Thursday, 11 May 2017

Is selling out a glimpse at the future?

It would seem the town of Boonville, California, home of
Anderson Valley Brewing Company, has their own unique
language. It's called Boontling and was created by the
farmers and loggers in the community back in the 1800s.
Well, all anyone in craft beer world could talk about last week was the outright purchase of Wicked Weed Brewing (Asheville, North Carolina) by Anheuser-Busch-InBev, as well as the final purchase of Lagunitas Brewing (Petaluma, California) by Heineken. You see, back in 2015, Heineken bought 50% of Lagunitas for what was believed at the time to be a sum of $1 billion. (Subsequent reports put it at $500 million.) Last week, they bought the other 50%. For all we know, in another two years, they'll buy 50% more. Math is not my strong suit.

We'll get to all that in a moment. I mean, all the angst and outright anger over the purchases by craft beer lovers is certainly something worth investigation. But my problem is, at the exact same time, I was learning a new language so my attention was kind of divided.

This new language, which frankly seems far easier to nail down than Klingon, has a handful of colourful phrases for everyday terms and I had one of those laid upon me recently. The language is called Boontling and was created back in the 1800s by the farmers and loggers in Boonville, California. It sounds like it was basically just made up by the gang two centuries ago for, well, shits and giggles.
As you can see, Boonville, California is not a
large place. That said, their own language of
Boontling has received serious attention from
linguistic experts world-wide. Dare I say that
put them on the map? Granted, they were on it.

As you may recall, a couple days back, I reviewed two beers from Anderson Valley Brewing Company from that very town. It was two of their mild sours called GT Gose and Blood Orange Gose. And then I did what I always do. I sent them some praise on Twitter with a link to the blog. That way, if they're bored, they can pull up the link and one of them can say, "Hey, some guy in Canada wrote about our beers." Then another can ask, "Did he like them?" And the first guy can respond, "Who cares? He's from Canada." As badges of honour go, a mention here is hardly the Purple Heart. It's more like the Orange Lymph Node.

So anyway, after I told them I liked their two Goses, Anderson Valley tweeted back, "Glad to hear it, friend. Bah! Hornin'!" Huh? Did they swear at me? No, quite the opposite, actually. You see, in Boontling, "Bah! Hornin'!" means "Good drinking!" or is simply another way of saying "Cheers!" Well, I'll be damned. The whole town has this crazy language and while only old-timers use it now, Anderson Valley is doing its best to keep it alive. They have separate words and phrases for, you know, gettin' down and nasty, driving, coffee, parties, everything. It's pretty cool.
"Come on in! We make great beers! But if you'd rather have a Heineken,
we can help you out there, too!" When Lagunitas sold off their remaining
50% to Heineken last week, shockwaves were felt through the craft beer
community. So what happens now? Do people still buy their product as
they do make excellent beer? Or do they shun it because it's corporate?
I'll include the brewery's entire Boontling linguistic breakdown at the end for others like me who want to learn a second language but really don't want to put much of an effort into it.

Okay, back to our craft beer sell-outs. Let's start with Lagunitas since I've actually heard of them and am something of a pretty big fan. So when they sold half their stake to Heineken two years ago, I thought it was the worst business purchase I had ever come across. Heineken paid $1 billion for half a company? Or even $500 million? It made even less sense when I checked Lagunitas' sales in 2015. According to the figures I found, Lagunitas sold about $200 million that year.
The sale of Lagunitas has a lot of their fans, which
includes me, feeling blue. Unless this is purple.
I'm not sure, being both colourblind and too lazy
to ask someone. So I may be feeling purple then.

So okay, Lagunitas' owner Tony Magee is doing okay for himself, right? Except that's gross sales. Now let's factor in his overhead. Lessee, two breweries - one in Petaluma, Calfornia, the other in Chicago (opened in June 2014) - the operating costs of those breweries, the costs of paying the hundreds of employees at those breweries, the costs of shipping and transporting their beer across North America, the business taxes on a company with $200 million in sales annually. And so on and so on. That drops that $200 million to a net value on the south side of $50 million. Still a lot of coin, right?

