Saturday, 18 October 2014

Craft Beer in a Post-Craft World

A pair of blog posts over at Jeff Alworth's Beervana (here and here) has roused me from current torpor with a few observations. In fact, this started as a comment on the blog, but quickly spiralled out of control.

The first thought is that although there is a big difference in the legislation between the UK and US markets (see here for a summary of the US three tier system. In the UK, this doesn't exist), it seems as though in practice it doesn't make any difference. So when Jeff writes "But having an invisible layer in between the producer and retailer also offers an opportunity for hard-to-stop corruption", the important word in that sentence is "opportunity". In practice, this doesn't happen, it just adds another layer of sweeteners and kickbacks.

The big problem is that whenever anyone writes about the beer business, the tend to focus on the "sexy" bit - the beer - at the expense of the "dull" bit - the business. These two, as we've seen from Dann Paquette's accusations, are inseparable. You can make great beer, as in my opinion Pretty Things do, but if you can't get it to drinkers, why bother?

But this isn't anything new. In conversation with Garrett Oliver in (I think) 2007, he listed a few bars in New York who would call the Brooklyn Brewery regularly and say that they had a line available if the brewery wanted to let them have a few free kegs. Garrett's response when asked "What have you got for us?" was always "Great beer at a fair price". But if anyone thinks this sort of integrity will carry on as the number of craft breweries continues to rise, in the UK, the US and worldwide, think again. Have a look at what Sam Calagione says here. Anecdotally, every small brewer in the UK has a story about being undercut by another brewer offering cheaper beer of lesser quality, or worse still, being told by landlords and beer buyers that quality is less important than price.

You can expect a lot more of this as we move into the post-craft era. Uh-oh, there's a buzz-phrase that's going to annoy a few people. But heads up, because here's some bigger news. Beer isn't going to get any better than it is now. I know, that's quite a rash prediction, but the beer business is going to stop being about beer, and become more about business.

Beer isn't going to get any better than it is now. That doesn't sound very sexy, does it? It will get more consistent, more reliable, but ultimately, the technology of craft beer - focusing on quality and flavour without cutting corners to maximise profits -  has reached endgame. There is nowhere else to go. What this means is that craft beer will have to focus on the dull business of making great, reliable beer, giving people what they want every time. In short, they will become big brands, go mainstream, and flood the country - the world! - with great tasting, flavourful beer, free of production flaws, tasting the same every time you buy it. This is exactly what the top tier of UK craft beer producers has done - build a brand built around consistency and great tasting beer. Once the beer is good enough, you have to focus on the business end of things. Price. Distribution. Brand-building.

Beer isn't going to get any better than it is now. It will be cleaner, more consistent, more reliable, less of a lottery. You might not like it, but Punk IPA will become the craft beer movement's Carling - a best seller, reliable, widely available, and reasonable priced. It's already happened. We all screamed "Judas!" when Punk IPA appeared in Tesco, but Bob Dylan's response to being called Judas was to simply say "I don't believe you, you're a liar" before telling his band to "Play it fucking loud!", and never looking back.

For earlier discussions of post-craft beer, please see Boak and Bailey, Pete Brown, The Pub Curmudgeon, and Justin Mason. They all (in the nicest possible way) focus on the sexy beer bit rather than the dull business bit.

15 comments:

  1. So very true Zak, was actually talking to a lot of people at IMBC about this very topic. Brewdog are very business savvy, which is probably why they are leaps and bounds ahead of most. Now a lot of top breweries are fast-tracking to the same destination, which I think you've hit nail on the head, as quality- and integrity-driven brands. Lot's of bandwagoning happening in the UK currently at the expense of quality and, equally, some people are concentrating too much on the business end before they've got a top quality product to sell.

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  2. I do wonder, though, whether the constant search for something new and innovative will effectively become the new mainstream.

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  3. Don't think so. When the bandwagon really got rolling, "craft beer" in the UK seemed to refer to a whole package of different things: new, international styles, quality keg beer, funky modern branding, endlessly trying new stuff. But as we talk about "craft" becoming mainstream, it involves that package being unpicked quite a lot. Loads of places seem to be picking up on smartly banded "English Craft Lager" as a new way of selling lager to people who want a refreshing and undemanding drink but also want to be a cut above Carlsberg drinkers, and international styles and quality keg seem to be gradually becoming an attraction for people who like their beer but aren't full blown trend-hopping beer geeks. I think this last bit ties in with Zak's original point about a post-craft world: the breweries that are doing this successfully are sometimes new-wavey craft brewers (Thornbridge) and sometimes forward-thinking older breweries (Adnams), but they're basically doing it by delivering something that's high quality, consistent, and good value for money.

