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Tuesday, December 4, 2012

Craft Controversy: Rotating Drafts Spark Concern Among Brewers

There’s no question that the surge in popularity of craft beer has resulted in the widest variety of brews and beer styles ever available. But some craft brewers are beginning to show concern that the very diversity that they have long promoted—particularly at beer bars with constantly rotating draft options—may actually be damaging to their companies and the craft beer category.

Bars that refuse to dedicate draft handles to particular brews, but rather regularly rotate beers in and out are “becoming more prevalent,” remarks Bob Sullivan, vice president of sales and marketing at Boulevard Brewing in Kansas City, Missouri, the tenth-largest craft brewer. The tactic—while often a successful strategy for on-premise operators—is damaging to all craft brewers, new and established, Sullivan says, as it doesn’t give brewers a chance to build their brands. “The on-premise is a critical place to engage our consumers and build brands,” he adds, and the “in and out” or “one and done” approach to draft brews by an increasing number of bars has begun to “dramatically impact our share.” Sullivan adds that other craft brewers report similar concern.

Other beer marketers agree that the rotating draft approach—while great for consumers and beneficial to many bars—is a challenge for marketers and distributors. “Retailers who are focused on rotating draft handles aren’t focused on building brands,” says Jim Gray, national draft director at Crown Imports. “They want the shiny new toy that is offered to them each month. The investment per account to support a draft brand comes at a price. We prefer a long-term commitment from a retailer so we can build our draft brands in an establishment.”

Sullivan agrees, revealing that when craft brewers move into new markets, rather than seeking out the trendy beer bars that refuse to devote draft real estate to particular brands or breweries, they target accounts where they’re likely to receive permanent handles. Sullivan cautions that while many bars like to feature the newest brewery in town or the hottest brand fueled by social media by purchasing a single keg, “it’s actually a disservice for new craft beer startups as they’re getting even less of a chance to build their brands.”

Sullivan concedes that the growing concern is one that brewers themselves have had a hand in stoking. “We, in part, created this, due to seasonals,” he says, “and now some retailers have taken it to the extreme. Accounts that offer 20 or 30 different drafts that all rotate is not a healthy trend for craft beer and craft beer brands.”

Wine Spectator: Where Is China’s Wine Market Going?

When Don St. Pierre Jr. announced in October that he had stepped aside as CEO of ASC Fine Wines, the company he cofounded with his father in 1996, it surprised many in the business. An American ex-pat, St. Pierre has been a trailblazer in building the fine wine trade in China. As one prominent Bordeaux négociant noted, “where ASC goes, we go.”

But in a lengthy interview with Wine Spectator, St. Pierre said the time had come for him to focus on long-term ideas and leave managing what has become a big business to an expert. ASC appointed John Watkins, an American executive who cut his teeth on Northwest Airlines’ expansion into China in the 1980s, as his successor.

A few years ago, ASC began a big shift, moving beyond China’s saturated first-tier cities into second-tier cities, opening 26 offices and a distribution network to 150 cities. Staffing shot up from 400 to 1,200. “The challenges China presents moving forward are really unbelievable. We’re just beginning to see Chinese consumers develop their own tastes and interest in wine and see wine as part of their life as opposed to drinking wine because of a business occasion,” St. Pierre told Wine Spectator. “We’re always trying to stay ahead. Hiring John is about staying ahead.” For the full Wine Spectator report, click here.

News Briefs:

•Texas retail giant Spec’s is planning its third store in the San Antonio area, according to local reports. The new unit, to be located in a 41,600-square-foot facility at 819 E. Rector Street, just south of the San Antonio International Airport, could open by February, reports My San Antonio. Houston-based Spec’s, which has more than 135 locations Texas-wide, entered San Antonio in 2009 and added its second area store this past summer.

•Patrón Tequila has teamed up with fashion designer John Varvatos to create a limited edition bottle stopper for its Añejo expression. Varvatos created a stopper featuring a miniature guitar head design, made of metal and complete with tuning keys. Patrón will release the limited edition bottles early this month to select retailers, packaged in a unique gift box. The partnership marks the first time ever that Patrón has changed a design feature of its recognizable Tequila bottle. Patrón is the Tequila category’s second-ranked brand in the U.S., selling 1.8 million nine-liter cases annually.

•Thatcher’s Organic Liqueurs has inked a deal to appoint Des Plaines, Illinois-based A. Hardy USA as its national sales and marketing agent. Thatcher’s, a certified organic line of 30-proof liqueurs, is in national distribution and retails for around $20 a bottle. The portfolio includes Blueberry, Chocolate, Elderflower, Cucumber, Apple Spice Ginger, Tres Chiles, Dark Chocolate, Chipotle, Pomegranate, Coffeehouse, Prickly Pear, Blood Orange and Yumberry. Thatcher’s joins an A. Hardy brand stable that includes fast-rising RumChata liqueur, as well as Hardy Cognacs, Drappier Champagnes and a host of other spirits and wines.

•New York-based Frederick Wildman & Sons has been named the national importer for Bodega Luigi Bosca wines beginning in January. Based in Mendoza, Argentina, the Luigi Bosca portfolio includes Finca La Linda, Luigi Bosca Reserva, Luigi Bosca Malbec DOC and a range of Icon wines. The wines were already available in select markets in the U.S., previously handled by Chicago’s Atlas Imports. Wildman’s Argentina portfolio currently includes Astica and Michel Torino.

•Fine wine retail site Bestwinesonline.com has made its debut, focusing on premium wines from major regions around the world. Founded by former Wine Exchange employees Tristen Beamon and Kyle Meyer, Bestwinesonline.com says it will offer a comprehensive selection of wines at all price points, from $10 to $10,000 a bottle, providing what Beamon calls “a more complete online shopping experience.” Additionally, the site offers older vintages straight from the wineries, a selection of Bordeaux and discounted specials. In order to educate consumers, Bestwinesonline.com also features short interactive videos—including video tasting notes from Beamon and Meyer—as well as vineyard photos, notes from top critics and customer reviews.

Craft Brewing And Distilling News:

•Kona Brewing Co. is entering new territory. The Hawaii-based brewer, a subsidiary of Craft Brew Alliance (CBA), is introducing its brews to five new Midwest markets—Illinois, Indiana, Minnesota, Missouri and Ohio. With the expanded distribution, Kona beers will now be available in 35 states. Kona’s flagship Longboard Island Lager will be available in bottles and on draught year-round in the five new markets. Its other year-round offerings, Big Wave Golden Ale and Fire Rock Pale Ale, and Kona’s full seasonal lineup of Aloha Series beers will also be available, beginning with the spring seasonal in the series, Koko Brown Ale. Acquired by CBA in 2010, Kona is enjoying solid growth in 2012, as are CBA stablemates Redhook and Omission.

•Hershey, Pennsylvania-based Tröegs Brewing Co. has unveiled two upcoming additions to its experimental Scratch Beer Series. This Friday, the craft brewer will release Scratch #82: Tripel, a pale ale made with 450 pounds of Pennsylvania honey and Westmalle yeast. Tripel will be joined by the launch of Scratch #82: ¿Impending Descent?—a Russian Imperial Stout brewed to commemorate the end of the Mayan calendar—next week. Both offerings will be available in cases, six-packs, growlers and on draft for a limited time. Tripel and ¿Impending Descent? follow the recent rollout of Scratch #81: Export Lager, a draft-only pale golden lager released at the end of November.

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