Thursday, July 26, 2007

Beer is like wine...I hope

My latest Condé Nast Portfolio column is up (actually went up last Friday...I've been busy), and it's something I've been thinking and talking about for a few years: the parallels between the beer industry of today and the American wine industry of 30 to 40 years ago. Here's my pitch to my editor where I laid the whole thing out:
  • Market dominated by a few big companies making technically competent but bland products (Gallo, Italian Swiss Colony vs. A-B, SABMiller, & Molson Coors);
  • Strong import sales dominated by products essentially similar to domestic products, but "imported!" (Lancer's, Mateus, Riunite vs. Corona, Heineken, and Labatt Blue);
  • Product seen generally as either expensive to be sipped by a few rich snobs and or jug-cheap to be chugged by drunks (French imports and jug wines vs. microbrews and malt liquor);
  • 'Shocking' successes by small American producers in blind competitions against Old World producers (The Judgment of Paris vs. great performances by American brewers in the UK-based Brewing Industry International Awards over the past ten years);
  • The rise of small producers emphasizing quality and variety (Mondavi, et al vs. Sierra Nevada and Anchor, et al.).

That's the seed. The real nut, and the pay-off of the column, is the implications for the beer industry and craft beer in particular. Go read.

13 comments:

Steven said...

Great read Lew, I'll recommend it along wherever I can. I used your "wino" line at BeerAdvocate last week and actually got a few head-turns from it.

I'm glad to see you used Gallo as an example, I was going to ask what your comparative thoughts to it and the Macro-brewers were, question answered.

If BMC can actually revert back to their roots, maybe they'll become forces to reckon with. But even with A-B's forays into "craft" brewing, they're still short of the mark IMO.

bill mc said...

Lew, do the craft and specialty beers you mention in the article include the big 3's offerings or is it just the smaller brewers?

Stan Hieronymus said...

Lew,

You know I already pretty much agree since we've talked about the book. I also suggest people read Lukacs' following book - "Great Wines of America" - and George Taber's "Judgment of Paris."

They make it clear that the interest in wine grew along with focus on fresh, local, better (sometimes "fine" dining). They don't mention that the same things were going on in beer but they were.

Some of the wineries that "won" in Paris were shockingly young. They started the same time Alice Waters got things going on one side of the San Francisco Bay about the same time Fritz Maytag began to modernize Anchor.

New Albion opened in wine country, Sierra Nevada followed, etc.

I realize your column targets a business audience, and I know you weren't making this a beer versus wine thing, but a lot of people do. There are times when beer seems like the more appropriate drink, (fewer, for me) times when wine is, and an awful lot where either might be perfect.

Those are the ones representatives of smaller brewers need to be talking about.

Lew Bryson said...

I suspect A-B's forays into craft brewing will continue, and get better. I'd be very damned surprised if they didn't, to be honest. As long as craft sales continue to increase, they'll keep at it. That's what Gallo did, and their first tries weren't exactly up to snuff either.

Lew Bryson said...

Bill,
The ones I'm taling about mainly are the smaller brewers. The BMC craft-type beers are being driven by the smaller brewers' beers. Give it ten years...and they might be indistinguishable.

Lew Bryson said...

I'd just as soon leave the whole beer vs. wine antagonism behind, Stan...if only the wine bastards would let me. But they do insist on patronizing me, and I'm just too easily riled.

I like wine now; didn't used to, but I took my own approach, and found wines I liked, not wines some wine aficionado liked and pushed on me. I like bourbon, rye, and Scotch whisky; I like vodka and aged rum. But what I drink, and when I drink it doesn't depend on what's better. It's what I want. One of those categories of drinks is not "better" or "best." That's more of the damned American insistence on ratings and top ten lists. "I only have time for one beer, which one is your best??!!" Have a glass of water, you big loser.

Steven said...

I'm probably less learned, therefore less discerning, in wine appreciation than beer appreciation, but I find the array of different wine labels on the shelves that are actually wonderful examples quite outstanding.

