Business Tutorial – Allagash

Allagash Brewing Co. and on the occasion of turning 20 years young, founder Rob Tod gave the Bangor Daily News “20 lessons he has learned in 20 years of business.”

Here are the (7) take-aways that I think are most important for the many L.A. start-ups that are soon to open:

When you see trash, pick it up. “If everyone’s doing it, it makes a big difference. We have 93 employees who pick up little pieces of trash when they walk by them — literally and figuratively. If something’s not right, they take the initiative to do something about it. It’s just as important to do it when no one’s looking, when you are not going to get any credit for it. It’s a reflection of how much everyone at Allagash cares about what they are doing.”

Be relentless about improving. “Even though we’re constantly making strides with quality at the brewery, we’re never satisfied. Once we make an improvement, we get back to work and look for the next. There is always opportunity for improvement.”

Value the community you live in. “Maine has been extremely supportive of Allagash Brewing over the last 20 years. We have never taken this for granted. We love Maine, and we love Portland. Our crew’s hard work making great beer has made our philanthropy program possible. We focus our philanthropy locally, and everyone at Allagash is very proud of that.”

Don’t be a mile wide and an inch deep. “Jerry Sheehan, who runs a number of our distributors, told me this. And we learned it the hard way. By 2005 we were selling about 5,000 barrels of beer in 30 states and frankly not doing a great job anywhere. Around then, we made the tough decision to walk away from a fair amount of this volume and pull back — eliminating territories where we did not think we could be competitive and relevant. Now we’re selling 80,000 barrels of beer in 17 states, and I’m much prouder of the job we’re doing today in all of our markets. Better to do a great job in a small pond than a not-so-great job in a big pond. I think every business has concepts like this that are so simple they easily are overlooked.”

Smile. “Earlier today I walked by our kegging line and saw one of the operators who always has a smile on her face. When she is around other people on the line, guess what they are also usually doing? Smiling. It’s contagious.”

Do your thing. “When I made our first beer, Allagash White, not too many people wanted it. It was different — cloudy, spicy, distinctively Belgian. For a very long time it was usually the slowest draft line at the bars that were kind enough to keep us on draft. But I thought it was important to be doing something that was different. What’s the point in spending years building a brewery and possibly a lifetime running it just to make something people can already get? We avoid latching onto industry trends. We try to keep doing our own thing at Allagash.”

Stick with it. “If you are doing something different, sometimes it takes a while to get traction. It took about 10 years for the Allagash White to start catching on, but I’m glad we stuck with it and didn’t switch gears.”

FW + DM = New & Improved Paso

After I put this week’s L.A. Beer Blast to bed, I started rifling through my e-mail and came upon one from Firestone Walker.

I reflexively smiled thinking about some barrel-aged beer or new sour surprise from Barrelworks. But when I clicked the link, this is what I saw:
Announcement_Letter
My first thought was “Oh no, I now have to see a bunch of ill-informed beer snobs posting about how they won’t drink FW beer because they aren’t independent anymore.”

Then I calmed down and realized that this might just be the straw that breaks the beer snobs anti-consolidation back. How can they use their copy/paste rant here? The near universal love of Firestone and the stewardship of Duvel with Boulevard and Ommegang will pretty much lay to rest any qualms that the auto-haters have.

I will post more about this next week over on Food GPS as I process the news with some pithy answers from the David Walker himself to my hasty questions that I e-mailed last night.

Leaks and Butter

QC. Quality Control.  It is super important.  And devilishly hard to harness, especially when working with bugs and critters. Even for large outfits like Hangar 24 and for places that have encountered taste issues before, like The Bruery.

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Both of which encountered issues recently which highlight the other side of QC.  Informing the public of QC issues and offering concrete solutions.

Hangar 24 had some bottles of their Sanguinello sprout leaks through wax due to a balky piece of equipment. The Bruery had to track down why some bottles of Hottenroth with peaches were more diacetyl heavy.

Both breweries explained the situation in clear language and took steps to ameliorate the problem. Either by tossing the bottling equipment or storing the beer at different temperatures.

