I also read the Tribune article yesterday and have to admit that I'm
perplexed
about certain aspects of this story. This "dilemma" that the article talks
about seems to defy conventional wisdom in the marketing of beer for smaller
companies. On one hand, as a brewer, you certainly want to instill a certain
kinship with your hometown (or homestate) customers. At a certain point in
the marketing of beer, however, limiting yourself to one market can kill
you. As I think most brewing industry people would agree, hometown loyalty,
in terms of future
sales, can be a dangerous thing to rely on. What happens when the new XYZ
beer brand gradually becomes the new darling of craft or specialty beer
drinkers in your area of operation? There has to be some market
diversification in order to buffer yourself against local competition and
other
forces that can eat into your home market.
Pete Crowley says he understands the reason behind the move."Your local
crowd of beer drinkers is going to be there a lot longer," the implication
being, I think, that hometown/homestate loyalty will always win out. I don't
necessarily think that's so. If you look back at the history of the brewing
industry in Chicago, securing hometown loyalty was always an elusive
objective. Why do you think the Pavichevich and Dinehart breweries started
shipping out of state? Among other reasons, the Chicago market was too
fickle for them to win over a large enough audience (though I'll admit that
they had enough other problems, too). How do you think Schlitz or Old Style
got into Chicago? Hometown loyalty? There is no such thing as
hometown/homestate loyalty. In my second book, The History of Beer and
Brewing in Chicago, Volume II, Randy Mosher's quoted as saying that "The
'Drink Local' strategy hasn't worked for 150 years...[that] it is arrogant
to assume that local people will support you simply because you're local."
He's right. A brewery needs to plan for this inevitable falling off in local
sales or the possibility that it never will be able to fully exploit its
local market. Without a "Plan B," a new market to exploit, you're going to
have a problem when that day comes along...and it will.
On the other hand, if a brewer is doing a poor job of serving two masters,
better to isolate one for the sake of the other. Seems reasonable. Chicago,
however, is an incredibly hard market to conquer, especially for the little
guys without the deep pockets for mass advertising and promotion. But once
you get in here, you better stay, no matter what the cost. Janet Bischoff of
Glunz says they'll replace New Glarus products with "...Edmund Fitzgerald
Porter and Burning River Pale Ale from Great Lakes Brewing Co. in
Cleveland." Out of sight, out of mind. I'd like to be a fly on the wall
when, and if, New Glarus comes back to Chicago and tries to convince Jack
Glunz to take them back on. As for people going to Wisconsin for New Glarus
beer...I simply ask "How many people and how many times will this happen
before this gets a bit old?"
Rather than pull-out of the Chicagoland area, why not contract the beer out
to someone with some excess capacity? You might not make the kind of money
you're pulling in by brewing the stuff yourself, but you also wouldn't be
abandoning the most lucrative beer market in the Midwest.
Maybe I'm reading more into this article than there really is, but I don't
think we're getting the whole story here.
As for the comment that "Some have likened the brewery and its following to
that of Goose Island in Chicago," somebody let me in on what that's supposed
to mean. I don't see an iota of similarity here.
Bob Skilnik
This might be old news to some but this is from today's Chicago Tribune.
Dave Persenaire
>
> --------------------
> Brewer's success to leave Illinois flat
> --------------------
>
> New Glarus eyes Wisconsin sales
>
> By Robert Gutsche Jr
> Special to the Tribune
>
> December 4, 2002
>
> Illinois beer enthusiasts won't find Spotted Cow, Uff da Bock or any of the
> other dozen beers made by Wisconsin's New Glarus Brewing Co. anywhere in
> the state next year.
>
> The microbrewery, one of the fastest growing in the region, is leaving
> Illinois in February after two years of struggling to fill distributors'
> orders. New Glarus, which has been selling beer in this state for six
> years, has been trying to serve two masters--and not serving either well.
>
> "We are growing as fast as we can, but we can't even meet the demand in
> Wisconsin," said the brewery's founder and president, Deb Carey, who owns
> the brewery with her husband, Dan.
