A Beer With Max at the Draught Works

Posted On April 16, 2012

Senator Max Baucus continued to show his support for Montana craft brewers as he headed to the Draught Works Brewing Company in Missoula for a cold refreshing beer, after a 5am to noon workday at the local post office.  Max and his staff shared a beer and discussed federal brewery legislation, and was joined by Bob Pease, Chief Operating Officer of the Brewers Association (BA), Tony Herbert of the Montana Brewers Association (MBA), and Josh Townsley owner of Tamarack Brewing, and Vice President of the MBA.

Bob Pease, Senator Max Baucus, and Tony Herbert at the Draught Works, Missoula

As Co-Chair of the Senate Small Brewers Caucus, Senator Baucus enjoyed a pilsner and expressed his support for the strong and growing craft brewing industry in the state, their small main-street business model, and the economic and cultural impact they are having.

For more, click here for Ryan Newhouse’s, of the Montana Beer Finder, take on the visit.

Home brewing the toast of the Beltway

Posted On March 27, 2012

Politico, Article, March 27, 2012, By Puja Murgai

Home brewing the toast of the Beltway

Craft beer and home brewing have been a trend in Washington, and even President Barack Obama has raised a stein.

Sam Kass, White House senior policy adviser for healthy food initiatives, told the Obama Foodorama blog in December that White House chefs, who began home brewing in March 2011, were still at it, with three kinds to date: White House Honey Ale, White House Honey Blonde Ale and White House Honey Porter.

In February, the president touted the White House home-brew at a fundraiser in Corona del Mar, Calif., saying, “We’ve got honey beer in the White House,” and noting that the beehive that supplies the honey is on White House grounds.

And Obama for America has been selling O’Bama pint glasses as a fundraiser — two for $25 — perhaps to try to woo members of the group Homebrewers for Obama, which backed his campaign in 2008.

Members of the House and Senate also have had beer on the brain.

The Senate Small Brewers Caucus, co-chaired by Sens. Max Baucus and Mike Crapo, met for the first time last month over beers from Big Sky Brewing in Montana. “This caucus,” Crapo said, “will provide senators with a better understanding of all aspects of small brewing and the positive impact it has on their communities.”

Baucus has included small breweries in his Montana Jobs Economic Engine Initiative, noting that “Montana has the second-highest number of small breweries per capita in the nation.”

Even the debate over postal reform has a hint of hops.

Sen. Susan Collins took to the Senate floor last week to tout the 21st Century Postal Service Act, co-sponsored with Sens. Joe Lieberman, Tom Carper and Scott Brown. The bill would allow the Postal Service to ship wine and beer in order to help increase revenue.

It’s certainly a growing market. An infographic posted to the Brewers Association blog Monday shows that “craft [brew] surpassed 5 percent volume share” in 2011 “for the first time and continues to gain at a point when large brewer volumes are in decline.” But for craft breweries, which are typically independently run, the cost of shipping beer has become a greater concern.

In a nod to small breweries, Collins added, “There are … customers who simply can’t adjust their business model and could be forced out of business, taking the jobs they support with them.”

According to The New York Times, Pete Johnson, programs manager for the Brewers Association, said shipping beer through the mail would lower costs for wholesalers who are currently forced to use private shippers to send their products.

Rep. Peter DeFazio, a home brewer and craft beer enthusiast who chairs the House Small Brewers Caucus, has also introduced legislation that would allow the Postal Service to ship beer.

The Oregon Democrat “has a real passion for the breweries, the brewers and the beer, and he truly understands the unique issues of our industry,” said Charlie Papazian, president of the Brewers Association.

But DeFazio isn’t all work and no play. He still manages to have fun with his hobby: He’s a judge for The Washington Post’s Beer Madness, a “March Madness-like” beer tasting that’s in its second round this week. Last week, the congressman initially selected Bell’s Lager before settling on Fordham Helles Lager.

2011 U.S. Craft Beer Grows 13%

Posted On March 27, 2012

Total U.S. brewery count tops 2,000

Boulder, CO • March 26, 2012 —The Brewers Association (BA), the trade association representing small and independent brewers, today released 2011 data on U.S. craft brewing¹. Craft brewers saw volume² rise 13 percent, with a 15 percent increase in retail sales from 2010 to 2011, representing a total barrel increase of 1.3 million.
In 2011, craft brewers represented 5.68 percent of volume of the U.S. beer market, up from 4.97 in 2010, with production reaching 11,468,152 barrels. Additionally, the BA estimates the actual dollar sales figure from craft brewers in 2011 was $8.7 billion, up from $7.6 billion in 2010. Increased retails sales represented 9.1 percent of the $95.5 million dollar U.S. beer market³.
“While the overall beer market experienced a 1.32 percent volume decrease in 2011, craft brewing saw significant growth, surpassing five percent total market volume share for the first time,” said Paul Gatza, director, Brewers Association. “It’s becoming increasingly clear that with the variety of styles and flavors to choose from, Americans are developing a strong taste for high-quality, small-batch beer from independent brewers.”

