News "A Craft Chemist Making Over Big Beer"

Discussion in 'Beer News & Releases' started by TheBeerAlmanac, Jan 29, 2013.

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  1. TheBeerAlmanac

    TheBeerAlmanac Savant (967) Mar 3, 2011 Kentucky
    Beer Trader

    A friend from the gym recommended this article to me and I felt it worthy to share. It talks about Rebecca Reid, brewmaster for AB InBev's Pilot brewery (where they make 10 barrel batches of experimental beers), and the brewery's foray into the craft beer market. She's also the one who created Platinum. AB essentially concedes that craft beer is gaining market share, but their attempts to adapt involve maintaining the same credo of light beers and less taste. Sometimes you just want your beer to be bitter.

    Here's the accompanying video:
    ProfessorValue likes this.
  2. Crusader

    Crusader Aspirant (200) Feb 4, 2011 Sweden

    It was an interesting article, though the beers that she described sounded less like beers and more like pastries.

    I guess it makes sense if one looks at it from a broader perspective though where people are choosing sugary cocktails and mixed drinks (cookiedough vodka and all the rest of it) instead of beer, so they try to offer something similar within the beer category for those people. If anything beer as a beverage can excell at offering people an "easy" to drink, sweet and syrupy concoction flavored with various flavors, even more so than spirits since the abv of the base-alcohol can shine through with spirits. With beer it's easier to hide the alcohol and just offer a straight up sugar rush.
    Nanners likes this.
  3. leedorham

    leedorham Crusader (701) Apr 27, 2006 Washington

    She is probably very good at her job and can do exactly what ABInbev needs her to do. Unfortunately, what ABInbev needs her to do has nothing to do with crafting a great beer.

    The chemists and businessmen have had the last 120 years or so to build us a better beer. They have failed miserably. Welders, programmers, and college dropouts who wouldn't know a covalent bond from a savings bond have turned artisan and produced better beer in a dirty garage than ABInbev will ever produce with the most expensive equipment and talent money can buy.
  4. NiceFly

    NiceFly Aspirant (275) Dec 22, 2011 Tajikistan

    That was pretty funny. We can thank them for alot of the new hops on the market, so they are not completely useless.
    jreindl likes this.
  5. TheBeerAlmanac

    TheBeerAlmanac Savant (967) Mar 3, 2011 Kentucky
    Beer Trader

    Did you notice how AB decided on a chemical engineer with experience in plastics and gas collection systems and who previously knew nothing about beer to pioneer their craft beer program?
    jreindl, mactrail, afrokaze and 5 others like this.
  6. mjshearer1

    mjshearer1 Aspirant (213) Dec 16, 2011 Michigan
    Beer Trader

    That's because anyone who knew anything about beer wouldn't work for AB.
    KevSal, Patandnik and RBassSFHOPit2ME like this.
  7. jesskidden

    jesskidden Meyvn (1,307) Aug 10, 2005 New Jersey

    This is hardly a "pioneering" effort on AB's part- they had a line of "specialty" (a common industry term for "craft-ish" bee styles) beers in the early 1990's called "American Originals" which included Faust Lager, Black & Tan (both pre-Pro brands of theirs), American Hop Ale and Muenchener, and also brewed a red beer called Red Wolf, Pacific Ridge Pale Ale, etc.

    A few years later, they had a pretty large line (now mostly defunct, apparently) under the dba of Michelob Brewing Co. that included a Pale Ale, Dunkel Weisse, Porter and a Marzen, among others.
    mathematizer and Bobator like this.
  8. Crusader

    Crusader Aspirant (200) Feb 4, 2011 Sweden

    Would you happen to know what sort of beer Faust was and how it related to their other beers? I remember seeing it mentioned in old pre-prohibition advertisements where they listed their line up of beers, along with Budweiser, a pilsner and a pale lager (which makes me wonder what the difference was between those latter three).
  9. jesskidden

    jesskidden Meyvn (1,307) Aug 10, 2005 New Jersey

    Offhand, I've only seen it described as a "golden lager". There was a Faust who was a family friend of Adolphus Busch who was also a St. Louis restaurateur, and eventually the Faust intermarried with the Busch's.

    Yeah, AB had many brands in the pre-Pro era - some of the others (not mentioned above) were "AB Standard", "Pilsener or Exquisite", "Pale Lager" "Old Burgundy", "Erlanger", "Liebotschauer", etc. "All varieties of beer from very pale and light brewings to dark and heavy beer..." according to a 1893 St. Louis Star article.

