The Audacity of Hops
Page 33
However, any craft beer aficionado who might have tuned in—indeed, any viewer who heard Stone Phillips’s incredulous questions about craft beer during the introduction—had to have known what was coming. It was as if NBC had painted a big, red bull’s-eye on Jim Koch’s back. Hansen, after the laudations:
[T]he bottle invites you to come visit their small traditional brewery in Boston. So we did, and found a small brick building, a photo tribute to previous generations of Koch brewers, and, just as you see in the Sam Adams commercials, the small copper kettles and equipment used to brew the beer. But there’s one small problem with this picture: At least 95 percent of all Sam Adams beer isn’t brewed here—or anywhere even near Boston, for that matter.
Shots now of other, much less bucolic breweries.
It’s brewed here, at the Stroh’s Brewery in Lehigh Valley, Pennsylvania. Here, at Genesee in Rochester, New York. And at several other large industrial breweries throughout the country. And while it may be handcrafted one single batch at a time like the bottle says, each single batch is brewed in a kettle that can hold up to one hundred to two hundred thousand bottles of beer. That’s right—the Sam Adams you buy in the store was likely brewed in the same place as more humble and less expensive brands, like Old Milwaukee, Stroh’s, or Little Kings. And Sam Adams is far from alone. Many of the expensive boutique beers that promote themselves as “handcrafted” or “microbrewed” are actually made in larger commercial breweries like this one; it’s called contract brewing.
The boom was lowered. Craft brewers of whatever size or stripe would never forget the Dateline segment. On it plunged with its blazing indictment of contract brewing, an indictment that grew throughout the segment to tarnish the entire craft beer movement. If Samuel Adams Boston Lager was brewed in Pittsburgh and it was the bestselling American craft beer brand on earth, then where was any bottle of craft beer brewed? It was all enough to make a consumer stare at the beer in his hand and then back at Chris Hansen, wondering what the extra buck or two per six-pack was really worth. The worst thing about it all was who NBC presented as the aggrieved party, the victim of these dastardly small-scale brewers and their deceptive marketing: Big Beer. Anheuser-Busch in particular put itself forward as a source for NBC.
Hansen: Francine Katz is the vice president of consumer awareness at Anheuser-Busch, the biggest beer maker in the world, one of the nation’s biggest television advertisers, and a brewer that’s hopping mad about a lot of the so-called boutique beers.
Katz, brandishing a bottle: This one says that it was brewed and bottled by Pete’s Brewing Company, St. Paul, Minnesota, but Pete’s doesn’t own a brewery in St. Paul, or anywhere; Stroh’s made that beer.
Hansen: Pete’s Wicked Ale is the second hottest-selling microbrew in the US. Anheuser-Busch manufactures some ninety million barrels a year?
Katz: Mm-hmm.
Hansen: Forty-five percent of the market? Why are you so concerned about what little Sam Adams is doing or little Pete’s Wicked Ale?
Katz: This comes down to honesty and truth in labeling. You know, I’m not going to stand here and tell you that we don’t want to sell beer. All we’re saying is, ‘Hey, guys, let’s agree on some basic rules of honesty, let’s be truthful on our labels.’
Hansen then returned to Koch for a classic clinic on gotcha journalism, though he had yet to unsheathe his sharpest weapon.
Koch: Sam Adams beer is brewed by Boston Beer Company. We select the ingredients; we select the recipe; we are the brewer.
Hansen: But the guys actually brewing the beer don’t work for you.
Koch: The people brewing beer are brewing it under our supervision and our direction. They do exactly what we ask them to do.
Hansen: But don’t you think you create the image in people’s minds that Sam Adams is brewed right here in this quaint Boston brewery, when, in fact, it’s farmed out all over the country?
Koch: We don’t lie to them.
Hansen: Well, it doesn’t sound like it’s being completely honest, either.
Koch: We tell them who brews the beer. If Julia Child comes to your house, brings her own ingredients and her own recipe, goes into your kitchen, and makes dinner for you, who made dinner, you or Julia Child?