Download High Resolution Graphic	View Expanded Infographic

With 250 brewery openings and only 37 closings, the BA also reported that 1,989 breweries were operating in the U.S. in 2011—an 11 percent increase from the previous year. Small brewers employed approximately 103,585 workers in the U.S in 2011.

“We saw rapid growth in brewery openings last year, particularly with microbrewery start-ups, and these numbers are poised to rise even more in 2012,” added Gatza. “In February 2012, we already topped 2,000 operating breweries—a truly remarkable milestone. We look forward to even more success and the continued expansion of the craft beer market.”

Note: Numbers are preliminary. The Association will publish its full 2011 industry analysis in the May/June 2012 issue of The New Brewer, highlighting regional trends and sales by individual breweries. Additionally, a more extensive analysis will be released during the Craft Brewers Conference in San Diego, Calif., from May 2-5.

¹ The definition of a craft brewer as stated by the Brewers Association: An American craft brewer is small, independent, and traditional. Small: Annual production of beer less than 6 million barrels. Beer production is attributed to a brewer according to the rules of alternating proprietorships. Flavored malt beverages are not considered beer for purposes of this definition. Independent: Less than 25 percent of the craft brewery is owned or controlled (or equivalent economic interest) by an alcoholic beverage industry member who is not themselves a craft brewer. Traditional: A brewer who has either an all malt flagship (the beer which represents the greatest volume among that brewers brands) or has at least 50 percent of its volume in either all malt beers or in beers which use adjuncts to enhance rather than lighten flavor.

² Volume by craft brewers represent total taxable production.

³The Brewers Association does not include flavored malt beverages in its beer data set.

Contact:

Abby Berman (on behalf of the Brewers Association)
[email protected]
646.695.7044

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About the Brewers Association:

The Brewers Association is the not-for-profit trade association dedicated to small and independent American brewers, their craft beers and the community of brewing enthusiasts. The Brewers Association (BA) represents more than 70 percent of the brewing industry, and its members make more than 99 percent of the beer brewed in the U.S. The BA organizes events including the World Beer Cup®, Great American Beer Festival®, Craft Brewers Conference and BrewExpo America®, SAVOR?: An American Craft Beer & Food Experience and American Craft Beer Week. The BA publishes The New Brewer magazine and its Brewers Publications division is the largest publisher of contemporary and relevant brewing literature for today’s craft brewers and homebrewers. Beer lovers are invited to learn more about the dynamic world of craft beer at CraftBeer.com and about homebrewing via the BA’s American Homebrewers Association. Follow us on Twitter.

Kettlehouse nears 10,000 Barrel Limit – Pulls from Markets

Posted On March 16, 2012

Kettlehouse Brewing Company of Missoula announced on March 1 that it is pulling out of the Helena, Kalispell, and Great Falls markets in order to be able to continue to maintain its current tap room operations.  Tim O’Leary’s decision didn’t come easy but state law requires breweries who make over 10,000 barrel within a year to cease selling beer for on premise consumption.  Kettlehouse is rapidly approaching that limit, and would rather operate tap rooms in Missoula, than continue to push to these markets.

In 1999 when the legislature smartly approved the current sample room exception law which has be instrumental in helping the craft industry grow, probably no Montana breweries had 10,000 barrels in their headlights.  Republished from the Growler Fills March 5th post, this article provides a good look at some of the rationale and implications of the current circumstances.

BY ERIC CIOE – Kettlehouse Brewing has unfortunately been forced to make a tough decision: either pull out of some of their markets, or shut down their two tap rooms in Missoula.  The decision isn’t forced by capacity demands.  In fact Kettlehouse has recently expanded their production brewery on Missoula’s Northside, more than doubling capacity with two new 90 barrel fermenters.  The issue is a legislative one, an issue that at least one other state has just dealt with quickly and justly, providing a blueprint for Montana legislators to support a popular and growing local business.

The rub is caused by the definition of ‘small brewery’ in statute 16-3-213:

(2) (a) For the purposes of this section, a “small brewery” is a brewery that has an annual nationwide production of not less than 100 barrels or more than 10,000 barrels.

(b) A small brewery may, at one location for each brewery license, provide samples of beer that were brewed and fermented on the premises in a sample room located on the licensed premises. The samples may be provided with or without charge between the hours of 10 a.m. and 8 p.m. No more than 48 ounces of malt beverage may be sold or given to each individual customer during a business day.

What these parts mean put together is that breweries that produce more than 10,000 barrels a year are no longer considered a “small brewery” and can no longer sell pints of their beer on premises.

Big Sky Brewing is so far the only brewery in Montana that exceeds that limit.  Because of this, they have to give away their beer rather than sell it in their taproom, and in quantities less than 48 oz.  One gets the feeling that this is not an issue for Big Sky, who have successfully built a regional brewery that distributes to almost half of the states in the country.  Their goals and circumstances are unique among Montana breweries.