    And many were all-malt, if Adophus Busch's testimony to Congress during the 1902 Pure Food Hearings is to be believed:

    mathematizer, frazbri and Crusader like this.
  10. chefkevlar

    chefkevlar Disciple (336) Apr 17, 2010 South Carolina
    Beer Trader

    So 500 batches a year, or an average of just under 10 per week. Sad thing is I'll bet some of them are actually good but will never be released because the people making the beer and in charge of the company have either forgotten or never knew what good beer tasted like.
  11. JackHorzempa

    JackHorzempa Poo-Bah (3,122) Dec 15, 2005 Pennsylvania

    I can’t comment to the present day brewers at AB but they have had talented brewers working for them in the past. Two great brewers that I am aware of:

    Mitch Steele is the headbrewer of Stone Brewing. He had a significant tenure at Anheuser-Busch with his most recent position being Assistant Brewmaster for Anheuser-Busch's Merrimack, NH facility

    “Mitch Steele: I've had a great career at A-B. I've had a chance to do some real fun projects, and this latest regional beer project was very fun. The IPA was a beer I thought would have been great for A-B's portfolio for a long time, and I'm glad our team had a chance to put this great beer together.

    But my roots are in craft brewing, and that's where my true passion has always been. When I saw the job opening at Stone, I couldn't think of a more exciting place to brew beer. And, at Stone, I'm going to be working for and with people who have such great passion for craft brewing. They believe in it, and they live it. I don't think there's a better place for me to be.”

    Florian Kuplent is the headbrewer and co-owner of Urban Chestnut Brewery. “So for the next several years, Florian worked at Anheuser-Busch, Inc., learning many of the aspects of the brewing business that A-B is most respected for across the industry: batch consistency, quality assurance and yeast propagation and control.

    During this time at A-B, Florian was also given free rein to experiment with new ingredients and different recipes at the brewery’s experimental microbrewery, which was where he created a series of award-winning craft-style beers under the well-known Michelob brand.”

    I am personally of the opinion that Anheuser-Busch has all of the resources (brewing resources, brewers, etc.) to make world class craft beer. For business reasons they simply do not want to make world class craft beers.

    jucifer1818, cavedave and Bobator like this.
  12. flayedandskinned

    flayedandskinned Initiate (0) Jan 1, 2011 California
    Beer Trader

    ...Just imagine if breweries who actually want make GOOD, high quality beer had AB's lab resources and wallet. OH my, the beers they could come up with!
    CityofBals likes this.
  13. CityofBals

    CityofBals Initiate (0) Sep 12, 2012 Illinois

    Look towards GI in the coming years, they may have lost Laffler, but with AB's wallet behind the barrel program I think things can only get better.
  14. leedorham

    leedorham Crusader (701) Apr 27, 2006 Washington

    In terms of facilities, free cash flow, and freedom to innovate, ABInbev doesn't have much on the larger craft breweries. There's only so much you can do in the lab. In fact, they're at a disadvantage because they are held to demonstrating a direct bottom-line impact with every move they make.

    On the other hand, if Ken Grossman (Sierra Nevada) wants MOAR HOPS just because he wants MOAR HOPS, he gets MOAR HOPS even if the accountants tell him he would make more money with less hops.
  15. flayedandskinned

    flayedandskinned Initiate (0) Jan 1, 2011 California
    Beer Trader

    Unless in two years AB comes to the conclusion that its not that cost effective.
    kexp, jgluck and VonZipper like this.
  16. CityofBals

    CityofBals Initiate (0) Sep 12, 2012 Illinois

    Beer is cost effective.
  17. flayedandskinned

    flayedandskinned Initiate (0) Jan 1, 2011 California
    Beer Trader

    what if AB thinks that the barrel program takes too long for them to make GI's quarterly quotas?
  18. CityofBals

    CityofBals Initiate (0) Sep 12, 2012 Illinois

    Besides AB explicitly stating they will not interfere with the barrel program, GI produces a very large amount of beer. While I don't know the numbers, I'm confident that whatever profit they make by selling 312 is more than enough to cover the operational costs of the entire brewery.
  19. flayedandskinned

    flayedandskinned Initiate (0) Jan 1, 2011 California
    Beer Trader

    I really hope you're right!
  20. kneary13

    kneary13 Initiate (0) Jan 30, 2010 Massachusetts

    Wasn't that basically what Mitch Steele was doing for them at the NH brewery before joining Stone? Bet she's just building her resume. :slight_smile:
  21. jtmartino

    jtmartino Initiate (0) Dec 11, 2010 California
    Beer Trader

    I really want to like this, but I can't. I can't because I know ABInbev has the money, skill, and equipment to make some excellent craft beer. But they won't, because it's not nearly as profitable as making American adjunct lagers.

