What lies beneath?

Uncover what resides beneath the streets of Maryland.

The floods that ravaged Ellicott City last year unearthed an unexpected mystery- underground caves. Research conducted by the Howard County Historical Society team led by Shawn Gladden revealed that the caverns below Main Street were multi-purpose. They served as a hideaway for booze during Prohibition, importantly as a stop on the Underground Railroad (as with many properties in Howard County) and cold storage for a saloon and beer garden in the 19th century. This was not at all unusual for Maryland.

Prior to refrigeration the coolest place to lager beer (age at cooler temperatures for about 2 months) and to store it was underground. Subterranean Baltimore was a cavernous network of lagering cellars excavated deep beneath the streets of Canton, Highlandtown, Federal Hill, and the northern Bel Aire/ Gay Street quadrant of the city, as the grounds were immensely suitable for such an undertaking. Frederick and Cumberland also witnessed vast lagering cellar excavations, fomenting growth of the industry in those well-travelled, populous locales. To produce and offer quality beer, and grow a brewery’s customer base, deep underground vaults became a necessity. Admittedly, a few brewers attempted the same feat by digging instead into a tall hillsides with somewhat dodgy results. Depth was key to reaching proper temperatures and good beer.

What began as good quality control measures for brewers eventually branched into another, most valorous mechanism for societal change. Prior to the outbreak of the Civil War, many slaves sought freedom via the Underground Railroad. Success was dependent upon safe places to hide from slave catchers while traversing northward to (hopeful) freedom. Maryland was a critical state with several safe ‘stops’ for fugitive slaves. Although great risk was incurred by those that hid these travelers, many Marylanders stepped up, including brewers. After all, they possessed the perfect hiding place (or weigh station) that was oft overlooked. Once the Civil War broke out the cellars continued to provide hiding places, not just for slaves, but for other valuables- from jewelry to horses, and even a few AWOL soldiers. Many of the brewers paid other men to serve in their place during the war, so they could remain with their family (and businesses) as a measure of both physical and financial protection. Civil War era brewers shared numerous stories of soldiers from both sides taking beer, property, horses, food, and anything they could lay hands upon from the breweries and their homes. This was rampant, and many had to devise methods of protecting their property and securing their post war survival. The lagering cellars offered just such an opportunity. When soldiers did discover these hidden underground gems, they often took possession of the cellars as places to hide guns, ammunition, and lie in wait for the enemy.

After the Civil War, ‘Ice machines” became a standard feature of late 19th century breweries, obviating the need for the cellars for those that could afford this new mechanical refrigeration. Those deep cellars however were not forgotten and evolved into perfect contraband storage for bootleggers (and ‘in the know’ citizens hoarding booze) during Prohibition! It turned out to be ideal when federal dry agents decided to conduct raids (since Maryland never paid for or appointed local agents), as they knew nothing of the vast subterranean vaults just below their boots. After thirteen years, liquid gold flowed legally once again with those agents none the wiser.

Many of these cellars have since been filled in, a critical aspect to the vast infrastructure built atop. Some however, like those in Ellicott City are still concealed, waiting to be rediscovered, revealing secrets and deepening our understanding of Maryland’s rich history.

When Craft Brewers Sell…

In recent years we have witnessed a vast growth in the craft beer market as well as a bit of a sell off. Why? The American dream? Certainly the entrepreneurial spirit of America includes building a successful business, selling it off and retiring comfortably. Many craft beer lovers are quick to castigate brewers that choose this path, often out of a sense of betrayal. The American dream also and often includes the creation of a business that foments the growth of communities through jobs and economic development, leaving a lasting legacy, sometimes for generations. This is the visage many staunch supporters of craft beer relish. These ‘dreams’ are not always mutually exclusive, but are often at conflicting purpose, most often based upon circumstance instead of (perceived) betrayal.