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Kettlehouse is a different animal entirely.  Their Myrtle Street taproom is an obvious hangout for the university and downtown communities, more relaxed and kid-friendly than nearby bars.

Even more obviously community oriented is the Northside taproom. There, Kettlehouse hosts Community UNite each Wednesday where $.50 of every pint poured goes towards varying organizations within Missoula.  These events are booked through the end of 2012 already.  Important community groups like the Big Sky Documentary Film Festival, the Caras Park Fund, and the Missoula Senior Center are all being represented in the first few months of 2012.  Every Wednesday there are bikes chained up outside and street parking full for a hundred yards in both directions.

With both of their taprooms, Kettlehouse supports the Missoula that has supported them through the years.

*            *            *

So when faced with the choice of brewing beyond the 10,000 barrel limit for selling beer in their taprooms in Missoula, or reigning in production by pulling out of markets where their beers are popular, Kettlehouse has chosen to side with Missoula.  No doubt Cold Smoke fans in Kalispell, Helena, and Great Falls are disappointed with the choice, but Tim O’Leary recognizes the importance that his taprooms have in Missoula and is unwilling to give them up, even at the cost of potential profits.

But he should not have been faced with this choice to begin with.  While arguments can be made for most of the other provisions that govern breweries, such as the 48 oz law and the 8 pm last call, one can scarcely see a point in the 10,000 barrel limitation for beer sales in taprooms.

Who are the beneficiaries of such a law?

Not the bar owners in Missoula.  Because of the other regulations on the Kettlehouse, there is hardly competition between local bars and local breweries as is.

Not the bar owners in Kalispell, Helena, and Great Falls.  They will no longer be able to supply their customers with the Cold Smoke that they enjoy.

Not local small brewers.  Missoula newcomer Draught Works is already pouring beer as fast as they can brew it and, like both Kettlehouse locations, are busy almost every night of the week.

Not the state.  The more beer Kettlehouse sells, the more tax dollars that go to Helena.

Not the local economy.  Kettlehouse employs brewers and bartenders at two locations in a town with a distinct job shortage.  Their growth would mean more jobs in Missoula.

Not the local communities.  Both taprooms are friendly, safe places where locals can grab a pint after work without being in bar environment.

Those who will benefit most of all from the Kettlehouse not being in three large Montana markets are large out of state brewers like Sierra Nevada and Deschutes, who will doubtless fill major parts of the void left by Kettlehouse’s departure.  And as much as I enjoy the beer from those breweries, I can’t help but feel they are doing fine without help from the Montana legislature.

*            *            *

Fortunately we are not in uncharted waters.  In 2010 and 2011 I watched a similar regulatory hitch encountered and eventually overcome while living in the Midwest.

The Three Floyds Brewery in Munster, Indiana realized in 2010 they were on course to surpass the 20,000 barrel limit that the state government had imposed in the early 1990s.  After reaching that limit breweries would no longer be able to operate a taproom, among other things.  Three Floyds teamed up with Sun King and Upland, two other breweries in the state who were approaching 20,000 barrels per year to lobby for raising the limit.

Recognizing the economic benefit to the community and the state as a whole that these three successful business provided, the Indiana legislature quickly voted to raise the limit to 30,000 barrels per year in May of 2011. With Three Floyds recently growing at a rate of almost 5,000 barrels annually, this law will no doubt be challenged again in the next few years.  But when pressed on the issue, the Indiana legislature was able to take quick action to prevent successful businesses in their state from being forced to make tough decisions regarding their production.

*            *            *

Unfortunately for Montana, Kettlehouse has already had to make a tough decision to comply with state law. Kalispell, Helena, and Great Falls residents are already beginning to see fewer Kettlehouse cases at their beer stores and fewer Kettlehouse kegs at their bars.

Tim O’Leary has committed himself to raising the 10,000 barrel limit through legislative action.  Doubtless the beer communities of Kalispell, Helena, and Great Falls support his efforts.  And Bayern Brewing, who is likely the next brewery to reach 10,000 barrels in Montana, also stands behind him.  But beyond that, any Montanan who cares about the growth of its local business, especially those who support the community they are part of as much as Kettlehouse does, should support him to get the limit raised or even eliminated.

Of course there will be complications involved.  Any alcohol-related decision made in Montana must contend with the biggest lobby in the state, the Montana Tavern Association, who have not proven flexible with previous challenges to brewery regulations.  But because the main beneficiaries of the limit seem to be out of state brewers who stand to gain sales while Kettlehouse loses them, the Montana legislature and any other interested parties should work quickly so that the natural growth of this successful business is not inhibited any more than it already has been.
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* Eric Cioe lives in Missoula, MT, having arrived not long ago from the great beer havens around Lake Michigan. He’s a fan of big stouts, cask-conditioned ales, fresh local brews and – as I can attest – sharing brews with friends.  You can find more from Eric over at Montana Beer Finder. Posted by Alan at Monday, March 05, 2012