    It has nothing to do with abilities. It has everything to do with profit. High-end craft beer is really not that profitable, and a vast majority of beer drinkers in the US still don't drink craft beer. It is absolutely not in their best interests to devote money and resources to an industry that still can't compete with the macro beer scene.

    But, as beer-drinking culture changes, so will the big players. And make no mistake - they will either buy or force their way into the craft market, and their beer will be excellent. See Goose Island.
    Sludgeman and Bobator like this.
  22. leedorham

    leedorham Crusader (701) Apr 27, 2006 Washington

    As I said above, ABInbev is a large corporation with responsibilities to stakeholders. They are actually at a disadvantage when it comes to making craft beer because the brewers can't just make whatever they want. Also, the claim that the best brewers in the world work for the big boys is a complete and total fallacy.

    High end craft beer is very profitable. Much more profitable gallon for gallon than low end beer. Not sure where you got that info.

    I hear Hoegaarden is drinking real well these days.
  23. jtmartino

    jtmartino Initiate (0) Dec 11, 2010 California
    Beer Trader

    You are seriously misinformed. Go read the financial reports of ABInBev and Boston Beer Company and then get back to me - they are both available online as both companies are publicly traded. Most financial websites also list everything you need to know to change your mind.

    Economies of scale, for one thing. But also bulk materials cost is much less for American Adjunct Lager. All things being equal, the ingredients in a gallon of Budweiser are much cheaper than a gallon of Sierra Nevada Pale Ale.
    TimJohnsonMN and mrkrispy like this.
  24. jesskidden

    jesskidden Meyvn (1,307) Aug 10, 2005 New Jersey

    ABInBev sold 98,000,000 barrels of beer in the US last year, Goose Island brewed about 150,000 bbl. - about 1/8 of 1%.

    Ah, but AB doesn't need the Goose Island brewery to brew 312, they do it themselves :wink:

    ...granted, they do it in part to free up capacity at GI for other beers...
  25. BierGartenok

    BierGartenok Initiate (0) Apr 4, 2009 Oklahoma

    I like how 10 bbls is an "Experimental" batch lol
    TheBishopco likes this.
  26. leedorham

    leedorham Crusader (701) Apr 27, 2006 Washington

    You're talking about something entirely different than gallon for gallon profitability. Also, snpa isn't really "high end."
  27. Stevedore

    Stevedore Poo-Bah (3,832) Nov 16, 2012 Wisconsin
    Beer Trader

    Never forget the bottom line.

    jtmartino likes this.
  28. jtmartino

    jtmartino Initiate (0) Dec 11, 2010 California
    Beer Trader

    Go look at the financial results. Take profit in 2012 (or even 2011) and divide it by gallons of beer produced. Compare AB with any craft brewery. Then get back to me.

    If you have a better metric for determining profitability that favors craft beer, I'd love to hear it. You can find plenty of figures online if you want to provide numbers.
    Bobator likes this.
  29. mocktm

    mocktm Devotee (437) Jan 3, 2011 Virginia
    Beer Trader

    I couldn't help but laugh reading the article. Lets get someone who knows little to nothing about beer to be the head brewer at our experimental pilot brewery...Brilliant!!
  30. TheBeerAlmanac

    TheBeerAlmanac Savant (967) Mar 3, 2011 Kentucky
    Beer Trader

    There has to be a threshold where brewing evolves from a strict balance sheet into an art. You still need to make money, but the primary directive shifts, and in shifting you focus on the craft, which hones the skill of production, which brings a better product to the table, which garners a larger margin of profit no matter what scale, albeit through sweat equity. Call it romantic or idealist or whatever, but maybe the DFHs and Picassos and Stephen Kings figured that out.
  31. sherm1016

    sherm1016 Initiate (199) Aug 10, 2009 Wisconsin
    Beer Trader

    FWIW, Dan Carey, Brew Master and Co-Owner of New Glarus Brewing was also a Production Supervisor A-B at one point in his career.

