22 February 2010

Sure, Let's Support the Little Guys..... hey, wait a minute.........

The Washington Post had an op-ed essay yesterday by Barry C. Lynn of the New America Foundation headlined "Let's Put Mom and Pop Back in Business," on the concept of supporting small businesses--i.e. the "mom and pop" businesses of old--over the international mega-corporations.

Well, yeah, don't we all do that, pretty much, drinking locally brewed craft beers or small-batch stuff from wherever and casting total disdain upon the big corporate/industrial stuff?

But then this line jumped out at me:

Then there's Sam Calagione, who built Dogfish Head Craft Brewery into a regional success in Delaware and Maryland. However, the shelf space across the country for his ales is limited not by the tastes of America's beer drinkers but by the people in charge of Anheuser-Busch InBev and SABMiller, two foreign-owned trading companies that directly control some 80 percent of all beer sold in America.
Ummmm........   Seriously, Mr. Lynn?  You're trying to tell me that Dogfish has been blocked into going into certain markets by the Big Bad Evil Mega-Swill Makers?  I'm demanding examples or proof.  Right now, if anything, Dogfish's aggressive marketing and cult status (and, admittedly, good products) are robbing shelf space away from more local brewers in further-off states.  I've seen it in Arizona.  They're not stealing sales from Natural Light or Miller Genuine Draft, or even Oak Creek or Bridgeport.

I mean, seriously, look at their latest press release/project:
Four well-know brewers are joining forces with Mario Batali, Joe Bastianich, and Italian food emporium Eataly to open a brewery-pub on a New York City rooftop with breathtaking views of the Flatiron and Empire State Buildings.
The four breweries collaborating on this project include two Italian craft brewers - Teo Musso, Brewmaster of Birrificio Le Baladin and Leonardo Di Vincenzo of Birra del Borgo, and two Italian-American craft brewers - Sam Calagione of Dogfish Head Craft Brewery and Vinnie Cilurzo of the Russian River Brewing Company.
The first floor of the building at 200 5th Avenue will house Eataly, an epic Italian specialty foods market and multiple restaurants which pair gourmet foods with artisanal beers and wines. Additionally, there will be an 8,000 square foot rooftop brewery and restaurant operated by B&B Hospitalitys Mario Batali and Joe Bastianich.
The rooftop bar and restaurant will house a copper-clad brewing system. The idea is to create an artisanal, old world Italian craft brewery that just happens to be located on a rooftop in Manhattan, says Dogfish Heads Sam Calagione. The four brewers are working together on recipes for Eatalys house beers. Those beers will feature Italian and American ingredients. The beers will be unpasteurized, unfiltered, naturally carbonated, and hand-pulled through traditional beer engines for the most authentic and pure presentation. The four individual brewers will also occasionally brew beers under their own names on site. The rooftop restaurant project will pair artisanal rustic, homemade beers with the artisanal, rustic cooking of Chef Mario Batali. Additional Italian and American regional craft beers will be served both at the rooftop bar and within the downstairs restaurants.
More power to them all, it's a free country and supposed to be a free market and all that, but......  does that sound more like a "mom and pop" business or a corporate merger?

All of us should want the proverbial "little guy" to thrive and succeed, even grow and expand production.  I'd love to see Brewers Art and Red Brick Station and Oliver's and all these folks have enough business--at the expense of mass-produced swill or the alcoholic fad of the month, of course--to need more workers and production.  And I do well remember the day when Dogfish Head was a cut-off keg brewing up the "beer of the day" in Rehoboth Beach, not a great big facility in Milton. Heck, there was a day when Wal-Mart, the megatron every leftist/progressive loves to trash now, was Sam Walton's store, no?  And what happened to KMart, the "downtown killer" before them?  Anyone remember Grant's?  Murphy's?  Woolworth's?

So, whadaya think?  Is Dogfish head still a "small guy," or is Sam & Co. well beyond that?


Caederus said...

Size is a relative thing. AB produces over 100 million barrels per year. Boston Beer Co. produces about 2 million barrels of beer per year. Dogfish is about ?100,000? barrels. (can't do the research at work). So comparatively Dogfish is mom and pop. The next step is to find out how much Oliver/Red Brick/Brewers Art/Brewers Alley/Alphenhoff make in a year and I bet all of them combined don't come close to Dogfish head.

Every time Boston Beer company passed the imaginary number, the discussion comes up what is the upper limit for defining a craft brewery. Last I heard it was 2 million barrels. I wonder what it will be next year...

