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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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Finding the Gateway to Craft Beer.

This is a metaphor.

Not this kind of Gateway.

I think it’s reasonable to assume that all of us have had bad beer at some point in our drinking lives. Whether we knew it was bad beer at the time is something that can probably be debated. If you were like me, you were young, you were broke, and you wanted the most volume for your limited dollars. Enter that sweet 30 pack of whatever was the cheapest and you were only too happy to drink down. When you are in your early 20’s, that is what we call ‘living the high life.’ Good thing for marketing campaigns.

Nowadays, ten plus years removed, it is fun to look back and think of the bad beers we have poured down our throats. It’s pure nostalgia and it helps to transport us back to times when we were living to party. Paychecks meant your drinking money for the weekend. Your night life revolved around getting as many of your friends together as possible and doing stupid stuff, usually in an effort to impress others. In that sense, it’s hard to look at all those beers as a negative thing, after all, you have so many positive memories attached to them.

For some people, they stick with the beers they know. People like things that are of a comfort to them. Why rock the boat? You know what you like so you stick with it. There is nothing wrong with that. For me, and a lot of people that I know, this mentality doesn’t work for us. Most of us have sought to broaden our beer drinking horizons, after all, it’s a big world and people are brewing up a lot of new and different beers. It’s an exciting time to be a craft beer lover. Out of this world IPA’s and mouth-puckering sours are only the tip of the iceberg when it comes to the brave new world that craft brewers want to lead us to.

But how did we get here? Specifically, how did you get here?

At some point we made the leap into the unknown, leaving the beers of our youth behind us and letting our palates come alive to all the flavor potential that exists in the world. How did your palate progression happen?

In my case I remember growing bored with beer. The big macro brews had grown dull so I craved something new. I started drinking Samuel Adams, say what you want about Sam, but he got me out of drinking macros in the 90’s. From there I started drinking Yuengling, a favorite of the region I lived in. For a few years I was a lager guy. Then two events happened that would turn my beer world upside down. First was with my very first taste of Sierra Nevada Pale Ale. It was not love at first sip. Secondly, I moved from the east coast back to my home state of California. Three beers would lead me to become the hop head that I am. In hindsight I realize I might have tried them out of order. Stone IPA was handed to me at one of the very first parties I went to in San Diego. I wasn’t worthy at the time. Next someone suggested Karl Strauss’s Red Trolley, a safe beer which I dug for a while. The third beer, well, this is the one that I give the most credit to for shaping my palate into what it is now, this is my gateway beer; Ballast Point Yellowtail. Currently known as their Pale Ale, this beer, which is actually a kolsh, had the perfect flavor profile and just the right amount of hops to make my tongue percolate. It was only a few weeks later when I stepped up to the plate and had my first Sculpin. I was hooked on IPA from that day forward.

Even if you aren’t a hop-head, you prefer stouts or browns or Belgians, at some point you had to find these beers. At some point you had to break away from macros and start to explore all the amazing malts, the dark fruits and floral notes, the citrus flavors, the piney aromas. I want to know, what was your crossover beer? What was the gateway to the world of craft beer for you?

Here are five recommended crossover beers. Now keep in mind that every person’s palate is unique and if they aren’t ready, they will probably not appreciate the beer the same way you do. You can’t give a person who has been drinking Coors for twenty years a freshly poured Pliny the Elder and expect them to fall to their knees and weep at the beauty of the beer. It’s not their fault. They just need to be exposed to a great craft beer that’s right for them before they can give it the same love as you. Having said that, once I started bringing them home, my wife took to IPA’s like a fish to water, so remember, it’s all subjective. These beers are available year round and are bottled or canned for ease of purchase and listed in no particular order. *Pictures are from each brewery’s respective website. Links to said sites are provided below. 

 

  1. Sierra Nevada Pale AleMight as well start with the beer that basically started the craft beer movement back in the late 70’s. The beer is light and fresh without having an overpowering hops profile. Having said that, it can and probably will come across as bitter to a person more accustomed to sweeter, malty beers. That’s alright, it’s an entry point so they can get familiar with the style. Plus you can tell people all about how they are the world’s leading Clean Energy brewery. paleale
  2. Alesmith Speedway Stout I’m probably a little out of my mind for suggesting you use this 12%ABV monster stout as an entry point to craft beer but hear me out; the complexity of the beer, it’s multitude of flavors and it’s pure, easy drinkability make this is prime example of craft beer at it’s finest. This beer will be a hit with your friends who can’t get enough coffee during the course of their work day. Plus, it didn’t win the 2013 Sore Eye Cup for best regularly brewed beer in San Diego for nothing…along with a score of other awards over the years as well. Alesmith-Speedway
  3. Modern Times Fortunate IslandsModern Times may be a new brewery but this beer is simply fantastic. The bright, tropic flavors and aromas will make this a beer that goes easy on craft beer newbie’s palate. The hops profile is noticeable but it compliments the beer without stealing the show and dominating your taste buds.MOD_webislands_220_488_85
  4. Anchor Steam Beer (California Common)Another beer with great history in the craft beer revolution, this beer might seem simple compared to some of the others I’ve mentioned, but that’s the point. Some peoples palates get completely thrown off when you hit it with too much too fast. If you are feeling overwhelmed by the beers you are trying, I suggest a switch to this. It has a malty base with only bare essential hopping, a benefit if suffering from hops fatigue. You get a sweet, caramel colored beer that drinks incredibly well anytime of day or year.steam-bio
  5. Firestone Walker DBA (Double Barrel Ale)This beer is also profiles with more of a malt base with only mild hops flavors, but I consider this beer to be an excellent platform beer. The well balanced flavors mingle nicely and can easily entice a drinker to see what other offerings might be brewed by these masters…which will eventually lead you to Union Jack, which in my opinion is kind of a big deal.DBA