Koch, the nation’s biggest craft brewer, came off looking defensive, a little sad even. Anheuser-Busch, the world’s biggest brewer, came off looking concerned for the consumer, a dipsomaniacal Ralph Nader. As Katz put it seconds later regarding craft beer packaging: “There’s enough on this label to be a small novel; certainly, there’s enough room to tell beer drinkers the truth.” She did not stray off-message when Koch argued to Hansen that Anheuser-Busch’s concern for consumers was nothing more than a pose in the face of a craft beer segment growing then by double digits. “This doesn’t come down to the issue of competition,” Katz retorted. “It doesn’t come down to whose beers are better. I can’t think of why asking a beer producer to be honest about who’s making the beer could be in some way being a bully.”
Hansen then went on to cite a federal tax credit that encouraged smaller brewers to expand, which, he said, was available to contract brewers as well. Craft brewers at this point were able to take advantage of not only this credit for purchasing equipment but also a lower tax rate of seven dollars per barrel up to the first sixty thousand barrels if they brewed no more than two million barrels a year (which everyone then did). Individual states, too, might have fairly generous tax breaks for expanding smaller brewers compared to those for Big Beer. It was something, Hansen explained, that peeved Anheuser-Busch, as well as competing craft brewers. That was because the tax breaks were meant, according to Hansen, for craft brewers who had started capital-intensive physical operations. He introduced Gary Fish, founder of the Deschutes Brewing Company in Bend, Oregon, amid scenes of a busy pub.
Hansen: Fish founded the Deschutes brewpub and restaurant in 1988, putting his and his family’s financial future on the line to make it happen. He expanded successfully, building a brewery from the ground up. And, today, the Deschutes name is popular throughout the Pacific Northwest. Deschutes and thirty other small brewers from Oregon have sided with Bud in the battle over truth in labeling.
Fish: Microbrewery is a—is a noun. To me, it means something.
Hansen then showed viewers the label on a bottle of the Boston Beer-backed Oregon Ale and Beer Company, explaining that it was brewed under contract by Stroh’s.
Hansen to Fish: How do people out here in Oregon involved in craft brewing react when they look at a bottle of Oregon Ale and it says “microbrewed” on the label?
Fish: I think they feel patently offended.
There it was: the tetchiness of the American craft beer movement that had swelled over the last few years. The rancor, the worries, the mistrust—it had all spilled onto a national, prime-time stage. But who had set the stage?
Jim Koch watched the episode with his kids back in Newton, Massachusetts, just outside of Boston, after watching the Yankees beat the Orioles 6 to 4 to secure their first World Series spot since 1981. He had kind of known what was coming. His last client at the Boston Consulting Group twelve years ago before he left to do beer full-time was General Electric, and GE owned a majority stake in NBC. Koch, following his interviews with Hansen and before the episode aired, contacted an old friend within NBC to try to get a read on what to expect from the final cut.
“Is it going to be objective?” Koch wanted to know. “Is it going to be negative?”
“It’s going to be negative, Jim,” his friend replied.
He broke it down for Koch like this: Anheuser-Busch was one of NBC’s biggest advertisers. It had bought, for instance, 175 commercials for the Olympics in Atlanta the summer before. It wasn’t that Dateline lacked journalistic standards, but any segment, with just about any set of facts, could be slanted as the show wanted it. Besides, GE management was not wont to interfere with the editorial side of the network, so what was any segment subject like Koch t
o do? Phone calls and worrying was not going to get him anywhere. Sit tight. “It’s not going to be malicious,” the friend tried to reassure him.
Unspoken between Koch and his friend was another possible cause of the segment’s slant, one brought up by Chris Hansen in a quick aside: “Anheuser-Busch makes Red Wolf, a specialty lager, and identifies itself as the brewer on the label. Anheuser-Busch is also a minority investor in another specialty beer, Redhook, along with a subsidiary of NBC’s parent company, General Electric.” Anheuser-Busch and GE were in bed together on Redhook. This would be the same Redhook that Koch had vociferously denounced for its 1995 deal with Anheuser-Busch, which he had called “a declaration of war” by Big Beer and had analogized to the original Star Wars trilogy, with Budhook—Koch’s nickname—in the role of the evil empire. There was never any clear indication that Redhook, GE, or Anheuser-Busch put a journalistic hit on Koch and the larger craft beer movement, and Anheuser-Busch denied the implication. The interconnectivity was undeniable, though. It appeared the chickens were coming home to roost, and on a national scale.
