independence seal

The Mark of Independence

Independence is in the air. The Fourth of July is upon us and this past week the Brewers Association rolled out a brand new seal that indicates if a craft beer you are drinking is actually craft or just “crafty.” The seal is being offered free of charge to any brewery that meets the BA’s definition of a craft brewery in terms of size, ownership, and ingredients used. The brewery doesn’t have to even be a BA member to use the seal and the BA hopes that soon you will see it popping up on packaging, labels, tap handles and at independent breweries themselves.

From the Brewers Association

So, what does the upside down bottle mean? Bob Pease, the president and CEO of the BA, explained it recently to Hop Culture.

What the image stands for is what we think matters. It stands for how America’s small and independent craft breweries have turned the industry upside-down.

As to the response from breweries, Pease said:

We had 600 breweries in the first day sign the licensing agreement and download the art…and that’s increasing by the second. We have no benchmark to compare that to, but we’re thinking that’s pretty strong.

Met with mostly positive feedback, one brewery was not into the idea of the new seal. Notch Brewing Co. out of Salem, Mass, tweeted this in response:

This is an interesting point by Notch Brewing and one that one can assume is pointed at Boston Beer, owner of Sam Adams. Boston Beer is the only independent brewing company that is publically traded. The other publically traded “craft” brewery is Craft Beer Alliance (which owns Widmer and Kona) which sold 32.2% of it’s company to AB InBev in 2013. In 2010, the BA changed the definition of what craft beer is to include breweries that produced up to 6 million barrels from 2 million barrels. This change was made to keep Boston Beer in the craft-beer-fold because the BA felt it was important for craft beer to hold onto Boston Beer’s market share. While this does raise the question whether or not, at its immense size, Boston Beer needs the benefits afforded by the BA, it does still technically fit the definition so will be able to use the emblem if they wish…until they reach 6 million barrels of production. In 2016, they sold just over 4 million so they have a little while before they hit that limit.

The High End’s Response

One day after the BA released the seal, the president of the High End (AB InBev’s craft beer division) wrote this Op-Ed piece for the Chicago Tribune entitled, ‘Big beer’ working with craft brewers: What’s the argument? In it, he laments that when Big Beer buys out a smaller company people are misunderstanding the true situation.

Yet increasingly we hear ludicrous claims that big beer companies are on a mission to destroy the craft brewing industry — that we are shutting down growth, eliminating choice. These claims are totally divorced from reality.

We rightly celebrate the technology companies that have led the digital revolution. Facebook, Google, Apple and others have helped turn garage innovators into household names. Why should the beer business be any different?

The verdict on craft beer will be made by consumers. No amount of distribution or promotion will keep a substandard beer on the shelf.

While some might take issue with the first two portions of this quote, especially his desire for AB InBev to be celebrated for its accomplishments in the same way Google or Apple has been, the last part is undeniably true. The verdict on craft beer will be made by consumers and with the seal that was just introduced by the BA, now consumers will have a much clearer idea which beers have remained independent and which ones chose to “partner” (using the term from the op-ed, though others might call it a buy-out) with Big Beer.

What It Means For Us

Here at Thorn Brewing, we are excited about the seal. We have been talking about the importance of transparency in ownership of breweries for a couple of years now and this is a step in the right direction. If you care, this helps you know that the beer you are drinking is actually indie beer and not big beer in craft-beer-clothing. If you don’t care, then it will have no impact on you at all. That’s really the beauty of an indie beer seal. It’s there to help the people who are interested, but those that want to drink their beer without worrying about ownership will still be able to do that with no hindrance. People will still buy Lagunitas, Golden Road, and St. Archer and because of the benefits afforded to them by their parent companies, their beers will still be distributed far and wide. But for the littler guys (and a few bigger craft breweries), this means that now there is an easy way to tell if the beer you are drinking is still independent. Look for this emblem to pop up on Thorn beer marketing, production info and at our brewery soon.

texas beer

SDBG Aims To Educate While Big Beer Wins In Texas

The San Diego Brewers Guild is rolling out an education program to help consumers easily differentiate between independent beer and big beer masquerading as craft beer. With all the recent talk of 10 Barrel (owned by AB InBev) coming into San Diego, it’s understandable why some people might be a bit fatigued when it comes to the discussion of big beer vs. indie beer. Being that we are here in California, with what many other states would consider pretty lax laws when it comes to alcohol distribution and regulations, many people don’t see the immediate impact of money flowing into politics from Big Beer.

