CityLab digs into "the strangest, happiest economic story in America:"
In almost every economic sector, including television, books, music, groceries, pharmacies, and advertising, a handful of companies control a prodigious share of the market.
The beer industry has been one of the worst offenders. The refreshing simplicity of Blue Moon, the vanilla smoothness of Boddingtons, the classic brightness of a Pilsner Urquell, and the bourbon-barrel stouts of Goose Island—all are owned by two companies: Anheuser-Busch InBev and MillerCoors. As recently as 2012, this duopoly controllednearly 90 percent of beer production.
But in the last decade, something strange and extraordinary has happened. Between 2008 and 2016, the number of brewery establishments expanded by a factor of six, and the number of brewery workers grew by 120 percent. Yes, a 200-year-old industry has sextupled its establishments and more than doubled its workforce in less than a decade. Even more incredibly, this has happened during a time when U.S. beer consumption declined.
Average beer prices have grown nearly 50 percent. So while Americans are drinking less beer than they did in the 2000s (probably a good thing) they’re often paying more for a superior product (another good thing). Meanwhile, the best-selling beers in the country are all in steep decline, as are their producers. Between 2007 and 2016, shipments from five major brewers—Anheuser-Busch, MillerCoors, Heineken, Pabst, and Diageo, which owns Guinness—fell by 14 percent.
It's not just the United States. The UK passed 2,000 breweries last fall, with organisations like the Campaign for Real Ale (CAMRA) leading the charge.
At least as far as good-tasting, high-quality beer goes, it's a good time to be alive in the English-speaking world.
On Thursday I hit all my (admittedly non-taxing) goals for the day. And yesterday, on into this morning, I almost did again, except that making three of the goals interfered with making the fourth.
Goal #1: See the Churchill War Rooms. Having recently seen "Darkest Hour," I wanted to see the rooms where it happened. I did, and they were really cool.
Goal #2: Visit three more pubs. I had planned to check in again at 214 Bermondsey, then head up to Ye Olde Mitre before stopping again at The Ship Tavern. I walked from the Churchill War Rooms to 214 Bermondsey (3.7 km) but it turned out they weren't open yet. So I trundled up to Fleet Street (another 3.7 km) and went to The George instead. At Ye Olde Mitre—which can use the archaic spelling legitimately as it's over 400 years old—I met up with an old friend, went to dinner with him, and then finally made it to The Ship Tavern.
Goal #3: Get to 10,000 steps as early in the day as possible. At the stroke of midnight I set off from The Ship Tavern back to my hotel in Earls Court, a distance of 6.4 km that got me 6,828 steps in just under an hour and ten minutes. I dropped my bag off, ate the curry I'd picked up on the way, and trundled around Earls Court for another half-hour before hitting 10,000 steps at 2:09 am GMT. Someday soon, but not today, I'll get there even earlier. At the pace I set from Holborn to Earls Court, it would have taken me only 102 minute had I not stopped for food.
Goal #4: Read another book. At The George, I started Robert Abelson's Statistics as Principled Argument, and managed to get halfway into the second chapter before getting swept up in conversations with the Aussies who mobbed the area where I was sitting at the Ship Tavern. It's also a bit denser than the Frum I read cover to cover on Thursday, which slowed me down a bit.
Today's goals included stopping in two more pubs, including the Southampton Arms, about which I have blogged frequently, and reading a third book. Alas, neither looks promising, for several reasons including the pouring rain outside right now and the six pubs I've already visited since I got here. So this afternoon I'm going to nap, plough ahead with the Abelson, and head up to Southampton Arms when the rain lets up, which the Met Office assures me will happen around 5 pm.
Yesterday I did exactly what I set out to do: visited three pubs and read an entire book.
The book, David Frum's Trumpocracy, should be required reading by Republicans. Frum is a Republican, don't forget; he's trying to put his party, and his country's shared values, back together. As a Democrat, I found his critique of President Trump and the current GOP's policies insightful and well-written. I don't agree with Frum's politics entirely, but I do agree with him fundamentally: disagreement between the parties is healthy when we agree on the fundamentals of what it means to be American.
