Ruminations On The Future Of Craft Beer In Chicago and US

A friend of mine who owns a well known craft beer bar here in Chicago posted something on Facebook recently which really caught my attention for a variety of reasons. These are the last three men on earth who have never drank a craft beer.  The craft beer movement ends on the day they order their first IPA.

The gist of his comment was that he's seeing a huge influx of beers coming to him from sales reps each and every week. Reps from distributors come in, bring in loads of bottles of craft beer and "craft beer" to try and he decides if he'll try selling them in his bar. The problem is quite simple: he has limited space in his bar for bottles and kegs. Bottles sit in refrigerators, kegs sit in a walk-in cooler (which I've seen, and it is very cozy in there). He has a finite number of taps to go with those kegs. These are the same issues that any purveyor of goods has to deal with. Target stores can only put so many products on their shelves and if you have a new product you want to sell there, it takes a lot of sales effort to get in the door (I know both through personal work experience in another life, and through a friend who is doing this very thing).

So my craft beer bar owning friend wanted to know if other bars, restaurants, retail stores were seeing this same issue which he described as "putting 20lbs of beer in a 15lb bag". After he posted this, many folks commented, many of them are in the beer business in some way, either as brewery owners, distributor reps, bar owners, etc. The comments ran the gambit but they reinforced what is an underlying question I think about all the time: What is the future of the Chicago craft beer market and the entire craft beer market in general?

There are so many moving parts in the answer to this question, if there actually IS an answer. How many breweries can Chicago support? How do we compete against non-Chicago craft breweries who are moving into our fine city fast and furiously? How do we get Chicago to support its hometown breweries first, much like Portland, Seattle, and all of Wisconsin? When will the growth slow? Is this the crest of the wave? If so, is it wise to open a brewery now?

I'll just answer that last question right now. For me, yes. Even if we had 500 breweries in this city, I'd do it. To me, this isn't about riding a wave. I got in on the ground floor of the craft beer movement in this country. I wasn't the first, but I was definitely there close to the beginning. This isn't a fad to me, this is my life. There is nothing I'd rather do for a living than own a brewery. There's nothing else I CAN do for a living. This is it. I have to do this. I have no choice. So anyone who thinks there are too many breweries in Chicago or in the U.S. or thinks that any new brewery that is coming on board is just following the herd....well...they can fuck off. Do you say, "Another restaurant in Chicago? We already have too many!" No, you do not. We're Americans, we crave choice. The more choice the better. Why would having choices in beer be any different? And specifically in a great metropolitan city like Chicago, I personally EXPECT to have a wide variety of choices for just about everything: food, beverage, entertainment, culture, porn. If I didn't want so many choices, I'd live somewhere with a lower damn cost of living. I should clarify that none of this is referring to my friend, as that was not his point. It's more of a reaction to some of the comments which conveyed, in my opinion, an obtuse understanding of what opening a brewery means to those of us who are doing it or have done it. Let's move on.

Let's talk about supporting local breweries. A few months ago, my friend Jessica Murphy had an excellent post about this on her blog, Girls Like Beer Too. Go into any craft beer bar in Chicago and you will find that almost without exception, Chicago breweries are a minority on the tap handles. Lots of California and Colorado beers, lots of imported beers, but a relatively small number of Chicago beers. And I don't recall being in any craft beer bar where all Chicago breweries were represented at the taps. Bottles maybe, but I personally judge a beer bar by its taps. (I never order bottles. I can get bottles at the store and drink at home for far less money.) So why the lack of support for Chicago breweries compared to Portland et al? Where is the allegiance to the home team? Where is our pride in our Chicago beer culture? Well, I think there are several answers here. First: wait for it....there aren't enough breweries in Chicago! Portland, OR has 40 breweries (including brew pubs) and a population of 1 million. Chicago has 2.8 million people. That would mean we would need approximately 40*2.8 = 112 breweries to have the same breweries/capita. We have less than 20, I believe. Does Chicago have the same appreciation for well crafted beers like the west coast? It should. Chicago was brewing commercial beers before any of those fuckers were!