Well, no. Because half that is now Heineken's money. But at $25 million a year, it would take Heineken 40 years to recoup their $1 billion or 20 years if the $500 million price tag is correct. Either way, a helluva long time. And odd. Big conglomerates like Heineken don't become big by doing stupid things. So then, just last week, the second landmine goes off as its announced Heineken has bought up the other 50% stake. For how much? We don't know. But it doesn't matter. Because even if it was for just $1.50 and a pack of gum, they've already dropped $500 million or a $1 billion.
It doesn't really matter if the purchase price
was $500 million or $1 billion. When Tony
Magee sold half of Lagunitas to Heineken in
2015, he could suddenly afford all the bowling
shirts in the world. Actually, it's kinda weird
because I have that shirt, too. But not the cash.

And that's when the light-bulb went off for me. The initial purchase of 50% of Lagunitas was a smoke-screen. It means even though they can't call themselves a "craft brewery" because of foreign ownership, they can still claim some "craft cred" because, "Hey, man, we still have half the company." I strongly suspect there was a "trigger cause" built in to the original deal - buy half in 2015, let the anger die down, retain some indie cred (though severely lessened) and *bam* less than two years later, it's Heineken's company in its entirety. (Keep in mind, this is all conjecture on my part. My knowledge of business deals begins and ends at me handing someone a $5 bill and receiving a cup of coffee and change in return.) As is always the case, it was explained as a "hands-off" deal. Lagunitas continues to make beer their way and Heineken helps them get world-wide distribution which, of course, puts even more dough in Heineken's ledgers and makes that initial $500 million or $1 billion look like pocket change inside the decade.

So as the question in the headline asks: is that selling out or something we're about to see a lot of? Soon, Magee can purchase his (well, Heineken's) product in China, Japan, wherever. His reach is far beyond anywhere it could be had he remained independent. And he has a huge chunk of change burning a hole in his pocket. Isn't the point of building a business to make it profitable? And one of the downsides to being profitable is that suddenly you're more appealing to those larger.
I'll be frank. I learned about Wicked Weed exactly one day before their
purchase by Anheuser-Busch/In-Bev when some of their Pernicious IPA
bottles came back in the empties and I Googled them on my lunch break.
Who among us could turn down a nine or ten figure cheque? Not me.

But there was some interesting backroom purchases going on after Magee got his fat cheque. About a year ago, Magee himself purchased stakes in three smaller breweries - Southend Brewing in Charleston, South Carolina, Independence Brewing in Austin, Texas and Moonlight Brewing in Santa Rose, California. So are they all flying the Heineken flag these days, then? Uh, I don't know how it works for certain but that'd be a pretty safe bet. So now that's three more small local breweries, all now potentially absorbed into something far larger. Brace yourself because I seriously get the feeling we're going to see a whole lot of this in the next decade or so.
My introduction to Asheville, North Carolina's Wicked Weed Brewing
were these bottles that came to the empties a day before their sale to
AB-InBev. Ironically, I had Googled what the word "pernicious" meant
and as it turns out, it means "having a harmful effect, especially in a
gradual or subtle way." You know, like slow poisoning. Hey, just sayin'.

Okay, moving along. I learned who Wicked Weed Brewing was exactly one day before their sale to Anheuser-Busch/InBev (AB-InBev) because some of their product came back in the empties at my Beer Store. So I Googled it because I'm a curious little bastard. But when news of their sale was released the next day, it was like someone dropped a 85-megaton grand piano (that's an odd metaphor, even for me) on the heads of craft beer drinkers in America. I think because Lagunitas was already half-sold-out at that point, the reaction to them was far less virulent than Wicked Weed's reception. The second I heard, I tracked them down on Instagram and, whoa, no one was holding back. They were getting seriously reamed by the former faithfuls.
"Okay," says Drunk Polkaroo, "this one is a big,
boozy bastard. A real slow-sipper!" This You-
Tube still shows Polkaroo doing what he does
best. Preaching the word of Ontario craft beer...
(Well, let's be honest. Due to the nature of social media, we don't know if they were all Wicked Weed faithful or just people who like to yell. It's the Internet. Anyone can howl at the Cyber-Moon.)