Currently, DuClaw Brewing founder Dave Benfield was quoted in a Baltimore Business Journal article as seeking an equity partner or new owner. As this information quickly spread, I was informed that DuClaw was not for sale but merely in need of funds to expand the taproom and canning line. This was based purely upon demand that the brewery could not meet until necessary funds became available. This is a perfect example of the convergence of needs potentially altering the course of the brewery. To remain competitive a brewery must be able to host patrons for tours and samples, and taprooms make that possible. That taproom however must be suitable to the interested number of attendees. Additionally, cans are the beating heart of craft at the moment. They are practical, prevent deterioration of the product for longer time than bottles, and are more portable (approved for beaches, parks, etc.) These are all practical business matters that smart breweries should invest in- if the demand is present. It clearly is in the case of DuClaw. So why tack on the extra- potential new owner clause. After all, it has served only to upset loyal DuClaw drinkers and begin an imagined countdown as to when AB-InBev will come calling.

Many breweries facing these sorts of expansion needs also require investment partners. 21st Amendment just sold an equity share to Brooklyn Brewery in a quest to drum up financial influx without ‘selling out’ to big beer. Brooklyn has also acquired an equity stake in Funkwerks, again helping them to remain competitive without ‘selling out’. 1 Brooklyn is a strong- perhaps ideal partner in the craft beer world, and has led the way in helping other craft brewers across the nation get started. Brooklyn cannot however invest in every craft brewery across the country. There are other interested investors, but there are major pitfalls to accompany them.

Last year Jim Koch of Sam Adams took part in a craft beer forum in Bethlehem, PA with Dick Yuengling and Ken Grossman. Koch made a statement regarding equity investors in the craft beer market that was rather jarring, “Equity investors have got to get a liquidity event…” meaning equity investments have a finite life span (anywhere from three to ten years) and at the end of that they need to be paid for their investment, quite a bit of money. If necessary this means resale, or a public offering. 2  The prediction? A great wave of sell-offs in the next decade for craft breweries that took on private equity partners. This is exactly the path many craft beer consumers object to. What is the alternative to investors? Not being able to meet the consumer demand equates to losing business, and the brewery’s market share in the region- or nation as the case may be. This is a downward trend that successful breweries want to avoid, as it may spell the end, particularly in highly crowded markets like California where they are nearing saturation. That is the antithesis of the American dream, and the very last thing craft beer consumers desire.

Beer for Thought…

The Tap House

When it comes to craft beer, it is easy to get lost in the nitty gritty of the industry focusing on BJCP guidelines, craft vs. macro, or ratings, among myriad things. Today I wanted to touch upon a critical partner to breweries- the taphouse (or tap house, as you prefer). Taphouses have grown in popularity (and I would argue necessity) in recent years, paralleling the growth of the craft industry state by state.

Every brewery wants to build their brand. Many include taprooms for interested consumers to sample their brews, and then take a tour of the plant. Brand building does not stop there however, and must extend into the retail sales side of things whether a bottle shop or bar. Breweries without a taproom need to reach the public, and concentrate heartily on this end of the system. The taphouse is a unique and ideal place for both. Why a taphouse over a typical bar? It stands as a beacon to craft beer lovers that fresh (usually) craft beer, often including a wide variety of local offerings is waiting for them. Most taphouses also provide smaller pours, and wee samples of craft offerings for consumers to enjoy a variety of tempting palate pleasers in one sitting without having to order five 16 oz pours. This is a gift to craft beer patrons, as it broadens their experience, exposing them to a multitude of breweries for later purchases. This helps build brands for the breweries. We have all seen and heard about the pint nights at bars, restaurants, etc to raise awareness of a brand, a new release, or a collaboration. That too is a critical component to brand recognition. I would suggest however that following up with placement at a taphouse foments that recognition, and later purchases. Why?

Taphouses know quality craft beer. They understand the import of clean lines, fresh beer, and partnership with the breweries. The beertenders hired are experts (although most are not certified Cicerones, they can elucidate the qualities of every beer on tap). They also are particular about the beers they serve, inviting confidence from their patrons. It is this relationship and venue that is ideal for breweries. Maryland boasts quite a few taphouses, and I am delighted to say they are exceptional. Max’s Taphouse (Baltimore), Baltimore Taphouse, Frisco’s Tap House (Columbia & Gambrills), JoJo’s Tap House (Frederick), Severna Park Taphouse, are only a handful, and the list goes on. Building a brand means not only crafting quality, but building relationships, and ultimately partners. The taphouse provides that willing partner, and becomes a catalyst toward recognition and success.

