Market Saturation

I've been thinking a lot recently about the astonishingly fast growth of the craft beer industry over the last decade, especially after coming across this article from last year's Draft Magazine. Whether the growth is sustainable into the future is anyone's guess (and a topic I'd like to explore in more detail soon), but today I'll focus on a wrinkle in that picture - market saturation.

Now, I'll preface this with a standard disclaimer: I'm not a businessman and don't have any formal business education. I'm simply an interested layperson who likes the big picture and not the wonky details.

Market saturation describes a situation wherein a product or service has become so diffused through a population that further growth is possible only through increased population or taking market share away from a competitor.

Are we experiencing market saturation in craft beer?

First, let's get some statistics to work with. Oregon Craft Beer, run by the Oregon Brewers' Guild, has some good basic information on breweries and the state. Now we have to decide how to practically measure brewery saturation. I think people per brewery is a reasonable place to start. According to recent census data, Eugene's got a population of around of around 160,000. This excludes Springfield and the outlying towns, but let's continue. OCB says there're 12 breweries in Eugene, giving us about 13,333 people per brewery (herein abbreviated PPB).

Now let's compare that with Bend and Portland, two cities both often said to be highly brewery-saturated. Bend's PPB, using the same data, comes out to about 3,809. Portland's, using just the city proper, is around 10,700. Bend should therefore be the benchmark for our discussion, being three times as brewery-dense as Portland.

Has Bend become saturated? I can't find any evidence - I looked for peaking/declining sales and brewery closures. By contrast, new breweries are continuing to open, and sales across the city (and state) continue to rise.

Tuesday, I'll look further into the topic and the related idea of sustainability.

Blind Tasting Results

Saturday was my long-awaited blind IPA tasting. Here's how it happened.

15 Oregon IPAs were procured. I chose to stick with Oregon beer to keep things stylistically similar.

I had about 10 folks attending, some of which hadn't really tasted beer critically in the past, and I was glad for the opportunity to preach the craft gospel.

The beers we served were as follows:

Oakshire Watershed IPA
Ninkasi Total Domination IPA
Hop Valley Alphadelic IPA
10 Barrel IPA
Rogue Brutal IPA
Breakside IPA
Burnside IPA
Flat Tail Rough Cut IPA
Mazama Hop Eruption IPA
Wild Ride Copperhead IPA
Laurelwood Workhorse IPA
McKenzie Twisted Meniscus IPA
Deschutes Inversion IPA
Hopworks IPA
Caldera Hop Hash IPA

The hosts and I devised a plan: flights of 4 samples each, picked and poured randomly by a tireless volunteer. At the end of each flight, after evaluating the beers, we were told which breweries were in the flight, and guessed which beer matched up with the tasting notes we'd written.

My tasting notes are quite revealing. I ranked each beer within its flight, best to worst.
So, my top beers from each flight: Hopworks, Rogue, Laurelwood, Burnside.
My bottom 4: Wild Ride, Breakside, Flat Tail, Deschutes.

Laurelwood being on the top doesn't surprise me; it's a wonderful IPA and I remember it tasting very hoppy even amidst all the other bitterness. Likewise Hopworks, I've enjoyed their IPA many times in the past. Burnside is surprising. I've been to their brewpub a few times, and my tasting notes from then don't seem to indicate their IPA as being especially good. Maybe my palate has changed or their recipe's improved. Rogue was also interesting to see on here; I don't visit them very often, but maybe I should be keeping closer tabs on their production.

The bottom 4 were also interesting to see. Wild Ride was a gamble; no one at the tasting had tried their IPA before, and it turned out to be lackluster. Breakside's surprising; I recall quite liking their IPA when I visited them a couple years ago. Flat Tail's in line with what I remember trying previously, and Deschutes is more of a malty, East-coast style IPA.

Here are a few things I learned for the next event:

- 15 beers is way too many to be able to meaningfully and critically evaluate. Palate fatigue was a real problem after the first couple flights. 8 would have been much easier.