Brad said...

Dogfish is a tiny ant compared to AB/MC, but bigger than most craft beers. But if you saw the movie Beer Wars, you'd know AB fears the rising stars of the craft beer world (those legal letters that AB continues to send DFH are laughable). Either way, this is great news for the craft beer community - as long as DFH and RR continue to make stellar beers.

There's a reason they've become the "rock stars" of the craft beer world that they are - the product speaks for itself. RR literally has zero marketing and the limited marketing DFH has, is pretty freakin genius (at least IMO).

Hopefully Sam isn't still paying off those massive bank loans he talked about in Beer Wars and the profits are starting to show up.

I'd much rather visit this new brewpub in NYC, enjoying great beer and enjoying the skyline view, than to be stuck in the 100s of tourist traps there!

betsy said...

Do major beer producers/brand managers pay for shelf space and placement? I know food producers do, in large grocery chains, (learned this from a Frito-Lay rep, standing in Giant) and I hear some publishers do in bookstore chains like B&N. Is that a factor in this industry as well?

Alexander D. Mitchell IV said...

Honestly, I don't know. Because the alcohol business is so heavily regulated, it's likely that if it happens, it's not openly acknowledged. There are regulations, for example, that prevent or prohibit the old standard trick of having, say, Bud or Miller (or, more accurately, their distributors) buy/install the bar's draft system in exchange for exclusive rights to what flows through them. But every distributor or bar owner I know of says such shenanigans, or subtle variations of the same, still go on--but, of course, they themselves don't engage in such unethical acts......

Furthermore, 1) brewpubs don't have to worry about this kind of balderdash, and 2) the kind of beer bars I go to prize their independence and variety far more than free Bud neon light signs or draft systems.

Folks? Do beer distributors pay for shelf space?

Alexander D. Mitchell IV said...

By the way, Brad: What I've seen of "Beer Wars" so far--admittedly, not the whole thing--was as one-sided and "propagandist" as the op-ed piece I cited to kick off this entry. It was nowhere near as bad as a Michael Moore "mockumentary," but it's by and large telling its viewers one thing, and that is largely what they want to hear anyway, much like a Rush Limbaugh fan listens for reinforcement of his or her world view.

Anonymous said...

Eataly? Ugh. Almost puked.

Alexander D. Mitchell IV said...

I'm not hot on that name, either. Just be glad they didn't try to set up shop in Little Eataly--oh, gad, now I have to get this earworm out of my head! [reaches for Gaelic fusion techno....]

Brad said...

Whoops, meant to say "bigger than most craft BREWERIES"... not "beers"

Anyway, sure Beer Wars was one-sided, but I was happy to see that side being told.

Many of the shady business practices conducted by the Big 3 aren't breaking news items to us geeks, but to the mainstream folks, it was eye opening.

I talked with a lot of people, who after seeing that movie, were both surprised and downright mad. Which, as a craft beer advocate, I was happy to hear. Because it means they'll think twice before ordering that Bud Light at a bar when there's a Sierra Nevada or better yet, a local craft beer on tap as well. Same with retail purchases. Lots of folks now thinking more about their choices of beer, especially after seeing the film.

Sorry, way off topic :)

Andrew said...

One sidedness has become the norm for documentaries. The format itself has evolved to the point that it's essentially a filmic op-ed... and I'd guess that most viewers grasp this reality. Sure, Beer Wars came from a decided craftbeer=good sensibility, but the majority of their arguments are valid. It's on the viewer to surmise, or find, the counter-arguments from the megabreweries.

But there is, in fact, a large segment about the war for shelf space at most liquor stores. The megabreweries roll out six packs of bottles and six packs of cans and 12 packs of bottles and 12 packs of cans and 12 packs of aluminum bottles and 18 packs of cans and cooler-packs of cans and... you get the point... not because their customers need those products, but because they occupy shelf space that cannot then be occupied by a craft brewer.

Whether we're talking about craft brewers, tennis shoes, or cheese, let's just acknowledge that what we have is not a free market. The deck is stacked against the little guy and it always will be. For every reader of this blog who's well versed on the value of a craft brewer, there's 35 potentially curious drinkers who see a Blue Moon and think they're buying a craft brew. I realize that ADM4 is one of the converted, but this Op-Ed can reach more than just you and your like-minded readers.

There's a three-tiered distributor system in the beer industry, and it tilts the market heavily in favor of the big guys. The market isn't free, not in the world of lobbyists, bureaucracy, politics, swolen advertising budgets, regulation, etc