The pubs were entirely less controversial.
First: The Anglesea Arms, Hammersmith, where I had a St. Aubell Tribute Cornish Pale Ale. Second: The Dove, also in Hammersmith, where I had a Hammerton N1 American Pale Ale and some foccacia with olive oil. (I'm trying to appreciate some pubs, not get sloshed.)
Both pubs were comfortable, classic English pubs. The Dove was more classic (it opened in the 17th Century), but the Anglesea Arms was more comfortable. I'd go back to either in a minute.
The third pub, where I read about half of Frum's book, is my third-favorite pub in the world*: The Blackbird in Earls Court. Over three hours, I sipped a couple of Fuller's ESBs and had their amazing steak and ale pie.
I may post some photos when I get back, but the glass over my phone's camera is all jacked up and I didn't bring my real camera.
Today I also plan to read a book and visit three pubs, and for the entire trip (including the flight home), I aim to finish four books and visit 10 pubs. And as it's already 11:30, I should get cracking.
* After Duke of Perth in Chicago and Southampton Arms in Gospel Oak, London, which I plan to visit tomorrow.
People watching the big-beer industry (think: Miller Lite and Coors Light) expect a 7.1% decline in mass-market beer sales—$2.1 billion annually—as more states legalize cannabis:
"There's a ton of overlap in marijuana and domestic beer consumption among younger college males," says Rick Maturo, co-founder of Cannabiz Consumer Group, an Inverness-based research company. "This is the group that drinks beer at a heavier volume and is most likely to cut back if cannabis is legally available."
He says 27 percent of beer drinkers say they've already substituted marijuana for beer or would do so if the drug were legalized in their state. Other research predicts an even worse dip: Alcoholic beverage sales fell 15 percent after the passage of medical marijuana laws in a number of states, according to researchers at the University of Connecticut and Georgia State University.
Sales of Coors Light and Miller Lite were down 3.6 percent and 1.6 percent, respectively, through the third quarter from a year earlier, according to Nielsen data from Beer Marketer's Insights. In October, Molson Coors, MillerCoors' Denver-based parent, said its U.S. beer sales dropped nearly 3 percent in the previous quarter. And between 2010 and 2016, the light category as a whole saw volumes decline by 14 percent.
What's worse: The decline of Miller Lite and Coors Light is nearly impossible to offset through other sales—even as the brewer's Leinenkugel's and Blue Moon brands post robust results—because the two light beers represent more than half of MillerCoors' overall sales volume. They're "a major driver of our profitability," CEO Gavin Hattersley acknowledged on MillerCoors' third-quarter earnings call recently.
Two things: first, pot was criminalized in the wake of the 21st Amendment exactly for this reason. Second, I'm not sorry to see declines in the sales of horrible products.
I'm heading back to the East Coast tonight to continue research for my current project, so my time today is very constrained. I hope I remember to keep these browser windows open for the plane:
- 538 examines why, a full year later, the 2016 election just won't go away.
- James Bridle says something is wrong on the Internet.
- Josh Marshall continues to bang the drum on President Trump's creeping authoritarianism. (Or, you know, not so much creeping as shambling, with all the zombie implications in the term. Says Marshall, "[I]ncompetence and authoritarian aren’t in tension. They tend to operate together, each catalyzing each other as both cause and effect.")
- On the same theme, yesterday the President called Chicago a "total disaster" because he doesn't understand how the lack of Federal gun laws makes our local regulations irrelevant.
- Last Friday, Andrew Sullivan wrote that the Democrats are failing the resistance. But Jeet Heer thinks our party's internecine conflicts are good for the party.
- Crain's Chicago Business lists the most indulgent dishes in Chicago.
- Chicago Magazine investigates the rash of suicides-by-train plaguing the area.