But I don't think sheer numbers is the complete answer. I believe it's a huge part of the answer as it limits what kinds of beers we have access to locally. There's another part of this answer that Chicago breweries need to address: make great beer. Now, we have great breweries. Metropolitan Brewing has carved a fantastic niche with clean German style lagers, which is quite unique not only in Chicago, but for the U.S. in general. Their "Crankshaft Kölsch" is just fantastic and can easily compete with any German version. Half Acre's "Daisy Cutter" is awesome. Revolution is making some terrific beers in their production brewery and shipping them all over the place. But we're competing against Stone, Firestone Walker, Lagunitas (who will soon be a hometown beer), Oskar Blues, and now Deschutes, all well established and universally loved breweries. I see plenty of those beers on tap at any bar, not just craft beer bars. So what does that say? Are their beers better than ours? I guess that depends on who you ask. I love, love, LOVE Firestone Walker and Lagunitas. Two of my absolute favorite breweries, but I would love to replace them with hometown beers of similar styles. The problem is, for the styles of beer they make, I like theirs better. If there's a hop centric beer, I'd take FW or Lagunitas over a hometown beer any day. They're just terrific. They don't make all styles of beers, but the ones they do are just superb. Where's my allegiance to Chicago? The same place everyone else's is probably. I want to drink the best beers I can get. I drink plenty of Chicago beers, don't get me wrong, my larger point is we absolutely have to brew beer that is as good or better than the big guys out west or wherever. I don't expect a bar to offer Chicago beer on tap just because of some sense of hometown allegiance. Bars are a business, just like a brewery, and they have to make money. If they can sell more Firestone Walker than a local beer, then that's what they're going to do, and I don't begrudge them at all.

(Case in point: Deschutes Brewery just made a massive splash in Chicago last month. Hell, I found their beer at a local large chain grocery store on the very limited shelf space dedicated to craft beer. No Half Acre, no Metropolitan, but yes to a brewery that just entered our massive market a few weeks ago! What the hell? Where's the Chicago love?)

Update 2/18/13: I just read Good Beer Hunting's excellent post on Wirtz Beverage Group, the IL distributor for Deschutes. I have to say I am well impressed with their marketing and logistics savvy given that this is their very first craft beer brand. I think Wirtz is going to be teaching other established craft beer distributors a few lessons on how it's done.

Now it seems that everyone and their brother is opening a brewery in Chicago. I keep finding out about new ones in planning all the time. It's going to be a much more crowded marketplace in the next couple of years. I won't lie to you and say it doesn't worry me a bit but in the end, it's going to push me to constantly improve my beers, my processes, and my marketing. That's how capitalism works and regardless of who's left standing, the craft beer drinker will benefit.

So what's going to happen to the craft beer movement in general? Is this a fad? Will we turn back to wine or go cheap and drink the yellow fizzy stuff? Will people get tired of talking about hop profiles and malt backbones? Will the lines at Dark Lord Day ever get shorter? I don't think it's a fad, but honestly I have no idea. The number of breweries opening in the U.S. is at a fever pitch. The rate continues to accelerate. Obviously the rate of growth will slow down and when it does, what then? Can all of these breweries survive and grow? I doubt it. I foresee a lot of closings and consolidations. Typical business cycle stuff. I also foresee the day when craft beer loses its cachet and becomes, well, normal. Growth will continue but slow dramatically. Some breweries will continue to aggressively expand, but mainly, I see cities and town supporting their local breweries much like the days of yore in Europe. Nothing special, just normal and delicious and expected.

Oh, and the big guys will continue to fight off the craft beer onslaught by trying to further put a stranglehold on distribution, completing mergers, producing more fake craft beers with aggressive marketing. The usual. They'll lose, but not for lack of trying.

So that's my viewpoint. I'm sure I'm wrong on several fronts, correct on others. Only time will tell. Regardless, I will continue with this journey and I will make sure that Panic Alarmist Brewing is nimble and ready to adapt to a changing craft beer marketplace. If that means hot models wearing nothing but dynamite themed body paint, well, so be it. No wait, I'm doing that anyway. Never mind.

Cheers.

G

What's Faster, Me Or A Glacier?

Once I kick this guy's ass in the 1,000,000 mile hurdle, I'm going to boil him and make beer. It's been over a year since I first started blogging this adventure. I wish I had remembered the anniversary back in October! Here's my first post. Hard to believe 14 months have passed. That brings me to today's subject which is: "Where's the damn brewery!".

My wife brought up the point today that I'm moving very slowly on this and I agreed with her. I know lots of folks opening breweries in Chicago and they are moving quite quickly. Some have already begun looking for real estate, I have not. Now it's hard to compare apples to oranges as we all have different stories including size of brewery, financial resources, life responsibilities and such.