Messing with Texas

Independent breweries in Texas, however, are fighting mad and have very good reason to be. House Bill 3287 became law this last week and was a big win for Big Beer, even though it might not be immediately apparent how. The law states that any brewery that produces over 225,000 barrels a year has to now give a cut of their profits to distributors by paying them to “distribute” their beer, even if that beer is moving from their brewhouse to their on-site tasting room a few yards away.

How did this law pass with so much pushback from the Texas breweries and the Texas Craft Brewers Guild? According to the Texas Tribune, the guild spoke out against this bill to no avail, stating:

“It is absurd over-regulation that will slow the growth of the craft beer industry in Texas and drive capital investment in breweries to other states,”

If you talk to the Beer Alliance of Texas, who represents the distributors, they say that the bill is needed to keep Big Beer from coming into Texas and taking advantage of loose regulations that would ultimately hurt independent brewers. From their website:

“These new laws amended the highly regarded Texas Three-Tier regulatory structure that has ensured an orderly beer marketplace for consumers for years. As the malt beverage marketplace expands today, craft brewers are growing and expanding as envisioned by policymakers. However, mergers and acquisitions by international brewers of Texas craft brewers, are challenging the intent of limited exemptions for self-distribution and on-site sales granted to small startup craft brewers.

CSHB 3287, stipulates that if a small production brewer is purchased or acquired by another brewer and their combined production exceeds 175,000 barrels per year, they are no longer afforded the rights and privileges the legislature put in place for small startup craft brewers.

This change only addresses a small percentage of “larger” craft brewers when aquired by a large manufacturer. 97 percent of craft brewers in the US produce less than 15,000 barrels a year.”

So why would a law that the distributors say is for the good of indie brewers be loudly and passionately opposed by the very indie brewers that the Beer Alliance says are helped by this law?

First of all, they are gas-lighting with this “97 percent of craft brewers…” comment because the law is only for Texas so what does a national percentage have to do with anything? Their concern is laughable, positioning themselves as champions of the “little guy.” There are numerous comments from the Beer Alliance basically saying that the people complaining are not and are never going to be affected by this bill. That view is short-sighted and just plain patronizing. No matter how many barrels are produced at a brewery, that brewery can still recognize a needlessly restrictive law that benefits one side.

If you follow the money, it’s apparent whose interests they have at heart. Here’s a breakdown from the Texas Tribune of the money that has been poured into Texas politics in the last few years.

texastexas

 

 

 

 

 

 

 

 

 

 

 

Looking at how the money was spread out, it’s no wonder that this bill passed and then was not vetoed by Gov. Abbott. These distribution companies are only going to put money into politicians that align with their views, just like craft beer guilds all over the country give money to politicians that they think will help their cause. This is nothing new. But if you follow the money, you will see where it ends. Silver Eagle Distributors, for example, not only donated more than $2 million to Texas politicians but they are also the largest distributor of AB InBev products in the whole United States.

Following that trail even further, take a look at the breweries who were granted exemption from this new law…

“But three Texas breweries recently purchased by mega-breweries will be exempt from the law. Karbach in Houston, bought by Anheuser-Busch InBev; Revolver in Granbury, purchased by Miller-Coors; and Independence in Austin, bought by a Heineken-owned subsidiary — will not need to pay distributors the tax at their existing facilities.”

So the big breweries who the Beer Alliance of Texas says they are trying to protect indie brewers from were granted the only exemptions? The Texas Tribune also noted that one regional brewery not included in this “carve-out” provision was Oskar Blues, which according to the new law will now have to pay distributors to deliver their kegs to their own taprooms, even if they are on-premise.

This Is Why

When people say indie brewers should let this conversation go and just worry about making good beer, this is why it’s important to keep shining a light on the topic. With Big Beer comes big money. Many of these distributors on this list of donors are directly or indirectly affiliated with Big Beer, which is the crux of the issue. Not only did Ab InBev, MillerCoors and Heineken manage to get their craft brewery acquisitions exempted from this law, they also get to profit from their affiliated distributors who now will get a cut from regional breweries who serve beer in their onsite taprooms. If legislation that goes against the best interests of independent brewers can pass in Texas, what’s to stop the same thing from happening here or anywhere else in the U.S. for that matter?

