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Train Kept A-Rollin’

Train Kept A-Rollin’

“Everyone’s drinking the Kool- Aid and looking through their goggles,” says Rui Lucas. He’s not talking about the electric acid test kind of beverage. The general manager at Iron Abbey Gastro Pub in Horsham, PA is referring to craft beer. This industry is kind of a big deal that’s only getting bigger. The Brewers Association, citing March 2013 data, identifies 2,360 craft breweries that currently operate in the U.S. Lucas thinks part of the market’s growth stems from the social component of enjoying a brew. “Anyone can talk about beer,” he says. Everyone envisions themselves as the ‘cool kid in the office’ if they know something about a niche culture. The surge in consumption, however, leads new individuals to believe that they too can succeed in this thriving community. This is when newbies pull on their goggles.

The craft beer industry feels little to no love for the late ‘90s. In Philadelphia Beer: A Heady History of Brewing in the Cradle of Liberty, Rich Wagner explains that four breweries and numerous brewpubs called the City of Brotherly Love home during that time. Microbreweries attracted many people to a then-new market before it quickly declined. According to Wagner, the “Poor performance of several early public stock offerings by microbreweries contributed to a decline in investors.” While economically devastating to some businesses, the shift eventually enabled the culture’s current ro- bust iteration to flourish. There are currently a multitude of options around Philly to satisfy every aficionado’s taste. This proliferation encourages more and more hopeful brewers to try and join the professional ranks. With hundreds to thousands of possible new brands ready to inundate Philly in the next two years, many beer lovers are won- dering: how much is too much? How does it affect the community as a whole? Those aren’t exactly simple questions for brewers, bar owners and managers, distributors, and a consumer to answer.

“I applaud all those who enter the market,” welcomes Rosemarie Certo, owner of Dock Street Brewing Company. She understands the financial commitment behind brewing.“$80,000 doesn’t buy you the same amount of equipment it did in 1985.” The increase in competition prevents her West Philly brewery and its compatriots from becoming comfortable or lazy, which can only lead to better products. Despite this attitude, Certo remains leery of a ‘90s reenactment. “Everyone needs to contribute,” she explains. A brewery can’t allow profit to solely drive its purpose. The desire to create good beer and support the industry should be every new brewer’s goal. Certo cites Tired Hands Brewing Company in Ardmore, PA and Forest & Main Brewing Company in Ambler, PA as two examples of companies meeting her expectations. “They make the best possible beer they can,” which ensures Dock Street does the same.

Certo isn’t the only one to praise Tired Hands. Lucas identifies the company’s suc- cess as “a great story that others want to imitate,” a fact that may worry Co-Founder/Co-Owner/Brewer Jean Broillet IV. He sees the market flooding, but wonders if all the products are particularly good. Brewing “isn’t about making a quick buck,” Broillet warns. New brewers “need to support the culture and the culture will support them.” By not mindlessly seeking financial gain, he and brewer Jon Defibaugh have found the right balance of experimentation and consistency. They launch small batches into the wild and gauge their customers’ reactions. This move has led to the success of HopHands, FarmHands, and other beers. Nancy Barton sees the risk for oversatu- ration, but shares Certo’s opinion that the strong, successful breweries will survive. The Philadelphia Brewing Company co-owner prides her company’s ability to self-distrib- ute products. It provides PBC a sense of security because otherwise they might get lost in or removed from wholesalers’ crowded offerings. “Fortunately,” she says, “we have really good relationships with all of our customers, so it’s rare that [they] would bump [PBC] for the new flavor of the month. I think we are all very lucky in this market to have so many options.”

The effect of overcrowding doesn’t escape the notice of bars and their patrons. Lucas recalls a customer pointing to his head and claiming that he simply lacked the hard drive space to remember every new edgy-named drink on top of daily meetings and his kid’s soccer schedule. Lucas likens the craft beer indus- try to “a train that’s running and won’t stop. Right now it’s selling and everyone wants to jump on.” Some breweries, however, won’t be able to keep up with the locomotive. These neophytes have start-up debts, which further operating expenses will only increase.