For many travelling craft lovers, the first place they seek out is a taphouse. That is where they expect to find the best of the local offerings, and a knowledgeable staff to inform them about the breweries behind the beers they sample. That often prompts a visit to the brewery, or at least a retail purchase in the future. It is much the same in Maryland. Maryland is rapidly becoming a beer destination. Taphouses are often a starting point, and from there a trip to brewery is next, or in some cases it is the reverse, sending thirsty travelers from brewery to taphouse and on to the next brewery. It is symbiotic and everyone making good beer, or selling it in their taphouse, or consuming it benefits from the partnership.

It is here that I would like to recognize one taphouse owner specifically. Baltimore Taphouse in Canton has become a mainstay in the city. Every craft beer lover in the region has frequented it at one time or another (or daily). That is entirely due to one man- John Bates. It was his vision, his passion for craft that motivated him to open Baltimore Taphouse. His dreams were realized, through his relationships with breweries, his community, and every patron that passed through his doors. Any person that met him appreciated his kind and passionate soul and his love of quality malted beverages. Sadly,  Mr. Bates passed away on July 22 of this year. His legacy lives on through his wife Kristen, and the incredible business he built. Raise a glass in honor of Mr. Bates, a good soul who loved craft beer, and helped us all to love it even more.

To find out more about John Bates:
Yours For Good Fermentalbes
Baltimore Beer Baron

Flying Dog and the 1st Amendment

Flying Dog recently made public their decision to no longer retain membership in the Brewer’s Association of America as of June 1, 2017. What was behind this decision? The 1st Amendment of the Constitution of the United States of America states,

“Congress shall make no law… abridging the freedom of speech…”

Terrific! I love America and the right to free speech, even when I don’t particularly care for the words that are sometimes spoken! That is how the 1st Amendment works. As citizens, we are all entitled to freedom of speech, agree or disagree. What does that have to do with craft beer? In a nutshell-marketing and labels. The Brewer’s Association of America in April, 2017 informed craft brewery members they were instituting a new Marketing and Advertising Code. On the surface, the code appears merely as a reminder that breweries need to advertise responsibly and follow the traditional path of making sure they DO NOT PROMOTE in their advertising:

• excess drinking
• underage drinking
• drinking and driving
• illegal activity and drinking
• bad or irresponsible behavior and drinking
• claims that beer can solve all of your problems (social, mental, professional, or otherwise)

If we stopped here, this code seems innocuous enough mostly backing up federal law, and something all craft breweries would like to get on board with- acting responsibly towards the consumers that support them. The code does not stop there however and goes on to prevent breweries from advertising which:

• contains sexually explicit, lewd, or demeaning brand names, language, text, graphics, photos, video, or other images that reasonable adult consumers would find inappropriate for consumer products offered to the public;
• contains derogatory or demeaning text or images.

This is where it starts to get a little murky when taking the 1st Amendment into consideration. There is an assumption here regarding reasonable adult individuals finding advertising appropriate or not. Don’t get me wrong- I understand that there is a section of every magazine rack that is required to shield young eyes from the cover and contents because they are not legally old enough to view those rags; much like the rating system for movies- like NC 17. This is fine as the law has been established to guide us (where children are concerned) as to what is appropriate. This doesn’t hold water when it comes to craft beer, an adult product.

It is easy to gather a group of ‘reasonable’ adult consumers together to determine what they find appropriate (or not) with regard to beer advertising/labels. Statistically they would probably be divided on many of the labels level of ‘appropriate’. That is because ‘reasonable’ and ‘appropriate’ can be extremely subjective in advertising. We have all heard the marketing mantra sex sells. Well according to the BA, sex, among other things would not be allowed as a sales tool any longer, if reasonable adults found it inappropriate.

This is where Caruso doesn’t budge, and views the new code as a form of as censorship, and critically a Constitutional violation. It has the potential to limit speech, freedom of expression, and advertising based on ideas and requirements that are entirely subjective. The supposed creation of objectivity in this code appears in the Advertising Complaint Review Panel. This three member panel would interject themselves if the brewery did not respond in a ‘satisfactory’ way to an advertising complaint. I am not completely clear on this eradicating subjectivity. How are they defining satisfactory?