This is also why it’s such a positive step forward that the San Diego Brewers Guild is taking the lead in helping educate consumers. San Diego Magazine just published an article on the roll-out of this education campaign and it’s a great read, so make sure to check it out. In the piece, they talk about the #indie beer campaign:

“The Guild will introduce a number of items that are designed to help craft breweries identify themselves—not only as independent, but also as members of the SDBG. The planned items include window clings and flags for hanging in tasting rooms and for use at events. There are also tap danglers in the works, which will identify local, independent craft beer tap handles at bars and pubs all over the county.”

Education is important. While some consumers don’t and won’t care, others do and will make different choices based on knowing who will benefit from their money. So people are free to drink what they want and shouldn’t feel bad about it, but for those San Diegans who are interested, it will now be easier to differentiate between true craft, independent breweries vs. those breweries who fill the coffers of Big Beer.

man in store looking at beer package

It’s All About the Package

While it’s no surprise that consumers, in general, are influenced by product packaging, it was certainly surprising to learn just how much craft beer packaging influences what people choose to buy. Recently, Nielsen released data on craft beer packaging and the role it plays in who ultimately purchases the beer.

It’s All About the Packaging

First of all, we found out that 70% of craft beer buyers make their decision when they get to the store vs. ahead of time. With more than 3,905 new beers on the shelf in the last year alone, it makes sense that most people wait to decide what they are getting until they get to the store and see the selection.  So what steers people to buy a specific beer the most? A nice package.

In fact, 66% of people surveyed said that they were “very likely” to buy a beer based on its packaging and label. Furthermore, 71% say they more likely to try a brand that has bold and interesting packaging. But what do people like when it comes to a beer’s label? Different features such as brand name, logo, color scheme, bottle shape and color, and the box or carrier that hold the bottles were all evaluated. Interestingly enough, the box/carrier came out on top as having the most influence, at 48%. Where the beer is produced came in second at 43%. They also found that more consumers were drawn to illustrations and logos vs. what was actually written on the labels.

Brands On Top

For the study, Nielsen tested 17 different brands that are top sellers with a nearly equal split between East Coast and West Coast beers. The brand that fared the best was Kona Brewing, which came out in the top two designs in both East and West coast demographics. Deschutes and Saint Archer rounded out the top 4 spots, after Kona’s Big Wave Golden Ale and Castaway IPA. What’s interesting is that While Kona and Deschutes are similar in their graphic, illustrative style, Saint Archer is quite different from both of these other brands. Maybe its clean cut, more modern design might help it stand out from those more illustrated styles or maybe it even speaks to a different consumer.

package of craft beer

Coming Soon…

With all of this info in mind, Thorn Brewing Co. is entering the craft-beer-can-fray. We are really excited to announce that in mid-July you will be able to get 6-packs of Thorn Brewing cans in stores and bottle shops throughout San Diego. We are starting with four of our core beers; Relay IPA, Rock the Pale Ale, Foreplay Belgian Blonde, and Barrio Baja-style Lager. Here’s a sneak peek at what they will look like…

Now, it will be even easier to take our beer on-the-go whether you are heading to the park, the beach, a friend’s BBQ or just home to enjoy a cold one. Soon the canning line will be up and running down at our Barrio Logan location and we will be able to can even more of your favorite Thorn beers.

To wrap it up, yes, labels are important when buying a beer, but don’t let that outshine what is actually in the can or bottle. We’ve said it before and we will say it again, the thing you should be the most concerned about on a bottle or can is the freshness date or bottled-on date. The beer’s freshness is likely going to be the biggest influence on how your beer tastes no matter what the style is, but this is especially true for IPAs. That’s why we will be putting freshness dates on all of our cans so that you can make sure you are getting a fresh Thorn beer no matter if it’s here at the brewery or out in stores. And for those people who don’t know just how delicious our beer is yet, hopefully, our packaging will entice them give us a try.

 

pull-out

How Effective is the Pull-out Method?

Just how effective is the pull-out method? Not very, apparently. This last week, waves were rippling in the craft beer community when it became public knowledge that AB InBev bought a minority stake in RateBeer.com. The collective raising-of-the-eyebrows commenced with many indie beer people wondering what area of craft beer will AB InBev not buy into or buy out?