- WaPo describes the weirdness behind the attack on Senator Rand Paul over the weekend.
- Writing for CityLab, Carolyn Adolph says Seattle has fallen out of love with Amazon, with some implications for Chicago.
- Finally, Samuel Adams now has a $200 beer at 28 ABV. Not sure if I'll ever try it.
So much to do today...and then a short, relaxing, upgraded flight to BWI.
The cashing-out consolidation of craft breweries continues with today's surprise announcement that Japan's Sapporo Holdings will acquire San Francisco's Anchor Brewing:
According to Keith Greggor, Anchor’s president and CEO, the move was a year in the making and the result of speaking with “many, many” larger breweries all over the world to find the right fit.
Anchor Brewing Co. is considered the leading pioneer of the craft beer movement, and is credited with reviving and modernizing some of today's most popular American beer styles. The price of the deal was not disclosed. Anchor Distilling, which produces spirits such as Junipero Gin and Old Potrero whiskey, is not involved in the deal and will become a separate company.
Anchor Brewing management said it did not specifically plan for a complete acquisition. However, to support the brewery’s long-term future and further international expansion (it currently distributes to 20 countries), it needed to relinquish full ownership to Sapporo.
When asked whether this deal jeopardizes Anchor’s “craft” designation, a commonly accepted definition dictated by the Brewers Association, the brewery’s executives did not seem concerned about that imminent debate, due to the brewery’s long history.
Well, yes, it jeopardizes the "craft" designation for the simple reason that Anchor won't be a craft brewer anymore, by definition. So, another one bites the dust. That leaves only about 5,300 other craft brewers in the U.S. Time to get drinking.
A group of 800 breweries—including Sam Adams and Sierra Nevada—has joined an initiative to differentiate their brands from the big guys:
The initiative, which was spearheaded by the trade group for independent craft brewers, is intended to differentiate "true" craft beers from those made by the likes of MillerCoors, Anheuser-Busch and Heineken.
To qualify to use the seal, breweries cannot be more than 25% owned or controlled by any alcohol company that's not itself a craft brewer. Its annual production also can't exceed 6 million barrels.
Distribution contracts frequently allow major beer brands to dictate where their beer is placed on shelves, for instance. And Big Beer has successfully driven independent beers out of some stadiums, music venues and chain restaurants by asking distributors to stock their craft brands instead of independents.
Brewers say these concerns have only been exacerbated by Big Beer's incursion into craft. The acquisition of independent breweries, they argue, has eroded the few advantages the indies had: higher-quality beers in different styles and a cooler, vastly less corporate brand.
Since 2011, Anheuser-Busch has bought Goose Island, Blue Point, Karbach, Golden Road, Devil's Backbone, Elysian, Ten Barrel, Breckenridge, Four Peaks and Wicked Weed. MillerCoors now owns Terrapin; Heineken has Lagunitas; and Constellation owns Ballast Point Brewery.
We'll see how this initiative fares. Most of the beer I drink qualifies as independent, but Lagunitas still makes some pretty good brews.
Still busy. So busy.
And now I have to set up a development environment.
The Economist has found that craft breweries are inversely correlated with religiosity in the US:
Some states are craftier than others. Atop the list of craft breweries per capita is Vermont, with 44 of them crammed into one of the nation’s smallest and least populated states. In addition to being better liquored, Vermonters are a good bit more godless than the national average. This reflects a broader trend: there is a markedly negative correlation between a state’s religiosity and breweries per person.
Local regulations determine the level of production much more than demographic characteristics such as income or education, says Bart Watson, chief economist of the Brewers Association, a craft-beer trade organisation. And religious legislators may get a bit overzealous. Utah, a state populated with many teetotaling Mormons, strictly limits the strength of draught beers and cocktails.
As you'd expect from that newspaper, they have a cool chart, too.
Here we go:
It's also a nice day outside, so Parker will probably get two hours of walks in.