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The Realities of Expansion; A Look at the Firestone Walker & Duvel Partnership

The big news coming out of the craft beer industry this past week was the reported acquisition of California craft beer heroes Firestone Walker by Belgian beer giant, Duval.

Turns out these first reports were a bit erroneous. David Walker spent a fair amount of time attempting to clear the air about the deal between the two companies and to break it down to its simplest form, the two have entered into a partnership agreement that will allow Firestone Walker to increase their brewing capabilities and begin to cast a wider net in national distribution.

It sounds simple enough. But it poses an interesting dilemma for the surging craft beer industry, how do you handle expansion?

Time for a disclaimer; I am not an economist, financial planner or marketing wizard. That means I certainly do not know the best answer, however, what is most interesting is there doesn’t appear to be one answer. Many breweries seem to be finding new and unique ways the expand the appeal of their brands and entice new customers to try their luscious libations.

Here in San Diego we are all bearing witness to the exponential growth of the industry. Not only are more new breweries continuing to open, we are also seeing a surge in established local craft beer breweries opening satellite tasting rooms around the county. Mike Hess Brewing recently announced plans for a third tasting room to soon open in Ocean Beach. Culture Brewing, out of Solana Beach, also has a second location in Ocean Beach. North County brewers Belching Beaver and Rip Current have opened satellite tasting rooms in North Park while local legends Ballast Point is on number four, Stone Brewing is at five and Karl Strauss has eight brewpubs in Southern California.

Every successful business wants to make money and get bigger. Make no mistake, the people who start breweries may have gotten into the industry for the love of beer, but once you put your livelihood and the livelihood of your entire family on the line, you need that business to be success, nobody is making craft beer with the intention of simply breaking even. So what are the ways we have seen craft brewers grow their business and their brands over the past few years?

Sierra Nevada opened a second brewing facility in Mills River, North Carolina. Lagunitas also opened a second location in Chicago, Illinois and have announced a third brewing location for Azusa, California. Green Flash has broken ground in Virginia Beach, Virginia, Stone has done the same in Richmond, Virginia and I continue to hear rumors swirling about that Ballast Point will soon announce plans to open a brewery in Austin, Texas.

This method of expansion is obviously not applicable to smaller craft brewers. This is what the giants of the craft beer are able to do by being so well established and having developed a loyal following across the country. For these companies, it is all about long term planning. Not only will these location cut down on the expenses associated with transporting beer across the country, it also addresses what could be a serious issue in the future here in California; water. These other states have access to large reservoirs of water that will help make expansion even more feasible in the future.

Then there is the method that caused a huge stir in the craft beer community in San Diego with some effects still being felt, the time when Alpine Beer Company sold to Green Flash Brewing. It was something we had not seen yet, a craft brewer buying another craft brewer. In this instance, Alpine was not necessarily looking to expand, but the demand for their beer was so high and the deal allowed them to not only expand their tasting room and still brew their own beers at their East County San Diego location, but it got all their employees health insurance and other benefits they could not provided before the acquisition. Now, Green Flash can brew up larger batches of Alpine Beer for the masses here in California and pretty soon nationwide.

Another method of expansion is one I am loathe to even address so we will make it short and sweet and never bring it up again. You can sell your brewery to Inbev or SABMiller or one of the other giant conglomerates from around the world. But we all know that is a terrible idea…I’m looking at you 10 Barrel and Elysian.

Initially, the above method is what most feared for Firestone Walker.

This is not Duvel’s first foray into a partnership with a craft beer brewer. Over the past several years they have acquired Cooperstown, New York brewery Ommegang and most recently Kansas City’s Boulevard Brewing. Duvel, a family owned and operated company, has stayed relatively hands-off with both, allowing them to continue doing what they do best. Now both breweries have access to more resources and help distribute their beers on a far larger scale, as we are seeing first hand with Boulevard who has recently made their way into the San Diego market.

In several interviews David Walker has elaborated that this is more of a case of Duvel investing in Firestone Walker to aid with their expansion plans. If that is one hundred percent accurate I cannot say with any certainty at this point. Since both companies are independently owned, the financial terms or the deal were not made public. You can read what Mr. Walker told TheFullPint.com and BrewPublic.com right here.

It also should be noted that Duvel is not without faults of their own, especially in their home country of Belgium where it is a contentious fact that Duvel is known for forcing bars into contracts that must be honored even in the event that new owners take over. This became a very public issue for the owners of Moeder Lambic which fought and won a battle with Duvel in order to help ensure that tap handles would be available to smaller breweries that they wanted to support.