>
> By leaving Illinois, New Glarus will be able to get a tighter grip on the
> Wisconsin market, where it is the eighth-largest brewery, Carey said.
>
> Illinois makes up 10 percent of the company's total sales, with most of the
> business coming from the Chicago area, Rockford and Peoria. About 65
> percent of sales in Illinois come directly from Chicago and its suburbs.
>
> Brian VanZandbergen, beer manager at Sam's Wine and Spirits on Chicago's
> North Side, said his business sells about 25 to 50 cases of New Glarus
> products each month, with the Wisconsin Belgian Red and Spotted Cow being
> the most popular.
>
> Those sales are above average for a microbrewery of its size, he said. "It
> is just good, quality craft beer," VanZandbergen said.The brewery's overall
> sales this year are up an estimated 34 percent, and are projected to jump
> to roughly 40 percent by the end of the year. That's the highest sales
> number the brewery has seen since it opened in 1993 in the small, Swiss
> town of New Glarus, about 30 minutes south of Madison, Wis.
>
> The microbrewery's growth has been steady, and its beer production has
> increased to 10,500 barrels in 2001 from about 9,500 in 2000. This year the
> brewery has produced roughly 13,000 barrels.
>
> Although most companies would envy the microbrewery's growth rate, New
> Glarus is feeling serious growing pains.
>
> New Glarus spent $500,000 this year to open a new bottling line, install
> four new lager tanks and build a 7,000-square-foot warehouse. Even with
> these enhancements, Carey said, the demand is too great.
>
> Crossing the border
>
> Illinois distributors also are feeling the pain, with some going as much as
> two weeks without any New Glarus beer.
>
> Louis Glunz Beer, a distributor in Lincolnwood, has seen its orders
> received from the brewery reduced. Janet Bischoff, financial manager for
> the distributor, said they have received shipments that were cut to less
> than half of what they ordered.
>
> Bischoff said the distributor will fill the void left by the departure of
> New Glarus with other regional beers, such as Edmund Fitzgerald Porter and
> Burning River Pale Ale from Great Lakes Brewing Co. in Cleveland. But she
> anticipates people in Illinois will cross the border into Wisconsin to find
> New Glarus beer.
>
> "They make fine beers that beer people love," said Bischoff.
>
> VanZandbergen said customers will be disappointed when the beer leaves the
> shelves, and he also thinks many will travel across the border.
>
> New Glarus makes mostly German-style lagers but also makes fruit beers,
> such as Raspberry Tart and cherry Wisconsin Belgian Red. Carey said a
> typical New Glarus beer drinker is 28 to 54, educated and well-traveled.
> Some have likened the brewery and its following to that of Goose Island in
> Chicago.
>
> Peter Crowley is president of the Illinois Craft Brewers Guild in Chicago,
> a group of 25 brew pubs and microbreweries that work to promote Illinois
> beer. Crowley says he has seen companies pull out of Illinois because they
> couldn't compete with other breweries, but, said Crowley, "I have never
> heard of a brewery not wanting to sell their beer" in Illinois.
>
> But Crowley does understand the reason behind the move.
>
> "Your local crowd of beer drinkers is going to be there a lot longer," he
> said.
>
> Pulling out of Illinois will improve relations with distributors in and
> around Madison and Milwaukee, the two largest areas that sell New Glarus
> products, says Steve Frank, president of Frank Beer Distributing based in
> Middleton, Wis., which distributes New Glarus beer.
>
> "It's a small brewery," Frank said. "They make really good beer, and they
> are picking up in the state of Wisconsin much more than they are able to
> produce. They have to satisfy their base customers."
>
> Growing in-state demand
>
> Frank said New Glarus beer--especially Spotted Cow, described as an
> unfiltered farmhouse ale--makes up less than 10 percent of his business.
> But demand for the beer is growing significantly in Wisconsin. Leaving
> Illinois was the only option for a company that can't keep up, he said.
>
> Tom Pirko, president of Bevmark LLC, a Santa Barbara, Calif., consultant to
> the food and beverage industry, said that the financial background of a
> business and how big it wants to grow, more than demand and the makeup of a
> specific market, drive success.