- 15 beers also take a long time to taste through, when you're pouring flights for 10 people at once. It was nearly 3 hours, start to finish, moving at a fairly decent clip.

- Once you sample a few hoppy beers in a row, a lot of the hoppiness and bitterness get muted due to palate fatigue. This has the interesting and unexpected side effect of allowing the malting to really shine through, and also illustrates relative hoppiness - a couple of the IPAs tasted hoppy/bitter even after trying many of the others.

- There needs to be plentiful foods available to help freshen the palate and slow down alcohol processing. Insightful critical evaluation of beer is really hard when you're buzzed.

Overall, I was very pleased with the results. I'm hoping to put together more such tastings in the future, either centered around styles or geography. If y'all haven't been to a blind tasting before, I highly recommend it!

Growler Fill Stations

I'm about to get my weekend started, but wanted to offer some quick thoughts on a recent phenomenon that's been very surprising to see.

I'm referring to the recent explosion of growler fill stations and bars in Eugene. A quick search turns up more than half a dozen dedicated growler-filling establishments - among them Growler Guys, Growler Nation, Steel Pail, Growler University, and The Filling Station. I've also heard of some local markets, restaurants, and gas stations getting in on this concept. Doubtless there are even more planned in the coming year or two.

What's remarkable about this to me is that all of the growler-filling establishments have opened in the last year - Growler Nation was the first, in late June 2013. I've had the chance to visit most of these locations, and they're all busy and popular. So now I'm wondering why.

Let's face it - growlers are a cumbersome, awkward way to get beer. It's true that they reduce packaging and allow customers to get fresh beer that's not available in cans or bottles. They're also a good deal compared to drinking draft pints - most places have fills of great beer for $10 or less. But there's a lot of drawbacks, too. They're not airtight, for the most part, and once opened, they oxidize and go flat within a day or two, necessitating quick drinking for optimal flavor. They also require substantial cleaning between fills - not an easy feat, considering the small neck. And for home drinking, they're still not a great deal compared to most prepackaged beer.

But clearly there's something a lot of people really like about the idea of taking half-gallons of beer to go. Though the growler idea doesn't greatly appeal to me, these establishments are also providing an excellent side benefit - the continued expansion of Eugene's available draft beer, wine, and cider. Most of these places have more than 20 taps, so it's a fair bet that between all of them and our great beer bars, there's something on tap in town for just about anyone's taste.

I'm just not sure if growlers are a solid basis for a business model. I certainly don't wish failure on any fill station - the folks behind them are good people who work hard. But I wouldn't be surprised if one or more of these guys go under in the next year or two, because these places are designed to primarily fill growlers. There's not much seating or food to speak of, and so it'd never occur to me to stop in for a pint unless there was something absolutely stunning on tap.

I think Tap & Growler is doing it the best way. By having tons of wine on tap, a pleasant ambiance, lots of seating, and decent food on offer, they've established themselves as more than just a fill station for beer. And even if the growler trend cools off significantly, they'll be in a good position to soldier on as a bar.

Virtues of Blind Tasting

This weekend, I'm planning a blind IPA tasting with some friends. I'll write more about the specifics after the fact, but I wanted to dig into why I find blind beer tasting such a tantalizing prospect.

For me, I suppose, the strongest draw is the ability to separate brand from the experience, albeit temporarily. I often wonder how much a beer's brand influences my perception of it - I know, for instance, that a beer from Hopworks or Santiam is going to be pretty good on average, and I'm less enthused at the prospect of a new beer from Falling Sky or Steelhead. But critically, I'm not sure I could reliably tell them apart without foreknowledge of what I was drinking. I suspect much of my thinking about a brewery is staked on those expectations.

The last blind tasting I participated in was several years ago, at the old Bier Stein, where they had 6 local IPAs on tap, with prizes on offer for anyone who could correctly identify all the beers. To my great shame, I got every single one wrong - and I'd probably had a pint of each within the month of the tasting. My pride was somewhat assuaged when I learned that no one had managed to identify all six beers - out of probably a couple hundred participants.