While I cannot claim that what Firestone Walker did is what I would have done, it is most certainly the option they considered to be the best for them and the people who work for them. The fact is that Firestone Walker is the 16th largest craft brewer in the country, but a whopping 80% of the beer they sell stays in California. While math was never my strong suit, I know that only leaves 20% for 49 other states. If they want their beer in the hands of more consumers, and since we already established that making money is the whole point of a business, this is clearly what they felt was the best option for their brewery. The most important issue for me is the status of genius Head Brewer Matt Brynildson, as long as he is happy, and all indications are that he is, and he stays at the helm of the ship, odds are very high that I will continue to enjoy the beers of Firestone Walker for years to come, and with any luck I will be able to do it in any state in the country and possibly any country in the world.

Cheers,

Tom


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It’s the Great Pumpkin (Beers), Charlie Brown!

It’s that time of year when the temperature begins to drop and the cool, crispness in the air signals the change of season from summer to fall as the leaves begin to turn color and sail to the ground where they wait for us to rake them up into big piles for the children of the neighborhood to jump into.

Well, maybe not in Southern California.a97bf1d1-794a-401e-a8dc-16a9dfe23805

October in San Diego usually means odd pumpkin patches in the middle of parking lots with straw on the ground. Costume shops in every strip mall that has an unoccupied building and lunatics who try to tell you that cold cider is just as good as hot cider. Savages I tell you!

But what we don’t have in the way of the more iconic definition of the fall season, we more than make up for in our efforts to evoke that fall feeling of cool nights and crisp air with some truly wonderful pumpkin ales made by some of the best craft brewers in San Diego, and for this list, one who is slightly further away.

Much like last week’s post on specialty ingredient hibiscus, pumpkin is something that can easily be done wrong. It’s also easy to look at the absolute flood of pumpkin related items and say that pumpkin beer is simply a gimmick to get money from suckers who worship at the house of gourd.

The question has been asked to me on several occasions; can pumpkin beers be considered a true craft beer? Or do you lose credibility because of the perception that pumpkin beers are merely a fad? It’s a question I like to answer with another question; Is it brewed by a craft brewer? Than the answer is yes, it’s craft beer. However, if you want to delve into the question further, I will happily elaborate. The beer must be carefully crafted to be something unique, not something that is simply allspice, nutmeg and cinnamon added to a fermentor. The design of the beer has to be really strong and showcase what real pumpkin flavor can bring to the world of craft beer.

That being said, allow me to present four craft beer that might make you rethink the way you look at pumpkin beer.

Coronado Brewing Company: Punk’in Drublic Imperial Pumpkin Ale.2014-10-08 18.39.43

The beer opens with a rich orange/amber color. lightly carbonated. The nose is a mix of pumpkin and nutmeg with a noticeable hint of cinnamon. First taste is a nice blend of natural pumpkin flavor with more sublet notes from the added spices and a light honey sweetness. The beer drinks easy and has all the nice flavors that a fall beer should have. The spices don’t overpower the beer, you can readily taste the natural pumpkin flavor without thinking that you are being force-fed pumpkin pie in a bottle. Plus the brew has a nice 8.0%ABV which you might not suspect as I found it to be a rather subtle. I love the design on the bottle and the name alone kind of makes it an easy sell to me, good thing it is also easy to drink and even easier to recommend.

Mike Hess Brewing: Magma Cucurbita, Imperial Pumpkin Stout.2014-10-13 16.06.38

Another beautiful bottle for a stout that pours at an impressive 7.25%ABV. The color is a dark molasses with a rich foamy head. The aroma is a roasted earthiness mixed with subtle hints of spice. Taste wise, it’s matches well with it’s aroma. This beer is roasted like pumpkin seeds and has an earthy quality like the brew just came out of the ground at a pumpkin patch. This beer drinks very well and gets more complex and enjoyable as it warms up to room temperature. On the front end of your palate, you get all the malty goodness, the pumpkin and spices are more subtle and noticeable on the back end. This is a wonderful beer to sit around on a cool autumn night with to help you stay warm.

Alpine Beer Company: Ichabod Ale.

With the amazing brewers at Alpine using a wheatwine as the base for this ale, you have to know it’s going to have a little something behind it, and at 10%ABV it doesn’t disappoint. The ale pours a golden orange color with a lovely nose of cinnamon and nutmeg but used moderately so as not to over power the beer they have crafted. It tastes as good as it smells and with a sticky wine sweetness that adds to the overall enjoyment of the beer. This isn’t one that should be gulped down in a hurry, this is a much more easy going, take a sip and enjoy the leaves changing color sort of beer. Take your time with this one and you’ll truly appreciate what it has to offer.2014-10-11 16.16.37

Kern River Brewing Company: Pumpkin Ale.

