First Things First, Second Things Second

Much has happened since neglecting my favorite web site, due to crazy local events. I refuse to bore you with those details, so let me get to the subject at hand: Beer!
I am sure by now almost everybody has tasted their fall marzen, or what is commonly called Oktoberfest. I usually sample as many of these as possible, but this year I slacked off a bit, but still had time to try the Kostritzer version from the black bier people in Germany. A change of pace from the caramel malt laden versions around, like Samuel Adams Octoberfest.
But the caramel malt profile has become synonymous with autumn beers in the United States. As the weather turns cooler the body has a need for more malts, which makes super hop productions seem out of season for the moment.
Since it is autumn and we are rapidly moving towards Halloween, I do want to mention one of my favorite seasonal productions, that being Saranac Pumpkin Ale.
Many compare this beer to pumpkin pie, although I do not eat pumpkin pie as a rule. No, what I like about this pumpkin ale is the recipe. I prefer it over Brooklyn Brewery’s Post Road, which Matt Brewing does the contract brewing for.
About a month ago I attended a distributor trade show where Rochester, New York brewer Dundee had samples of their Oktoberfest. A very good take on the style, that is not as widely distributed as it should.
I also got to sample Sierra-Nevada’s Chico Estate. A complete “in-house” brew, using hops grown by the brewery. It was quite good, but time limitations prevented the kind of serious, sit down contemplation this smooth ale demanded.
At the very same show (hell, it might as well been called a party) the Schlitz Gusto folks were in full promotional mode. Schlitz Gusto is the trade book name for the revived early 1960’s formula of Schlitz, before the marketing geniuses came up with the idea of tweaking the recipe, to supposedly produce more, while using less ingredients. That lead to the ultimate disaster where Schlitz, the number one beer in America since World War II, lost its market dominance to Budweiser, and never gained it back. As a kid, I heard beer drinking adults refer to Schlitz as “Shits” when the reformulated suds turned people away in droves.
But corporate amnesia was in full play this evening. Like Microsoft wanting you to buy 7 and forget all about something once known as Vista, the Schlitz Gusto had not only tied in to their daddy or granddaddy’s beer, with its Schlitz classic logo, they even had buttons promoting it as the beer of choice for the 1969 Woodstock music festival.
I also had to marvel at the riffs being used by the sales representative. Not only was he promoting Schlitz with quite a bit of gusto, he also had on hand their strong (8.5%) malt liquor, which he made a distinction that it was not malt liquor (which is in fact, a rather ambiguous term) but a high gravity lager.
Which was also in full play at this trade show, the distinction between craft, regional retro and corporate has becomes pretty much of a blur. I know the so-called craft brewers want to seperate themselves from the rest of the brewing industry, but is that actually possible, or is it by now, just another marketing ploy? I mean after trying Samuel Adams Coastal Wheat, how is it different than other big brewer’s wheat productions? From Coors’ Blue Moon to Bud Light Golden Wheat?
As I stated in a previous post, the recipe is the final deciding factor. Consolidation of brewing interests can reek havoc on a beloved brew. Take what A-B Inbev as done to the venerable Bass Ale. Corporate concerns have forgotten all about the character of this famous ale, that once upon a time, in Burton-On-Trent England, was brewed with gypsum mineral rich water that provided a somewhat chalky but delicious finish. None of that is present in the concoction now sold as Bass.
Luckily, some recipes have not been changed, or in rare cases, actually improved. Two of the early winter arrivals are outstanding: Avery’s Old Jubilation Ale and Flying Dog’s K-9. Both of these examples show that if you are going to fork out some serious money for a six pack of beer, it had better be worth it. In the case of these two, I would say it is.
As always my only prayer is thank you.