>
> Pulling out of a market is unusual for a brewery, he said, but that would
> be a way to keep a strong local customer base versus trying to compete in a
> larger market with more powerful players.
>
> "The premise here is that it's very hard to be a microbrew these days and
> make it," he said. "Unless you stay small, it's not a quality issue, it is
> a planning issue."
>
> Crowley said he sees New Glarus doing well in the Wisconsin market and
> would welcome the brewery back to Illinois when it is stronger and capable
> of producing more beer.
>
> "We hate to see them go, but if they are selling that much beer, good for
> them."
>
>
> Copyright (c) 2002, Chicago Tribune
>
-- Attached file included as plaintext by Ecartis --
From: dave persenaire
--------------------
Brewer's success to leave Illinois flat
--------------------
New Glarus eyes Wisconsin sales
By Robert Gutsche Jr
Special to the Tribune
December 4, 2002
Illinois beer enthusiasts won't find Spotted Cow, Uff da Bock or any of the other dozen beers made by Wisconsin's New Glarus Brewing Co. anywhere in the state next year.
The microbrewery, one of the fastest growing in the region, is leaving Illinois in February after two years of struggling to fill distributors' orders. New Glarus, which has been selling beer in this state for six years, has been trying to serve two masters--and not serving either well.
"We are growing as fast as we can, but we can't even meet the demand in Wisconsin," said the brewery's founder and president, Deb Carey, who owns the brewery with her husband, Dan.
By leaving Illinois, New Glarus will be able to get a tighter grip on the Wisconsin market, where it is the eighth-largest brewery, Carey said.
Illinois makes up 10 percent of the company's total sales, with most of the business coming from the Chicago area, Rockford and Peoria. About 65 percent of sales in Illinois come directly from Chicago and its suburbs.
Brian VanZandbergen, beer manager at Sam's Wine and Spirits on Chicago's North Side, said his business sells about 25 to 50 cases of New Glarus products each month, with the Wisconsin Belgian Red and Spotted Cow being the most popular.
Those sales are above average for a microbrewery of its size, he said. "It is just good, quality craft beer," VanZandbergen said.The brewery's overall sales this year are up an estimated 34 percent, and are projected to jump to roughly 40 percent by the end of the year. That's the highest sales number the brewery has seen since it opened in 1993 in the small, Swiss town of New Glarus, about 30 minutes south of Madison, Wis.
The microbrewery's growth has been steady, and its beer production has increased to 10,500 barrels in 2001 from about 9,500 in 2000. This year the brewery has produced roughly 13,000 barrels.
Although most companies would envy the microbrewery's growth rate, New Glarus is feeling serious growing pains.
New Glarus spent $500,000 this year to open a new bottling line, install four new lager tanks and build a 7,000-square-foot warehouse. Even with these enhancements, Carey said, the demand is too great.
Crossing the border
Illinois distributors also are feeling the pain, with some going as much as two weeks without any New Glarus beer.
Louis Glunz Beer, a distributor in Lincolnwood, has seen its orders received from the brewery reduced. Janet Bischoff, financial manager for the distributor, said they have received shipments that were cut to less than half of what they ordered.
Bischoff said the distributor will fill the void left by the departure of New Glarus with other regional beers, such as Edmund Fitzgerald Porter and Burning River Pale Ale from Great Lakes Brewing Co. in Cleveland. But she anticipates people in Illinois will cross the border into Wisconsin to find New Glarus beer.
"They make fine beers that beer people love," said Bischoff.
VanZandbergen said customers will be disappointed when the beer leaves the shelves, and he also thinks many will travel across the border.
New Glarus makes mostly German-style lagers but also makes fruit beers, such as Raspberry Tart and cherry Wisconsin Belgian Red. Carey said a typical New Glarus beer drinker is 28 to 54, educated and well-traveled. Some have likened the brewery and its following to that of Goose Island in Chicago.
Peter Crowley is president of the Illinois Craft Brewers Guild in Chicago, a group of 25 brew pubs and microbreweries that work to promote Illinois beer. Crowley says he has seen companies pull out of Illinois because they couldn't compete with other breweries, but, said Crowley, "I have never heard of a brewery not wanting to sell their beer" in Illinois.