Kern River is not a San Diego brewery, but you’d never know it from the way their “Just Outstanding” IPA tastes. In fact, that beer is the sole reason I was so excited to try out this pumpkin ale. The label is simple yet the tag line says it all, “So good it’s scary!”. The beer pours a healthy orange color with a nice level of carbonation. The nose on this ale is full of fresh pumpkin smell and that’s exactly what you get as the ale touches your tongue. You’ll notice a soft undercurrent of allspice on the backend, but only if you are paying close attention. This pumpkin beer is amazingly drinkable and at only 5%ABV it’s not going to end your night of trick r’ treats early. The restraint from the temptation to over spice this beer is perhaps the most impressive thing of all. It takes true craftsmanship to show that level of restraint and let the fresh pumpkin flavors be the star of the beer. A phenomenal ale and luckily, everyone I’ve shared it with has agreed with that assessment. Highest recommendation you go find this beer right now.2014-10-13 23.06.59

So there are my four favorite pumpkins ales for this Halloween season, did I forget any? Let me know which ones have caught your eye.

Now if we could only get the brewers to make that beer with the turkey/cranberry/gravy/stuffing flavor for Thanksgiving we’d be all set!

Cheers and Happy Halloween!

Tom


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Save the date: August 23rd is Beer-Con!

Craft beer is my passion. If you are reading this blog odds are pretty good that it’s your passion as well. One of my favorite things to do here on the website and with my friends out at the bars is to share my knowledge and to hopefully learn new and exciting bits of information and insights into the world of craft beer. Whenever the opportunity arises sit back and listen to a respected member of the craft beer community speak about important issues in the world of craft brewing, I will always jump at the chance to sit in and try to soak up as much knowledge as I can. Luckily for us here in San Diego, there is a wonderful collection of very smart and knowledgeable beer people who can not only be informative but also very entertaining. It also doesn’t hurt that quite a few of them can also make a really nice beer to drink.

This is why I am so excited that on August 23, Beer-Con is back!

If you are not familiar, Beer-Con is a convention that is hosted right here in San Diego for all levels of craft beer lovers, from the newest of novices to the most expert of experts, Beer-Con is where you bring your passion for craft beer and share it with others. But this isn’t simply a gathering of craft beer enthusiasts, this is a convention designed to help you learn more about the world of craft beer and you have an opportunity to engage with the people who create your favorite brews. Panels are designed to help impart knowledge and to allow patrons to ask questions of their own.

This year the fun begins at 10am with a keynote address from the master of craft beer pairings, “Dr.” Bill Sysak, which I can speak from personal experience, should really help set the tone for a fun day. Panelist for this year will include, Doug Constantiner from Societe Brewing, Mike Hess from Hess Brewing, Shawn Dewitt of Coronado Brewing, Tristan Faulk-Webster from Aztec Brewing and many more as you get a full day of information and discussion from some of the best craft beer minds in Southern California. Your ticket will also get you a lunch, provided by MishMash, that gets paired with local craft beers and as if that isn’t enough, when the symposium wraps up, the beer festival starts! From 5pm to 8pm you can sample fine brews from the breweries listed above as well as Rip Current, Latitude 33, ChuckAlek and more!

I should also mention that your ticket entitles you to a free limited special edition t-shirt made by CraftBeerd himself, Rudy Pollorena Jr. It’s pretty badass.

You can also get more details on the event itself from my friends over at Three B Zine, the latest episode of the podcast features Michael Bowen, the creator/organizer of Beer-Con as well as Rudy Pollorena Jr. who talks about what ideas went into the design for the special edition t-shirt. It’s great stuff. You can find that episode right here.

This is not your typical beer festival, this is an excellent opportunity to increase you craft beer knowledge and it just happens to have a beer festival at the end to celebrate a successful day of learning from some of the best around about craft beer. Click here to go directly to the ticket purchasing page.

It’s important that all of our understandings of craft beer continue to grow. It’s vital that as consumers, we amass as much information as we can so that we will continue to make informed choices on how and where we want to spend our money. Smart consumers are what macro breweries are most afraid of. Craft Beer can’t change the world unless we help propel it to the great heights that it deserves to be at. Smart, well-informed consumers are going to be the ones that put macro breweries on notice that their time is done. Beer-Con is here to help make new well-informed consumers and help increase the knowledge of those who are already helping to spread the word. So when you go to beer con on August 23rd, take a person with you who needs that little extra push to be a smart consumer, heck bring two or three who need that push. When craft beer drinkers are legion is when we change to world. The revolution has already started, Beer-Con is here to help grow our army. This is your chance to become a better craft beer advocate as well as help make two or three new ones.

Having said all that, be sure to go and have fun! After all, if you aren’t having fun while drinking craft beer… you are doing it all wrong.

Cheers,

Tom