In tighter times, the general manager finds himself returning to the classic beverag- es that he’s offered in the past. Founders’ Breakfast Stout, Left Hand’s Sawtooth Ale, Allagash White, and Ommegang’s Hennepin have proven themselves time and again.

These standbys are wonderful for regulars, but Lucas is always looking for new things.

Monk’s Café owner, Tom Peters, knows that too many choices means potential brand failure, especially with so many labels already established. “There are too many IPAs coming in these days and it seems that I might soon be overrun with traditional takes on saisons,” he explains. “I really don’t need another new brewery coming into the Philly area with their version of an IPA. It’s already been done and done well.” He thinks that craft beer will remain a niche pleasure, even with an onslaught of options. “Devotees are always looking for something new,” which could benefit the market’s new entrants. As a bar owner, Peters views his establishment as a gatekeeper to quality. “I could carry 500 bottled beers if I felt that was good for anyone, but I work hard to curate our bottle list so that our guests and the brewers’ needs are met. The brewers want their beer to be well- stored and served fresh. Offering a huge selection is not always in the best interest of the consumer.”

“If you look back in the past three years…less than 20 percent of the [new] brands have actually gained any traction,” says Nima Hadian. “They are brands without a purpose. The days of funny names and clever titles are here and gone. Consumers want and know quality.” The Shangy’s…The Beer Authority owner trusts Darwinism to combat the industry’s current glut. His family’s store survived and learned from the ‘90s collapse. “We realized that once the ‘me too’ beers [shook] out of our market, our established portfolio [rose] to the top.” He wonders, “How do you top a Bell’s Two Hearted Ale, Westmalle’s Trappist Tripel, or Rochefort 10? You don’t.” He knows that customers will always return for the best. Hadian views the current landscape as difficult to navigate for his fellow wholesalers and retailers. “If it was up to us, all accounts would sell nothing but the best in craft beer.” Product knowledge and consumer interaction can help businesses survive.

That lack of simple communication is a component of what Jordan Fetfatzes views as some wholesalers’ problem. According to the brands manager for Bella Vista Beer Distributors Inc., they possess “a grab anything mentality,” which ignores the need to strengthen portfolios and cannibalizes extant options. Smart business choices in- volve avoiding the “pay for play” concept that Fetfatzes sees as a plague in the industry. This occurs when Brand X splashes into everyone’s consciousness, vanishes into the night, and then sends representatives claim- ing wholesalers owe them favors to save their dying image. The action turns “craft beer into a commodity and clogs the pipe- line with mediocre beer on deals bar owners simply can’t refuse.”

Fetfatzes, however, doesn’t necessarily see the community in danger of bursting like a bal- loon. “I feel [others] say this because they start seeing even flagship brands squeezed off shelves to make room for more beers. It’s the same feeling Bud, Miller, and Coors felt when they lost a little bit of shelf space to a Sierra, New Belgium, or Yuengling.” According to him, there’s still a variety of beverages that Philly needs to sample. He, too, concedes that his peers rightfully fear the amateur brewer who thinks simply adding to the market will allow him or her to triumph financially.

Mike Gretz, Sr.’s portion of the beer world, Gretz Beer Company, continues to shift its business model because of the influx of options. “We certainly enjoy the consumer interest, growth, and excitement that comes with the proliferation of craft, but this has been somewhat offset by the costs of han- dling the challenges of SKU (stock keeping unit) proliferation,” says the president of the family-owned wholesaler. On the op- erations side of the business, Gretz’s company previously unloaded pallets directly into bulk storage. Now they unpack mixed pallets and store them on recently installed specialty racking. Their inventory lists once consisted of less than eight SKUs consisting of 30 cases. Now, Gretz Beer Company averages 30 SKUs, each made up of eight cases. Delivering fresh draft products has become increasingly more important so that con- sumers get the best drink in the end.

“We like to think of ourselves as ‘brand builders,’” Gretz reveals. This means that the behind-the-scenes revisions aren’t the only adjustments his company has made as the market becomes saturated. They endeavor “to cut through the clutter of a retailer’s shelves and identify why a consumer should choose [their] product versus competition.” As a result, the wholesaler invests more in merchandising and sampling teams to predict and win at the roulette table of consumers’ tastes.