But Crowley does understand the reason behind the move.
"Your local crowd of beer drinkers is going to be there a lot longer," he said.
Pulling out of Illinois will improve relations with distributors in and around Madison and Milwaukee, the two largest areas that sell New Glarus products, says Steve Frank, president of Frank Beer Distributing based in Middleton, Wis., which distributes New Glarus beer.
"It's a small brewery," Frank said. "They make really good beer, and they are picking up in the state of Wisconsin much more than they are able to produce. They have to satisfy their base customers."
Growing in-state demand
Frank said New Glarus beer--especially Spotted Cow, described as an unfiltered farmhouse ale--makes up less than 10 percent of his business. But demand for the beer is growing significantly in Wisconsin. Leaving Illinois was the only option for a company that can't keep up, he said.
Tom Pirko, president of Bevmark LLC, a Santa Barbara, Calif., consultant to the food and beverage industry, said that the financial background of a business and how big it wants to grow, more than demand and the makeup of a specific market, drive success.
Pulling out of a market is unusual for a brewery, he said, but that would be a way to keep a strong local customer base versus trying to compete in a larger market with more powerful players.
"The premise here is that it's very hard to be a microbrew these days and make it," he said. "Unless you stay small, it's not a quality issue, it is a planning issue."
Crowley said he sees New Glarus doing well in the Wisconsin market and would welcome the brewery back to Illinois when it is stronger and capable of producing more beer.
"We hate to see them go, but if they are selling that much beer, good for them."
Copyright (c) 2002, Chicago Tribune
--------------------
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Hey,
Was good to see a nice turnout for the release the day after Thanksgiving, hope you had fun!
This Wednesday December 4, we have another release from 5-6pm. Come in and try our Dusseldorf Altbier for just $1 per pint. This German style ale is light copper color, full of malt with a hop presence in the nose and a slightly dry finish.
Cheers,Mike
Ladies and Gentlemen, Boys and Girls, Only 11 days remain until the
premium beer event of 2002.
The MHBA annual Christmas extravaganza party is scheduled for December
13, 2002. This party is a celebration of home brewing and cooking and
marks the end of the 2002 brewing season. Well almost the end.
The event is free to all full fledged members and guests of the MHBA.
Are your dues current? The event occurs in the evening at the CSPS
hall. You know where it is. They have a wonderful new kitchen and
hopefully we can again brew beer at their facility.
What can I do to attend and what should I bring? Well actually, a
bushel basket of cash is always appreciated but the only thing you can
buy with cash is votes! You bring a famous food dish and recipe or a
famous beer, or dessert. With a recipe, you can enter the food contest
and have a chance of winning a wonderful prize. OK maybe not a
wonderful prize but some really nifty things like mugs and beer tools
and yeast and barley. The kind of stuff that brewers use.
What is in it for me? Another very interesting question. One or more
lucky members may be chosen for status elevation to the office of Vice
President or President. Yes, just think - you too could brag to your
mother, tell your uncle, or entice your wife. The requirements are not
great - you make beer, go to meetings, get to camp in great places, and
have a beer. No salary but the benefits only cost ten bucks a year.
And you didn't think a ten spot would get you anything?
Last item is the beer exchange. The more beers you bring, the more
beers you get. What you do is place your beers on stage or a table for
the exchange. Each beer nets you a ticket. When the ticket number is
called, you go up and pick up a beer! What could be easier than that?
I guess we could bring along a counter pressure bottling system but not
this December.
So there you have it beer fans. Let's review:
Friday, Dec 13,
6:00pm (18:00)
CSPS
Beer, food, display, labels, and don't forget the beer exchange.
Bring extension cords, hot plate, crock pots, napkins, towels, and
smiles.
Best till then.
Rick O
Wanted: Used glass carboy.
For Sale: Kegging equipment. 3 5-gal. soda kegs, 1 10 lb. CO2
cylinder (empty), regulator, dispensing hoses. Price TBD.
Contact Terry, 612-869-2921 or at this email address.
__________________________________________________
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