A free market economy allows consumers to decide what they will and will not purchase/consume. The quality of the beer should be the determining factor. To get consumers in the door to sample quality beer, breweries advertise. In a crowded craft beer market, a unique or even controversial marketing campaign may set a brewery apart, luring or deterring potential customers. If a consumer doesn’t care for a marketing campaign, like the Swedish Bikini Team for example, they can choose to go elsewhere to spend hard earned dollars. Shouldn’t that be the determining factor? Caruso thinks so, and the 1st Amendment backs him up.

The counterpoint to this is that the Brewer’s Association is trying to hold their members to a higher standard than the ‘Swedish Bikini Team’, or mudslinging among competing breweries (another part of the ‘code’ prohibits defamation toward competing breweries). For that they should be lauded. These standards however (some of them) might be better off self-imposed as opposed to dictated when they violate the foundational documents of our nation. Why? Once you begin to make exceptions to the 1st Amendment, it will become easier to chip away at those core rights granted to us by our founding fathers; rights many died for, and continue to sacrifice for today.

In the end it may be much ado about nothing, and perhaps an overreaction. All breweries may in fact continue to operate as they have, with no actual infringement upon their rights to advertise as they see fit. Time will tell. Jim Caruso and Flying Dog won’t take that chance.
Cin Cin!

Inspire, Incite, Revile- What’s in a name? What’s in a campaign?

This week social media was aflutter reacting to a new Czech Beer Aurosa. When I hear ‘Czech beer’ the first thing that comes to mind is a traditional, exquisite Czechoslovakian Pilsener. That however is not quite what Aurosa is. The backlash has been tremendous. Why? Perhaps less due to the name, or even style of the brew than the campaign.

One visit to the web page immediately lets the visitor know that Aurosa is a sophisticated and elegant premium beer representing a collaboration of art (as witnessed in the marble like design of the bottle) and the craftsmanship of the brewer that breaks stereotypes and benefits local small artists. Wow! On the surface this seems just fine, as most craft beer folks enjoy supporting local businesses and artists. As one navigates the site, things take an intriguing turn, one that is potentially fraught with deeper meaning, and that is what has the craft beer twitterverse quite agitated.

Aurosa is advertised as a beer crafted specifically for a woman, embracing (and copyrighting) the tagline, “First Beer for Her”, #Beerforher. I am a woman. Do I need a beer brewed specifically just for me??? Hmmm….  On the website I am informed that this beer represents the tenderness of a young lady, and the strength and perseverance of women that succeed in any venue, whilst never sacrificing femininity. Lofty ideals for a beer. As expected the response was a range of rants mostly along the lines of ‘women drink the same beer as men’, which is absolutely true. Other (not unexpected) interpretations of what the name actually means (no it isn’t sexual) were also floating about. I am not the first to take up the conversation of women and beer marketing. Morgan Childs wrote a lovely expose on this topic a few months ago addressing statistics, women, styles, and preferences where she briefly touched upon the controversial Aurosa brand.

It is easy to be gender-offended but I wanted to dig a bit more and think it through before determining my emotional vs. logical response to this new (?) beer- which has technically been around since November of 2015. The first thing I discovered was that this beer might in fact be quite pleasant. A strong, unfiltered, semi-dark (Vienna malt) lager, if well-made is quite appealing. I am always willing to try a new beer- the stumbling block in this case isn’t the beer, but the campaign that reviles so many. The most significant factor to me however is the brewer/founder, Martina Smirova. Yes, a woman who happens to have three Master’s Degrees- all centered on business and marketing. This was her idea, her dream fulfilled, working in collaboration with other women also trying to make their artistic goals a reality. Without an interview, which I am currently trying to secure, I must surmise her true objective based on my research of Ms. Smirova. Considering her resume and business partnerships with various (female) artists, I honestly don’t see malintent. There appears to be no femme fatale, or a misogynistic angle here at all. I see a businesswoman trying to find her niche in the industry.