For this tasting, I chose Oregon IPAs - mostly for the fact that pretty much every major brewery in Oregon makes at least one. Instinctively, I know the ones I'm selecting are all quite different in their hop profile, malting, bitterness, and booziness, but we'll see whether that's still the case after the fact.

Eugene's Missing Beer

Eugene's been blessed with a lot of very good breweries, and more seem to appear every year. But there's something I've been thinking about a lot, recently. What sort of beer is Eugene missing?

At first glance, not much. We've got our resident West-coast super-hoppy brewery in Ninkasi. There's Viking, our braggot producer. McKenzie's our 90s throwback. Falling Sky, Hop Valley, and Oakshire experiment endlessly. Plank Town's got British-style beers dialed in. Agrarian makes good farmhouse ales, Rogue/Tracktown and McMenamins are the elder statesmen. Brewers Union, out in Oakridge, makes great British real ale. And the up-and-comers - Claim 52, Sam Bond's, Mancave, Elk Horn, and Hughes Brothers are all trying to get off the ground and differentiate themselves.

Even with this wealth of beer, there's still some things I wish Eugene had. In no particular order:

- A brewery that focuses on Belgian-style beers, hopefully including sours, lambics, and barrel-aged ales. No brewery I'm aware of in town produces any beers like this, except as occasional one-offs.

- A brewery with a strong focus on German-style beer. Ninkasi's Prismatic Lager series is the closest thing we've got at the moment. Not to knock Ninkasi - the lagers are pretty good - but it would be lovely to see a brewery really step up and focus on German beer, as Occidental does in Portland, for instance.

- A great brewpub. Eugene's got Falling Sky, McMenamins, and Steelhead, but their beer has been pretty lackluster, and the food's hit-or-miss. Brewers Union does a good job on both counts, but they're an hour away from town. It would be lovely to go somewhere local not just for the beer or the food, but both.

- A boldly experimental brewery, eager to try making beer with extreme adjuncts. Some breweries here make single beers like this, but infrequently at best. I kind of have a weakness for crazy beer, so I'm not sure how many others this'd appeal to.

I'm predicting that most of these niches will be filled in the coming year or two. It's easily conceivable that Eugene/Springfield could have 20+ breweries in the near future. But these are the recommendations I'd make to brewers thinking of starting a new brewery right now.

Breweries of Salem: Gilgamesh

As part of my trip to Salem a couple of weeks ago, I had the opportunity to visit Gilgamesh's beautiful new brewing campus (as they term it) and checked out their brewpub. The last time I'd been to Salem, they had recently opened their downtown lounge location, which was mediocre at best (though the beer then was quite good).

The new digs are visually pleasing - lots of light wood, high ceilings, a large patio with plenty of outdoor seating, plenty of big bay windows, and a fireplace built to resemble their arrow logo. It's obvious that the owners put a lot of thought into designing the place.

Given that it was afternoon on a weekday, service was prompt. I think we were the only ones there at the time we arrived.

The bar has a huge mirror behind it, and the taplist was written on the mirror, making it very hard to read from a distance. A minor quibble, but annoying nonetheless.

Flights are $6 for 6 4oz samples. I opted for a 7th, to be able to try all the single-batch beers they had on offer.

Here are my tasting notes:

Mega Mamba - An imperial version of their hopless beer. Boozy and spicy, with pronounced mango.

Blueberry Sour - Acidic, sour, with good blueberry flavor and a cereal malt finish.

Fun Guy Bock - Apparently made with mushrooms. Woody and maple-like.

O'Doyle Rules - A very forgettable and average amber.

Oedipus IPA - Harsh, vegetative hops.

Chai Oatmeal Stout - Tea and spices dominate, a creamy, milk-like finish.

Bandit Porter - Smoke, vinegary sourness, some roast.

