The Thirsty Beagle: Busy beer times at hand in Oklahoma

Thursday, July 9, 2015

Busy beer times at hand in Oklahoma

It's been an interesting last couple weeks on the Oklahoma beer scene.

While a whole bunch of things were happening and a whole mess of events were being announced, I was on the annual Beagle Family Disney World Summer Vacation, and was missing everything.

So, let's get up to speed on what's going on.

First, apologies to Red Earth Brewers club member Sean McCanne. Before leaving for vaca, I posted the first installment of his epic guest blog, an introduction to basic homebrewing. I promised to post the second installment, but with packing and getting the dogs dropped off at the boarder and all sorts of other last-minute stuff, I ran out of time. So, stay tuned again -- I will indeed post part two soon!

So, now on to the news. For one, we've seen the roll-out of Evil Twin and Stillwater Artisanal in Oklahoma, and the beers seem to have been greeted warmly. Last night I had the chance to try Evil Twin Ashtray Heart and Stillwater Surround. Both good beers for sure. I especially was intrigued by Surround, the oak-smoked imperial wheat stout.



I felt like the wheat actually lightened/brightened the beer, considering the style. It hides its 10% ABV well and gives just a pleasant hint of smoke. Overall, quite the enjoyable beer.

Secondly, and I'm totally burying the lead here, there was the news that Anheuser-Busch is withdrawing its membership from the Beer Distributors of Oklahoma (BDO) after multiple decades. In a nutshell, AB says its definition of modernization does not align with that of the BDO. I've digested every angle of analysis on this news, which had been in the offing for several months, so now why not throw in my two cents?

What we have coming to Oklahoma is a big ol' fight. Write that down. The participants in this fight are Anheuser-Busch vs. Every Other Distributor (EOD) represented by BDO. The playing field will be the Oklahoma Legislature.

The trophy will be new alcohol laws in the state.

Make no mistake: This is about money and preserving business models that you feel are advantageous to yourself. And remember, both sides in this fight have a lot of money.

So, the issues at hand: Why is AB squaring off in a fight against EOD? What do they want? And will Oklahoma's craft brewers actually find themselves in league with AB? So many questions!

Let's get one thing clear first. Oklahoma's laws allow you to distribute your own beer -- to self-distribute -- if the beer in question is low-point beer. Of the mega brewers, only AB takes part in this type of distribution in Oklahoma.

That is why AB is squaring off with EOD and BDO. Everything I've heard over the years from people in the know is that AB would love to do away with the dual-strength system. They find it quite annoying to have to produce 3.2 beer for only five states and would prefer to streamline. They also view Oklahoma as a key stakeholder in bringing down the dual-strength system. The feeling in the industry is that if Oklahoma moves to single-strength, the rest of the states will follow.

So, hey, I'm Oklahoma, and I'm kind of a big deal. To AB especially.

Of course, as stated, the only thing that allows AB to distribute its own beer in Oklahoma is the dual-strength system. So how do you move to single-strength while still keeping your business model intact? You write the rules to fit your needs.

AB wants to continue distributing its own beer, regardless of what strength it is. This is why AB has drawn its line in the sand. Expect AB to put up a vicious fight. They will advertise and lobby and blanket social media and maybe even seek donations to support their cause.

But as anyone who has drawn a line in the sand knows, it's generally better to have someone else -- multiple other someones elses, if possible -- digging into the sand on your side of the line.

So who will wiggle their feet into the sand with AB? There are a lot of people who love Budweiser, or Bud Light if you will. These are the people who buy -- gasp! -- 24 packs of Bud Light at the gas station. They think Budweiser is -- gasp! -- a great American beer. After all, it's the beer their dad enjoyed and the beer their granddad enjoyed before that. They will likely be swayed by AB's pledge of putting the consumer first in this fight to define modernization of Oklahoma's laws.

Everyone else, of course, hates the crap out of AB.

EOD and BDO are against AB. In response to the AB pull-out, BDO released a statement claiming that AB is losing market share and laying Oklahoma workers off and is generally un-American. They assert that the local AB distributorship used to be run by hard-working Oklahomans, but now is being run into the ground by a "foreign ownership group comprised primarily of interests from Belgium and Brazil." Tough words, especially considering that every mega brewer -- hello MillerCoors! -- is ultimately controlled by foreign interests.

You know craft brewers -- maybe except the ones who took mega-million buyout offers from AB -- hate AB. That little Super Bowl commercial you may recall? That was like an Arctic storm system blowing over AB-craft relations. (And still so peculiar considering AB was directly bashing an important part of its own portfolio.) But here's the rub: In this fight to change alcohol laws, Oklahoma's craft brewers actually have something in common with AB. They're also taking part in self-distribution.