Projecting that evolution on the beer world is great optimism and something I think we've all really hoped for since the start of the micro revolution.

bill mc said...

A friend of mine and I like to hark back to our younger days when he and I were drinking single malt scotch, smoking good cigars and drinking beer other than the big three (he's from CA and partial to Sierra Nevada & Anchor Steam..says "'tain't no upstream beer, 'tain't no downstream beer, 'tain't beer at all..its Coors) I gravitated to imports since I thought that most American beer (read big 3) was crap. We like to joke that we were cutting edge all those years ago as we watched the craft beer boom and downturn (likewise the cigar industry and scotch distillers).

Anyway, I hope that craft beer stays unique like it is now.

Richard said...

Lew enjoyed your article and the parallels of the domestic wine industry of yesterday to the beer industry of today. I don’t think your message is lost on most of the craft brewers or the Big 3 brewers, but it’s clear that the Big 3 still haven’t embraced it yet.

It’s pretty obvious that the wine analogy is important and recognized, but some members of the Big 3 still don’t understand the significance and sustain success of craft and specialty brews. Their arrogance is remarkable. Specifically, let’s talk about Mr. Graham Mackay, the CEO of SABMiller. I have attached a link to an interview with him that was published in June 2007.

http://money.cnn.com/2007/05/31/news/newsmakers/pluggedin_boyle_SABMiller.fortune/index.htm?postversion=2007060105

There are some interesting take-aways of this interview, but most notable was his totally wrong and incorrect perception of the craft brewing industry. Here’s the question and his response:

What do you make of the craft beer resurgence in America?
“I think it's going to fade. It's inevitable.”

Wow!!! What a surprising, stick-my-head-in-the-sand (or stick-my-head-up-my-butt) response. May be 10, 15 or 20 years ago, I may have mildly agreed with him, but he is ignoring the past 10-year trend of the domestic craft brewing industry….it ain’t going away. This trend represents a real seed change and a clear indication by the U.S. consuming public that good beer that is appreciated. Hopefully, the growth and success of the craft brewing industry will continue and demonstrate to Mr. MacKay that it’s not a fade. As people continue to experiment and taste the many different styles and variations of beers and pair them with their favorite foods, the love of good beer will never fade.

Simply, the craft brewers need to capture moment and continue to provide a consistent, quality product and educate the public of the pleasure and enjoyment of drinking a fine alcoholic beverage that does not result in frat boy or bachelor party behavior. Let the Big 3 continue to pander that behavior message when one drinks “fizzy yellow water.”

Bill said...

Fantastic research and perspective, Lew. Here's hoping that once beer drinkers shed the image of being can-crushed-on-the-forehead fratboys, consumers will start to value all the properties that make beer every bit as complex as wine. Just have to do it one beer drinker at a time. Just hoping the BMC boys don't corner the market and then go back to making all pale lagers again. Great reading.

Loren said...

I like the title, and leaving out the -vs- in using a beer and wine comparison. The only VS out there is a Pearl Jam album.

Share this link with Nat Decants did 'ya?

Lew Bryson said...

Richard,
Mackay's response was shocking, but also shockingly brief, which has led some of us to wonder if there was more to it, or if he merely meant that the booming growth of craft beers would fade -- a position that would be quite reasonable for someone who's seen dry beers, ice beers, and fruit beers come and go. I'm not defending Mackay, mind you, just trying to understand why a bright guy would say something that apparently clueless.

As to craft brewers capturing the moment and continuing to produce high quality beers...see my earlier Portfolio column, the one titled "Capital Punishment."

Steven said...

"...quite reasonable for someone who's seen dry beers, ice beers, and fruit beers come and go."

Don't forget Clear Beer. :-/

Here's a parallel from another direction Lew; remember when Miller was attempting "craft" brewing a few years ago? Stouts and Ales, much as A-B is now doing, whatever happened with that, was it just the wrong time? Or will A-B's attempts fall to the wayside as well?