is an attempt to capture this moment in time and chronicle this emerging trend in American life and business through the stories of the people involved and the work they do every day, particularly in the growing nano segment of the market.

The craft beer industry is full of upstart, independent breweries like those profiled in this book. Theyre small, theyre agile, they brew tons of great beer, and, as startup businesses, they come with many of the same rewards (and challenges) that entrepreneurs in technology and other fields know well. The promise? Probably not riches, as food and beverage is a notoriously finicky field in that regard, but the creative factor is through the roof. Brewers get the chance to work with beer every day, to experiment with new recipes, and to develop their own manufacturing systems, all while making something tangible with their hands that makes people happy. In todays digital economy, this opportunity is tough for many would-be nanobrewers to turn down.