A good portion of Oklahoma's craft brewers, including Prairie, Roughtail, Marshall, COOP, Choc, Anthem and Mustang, distribute their own low-point beer.

How much do the craft brewers enjoy doing that? Beer by the pint is the biggest cash cow in the beer sales world. What if new laws meant craft brewers had to sell their own high-point beer to a distributor or wholesaler so they could then turn around and buy it back to put it on tap at their brewery?

Craft brewers right now can skip all that rigmarole: They have the option to simply brew some low-point beer, put it in a keg and hook it up in their tap room. It never has to leave the brewery.

The definition of point-of-production sales could be defined in this fight. If that's the case, we could see a scenario where the state's craft brewers actually find themselves fighting for the same thing AB wants. That would be a strange partnership indeed.

Of course, Oklahoma's craft brewers have become quite politically savvy. They likely won't openly align with AB because they need EOD right now to distribute their high-point beer in our current system, and for the fear that AB may lose the fight against EOD. In that case, craft would have to push up to the bar with the enemy, so to speak, in the new alcohol law landscape.

So, what does the distribution fight mean to the average Joe (Six Pack)? It's hard to say. Naturally, it depends on what the specific language of the law ends up looking like. AB is in it for the money, so you generally can't trust their motives. But don't forget, EOD is in it for the money, too, so be cautious there as well.

The group LOCAL -- League of Oklahomans for Change in Alcohol Laws -- made a sound argument that AB may be interested in controlling territories and, if they win the fight, could end up refusing to distribute certain brands they don't prefer in said territories, thus limiting access to consumers.

The argument against that -- as AB has pointed out -- is that in several areas where AB owns distributorships, the craft beer market is thriving. So who do you believe?

My takeaway is this: This distributor fight is not about what's best for the consumer. It's also not about what's worst for the consumer. It's about two sides loaded with cash who want to keep at least part of the system the same as it is now.

That doesn't mean the distributor fight is not interesting or important. It's just that for my money, what will be more interesting for the consumer will be the other aspects of alcohol reform -- stuff like refrigeration and Sunday sales and convenience stores and brewers operating tap rooms -- stuff that impacts the day-to-day.

How this fight will impact those things remains kind of fuzzy. What's clear, however, is that this is an issue with multiple layers that will be very interesting to follow.

So, how do you top all that? Well, there's plenty more going on. Let's move on to the bullet points.

Pints and Pins

-News came out on July 3 that Nebraska Brewing Co. will enter the Oklahoma market on Sept. 1 through Oklahoma broker Paragon Brands.

-Mark your calendar! The annual international IPA Day celebration at TapWerks is set for August 7.

-Speaking of TapWerks, they are going bonkers! Tonight is COOP Pint Night featuring Coconut TROAIS and Coffee TROAIS. Then on Monday, they're kicking off Belgian Beer Week, featuring a different Belgian beer each night, leading up to next Thursday, when they'll offer up 10 different Belgians and corresponding glassware on one night. Wow.

-Oak & Ore and Anthem Brewing are teaming up on Friday for a release party to unveil the name of the new Anthem Energy FC beer. It will be either EPA (Energy Pale Ale), Upper 90 or Bruised Shin. More details here, and you can cast your vote here.

-The Patriarch just put seven different Evil Twin beers on tap. What's more, they may just go ahead and take them all off tap next week because they're promising a week-long Oklahoma tap takeover starting Monday. Key nights will be Tuesday, when they're expecting a visit from State Sen. Stephanie Bice, and Wednesday, when Patriarch founders will be on hand to discuss their bar and unveil a special firkin.

-Mustang Brewing's sixth anniversary party is set for noon to 6 p.m. Saturday at the brewery. More details here. More Mustang news: They'll be pouring a keg of Peanut Butter Milk Stout at 6 p.m. Friday at McNellie's-OKC. In addition, the Monday pint night at McNellie's-OKC will be Mustang's Tractor Therapy Session IPA.

-Roughtail is rolling out cans of its newest beer, Adaptation Ale, as early as this weekend. This is the first in a new line of rotating IPAs from Roughtail.

-Eskimo Joe's is celebrating its 40th anniversary with a huge craft beer party on July 24. More details to come, but this looks like a good time.

2 comments:

  1. As to the battle over distribution, what about the cost to the consumer ? Seems to me, that one less middle man would offer some savings. Whether that savings goes to the brewer's bottom line or lower cost to consumer is debatable, but just me, it seems the fewer people getting cuts could lower my cost.

    Which , actually, cost is becoming an issue for me. Over the last 10 years, the price of craft beer has steadily risen in spite of an increase in supply, as more breweries open and more beers are on the market. I'm sure there's been a huge increase in demand over that period, but there's gotta be a tipping point coming.

    I'm being overwhelmed by choice, while limited by price. Demand must be through the roof.

    ReplyDelete