Considering Wicked Weeds' annual sales are a fraction of Lagunitas, let's assume this sale was probably in the $25-$40 million range. A drop in the bucket to AB-InBev, which is considered by most craft drinkers to be a far Bigger Badder Wolf than Heineken. Hence the outrage from the Wicked Weed Whackers. But even then, one in every 15 or 20 commentators said the same thing. Words to the effect of "Oh, come on, are you telling me you wouldn't take the cash?" And let's be honest. It's easy to say, "No, I would retain my integrity and not sell out!" when you will never be in the position of being offered that kind of cash.

Which bring me to a conversation surrounding all these brewery sales that I and my beer writing-videographer buddy Drunk Polkaroo had. Now, Polk is a craft beer purist. Lives and breathes Ontario craft beer. Two or three Instagram and Twitter posts every day. Two videos a week. A blog once a week or more. No one in Ontario is putting the kind of time into craft beer writing and exploration as Polk. He is our James Brown, the hard-working man in Ontario Craft Beer Showbiz. It tires me out just watching his enthusiastic efforts every day.
Well, the good name of Nickel Brook Brewing
has been invoked so let's look at some of their
recent offerings, including Duplicitous, their
Citra dry-hopped Gose. This was tasty-ass stuff

We were talking about the purchases and I noted that it would absolutely gut me if my local brewery, Nickel Brook, was bought out. But at the same time, if someone waved a $50 million cheque in front of owner John Romano, how could I resent him for taking it? I mean, the guy has busted his hump getting the brewery going, especially through some incredibly lean times at the beginning. But, Polk asked me, would you still buy Nickel Brook products if they were suddenly owned by Molson's? I had to admit I didn't know. And I mean, I work for the Beer Store, run jointly by Labatt and Molson's. So I should have the least issue of anyone with ownership deals.

And yet, I do. I like Nickel Brook being a little local outfit. Shop locally and all that other stuff I like to yell. Like Polk, I would far prefer the small brewers to maintain their independence forever, if possible. I know the folks who work there. They're a great group of thugs and hooligans and I would very much like it to stay that way. But will that be our craft beer reality for any brewery in general five to 10 years down the road? We don't know. Those two American sales tell us that much at least.

Recognizing it's a truly grey area, Polkaroo did a survey on Twitter, asking this: "Not a simple question: If your favourite craft brewery sold to one of the Big Beer corporations, would you still buy their beer?"
Like most beers being put out by Nickel Brook's
Funk Lab these days, there's gonna be a level of
haziness in the glass. All those Brett yeasts and
such make for a pretty cloudy brew, such as this
Uncommon Element Brett Pale Ale. It's funny.
I wouldn't drink water that hazy but turn it into

beer and suddenly, I'm onboard. Pretty weird...
Of 126 responses, 37% said no, 34% said yes and 29% said not sure. That is one helluva lot closer than I expected the results to go. Basically, it's a three-way split. And me? I was a "not sure" for the record. But clearly the results show us it's a situation that invokes different responses from different craft drinkers. But after a recent story broke that AB-InBev was hoarding South African hops for own craft brewers, blocking their sales to independent brewers, I suspect the nay side might be a little more adamant next time.

Okay, since we have independently-owned and operated (yay!) Nickel Brook in our sights, let's look at some of their newer stuff. I have a chance meeting with Nickel Brook's Funk Lab head brewer Patrick Howell and he was telling me that there will be four new releases in June. Two are packaged and ready to go. All sours, all barrel-aged, all using Brett yeast. The one that jumped out at me was a brown ale barrel-aged with sour cherries. I'll be all over that. (Okay, okay, I'll be all over all of them.)