Czecholslovakia (now The Czech Republic) has a long history of strong, smart, independent women like Vera Laska, the famed resistance fighter that once topped Hitler’s most wanted list. That hasn’t changed. Based on what little I know of Ms. Smirova, I would glean that she is very capable, quite independent, and clearly intelligent. After all, no publicity is bad publicity now is it? Good or bad, Aurosa is the topic of conversation, now garnering very strong name recognition. Perhaps this was her strategy all along?
Na zdraví

Room for more breweries?

Looking at the growth of craft breweries in the United States over the past decade, many have pondered if there perhaps are too many breweries these days. Noticeably the question took on more significance once the number of craft breweries eclipsed 5,000 in 2016. Blasphemy or Truth? Reality dictates it is based on upon factors within each state of the union. One thing I love about the Brewers Association of America is their willingness to keep such detailed statistics. This is particularly relevant when it comes to determining the answer to such questions as how many is too many?

According to BA 2016 data, Maryland has not reached saturation yet at 65 breweries. How do they know? Taking the overall craft beer production, barrels sold, population, and economic impact (just under $652 million for 2016) they created an algorithm to determine where each state ranks and when they near the tipping point of saturation. Currently Maryland ranks 36th in the nation with 1.5 breweries per capita. Based on our population each adult in Maryland consumes approximately 2 gallons of beer per year (raising us to 25th overall!) So what does this tell us? We have far fewer breweries than most states, but we drink a lot more craft beer per person. It also means we have room for growth. Vermont does not have room for growth ranking 1st at 10.8 breweries per capita (100,000) and they have a noticeably smaller economic impact than Maryland at $271 million. Vermont has reached saturation, and other states like Colorado are not far behind.

Even with all of this room for growth in Maryland, which is rapidly marking her place as a premier beer tourist destination, there are still more than 65 breweries (2016 numbers)and counting.  How does a brewery in Maryland stake a claim as relevant, worth a drive,  or investment in a six pack? What value can a new brewery add to those already established? It is fairly  simple really. The priority focus of  a new brewery should be to make certain they are producing a quality brew. There is no longer room for errors in the market as consumers are less forgiving, and more willing to drive to the brewery down the street if they feel a product isn’t well crafted. Beyond quality how does a brewery set itself apart? This is where it gets tricky. I am always the first person to state that every palate is different and what one person loves another will find no affection for leaving the field wide open when it comes to flavor and style.

Many breweries try to make their mark via the name- attempting to make it synonymous with the state, or a particular city, or sports team, or important person. When the field begins to get crowded these catchy names may become irrelevant and lost in the mix forcing breweries to find something else to set them above. A niche perhaps? Indeed. There is so much that has changed in the industry since brewing first began in the colonies and even more so since Repeal of Prohibition. Hop varieties have multiplied, offering innumerable possibilities for creative (sometimes adventurous) brewers willing to try something new. Most recently exciting news has come out of Britain that a new strain of yeast has been discovered specifically for lager beer. This offers the possibility of more variety for craft lagers. Another opportunity for brewers is stretching beyond strict BJCP style guidelines as many American brewers have been known to do. Additives are bit tricky, even if one does not want to stay within the guidelines. One of the defining features of craft used to mean no adjuncts (or technically fewer than macro) and specifically corn was targeted as a no-go for craft. Things have changed. One example is a curiously crafted popcorn beer created by a brewery down south- that is thinking outside of the box! A consumer would be hard pressed to find this anyplace else.

Perhaps the ‘niche’ is reversing the trend and going back to what reawakened a love of beer- the historic brews that got us drinking once again. Stillwater Artisanal created a post- Prohibition lager, Premium that relied upon corn and rice adjuncts to mimic the style of the time. Many breweries have seized upon historic beers as a distinctive focal point and the results are often quite delicious- bringing thirsty patrons back for more. The bottom line for new breweries is that there is room for growth in Maryland if they start with quality brews (regardless of the styles they make) it is the first step to longevity and recognition. Beyond that anything is possible in this rapidly expanding industry. It can’t wait to see what they come up with next!