Of all the folks I know here in Chicago opening breweries, I believe I'm the only one who has all five of these attributes: 1) has kids, 2) is in his mid 40's, 3) has a mortgage, and 4) is opening a full sized non-nano brewery, and 5) has a good paying day job which happens to be the sole source of funds for the family. I could be wrong about the other breweries, but I believe this is the case.

These five things plus a few others combine to make me very cautious during this journey. I have a shit load of responsibilities on my shoulders that weigh in on every decision I make. I'm not saying others do not have equal responsibilities or limitations but these are mine. The only reason I mention my age is the whole idea of waiting so late in life to make these major changes is daunting. Add in children and all these other things and you get a very cautious man moving slowly and deliberately.

I've spent a lot of time playing out scenarios in my head. No failure scenarios, but lots of contingency plans. What if I can't afford a canning line? Can I grow the business by packaging only in kegs for the first year? Would it be more profitable to open a tap room before spending money on a canning line? What about a retail store? Does Chicago need another xyz beer? What about those damn hops I want so badly?

Well, I'm at the point now where I feel I'm ready to deal with just about any contingency. The only really big hurdle that I will be facing soon is getting bank financing. The result of that will play a big part in all of these other decisions.

So that's my litany on why I'm moving at the pace I am. Some might think it slow, some might not care one way or another. Just realize that this is my journey and I have to do it the only way I know how. Patience is not something I'm known for, so this enterprise is a real test for me.

Enough of that touchy feely Oprah crap! On to brass tacks.

I had a really productive meeting with my attorney a week ago yesterday. He's been amazingly helpful in guiding me through the maze of LLC's and member investment. We're getting very close to the first draft of the Operating Agreement. From there we'll move onto the other documents discussed in my previous post.

Despite my glacial pace, things are really moving along now. I've received rousing reviews of my business plan. People are complimenting me on how detailed and well thought out it is, which makes me feel like I'm on the right track.

I now have several commercial real estate agent referrals and I'll be talking to them this week to try to find one who's a good fit. It looks like the search could take several months so I better get my ass in gear to make sure I have a few choices once I'm funded.

Stay tuned, we're getting into the good stuff now.

G

Beers To Surprise and Delight

Old, new, who cares? It's good at any age! As I wrote a couple of weeks ago, I've been spending a lot of time thinking about my flagship recipes. I don't recall mulling over any other major decisions in my life as much as this one. Seriously. I've gone back and forth in my mind about which style-esqe beers to launch with and as soon as I think I've come to a final decision, I brew them, re-brew, take notes, let people taste them, get feedback, discuss, mull some more, wash, rinse repeat. My feeling at this point is that my initial desire to brew a Belgian monk table beer/saison/rye blonde, whatever it is, has been quashed. I think all the versions I've made with various grist changes, yeast strains, and hopping schedules have been tasty beers, but I just don't find them inspiring. They don't surprise or delight and at the end of the day, that's my ultimate goal. Disregard what I wrote previously about wanting to create award winning beers, I do, but a more articulate way to put it is I want to "surprise and delight". Hats off to Steve Jobs for that term.

I wrote very early on in this blog that I am not attached to any particular style of beer. There are very few styles or non-styles that I don't like (except American wheat beers, not a fan, boring IMHO), so unlike how I perceive other breweries deciding what beers to launch with, I'm not married to any particular styles that I just HAVE to brew. I have a feeling that I'm the exception rather than the rule in this regard, which is the story of my life and causes me much stress in a variety of situations (like trying to fit into corporate culture for instance).

The reason this subject has come up again for a post is that I've been focusing on my temporarily named "Panic Pale Ale" recipe. This is an American style pale ale, very pale in color (no caramel malts), lots of late hopping, and no Citra/Simcoe/Amarillo due to the shortages of these hops that I've mentioned a million times. In a related note, Founders Brewing announced this week that they won't be able to brew their "All Day IPA" year around due to shortages of Simcoe and Amarillo, which just happens to be my favorite beer at the moment (see? I DO like IPAs!). Seriously, go find that beer if you haven't. It's amazing. Exactly what an IPA should be, again IMHO.