Gilgamesh makes beers that are interesting. Following up on my last post, generally they go for Point 3 beers - adding ingredients without really seeming to build beers around them, which is necessary, especially if you're working with very potent adjuncts like tea and blueberries. I enjoyed the Mamba and the sour, but the rest all suffered from mistakes a little bit more experimentation and planning would have fixed.

I'm always up for trying more of Gilgamesh's beer, if only because I know that whatever they're offering, it won't be boring. If their consistency and quality tick up a little bit, they'll be in very good shape.

Extreme Adjuncts

Recently, a friend in Texas pointed out to me that some breweries in his area are starting to experiment widely and wildly with their beers - aging them in barrels, adding peppers, spices, and other oddities.

Upon hearing this, my thinking is twofold. Is this a trend that has long-term national viability?

And perhaps more importantly: what drives brewers to add strange things to beer?

I think the answers to these questions are related.

It's pretty clear by this point, at least to someone living in the Pacific Northwest, that certain adjuncts have become so frequently used as to be considered standard. Here I'm thinking of stouts in particular - it's common to find coffee, chocolate, cacao, oatmeal, and vanilla added to these beers at various points. By contrast, there are plenty of adjuncts used that tend to define a beer - strong spices, peppers, animal parts, intense fruits, and others. So here's my general term for these non-standard, often eye-catching ingredients in beer: extreme adjuncts.

Back to the questions. Broadly speaking, it can sometimes be hard to discern a brewer's intent on producing a specific beer, but for the sake of understanding, I'll divide the reasoning behind the use of extreme adjuncts into three categories:

1. The desire to tweak or riff on an existing recipe.

2. The desire to make a better beer than would otherwise be possible.

3. The sheer novelty.

Point 1 is deeply embedded in brewing philosophy: iteration begets quality. Small changes in the ingredients and brewing environment can create very different beers. And once you're working with a solid, easily-reproduced recipe, you can begin to tweak it to attempt to improve it further. It's easy to see how 'Hey, let's use a little less of this bittering hop and a little more to dry hop' can progress to 'And hey, we've got these fresh spruce tips, let's throw some of those in, too'.

When using non-traditional adjuncts, it can be very difficult to determine the appropriate amount to add to create the desired effect, or even if the selected adjunct will do what the brewer expects. As a result, beers created under point 1 will tend to taste like inferior versions of their base beer, with occasional exceptions. A great local example is Oakshire's Goatshed IPA, made using Wandering Goat coffee - it's got all the hopping of the base beer Watershed, but the coffee is also prominent, and the piney and citrusy hops mesh well with the rich, sweet coffee.

Point 2 is, I believe, the most important development of the three, and reflects a maturing beer market. Brewers who make beers using Point 2's philosophy understand that while beer is often just barley, hops, yeast, and water, these ingredients are not what defines beer. There are far fewer Point 2 beers, because deconstructing a beer recipe, rebuilding it around an extreme ingredient, and coming up with something great on the other end is a challenging feat. A great local example of this type of thinking is Allies Win The War, a collaboration between Ninkasi and 21st Amendment. It's a strong ale made with dates where the date sweetness is the backbone of the beer.

And.. Point 3. This is beer made for the hell of it. It's rarely balanced, and often a trainwreck, but sometimes it's that kinda trainwreck where you can't help but stare. At best, you get something like Wynkoop's Rocky Mountain Oyster Stout - a foreign-style stout made with roasted bull testicles which is actually quite excellent. At worst, it's something like Rogue's Voodoo Bacon Maple beer - which does indeed taste like smoke, salt, and maple sugar. Or from Deschutes, The Stoic - a Belgian-style quad that's a blend of several different types of barrel-aged beer, and which reminded me, not-so-fondly, of the fountain 'suicide drink' made of a little bit of every type of fountain soda available at a restaurant.

Getting back to my initial question - will extreme adjuncts be a viable long-term trend in the industry? I think we'll just have to wait and see. However, I'm willing to go on the record saying that Point 1 and Point 3 beers will come and go, but there will always be plenty of room in the market for excellent Point 2-inspired craft beer.