GETTING IN BED WITH INBEV, PART TWO

This is all starting to sound like a suspense novel. Now Washington is involved. InBev has hired a posse of lobbyists. Trent Lott is on board. So is Senator John Breaux of Louisiana. The Glover Park Group, a media firm known to be connected with Senator Clinton, has been tapped for consultation. Carlos Brito is taking no chances, well aware that Anheuser-Busch spent over $3 million in lobbying in 2007. This year their PAC and employees have already given over $1 million in political contributions. The foxes are scrambling to see who gets the big hen house, with all those prized eggs.
Senator Kit Bond had another take. He told Carlos Brito: “This Bud is not for you.”  The Missouri Senator has concerns he says, for the line workers, the farmers, the suppliers, and the St. Louis community in general. It does not matter who InBev hires, he is against the deal and that’s that.
But is it? What about the Oracle? What Oracle? Why the Oracle of Omaha of course. I’m talking about Big Daddy Warren G. Buffett, owner of 35.3 million shares of A-B stock, or 4.9% of the company. According to the Dutch newspaper De Standard, the Oracle is on board with the acquisition. If this is the case, having the Oracle’s blessing may very well mean the purchase will become a reality. 35.3 million shares at $65 a share. Go ahead, don’t be afraid of the math.
Yikes! All this monumental fuss over a very pedestrian beer. It is enough to drive you to drinking… water.

GETTING IN BED WITH INBEV

The news announced: “an all cash takeover at $47 billion”, now that sum is reported to be $47.5 billion. I am speaking of course of the buyout of Anheuser-Busch (ticker symbol: BUD) by the Belgian based brewing conglomerate known as InBev.  According to Theresa Howard of USA Today, it just might be that InBev needs to bed A-B, more than vice versa. It is being reported that the hydra-headed brewing concern has squeezed all of the profit margins from their existing portfolio. Sales in Latin America, their biggest market, are now flat. The old adage, get bigger or get out, seems to apply here. InBev’s CEO, Carlos Brito reveals their desire by promising to keep A-B’s headquarters in Saint Louis, along with continuing operations in their 12 regional breweries.
But then, there is the whole matter of marketing, especially sports marketing. InBev known in big business circles for its cost cutting, will certainly change Budweiser’s advertising, what beverage industry analyst, Tom Pirko calls “Anheuser’s carpet-bombing approach”.
Anheuser-Busch, known for making The King Of Beers, is most certainly the king of advertising, spending $475 million in the United States, with $20 million going for TV spots on the Super Bowl. Contrast that with InBev, whose brands include Bass, Beck’s, Stella Artois, spent $58 million in the United States.
Many analysts believe that InBev will cut advertising expenditures and fight competition by cutting prices (so that’s why that 24 ounce Labatt’s costs one dollar!).
Of course there is much controversy in all of this. Objections to the purchase, on patriotic grounds seem disingenuous at best. Since 1852, Anheuser-Busch has been an American-owned and operated business. In addition to great tasting beer, the company has provided thousands of domestic jobs as well as millions of dollars in charitable donations to nonprofit organizations and disaster relief, and has a long history of environmental awareness. Anheuser-Busch is a huge supporter of our military and their families both here and abroad… so intones savebudweiser.com, a web site created to cancel the purchase. Throwing in the military line seems to imply that to be bought by the Belgium based company is somewhat an act of surrender. But what is truly suspect on savebudweiser.com, is when it declares, We don’t want another American icon turned over to a foreign company; we want the motto to remain… The Great American Lager. Funny they just happened to use the latest marketing motto to express their nationalistic fervor. Instead how about “A Bud Never Meets A Stranger” or “When You Say Budweiser, You Said It All” or “For All You Do, This Bud’s For You!”
Putting aside the emotional jingoism, consolidation has been going on in the beer industry for a long time. From a Pitt News editorial on May 24, 2006: Last Friday, Rolling Rock said goodbye to its home in Latrobe. The recipe and label of the green-bottled brew were purchased for $82 million by Anheuser-Busch. Which says nothing of Bud’s relationship with Japan’s Kirin Brewery. Throw in the marketing arrangements with Tsing Tao in China, and what we have here is an American based company with very global concerns.
And then, there are always those people who simply can not stand Buweiser, who couldn’t care less. I find their posts on beer sites: The man who drank 3 Buds at a wedding reception, which produced his first hangover in twenty years. The people who love the Bell’s Brewery, and that’s that. (Well, maybe not, Carlos Brito may one day make Larry Bell an offer he simply can not refuse.)
“Anheuser-Bush is just about as American as can be” said one construction manager, “I just don’t like them being gone and owned by a foreign company.”  I am sure the people of Latrobe, Pennsylvania felt likewise, when the 250 jobs and $300 thosand property taxes evaporated when Anheuser-Busch bought the brand and pulled up stakes… from the glass lined tanks of Newark, New Jersey?
Money does not talk, it screams. The possibility of $70 dollars a share (ticker symbol: BUD) may be impossible to resist.