The real question after reading over my list is, are these beers you agree with or have I lost all my marbles? The whole topic is subjective and open to multiple opinions. Depending on the tastes of the person who is trying craft beer for the first time you could very easily add brown ales, dubbels, barleywines, it’s never ending. We live in a time where getting craft beer is now as easy as walking to the corner store. The most important thing is to get people to make that leap, let them try anything and everything. Breweries and most bars in town are only too happy to pour you a taster. It’s easier than ever to find one that suits you and gets you started on the adventure of craft beer and the incredible journey that evolving your palate can take you on.

Cheers,

Tom


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The 12 Beers of Christmas! Pt. 1 Jingle Beer Rock, Beers 1-4

Tis the season for all sorts of excellent Winter seasonals and Holiday beers to make their way to the shelves of bottle shops everywhere. I have a tremendous amount of love for the Christmas season and so these unique brews that show up once a year like a jolly fat man in a red suit never fail to capture my attention. The festivel labels and creative name are only part of the appeal. More often than not a winter/holiday ale will offer new and unique ingredients and fresh takes on old classics.

As a hop-head, this is sometimes a risk as not a lot of brewers are whipping up wild triple IPA’s to help with your yuletide spirit. This means that what I’ll be sharing with you is a wide variety of styles and flavors. The list is in no particular order and this is by no means a ranking. Also this is nowhere near complete to all the different Christmas beers around, just twelve beers that captured my attention and I thought I’d share with my friends. Some of these might be obvious selections but I hope to point you at a few new ones as well. Here we go…

  1. Sierra Nevada “Celebration Ale” – American IPA 6.8%ABV – This beer is a truly delightful treat. It’s aptly named for the first hops harvested of the season. This is one of the few IPA’s you can find on a regular basis for the holidays and it’s also one of the oldest, since Sierra Nevada first brewed it in 1981. The nose on this beer is a wonderful blend of citrus and pine. The color is a bright golden copper and when you sip it that brightness comes through with a pleasant kiss upon your tongue.   The hops are bold yet not aggressive and helps to makes this a beer that has a nice crossover effect with people who may not be the biggest lovers f hops. A truly winning blend of cascade, centennial and Chinook hops, this beer is a must have for your ugly sweater party.

    The doggie wants the beer too!

    The doggie wants the beer too!

  2. Anchor Brewing “Our Special Ale 2013” – Winter Warmer 5.5%ABV – Anchor has been brewing this fun and tasty season for 39 years. Every year the tree on the label is new and so is the recipe for the beer. This year the label is a California White Fir and the recipe is distinctly Anchor, new and exciting but right in line with their 100 year old legacy. The beer pours a deep mahogany color with a thin off-white head. The smells are straight from your childhood and Mom’s kitchen; nutmeg, cinnamon and the usually suspects. The malts are roasty/toasty and give the ale a sense of warmness. The hops ops are there giving the beer a sense of pine adding the idea that this might be the tree in your living room. I liked this beer quite a bit despite it not being my usual style choice. This is a nice beer for drinking after you’ve opened all your presents.

    Lucky bird!

    Lucky bird!

  3.  AndersonValley “Winter Solstice” – Winter Warmer 6.9%ABV – Another lightly hopped, malt heavy beer that is a wonderful surprise to drink. A nice amber color pours from the bottle with a slightly tan head. The nose is sweet with a only the faintest of hops noticeable. The flavors pop along the tongue where you should be able to detect notes of toffee and caramel and some seasonal spice as well. The beer goes down smooth and easy might pair well with your holiday meal or maybe even better with a slice of pie.

    Snazzy!

    Snazzy!

  4. Port Brewing “Santa’s Little Helper” – Russian Imperial Stout 10.0%ABV – This one is for lovers of stout and coffee and it has the big flavors that are associated with both. It pours a very dark brown, just a shade or two from being black. The foam layer has an almost milk chocolate quality. Despite its high alcohol level it’s hardly noticeable underneath the espresso flavors that coat your palette on the back end. While this brew isn’t my personal favorite I can recognize the qualities that will make a must have for many. Like most other stouts on the planet this beer would probably be exceptionally tasty with a chocolate dessert.

    Super Stouty. That's a word.

    Super Stouty. That’s a word.

So there we have it, the opening salvo in the 12 Beers of Christmas. Hopefully you have already had occasion to try some of these beers or perhaps you’ve found a few that you like that I’ve not mentioned yet. The next installment will be up very quickly as the holiday rapidly approaches.

Cheers,

Tom