But while I regularly stop into my locals to replenish my supply of Headstock IPA (always and forever, a favourite), I always cherry-pick a couple of others produced by their now notorious Funk Lab. Tons of sours and beers created using Brettanomyces (funky-ass yeast) are coming out of the Labs and I feel it's my personal obligation to try them. I'm not certain I was always this prone to making sacrifices or if this is a late-in-life calling. Either way, I'm pretty damn noble.
Nickel Brook's Event and Communication Manager Tory holds up a
handful of hops grown in the small garden right in front of the Drury
Lane brewery. In actual fact, they were planted by owner John and
just took off, running from the ground to up to the building's roof.

Okay, let's with their Duplicitous, a Citra Dry-Hopped Gose. Of course, because it was dry-hopped with Citra, one of the most flavourful hops, I was expecting some bitterness from this 4% brew. And yet, even with that dry-hopping, the beer stayed at 0 IBUs (international bitterness units.) The name, which also means deceitful and is often aimed at politicians, should have told me there would be some tricks afoot. Like many Goses, there is certainly a saltiness to it, though mildly so. Tart and lemony would be the most accurate description here, making it a definite must for Summer fun on the patio at Donny's Bar and Grill. While I am really warming up to sours, it's nice to start with the milder styles, such as Goses and Berliner Weisses, before moving up to the mouth-puckering fare. (Seriously, brace yourself before having a Flanders Red. Yowsa!)

Okay, of all of the newbies coming out of the Funk Lab, the biggest hit so far for me is their Uncommon Element Brett Pale Ale. Basically, the gang has started with a west coast pale ale style but used that oddball Brett yeast in the mix. Clocking in at a very sessionable 5.2%, this ups the IBU ante to 32, which is mid-range for a pale ale. I got orange on the nose with that, grapefruit and maybe a bit of pineapple on the tongue. This has made many appearances to my fiefdom and will continue to do so.
Now that Trevor has left for BC, it's up to Nickel
Brook's Tony Cox to fill the void for Ontario's
Sexiest Cellerman. Glenn may not like it but
hey, his guy skipped town. Tony's up to bat now
Like I said, in a few weeks, brewer Patrick has promised a new additions to the Funk Lab repertoire and I will be on their doorstep for each new arrival.

Okay, finally before I go, I have to deal with Beer Bro Glenn out there in Oshawa. You see, he, too, writes a beer blog called IPA Tales. I have no qualms with any of his beer choices and descriptions. In fact, he's usually bang-on the money. However, in Glenn's blog, there are frequent mentions of this young cellarman named Trevor working at Manantler Brewing in Bowmanville. Glenn refers to him as the "world's sexiest cellerman." In fact, Glenn called him that so many times that Trevor up and moved away to BC just to get away from Glenn's persistent and unwanted flirtatious nature. Trevor now plies his trade at Russell Brewing in Surrey, BC, some 4,397 kilometres (2,732 miles) away from Glenn. To my thinking, that leaves a vacancy in the Ontario's Sexiest Cellerman category. So I'm nominating my buddy, Tony Cox, Nickel Brook's cellarman to fill that void. Do I think he's sexy? No, not really but he's totally into Batman so that's enough for me. Frankly, there are some nice women at Nickel Brook that by comparison make Tony look like a, well, dude. That said, the title's taken now, Glenn. Leave poor Trevor alone. To put it in the Boontling vernacular, I think Glenn needs himself an Apple Head. And yes, Tony is gonna kill me when he sees this. But hey, you wanna know how to speak Boontling? It's easy as pie. Check out their crazy words here at: Speaking Boontling In Five Easy Steps! Okay, guys and dolls, that's a Bah! Hornin'! for me and I am outta here. Back in a few days with the new Lake of Bays line-up of beers and other stuff. Until then, I remain...





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