Why does this sale of shares matter? RateBeer is one if the biggest beer rating and review sharing sites out there along with BeerAdvocate.com. Thousands of people use it every day to rate, discuss and categorize their favorite beers with the underlying assumption that it’s a user-driven database with no special interests. With AB InBev hopping into business with RateBeer (through their investment arm, ZX Ventures, whose Instagram account features Goose Island almost exclusively when it features a beer brand), this assumption of non-bias is put into question. The situation becomes even murkier when you take into account that the partnership actually was official back in October but Ratebeer and ZX Ventures decided to keep it under wraps because “the two sides wanted to get ‘points on the board’ to prove the value of the partnership without the ‘disruption’ of making it public.” According to Good Beer Hunting, which broke the story.

Craft brewers and fans across social media were not happy with this belated news. Dogfish Head Brewing posted their intention to formally request their information be taken down from Ratebeer’s database and other breweries like Mother Earth, Karl Strauss, Harpoon, Six Point Brewery and Noble Ale Works followed. We also sent an email to show our solidarity with the rest of the indie beer community as well as the desire to not have AB InBev profit from any part of our business. So does asking to pull out brewery info matter? Nope. The response that we got from site admin and owner, Joe Tucker, was the same one that everyone who requested received.

We’ve received your inquiry about content removal from RateBeer.
The beauty and value of RateBeer comes in our users’ ability to add publicly available content to our database. If there is content that you are concerned with, please refer to the removal processes defined in the Digital Millennium Copyright Act section of our Terms of Service here:
Thank you,
Joe Tucker
Joseph Tucker
Executive Director
RateBeer  

That means there will be no pulling out of RateBeer (much like you can’t have Yelp reviews taken down about your business). Noble Ale Works took a different route and posted this picture where they changed all of their info in RateBeer to pure ridiculousness in protest of the investment, along with this caption:

“Current Status: Changing all of our info on RateBeer to nonsense and all of our beer descriptions to Rick Astley lyrics.
#YouKnowTheRulesAndSoDoI

This made the people over at RateBeer very unhappy and they responded to Noble Ale Works’ Brand Manager, Vito Trautz, with this message:

 

All the drama has people wondering, what’s the point? Can AB InBev even influence the data if they wanted to? The answer is, not likely, due to complex algorithms used by RateBeer and the nature of user-driven content.  But that doesn’t mean their intentions are pure. In fact, Urbain Coutteau, one of the owners of the Belgium-based brewery, De Struise Brouwers, brought up a different idea. He urged breweries and reviewers to keep using RateBeer because he believes that their intentions might be to kill-off RateBeer:

 

So what’s a brewery to do? Educate. The RateBeer drama is over and done with for the moment. What needs to be done, is for breweries to continue to educate craft beer consumers on the difference between true craft beer (indie beer) and faux craft breweries owned by AB InBev and other Big Beer and let them make their own decisions as to how they want to spend their money and who they want their dollars to benefit. In the spirit of shining a light on just how entrenched AB InBev is in the craft beer community, here is a list of all the beer businesses that we know they are involved in.

AB InBev Owns:

Craft Breweries

Goose Island Brewery

Golden Road

Elysian Brewing Co.

Devil’s Backbone Brewing Co.

Karbach Brewing Co.

Four Peaks

10 Barrel Brewing

Breckenridge Brewery

Wicked Weed

Blue Point Brewing

Home Brew Suppliers

Northern Brewer (they push Goose Island, Elysian and Golden Road brew kits)

Midwest Supplies

Beer Websites

RateBeer.com (minority investment)

Beerneccessities.com (beer blog)

October (beer blog)

Distributors/Wholesalers

Unknown

This last category of distributors is the most concerning. When researching to find out how many wholesalers AB InBev owns, I came up short. You can find wholesalers on their website and a ton of these lead back to the AB InBev website. It’s unclear if that means they own the distributors or the distributors are just aligned with them. For instance, Western Beverage distributes all over Oregon, and when you go to their website, you are redirected to AB InBev’s official wholesaler site. I haven’t had the time to slog through all of the distributors on the map to see how many of their websites redirect back to AB InBev and I’m unclear on what that redirect means. Why is it so hard to find out how many wholesalers AB InBev owns? We will keep you updated, and if you have anything to add to this list, please comment and I will get it added.