September 26, 2008 Craftsman Style

Volume 4 | Issue 3

Craft beers are gaining ground through word of mouth and are proof that the little guy, ingrained in the community, can withstand the might

At the tail end of American Craft Beer Week in mid-May 2008, 2,100 foodies and beer enthusiasts descended upon D.C.’s swank Andrew W. Mellon Auditorium for SAVOR: A Craft Beer and Food Experience. This event was a first of its kind and hosted by the Brewers Association, known for producing the Great American Beer Festival and World Beer Cup and its 15,000-plus member American Homebrewers Association. The ticket price at $85 served to filter out many who might attend a beer festival for reasons other than tasting beers in a responsible manner. The pairing of specific beers to specific foods drew in people more accustomed to wine and cheese events and featured 86 beers from 48 craft breweries from across the country and 35 sweet and savory appetizers.
In particular, the Savor Salon seminars provided messages that reinforced much of what attendees tasted: that beer can go as well or better with food than wine due to a range of both contrasting and complimentary flavors that are more versatile than the acidic base that anchors nearly all wines. One intriguing salon hosted by the Brewers Association’s Julia Herz was a panel discussion with Ray Isle of Food & Wine Magazine, Ken Wells of Conde Nast Portfolio and Lauren Buzzeo of Wine Enthusiast Magazine on “Cross Drinking Without the Social Stigma.” The message was loud and clear. It is OK to love both wine and beer in this day and age in which small vintners and brewers are offering flavorful, unique beverages and allowing the human experience to grow accompanied by a beverage that matches the occasion.

CRAFT BREWERS ON THE RISE – 12 PERCENT GROWTH

Americans are turning to craft-brewed beer in increasing numbers. The dizzying choices of brands and styles from the 1990s have given way to a greater understanding of beer styles. IPA used to be a term that only hardcore beer enthusiasts knew a decade ago. Now many Americans know it is a very hoppy beer style; many even know it stands for India pale ale. India pale ale’s roots come from the need for the British Empire to supply its troops in India with beer that could survive the seven-month voyage around the tip of Africa. Both hops and alcohol serve as preservatives, so this strong, hoppy style was born out of necessity. Pale ale was recently in The New York Times Crossword Puzzle as the answer to “beer style.”

A craft brewer is a small, independent and traditional brewer generally making beer from 100 percent barley or wheat malt, rather than adding rice or corn to lighten the body and flavor of the beer. Craft brewer sales grew at 12 percent by volume and 15 percent by dollars in 2007 and continue to grow at a strong rate in 2008. By contrast, large brewer and imported beer sales in the U.S. grew by 1.4 percent for 2007. While the numbers for large brewers is solid for growth due to such a large base, the results for the much smaller import sector was the lowest growth rate for imports since 1991. Imports and craft beers compete in the “high end” of the beer market, and craft has caught up to imports in quality perception in recent surveying. With an equal perception of quality, Americans see a small local company as more attractive than beer that needs to expend resources just to get the product into port, then to the importer, then to the wholesaler and finally to the retailer. Naturally, the large brewers are trying to access the high end through their own offerings and through import distribution arrangements. The large brewers do have advantages in that they are often responsible for making the tap handle and shelf space decision where they are a category captain or category validator for specific retailers. A brand like Blue Moon from Coors can increase distribution not from demand, but from being pushed into the marketplace by wholesalers.

The biggest strength for the craft brewing sector is the demand from the beer drinker. What large brewers cannot deliver are authentic small, independent, local beers from companies immersed in the community as employers and participants in local charitable causes. Craft beers are not grabbing share from the bigs and major import brands because they are pouring millions into advertising; crafts are increasing share by word of mouth and respected beer lovers turning their friends onto craft. To many beer drinkers, who makes the beer is very important. Generation Y/Millenials hear the news stories of off shoring of jobs, pensions disappearing and have an orientation to the world that technology is the ticket to making one’s mark, whether it be through developing video content for U-Tube or creating IPod play lists for friends. The idea that they should be loyal to large corporations is unfathomable because there is no reason to. As restaurant industry speaker Eric Chester says “It is not Generation Y, it is Generation Why?”

WHAT’S NEXT

Will beer drinkers really leave the fizzy yellow lagers and light lagers that used to make up 99 percent of beer in America? They already are and we are in the midst of it. We have seen similar changes in coffee, tea, wine, cheese and bread. All of these food and drinks industries have seen dramatic shifts to small producers offering new, flavorful products in the last 20 years that have changed the industry landscape. Beer is next, and it should be a tasty journey.

Paul Gatza is director of The Brewers Association, which was established in 2005 through a merger of the Association of Brewers and the Brewers’ Association of America. Its goal is to unify the combined 88-year history of service and to promote and protect the U.S. craft brewing community’s interests. Visit www.craftbeerandfood.org for information on seasonal beer releases and craft beer and food and www.beertown.org for information about craft brewers.

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