The next step is to add that problem to what I call the “watch list”. This is a simple list of problems that have occurred.  But it does not end there. It is incumbent on breweries to also look at that list and make a second list of what could occur.

The other piece to the puzzle is to have plans, in place, to make your customers and fans happy-ish if something does goes haywire. Which it will because, you know, life happens.

Miller/Coors Shake-up

I don’t know how much power a temporary CEO has, never risen even close to that high in an organization, but apparently Gavin Hattersley of MillerCoors has enough to discard some senior execs upon taking office.

I don’t usually follow the comings and goings of corporate beer. Though I should since beloved brands are headed deeper into that territory. imageBut I found the “who” fired seemed quite relevant.

Chief Marketing Officer and President of Sales and Distributor Operations gone and replaced.

Two occupations most affected by the rise of craft beer.  Granted, that is a bold statement to make but hear me out. The industrial water lager behemoths don’t care what the flavor of the beer is as long as is tastes within parameters so the only people who catch blame are those advertising it and selling it. If the latter doesn’t happen, then the formers amps up the desperation knowing that their jobs are now on the line because one layer of insulation has been removed.

If both get the proverbial axe to the point where a caretaker can can you then sales have dropped far too far. And where did those sales go?  I can answer that with a question: Who has grown for the past umpteen years?  Craft Beer.  Ergo.  Quid pro Quo.  Me drinking craft beer made MillerCoors change course.

Not just me. You too of course.

My DD

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BeMyDD (Be My Designated Driver), if you don’t like the attitude of the Uber founder and find Lyft wanting, or if you just like to have as many options for getting to craft beer events around Los Angeles then here is that 3rd choice.

The new website has updated their look to make navigation easier. “The service costs US$14-$19.50 an hour, depending on location..” or you can use the Pickup Service (US$25 pickup fee + $3.45 per mile). “Two drivers arrive, one to take the customer home in their car and one to follow behind to retrieve the BeMyDD driver.”

To celebrate the website’s launch, BeMyDD will be offering a US$20 discount for first time customers who sign up at www.bemydd.com/launch and use the promo code: LAUNCH.

Bud at it Again

So Budweiser would have us pair artisanal burgers with fancy buns and all sorts of toppings with their beer.

Here is the thing though.  People who enjoy a really good burger probably don’t want your Big Mac beer. Again, ABInBev, who are you advertising too?  Just show semi normal men with hot women and an outdoor grill. That is your diminishing market. 

You may have also seen that they have bought David Chang and his loathing of craft beer to judge a burger contest as well. But Chang lost cred with craft beer and is probably unknown to Bud fans so the only winner is whoever pockets the prize money and then drain pours the Budweiser. 

Maybe if a Don Draper were around, he could explain what is going on but from my perspective, Budweiser is losing its marketing touch.

Oh and the clinking bottles at the end was a little aggressive, or was that me worrying about broken glass?

The Regulations

Let me explain myself. I am what Fox News would call a liberal heathen. But when it comes to business, especially the craft beer business, I am much more laissez faire Libertarian minus the strange 4 letter name. I don’t agree with the over oversight that government (looking at you City of Los Angeles) imposes on breweries. (Within reason of course)

Which is why I have been following House Bill 1217 in Colorado with interest and trying to pinpoint if I think it works. In a nutshell, the bill signed by Wynkoop Brewery past and current governer of the state, John Hickenlooper puts the decision of approving a brewery taproom in the sole hands of state regulators. While still giving local government a voice but not a veto sized one. Gaining neighborhood resident signatures would also be off the to-do list for a brewery.

As long as the regulators are familiar with the world of craft beer, I am down with this. I assume that Colorado has such people in that office. The largest stumbling blocks that I have seen here in SoCal has been the simple lack of beer knowledge that community residents have and that their elected officials have. Finding a council member who “gets it” is rare, though incrementally growing.