I brewed 10 gallons of my pale ale a few weeks ago, split into two 5-gallon fermenters, and used different yeast strains. I really enjoyed how they both came out, really nice hop aroma and flavor, lovely color, yum! But, the lack of C/S/A hops really holds this beer back from what it could be, at least in my mind. I entered one keg this weekend in a very fun event sponsored by one of my homebrew clubs, HOPS. The event was the first ever Bubbly Creek Barrel Brawl and it was a keg only homebrew competition/mini beer festival. You just go ahead and mark your calendars for next year for this. It was awesome. There were two competitions involved for the event. The first was a standard BJCP sanctioned homebrew competition, limited to the 23 beers that were entered. The beers were divided into groups of 6, and one with 5, with two judges per group. The groups were not organized by style, in fact each group purposely didn't have duplicate styles in it. Very interesting concept. Each pair of judges picked the top two beers from their group and pushed them on to the Best of Show round. The second competition was the People's Choice awards. Every attendee was provided with a ballot and voted for 1st, 2nd, and 3rd place.

So at this point you're probably saying, "Man Gary, you went to pro brewing school, you're opening a brewery, you must have just KILLED everyone!" Um, no. Didn't even get past the first round in the BJCP portions. And didn't place in the People's Choice. Nada. Nothing. And the first place for the BJCP portion went to ..... an American pale ale, brewed by my good friend Nate. Both of our beers were very pale in color, both late hopped. Nate used some Citra but I have no idea what the rest of his recipe was. My scoresheets from the judges made no mentions of fermentation flaws, so that's good! Their only real complaint was that my beer didn't have enough malt flavor for the style, just lots of hop flavor and a bit too much bitterness perhaps. Now understand that BJCP competitions are based completely on a) how well your beer fits the style guidelines and b) how good it tastes. That's a bit of an over simplification, but it's close enough. You could have the best beer in the world, but if it's not brewed to the style you entered it as, then tough titties, you get a shitty score. My beer was definitely too bitter for the style, it had more of an IPA bitterness which isn't what I was going for. I also completely agree with the judges comments on the lack of malt flavor. The beer is very dry and comes across as one dimensional. FYI, the beer scored a 31.5, which isn't too bad, Nate's Best of Show beer scored a 39.

I have no issue with not winning a BJCP competition. I don't brew for competition, I brew for me and Panic , and whenever I enter a competition, I usually have to guess what category to enter my beer in and it's never quite right. I rarely get any scoresheets pointing out off flavors from fermentation problems, which is something I'm very proud of. I pay a lot of attention to my process and really focus on cleanliness, sanitation, and fermentation process (yeast pitch rates, yeast health, temperature control, etc). So I'm all good with this.

What I was disappointed with however, was that I got nothing in the people's choice part of the competition. How do I expect to make a living selling beer that I've created if I can't even place in the top 3 out of 23 beers? Well, the answer to that is to take the lemons and make lemonade.

A big motivator for me to enter this competition, in addition to just having fun and hanging out with my friends, was the eye on the prize of opening a brewery. This event created an almost perfect market experiment for me in my endeavor. I went into this wanting to learn a few things. How will people respond to my beer? Which beers will be requested the most? Which beers will win the people's choice and why?

Here's how the people's choice went down: 1st: Saison, 2nd: Saison, 3rd: Tie with Double wheat IPA (I think?) and pineapple pale ale (which I really liked). So, the top two beers were saisons. Interesting. Does that mean I should proceed with my saison? Well, one event is just one data point, but I'm really fascinated that the top two most liked beers were saisons, the only two saisons at the entire event. I had them both and liked them. In fact, they were both some of the few beers I went back to for seconds, and thirds.

I had a few people tell me they really liked my beer but I didn't get the overwhelming positive response I had hoped for. My friend Matt, who got third in the BJCP comp, really liked it and came back multiple times, so that made me feel good, but I didn't get anywhere near the response I wanted. I made it a point to work at all four beer stations so I could see which beers people were ordering the most. Keep in mind that event goers were only allowed one sample of each beer, so they couldn't come back for seconds, but most people didn't get through all 23 beers, so the ones they did order were probably the ones that seemed most appealing to them. There was no real correlation between which beers won and the number of times I poured them. So that simply means that the winning beers weren't particularly sought out more than other beers, but it does mean that the people who ordered them really liked them.

I have no idea why people chose the beers they did for the winners, so that question goes unanswered. I don't mean that the beers were undeserving at all, I simply mean I didn't go around and ask, and I wish I had. Did the warm weather drive people to something lighter and more refreshing? We're those saisons just really good (they were, BTW)? Did that particular sample of people on that day just prefer saisons? Were the other beers simply not as good?