    People can despise A-B and M-C all they want for this reason or that, but they have done a lot to educate and launch the careers of many, many successful craft brewers.

    Rebecca sounds like she is very talented. Hopefully her skills will aid the craft movement at some point (if they haven't already...).
    Sludgeman and TimJohnsonMN like this.
  32. Norica

    Norica Aspirant (233) Feb 2, 2006 Massachusetts

    I'd say Hoegaarden has slipped considerably, I mean it only beat out 48 others in the style.

  33. reverseapachemaster

    reverseapachemaster Aspirant (244) Sep 21, 2012 Texas
    Beer Trader

    Some of the comments here are not entirely true. AB InBev has a deep portfolio and there are many of the smaller labels, particularly from InBev's side, that are as good or better than a lot of US craft brewers. Of course, that doesn't stick up for their brand light lager products.

    AB alone has tremendous brewing expertise and knowledge. It is not at all easy to brew beers that light that flawlessly on that large of a scale across multiple breweries. You may not like the product but that doesn't mean there isn't a lot of work put into the beers. Furthermore, AB (along with MillerCoors) has tremendous resources for brewing. They have one of the largest, if not the largest, library of brewing materials. They also have a substantial yeast bank that is probably outdone by Weihenstephan but still very extensive. If they wanted to, they could make a beer that would make you think your favorite beer of all time was a complete drain pour and they could make it on a large scale that it wouldn't cost you $20-40 per bottle.
    Bobator and jfarrlley like this.
  34. hopfenunmaltz

    hopfenunmaltz Meyvn (1,318) Jun 8, 2005 Michigan

    Sierra Nevada has a 10 bbl. pilot brewery.
  35. coreyfmcdonald

    coreyfmcdonald Savant (953) Nov 13, 2008 Georgia
    Beer Trader

    Having worked in Operations and Supply Chain for a publicly traded company, I'll tell you that this information does not matter at all. AB has to hit their metrics just like any other publicly traded company. Many of these metrics will be year over year improvements. They will find ways to lower production and materials costs, overhead, and inventory to make Goose Island more attractive as they pump up production. If they are smart, they will do their research to figure out where consumers won't mind they make their cuts. This is where many companies get it wrong.
  36. jacksback

    jacksback Initiate (0) Jul 20, 2011 Massachusetts

    Such as? Easy to say that... well, without actually saying anything.

    I'd also like to see some profitability numbers (actual numbers) on the "higher end" craft beers, as I doubt they are very profitable. Ingredient cost, time in barrels (if applicable), specialty bottles, and so on. But I've got no numbers offhand either...

    To the OP- sure, AB-Inbev, and Budweiser specifically, has a good deal of brewing talent. But they aren't about talent, or brewing great beers- all about the bottom line. Whole different business outlook than even the largest of craft breweries.
  37. jacksback

    jacksback Initiate (0) Jul 20, 2011 Massachusetts

    Yeah, but as the fans have stated, there's absolutely NO danger of GI beers falling off. AT ALL.

  38. coreyfmcdonald

    coreyfmcdonald Savant (953) Nov 13, 2008 Georgia
    Beer Trader

    Ha, yes - this would be the first time a huge corporation went back on their word. Ever.

    "You don't need to change the malt bill or the time in barrels for BCBS, but you need to raise the gross margin by 10%."
  39. rlcoffey

    rlcoffey Initiate (0) Apr 20, 2004 Kentucky

    One of the problems Bud et al have is that their brands have to make a very big splash to survive.

    Of the top 15 new beer brands of 2008, 8 had been discontinued by the end of 2011. Three of the 7 that survived were the 3 craft brands in the list. And 1 of the survivors, Bud American Ale, the #3 new brand of 2008, is dead/dying. I have no idea on its current state, did it make it to 2013?

    And the #3 new brand of 2011 was cancelled before the end of 2011.

    Two of the 2008 cancelled brands were Michelob Dunkel Weiss and Michelob Pale Ale. They just didnt do enough sales to justify staying around. They had sales numbers that even larger craft breweries would kill to have, but to A-B or M/C, those kind of numbers dont justify continuing on.
  40. leedorham

    leedorham Crusader (701) Apr 27, 2006 Washington

    What are you finding online for privately held companies? Do you have access to The Bruery's balance sheet?
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