The problem, as I see it, is that the rules and regulations expect bad actors. Remember in grade school when the whole class was punished with a rule because of one bad kid? That is what it seems like navigating through the system. I would think it would be easier and more cost efficient to have less paperwork upfront and more supervision during operation. Assume that a brewery will be an asset and then, if it doesn’t live up to it, shut them down until they behave. If that doesn’t work, then we can go back to the way we do it now and if anyone complained, they would complain to the breweries that f…ed it up for the rest of us.

Maybe if the Colorado law works, something to that effect could be put into place in California.

Just Say No?

If you saw the Last Week Tonight clip about Bud Light and their obnoxious Up For Whatever campaign, you are probably still laughing about the “flavor” descriptors used by the actors in the “truthfull” version of the ad.

But after the laughter is done, you are probably left with, like me, head shaking at the continued incompetence of Budweiser and their Belgian/Brazilian overlords.

One could easily pick apart my blog for errors. I would humbly accept any corrections. But that is me, one person, with no separate editor or separate fact checker. Accountable only to me. How though could an ENTIRE marketing department let the Remove NO from your vocabulary for a night tag to pass layer after layer? Are there no women working there? I would have recognized it and I am a white guy. It’s as if they were tossing red meat to John Oliver and his writers.

But that oversightus maximus pales in comparison to the Blue Moon lawsuit. Now, I only know the outlines of this case but it has got frivolous written all over it.

This dude:

A) couldn’t do a cursory Google search which would have led him to the fact that Miller/Coors owns Blue Moon.
B) seemed to like the beer enough to buy it more than once.
C) thinks that big business is a transparent, paternal enterprise.

Only the lawyers are going to win on this case. Captain Oblivious will lose and look like a bigger fool than when he realized that Blue Moon wasn’t his type of “craft” beer. Miller/Coors loses the anonymity that they are clinging onto along with ABInBev for their limping “craft” and foreign brands.

To me, this litigant is more of what’s wrong with craft beer fans than any snob. The all too easily affronted. This subset of people, whether they are comic book fans who decry movies that alter from the course of their beloved books or the Fox News commentator who finds fault in everything that a democrat says push casual fans away from joining the cause with their hyper misguided vigilance.

I need to set-up a Craft Beer – Department of No. People can ask me if an idea is good and I can review and render my judgement. Most answers will be NO.

 

Law Firm of

As the pool of super-cool and available brewery and beer names grows smaller, so to will the amount of legal actions taken. So I was pleasantly surprised to hear about a case where no litigation took place. Where two parties talked and worked it out.

Or as the cool guys (and Fran) from The Full Pint put it: “So no cease and desist letter, no venomous email threads, no 20 page forum thread talking about the big guy is going after the little guy, just two sets of hard working dudes who have similar tastes in company names who worked it out in the end.”

No, this wasn’t a case of brewery vs. brewery but it is how the big boys in a business should play. Have your branding and trademarks set, hire a smart but not auto-litigious lawyer, then call to protect your brand with the hoped for outcome of no court dates.

Check out the Full story HERE.

Enjoy Beer (& Acquisitions)

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The money has found craft beer. Now it hasn’t penetrated that deep into the sub-strata of breweries who would like/need loans. Start-ups especially. But the private equity is looking for assets and they are tapping insiders.
First it was Oskar Blues detailing a plan of acquisition and now Rich Doyle (formally of Harpoon Brewery) has established Enjoy Beer LLC, that the Brewbound website describes as “an acquisition vehicle and craft beer consortium that he hopes will one day become a publicly traded company with multiple craft brands under its control.”

And they have come out of the gate with the purchase of Abita Beer of Louisiana. Enjoy Beer will be behind the scenes with sales, marketing, money to help the breweries under their banner better compete with national AKA BMC brands as well as those regional superpowers with multiple brewing locations.

How these umbrella corp’s will evolve will be an interesting social/beer/business test.

Here are my questions:
1. What if one brand takes off? How will the others react if they feel slighted?
2. Will breweries want to be part of a corporate structure taking orders from on high?
3. Will brewers move from one brand in the family to another and take recipes with them?