My beer was particularly hoppy. The style with the most growth in the first six months of this year in craft beer is IPA. People love hoppy beers right now. Was my beer too hoppy, too dry, bland? I don't know but I found the whole experience really eye opening, in a good way. These people are my future customers. How do I get them to drink my beer in such a crowded marketplace which is just going to get more crowded? Do I try to cater to people's tastes or do I just brew what I want to brew? Kinda like "Beer of Dreams", if I brew it they will come? These are the questions I'm asking myself right now and I think it's a very wise thing to do. Despite the fact that I've made the decision long ago that nothing's going to stop me from opening this brewery, I wouldn't call myself much of a risk taker. I'm a firm believer in risk mitigation and contingency plans. I'll be putting my family's livelihood on the line not to mentions tens of thousands of dollars from investors who believe in me. I'm not going to brew a bland, middle of the road American wheat beer, but I'm not going to brew a strawberry and gingko infused Czech pilsner either.

One very interesting thing I noticed was that the only Belgian wit at the competition was requested about twice as much as every other beer at the station where it was on tap, at least when I was pouring. When I first hatched this idea in my head to open my brewery, I was convinced that a Belgian wit was a definite launch beer. Since then, however, no less than two other breweries in the Chicago area have Belgians wits in their flagship lineup. Is there room for yet another? I don't know, but did I ever mention what my favorite beer style is? ;-)

Somewhere in the middle of this quigmire of questions lie the answers to my flagship beer questions. Quite honestly, I can't think of anything much more fun or interesting than getting to brew a lot more beer to find those answers. At the end of this endeavor I truly hope I have some beers that surprise and delight. That would be the greatest award of all.

Cheers,

G

A Journey Of A Thousand Miles Begins With A Single Step

A year ago last Friday my wife Bridget was diagnosed with breast cancer. She is the picture of health now. The chemo was completed last December, all cancer is gone. We are very blessed. See her blog, http://bridgetdehl.com for more on that journey.

That event is what pushed me to take the first, real step on this journey and there's no looking back now.

My question to you is: what will push you to take YOUR first step? A death in the family? Divorce? Losing a job you really didn't like anyway? Let's all make a deal with each other. We won't wait for tragedy or near misses to give us the collective kicks in our asses we all need to pursue our dreams. It's a fucking cliché anyway. How about we just go for it now while we all still have our health and the health of our loved ones?

Don't anybody stand in my way, 'cause you're gonna get mowed over.

Cheers!

You Think You Have Problems?

I like his style. Opening this brewery has opened up a whole new chapter in my life. I've always been one to give up very easily when things get tough. I think fatherhood has really helped me overcome some of that. The thought of my children giving up on problems as soon as they start makes me sick to my stomach. I'm trying to teach them to do something that I inherently would never do.

This enterprise has changed all of that. I'm so fucking determined that no matter what obstacles I've run across I've managed to mow them down. I don't even think about it anymore. When I say "failure is not an option", that's not some slogan I'm using to pump myself up, it's a statement of fact. I will not fail. Panic Alarmist Brewing will open and nothing is going to stop me. Nothing.

If I can't afford the system size that I want, I'll go smaller. If I can't afford a canning line, I'll go keg only until I can afford one. If the space I end up leasing is not zoned correctly for a future retail store or tap room, I'll get it rezoned. I'm not hemming and hawing. I'm deciding and I'm executing. Simple.

I have a lot of problems which will require solving in the next couple of months. Big problems. They will be solved and if anyone or anything gets in my way, I'll go above, around, below, or through.

A couple of days ago my wife was telling me about a play that she was asked to audition for (she's a graduate from Depaul University's Theatre School, one of the most prestigious acting/directing programs in the country). Rehearsals would start in the summer and the show would run through the fall. It requires a lot of time. She would be rehearsing 6 days a week including weekends. We have kids. We're very busy. Brewing/brewery stuff is taking up a lot of time. She was worried that it wouldn't be possible. My response? "It's a problem, we'll solve it. Go for it". She cried. That little story isn't to show you how great of a husband I am (but c'mon, right?), it's an example of how this whole project has changed everything for me.

Why am I telling you this? Because I remember when even the thought of opening a brewery was so overwhelming that I'd just shut down and go on with my day job, unsatisfied. Those days are loooooong gone. Here's the takeaway:

Whether your dream is to open a brewery, winning an Oscar, or becoming a high paid prostitute, don't fucking sit there and come up with all the reasons why you can't do it or why it's a bad idea. BREAK THE PROBLEM DOWN INTO SMALL PIECES AND SOLVE THEM. Easy.

That is all. Next posts, when time allows, will have more substance. I've got some great stuff on canning costs, hop market, fermenter designs, glycol, steam. The list goes on.