Independent Craft Breweries vs Macro: It has all been done before…

Today it’s time to take up the macro vs independent craft brewery conversation. Much has been made for quite some time about AB InBev buying up many of the craft breweries and now buying Miller Coors (without a peep from the government despite its likely violation of the anti-trust laws). For years I have heard from the old Anhauser Busch, Miller, Coors, and Heineken salesmen that the macro breweries will always reign supreme and the craft beer market will not see much in the way of growth (I also heard from those same men there was no place for women in the beer industry- but that is a tale for another day.) Let’s begin by noting how much market share craft beer (despite the most recent slip in numbers) has gained, while macro breweries like AB InBev have started to lose. As of March, 2017 there are 5,301 independent craft breweries in America that have seized 12.3% of the volume share (up from a mere 5.7% in 2011.) That is a major gain, while the macro breweries may look at 7 % and thinking that isn’t much, but it is certainly not what they anticipated and cuts into their profits. Craft retail dollar share is up to almost 22 % – a 10% increase in only a year and that is noticeable. Big beer is fighting back.

Now many people will look at the numbers and ask why bother caring because the macro breweries don’t care about what craft beer is doing since the percentages are so small. I will argue they do. If AB InBev didn’t care about the growth of craft breweries cutting into the market why try so vigorously to purchase the successful craft breweries? Why spend millions of advertising dollars on campaigns proclaiming AB InBev to be one and the same as craft? Why purchase a stake in Ratebeer where many go to seek reliable ratings on craft beers? And most recently why bother to spend time and money downplaying the Brewer’s Association of America’s latest move to signify ‘certified independent’ craft breweries with a special label? What does the label mean? More than 25% of a certified independent craft brewery cannot be owned by any other entity, and it must produce less than 6,000,000 (million) barrels per annum.

Much has been made lately of the new label and how “divisive” it is. Really? Technically that is the appropriate term as it divides the beer into separate classification from macro to independent craft. I however prefer to think of it as a line of demarcation for those of us that care whether or not or beer is locally produced, sourced, employed, and crafted. Some beer drinkers (yes even craft beer drinkers) will not care. I do, as do many that prefer to know where their (nourishment) beer is coming from. It foments economic growth within communities at every end of the spectrum from agriculture to community gardens, to increased retail and food sales in neighborhoods where breweries are located. Is the ‘certified independent’ label really that different from a terroir designation on a bottle of Pinot Noir? Or an ‘organic’ label on your produce? Well many have taken pen to paper (or keyboard to internet) to argue the needless futility of the designation, and just as many have hit back challenging that those that prefer to do away with the ‘divisive’ label are predominantly macro brewery stakeholders. Jacqeuline Dheere was just one in a long line of beer writers to point this out. The battle lingers on with no signs of abating.

Curiously, all of this has happened once before, a little over a century ago. Just before the turn of the 20th century a war raged between macro breweries and independent local craft brewers. It started with a British brewing consortium buying up the top breweries in each city as an attempt to recoup financial losses from the former colonies and their now thriving breweries. Next it was a local trust- the Maryland Brewing Company that purchased the top breweries in the beer capital of Maryland- Baltimore in 1899. That failed and was replaced by yet another monopoly (with better management) G.B.S. Locals were deeply concerned by this and lacked any understanding of why their favorite breweries would sell out. Well the answer then as today was a great payoff for all their hard work! That is the American dream isn’t it? The rise of the monopolies also created at times, a vitriolic and divisive atmosphere for both the consumers and the breweries. Many breweries added ‘independent’ to their names just to make it easier to identify that they were not sell outs, and could be relied upon to continue producing that same favorite regional beer. Among brewing families, a sort of dystopian nightmare ensued where family members that wanted to remain independent disowned those that sold out, some even engaged in legal battles over the sales and the family fortunes.

So how did it all shake out? Prohibition shut them all down in 1920. Today I have no inkling that America would ever attempt to recreate that failed experiment, although I have been wrong before. I honestly don’t know what will happen. What I do know is that people will act based upon what is important to them. Perhaps they will look beyond the tasty malted beverages on their lips, and see talented local craftspeople investing their own neighborhoods, bringing jobs, building trust and fomenting communities. Beer for thought.