It wasn’t just the Dateline segment, either. Around the same time, Anheuser-Busch, along with more than two dozen Oregon brewers, petitioned the federal Bureau of Alcohol, Tobacco, and Firearms (ATF) to force smaller breweries to put on their labels who made the beer and where, a requirement similar to one already enforced for other foodstuffs and household products like cosmetics and medicines (beer had no nutritional value, the thinking had gone since Repeal, so best to avoid things like ingredients and origins on the labels lest the public think otherwise). The petition was seen as an assault on Boston Beer in particular, which countered with a petition of its own asking the ATF to require sell-by or best-before dates on beers as well as where they were brewed (something Boston Beer had been doing on its own since 1989). Beer has a relatively short shelf life as opposed to, say, wine, and the implication was that Big Beer brands routinely arrived in front of consumers old and spoiled, owing to the volumes made and the distances shipped.*
Boston Beer also asked the feds to please define what a craft brewery or microbrewery was. Since the second wave of openings in the early 1980s, the unofficial handle promoted by the Association of Brewers, critics, and brewers themselves was any brewery or brewpub making up to fifteen thousand barrels annually; the rest were regional breweries or craft regional breweries or regional craft breweries. The public at large might also take “craft brewery” and “microbrewery” to mean any operation that wasn’t one of the Big Four—Anheuser-Busch, Miller, Coors, and Stroh’s—that controlled nearly 90 percent of the market. This semantic confusion was part of the reason for the recriminations. For its part, Charlie Papazian’s Association of Brewers, which had with seeming ease been able to define more and more styles for the Great American Beer Festival, was working on an official definition of a craft brewer, and it looked like it could not come soon enough.
Around the same time as the Dateline segment, Anheuser-Busch launched a television, radio, and print ad campaign that further clouded things for consumers. The ads were merciless: “Why does Sam Adams,” asked one, “pretend to come from New England when the truth is, it’s brewed by contract breweries around the country?” Another all but called Koch a liar: “Time to stop tricking beer drinkers, Jim.” And another went for the jugular on the all-important issue of price: “If Samuel Adams is made at the same contract breweries that churn out cheap, blue-collar beers, why does Sam Adams cost so much more than these other products?” Anheuser-Busch also targeted Pete’s Brewing as well as, interestingly enough, its longtime archrival Miller in the ATF petition and the ads. Without a hint of irony, considering its own myriad forays into phantom crafts in the last few years, Anheuser-Busch called on Miller to come clean about its Plank Road Brewery, the supposed rustic brewhouse behind its popular Icehouse and Red Dog brands since 1993. With an almost audible sigh to any reporter who read it, Miller felt compelled to release this statement in early 1996 regarding its competitor’s calls for full disclosure: “The Plank Road Brewery, the original name of the brewery established by Frederick Miller in 1855, is a separate division of Miller Brewing Company. Plank Road beers differ from Miller in both style and taste. Plank Road’s relationship with Miller is well established and well documented. We view it as most unfortunate that the industry leader is looking to use a government agency to stifle competition.”
Pete Slosberg’s company had already sparred at least twice with Anheuser-Busch—the first time over a dog. The bigger brewer felt that Slosberg’s black-and-white English bull terrier, Millie, which Pete’s used on its early packaging beginning in 1986, was a tad too similar to its own black-and-white English bull terrier, Spuds MacKenzie, which it introduced in 1984. Although Pete’s reach then barely extended through the San Francisco Bay Area, Anheuser-Busch threatened legal action, and the smaller brewer stopped using Millie on its packaging in 1989.* Anheuser-Busch also swooped in and lured away the ad agency that Pete’s used for its national television ad campaign in 1994, the first by a craft beer company.