In the current environment, wholesalers need to be careful of excess. To move products, they may need to resort to discount strategies that will diminish or eliminate retailers’ profit margins. That is most certainly a rough patch of tracks for the craft beer train ride. “We are much more cautious than in the past about what brands are coming on board,” Gretz explains. It would make sense that the company pursues breweries outside of the Philly marketplace that their con- sumers seek. Still, “there are also other brewers, especially local, that are doing some great brewing and [Gretz Beer] would love to help them build upon their success.”

Any form of prosperity is dif- ficult to achieve when drowning in a flood. Ed Friedland of Origlio Beverages knows everyone wants a piece of Philly’s beer industry, but the current atmosphere means that “all breweries are becoming seasonal.” So many new brewing opportunities may not achieve any potential right now. His hope for the community includes brewers promoting the full depth of their lines and working with distributors. He cites Great Lakes Brewing Company as an example. “I’ve asked them what their flagship beverage is,” he elaborates, “and they say, ‘Our fleet is our flagship.’” Locally, Friedland wishes breweries would emphasize variety packs to showcase the wonderful products available.

The trend that many professionals stress about is also apparent to consumers. “Walking into a beer distributor has been getting a little overwhelming,” says longtime Philly Beer Scene reader Frank J. Schlipf. “I have friends that have left a store with nothing because they simply could not make a deci- sion given all the choices.” Still, the plethora of possibilities doesn’t really bother him. No, the tipping point for Schlipf will be when five different brand labels offer the same ex- act taste. That’s the true lack of variety.

The idea of another (or already-present) shakeout in the craft beer community doesn’t limit the excitement about the culture in Philly and beyond. For example, Friedland can’t wait to try the new Dogfish Head/Wells and Young’s collaboration. “Dogfish was one of the first craft brewers to really think outside the box,” he praises. He also loves the saisons available from Tired Hands.

Peters says, “People like Ryan [Sentz] and Giani [Zambiazi] of Funky Buddha expanding their brewery will actually bring new options into our market. Ryan has a special love for Berliner Weisse that I think will change that category for everyone. That is the type of new label that I will proudly support.” He enjoys the idea of more session beers coming to Philly. It reflects his personal preferences and a great bar customer. Peters also looks forward to the next innovation brewer Mike Fava brings to Oxbow in Newcastle, ME.

Enthusiast Schlipf raves about seasonal beer offerings. Summer wheat beers, autumn pumpkin ales, and winter stouts tend to please him the most. He also keeps watch on his local favorites, Weyerbacher and Neshaminy Creek Brewing, “and, of course, Dogfish Head for their latest concoctions.”

Hadian, who samples new beer every day of every week, seeks “the out of the ordinary or extraordinary.” He highlights newcomer Saucony Creek Brewing Co. in Kutztown, PA, which has brewed a banana hefeweizen made with an extract from Chiquita Banan- as that he wants to try. It sounds like an experiment worth tasting.

Despite business recalculations, Gretz can always find excitement in the industry. Be- sides the beverages, the great joy for him is in traveling the country and the world to experience a variety of styles, beers, and heritage. He says, “There is new brewing innovation every day which defies the paradigm of classic brand styles.”

Lucas is thrilled to see whatever comes next. Good products, he believes, are all the Philly area needs to survive. Broillet, from the oft- praised Tired Hands, equates “good” with “fresh.” He believes that more and more op- tions will force everyone to get away from packaged beverages that may sit around for a while. “If consumption goes up,” he says, “fresher beer goes out” for delivery.

There’s a lot of cautious optimism amongst the surveyed beer constituency. These pro- fessionals have achieved their industry sta- tus through hard work and perseverance. Such qualities mean that they have little to fear in a flooding market. Newer brewers, bars, and distributors may not be so fortunate. Only history will be able to determine if the next few years mirror the late ‘90s for Philly’s beer scene. All anyone can do is get on that train and enjoy the ride for as long as possible.

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