    On the other hand, most of the time that a pub around here starts trumpeting its new "craft beer selection" it means they've got bottles of Punk IPA or keg Camden Pale or Adnams Dry Hopped Lager as permanent fixtures, not that they've got an ever--changing lineup of the latest exotic collaboration beers that have been making waves at this year's IndyMan. That sort of stuff is still pretty much a niche within a niche - and if anything is likely to become more so as people who don't mind drinking the same beer twice but want something cold and fizzy and grapefruit flavored realize that they can get it more cheaply and reliably from Brewdog or Thornbridge or Camden than from the latest and greatest bleeding-edge South-= London micro.

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  4. I don't really agree that a three tier system applies only to the US. The two biggest pub companies in the UK plus a hand full of the medium sized ones are all closed to direct selling from breweries. They either use KNDL, Carlsberg, Tradeteam or Heineken as the middle man (tier 2) between pub Co and brewery or there is SIBA the society of independent breweries who act as a go between (tier 2) by taking guest slot orders from major pub Co (tier 3) and placing orders with tier 1 breweries, while making a large cut. While it is great to see so many micro breweries opening in the UK we are a long way from consistency or a single tier system.

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    1. Hi Stuart, you're right - what I meant was that there is no legal structure to enforce the 3 tier model in the UK. Ironically, I'm sure that this system is more open to abuse and kickbacks than direct distribution.

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  5. Greene King will refurbish your cellar if you agree to sell their beer or will lease you one of their pubs if you agree to stock some of their beer,Surely they don't need to give you a kick back as well.The American system has flaws but the British system has ruined the pub trade at least for the drinker.

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    1. Am I wrong to think that's a perfectly reasonable business investment by Greene King?

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    2. Think Mr Anon just said it's a bad arrangement for the drinker (given this is a drinker who doesn't want to drink Greene King beer).

      For Greene King and the publican, on the other hand, it is a good business arrangement. GK get some guaranteed volume - the publican gets less hassle. Win/win. And at the end of the day, as much as it pains me, there are a lot more Greene King IPA drinkers than "craft beer" drinkers. I've known pubs to go ex-GK FoT and end up stocking GK IPA due to local pubgoers threatening to revolt. And... from the publican PoV, why damage your business? (There is an argument here for choosing your business and sticking to your principals. But what if that makes said business non-viable? Many pubgoers want to drink a standard bitter... you could probably get away with swapping GKIPA with something similarly innocuous but it would be little different at the end of the day.)

      Currently at least Greene King allow flexibility - an increasing number of their pubs are 50% FoT on cask. It costs the landlords... but these particular pubs seem to end up more vibrant and successful from what I have seen. Whilst still providing a core GK lineup for those that want it.

      A bigger and less talked about problem, IMO, are the companies that have even otherwise FoT pubs tied down on keg kit. Forget Greene King... cast your dispersions toward Heniken et al. It saddens me to walk into a pub that has 6 interesting cask ales and then... Foster's and Stella. But again, there are a variety of good business reasons for this. Keg fit-outs make cask kit look like child's play - the cost of install and maintenance is much higher. The complexity and occupational hazard higher too. In general British publicans do not really seem to be competent cellar technicians and it makes sense to swap tied supply of known well-regarded "brands" for "free" technical support.

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    3. That was about my response to the "Pay-to-Play" thing, too.

      As I understand it, the ideal of the US system is that bars are generally independent and can buy any beer they want on an essentially open market in order to give their customers the beer that they want at the best prices. The shocking revelation is that they're being motivated to buy some not-quite-as-good beer by being offered cash bungs or free stuff from the brewers. This is bad, obviously, but it still sounds a lot more responsive to consumer choice than the common UK situation where most of the regular pubs in your town are owned by one or two brewers and only sell beer that's brewed by those brewers and if you want to exercise consumer choice you can do it by staying at home.

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  6. You've known for years that craft is old hat. Artisinal is the future.

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  7. THIS. THIS. And THIS again. I was thinking about this the other day when going to yet another talk by a brewer about how much more innovative and hoppy and booming the 'craft beer movement' was going to get and I thought..."no it isn't".

    Don't get me wrong, I love craft beer and I love watching it grow, but you're right, at some point it has to be about the business. Not everyone can open and run a brewery simply for the love of it, it needs to be profit making. A brewery that have done a great job of this is Meantime, but I get the impression that they aren't viewed particularly fondly by the craft community?

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  8. Buying a pump (or a line, or a tap, or whatever you want to call it) or supplying the keg kit (as Yvan points out) to shut out competition has been completely normal practice in the UK for years. Kickbacks as well? Depends on your definition. There's certainly a lot of "retailer support" goes on.

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  9. As a consumer I disagree with your statement that "beer isn't going to get any better than it is now." In my mind "cleaner, more consistent, more reliable, less of a lottery" equates to better.

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    1. Hi jdogg, you're quote right, of course. What I meant was that the best beers aren't going to get any better - the technology to produce them (hygiene, yeast management, minimising exposure to oxygen, etc) is not going to improve beyond this point. The best beer in the world ever has already been brewed. The rest will just level up towards this ideal. So overall, yes, beer will get better, but it won't get much better than the best beer currently available.

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