Otherwise, though, the single, biggest fallout from the Anheuser-Busch ambush—the phantom crafts, the 100 percent share of mind, the ATF petition, the ad campaign, and, especially the Dateline segment—was a wavering in consumer confidence in craft beer. An industry already swollen with newcomers, given to in-fighting, and growing at a torrid pace suddenly lost its hard-won authenticity in the eyes of millions of consumers or would-be consumers. Some craft brewers understood that immediately. Dan Kenary, a cofounder of the Mass. Bay Brewing Company—which had never shied from reminding consumers that its Harpoon brand was the first beer to be brewed in Boston since the 1960s, not Samuel Adams—knew he would never forget a closing image of the Dateline segment: an ugly-looking smokestack at the Stroh’s plant. He knew that the brush used to paint Boston Beer and Pete’s Brewing, no matter what others may have thought of them, colored everybody in the industry. It was all a whiff of grapeshot aimed to kill competition, no matter how scattered. The lines now had been clearly drawn: it was not physical brewer versus contract brewer anymore, newbie from the 1990s versus veteran from the 1980s, certainly no longer West Coast versus East Coast. It was Us versus Them—and Them had a lot of resources.
There was an almost visceral reaction among craft brewers as a survival instinct kicked in. John Hickenlooper, cofounder of the first brewpub in Denver and now co-owner of others, pulled all Anheuser-Busch brands in the face of the ad campaign. There were smaller acts of defiance throughout the nation. Don Russell, the Joe Sixpack columnist for the Philadelphia Daily News, described the angry reaction in the City of Brotherly Love:
It’s been maybe 10 years since Bud last touched Joe Sixpack’s tongue. But, now, in the spirit of journalistic accuracy, I find myself on the brink of actually tasting this dreck once more. The occasion is the Budweiser Backlash—a stiff, negative reaction to last year’s network television broadside in which Anheuser-Busch claimed the nation’s burgeoning microbrewery revolution was a fraud…. About that backlash: It actually goes back a few years before A-B’s craft-brew assault. Tom Peters, the manager of Copa Too (263 S. 15th St. in Center City), said he stopped stocking the slop about five years ago when he heard how the company was bullying a tiny Czechoslovakia brewery called Budvar over trademark rights to the Budweiser name.
Across town, Dawson Street Pub (Dawson and Cresson Streets in Manayunk) also proudly refuses to carry Bud. The pub’s only bottle of the gunk is displayed above the bar, with its familiar red label marked up with the international cross-out symbol.
It was, as the beer writer Jack Erickson put it, an unceremonious meeting between the Big Beer-dominated industry and the culture that had grown up around the movement over the last two decades. Every budding aficionado who knew the name Michael Jackson as synonymous with beer and not pop music; every critic, compensated or not; every homebrewer with his or her dog-eared books by Fred Eckhardt, Byron Burch, and Charlie Papazian; every
person behind each e-mail address on the earliest online beer and homebrewing newsletters; every regular at every brewpub in nearly every state—they all had skin in this game. “What we have now is a beer culture,” Erickson explained to Russell. “It tends to be young, affluent and opinionated. Beer is an important part of their lifestyle, and they don’t like the big boys pushing around little guys…. A-B is just trying to take market share—that’s the way they do things. The backlash is the beer industry clashing with the beer culture.”
Finally, in the spring of 1997, Anheuser-Busch ceased the ad campaign. The influential National Advertising Division of the Council of Better Business Bureaus had, at Boston Beer’s request, examined the ads. It said that they contained “contextually inaccurate factual statements” that could be “false, misleading, and deceptive.” Both sides claimed victory. Anheuser-Busch could continue to tell consumers that most Boston Beer was brewed outside of its namesake city, if not New England entirely, but it had to stop implying that that fact meant the beers were the same as lower-priced, mass-produced ones made by Anheuser-Busch and its Big Beer brethren. Regardless, the damage had been done. If 1978 was the first undeniably pivotal year in the American craft beer movement, 1996 was the second—though for negative reasons rather than positive. Things would never be the same.
*Both Anheuser-Busch and Boston Beer were able to walk away from the labeling controversy claiming some semblance of victory. Anheuser-Busch began voluntarily placing “Born on” dates on their beers (though not necessarily telling consumers the beer might go bad within several weeks of that date); and Boston Beer voluntarily started saying on labels where particular beers were actually brewed rather than just the Jamaica Plain, Boston, headquarters address.
*Stroh’s had them both beat anyway: its commercials featuring Alex, the beer-fetching dog, debuted in 1983.