Beer Photo of the Day

Maybe instead of "chocolate" labradors they should call them "stout" labs?

Samuel Adams Moving Up in the Brewing World

Via Lew Bryson, Samuel Adams recently brewed its first batch at its new Pennsylvania production facility, getting the Boston Beer Company "out of the contract brewing business and [putting] them in control of their destiny."

According to Mr Bryson, the new facility is "built for the tours a company like Sam Adams would love to do" - I can't wait to take one myself. Congratulations, Mr Koch!

Gimmick of the Day

Whose bright idea was this Budweiser telephone, yours for just $16.99? Maxwell Smart, eat your heart out.

Price Increases Brewing for Craft Beer

Beer drinkers are already feeling the effects of the surge in commodities prices, as increased ingredient prices for brewers trickle down to the consumer, according to a Wall Street Journal report from late last year:

Consumers could pay 50 cents to $1 per six pack more in the coming months for many small-batch "craft beers," as brewers pass on rising hops and barley costs from an unpalatable brew of poor harvests, the weak dollar and farmers' shift to more profitable crops. Other makers of craft beers, the fastest-growing segment of the U.S. brewing industry, say they may eat the higher ingredient costs, which will pare their profits.

According to the report, "cost pressures could slow the expansion of American craft brewers," who will be hardest hit for several reasons:

Craft-beer makers also are battling other cost increases, including higher prices for glass, cardboard, gasoline and the stainless steel used to make beer kegs. "People are very concerned," says Kim Jordan, co-founder of Colorado's New Belgium Brewing Co., which makes Fat Tire Amber Ale, a top-selling craft beer. "It significantly affects profitability..."

Big American brewers like Anheuser-Busch Cos. and SABMiller PLC's Miller Brewing Co. also face cost increases, but the impact isn't nearly as great for them. They use much less hops and barley in most of their beers, which is why they are lighter in taste and calories. A barrel of craft brew Sierra Nevada Pale Ale, for example, has about twice the malt and as many as five times the hops of a mass-market brew, like Budweiser or Miller High Life.

Large beer makers are also better able to secure long-term contracts to mitigate the impact of rising ingredient costs.

Brewers including are scrambling to adjust recipes to keep costs down, but what lessons should be learned for the next time? Small craft brewers have not been locking in their hops prices in advance on the futures market and lack the clout to negotiate for much lower prices. If there were hops futures options available, could small brewers hedge with an options position? It would certainly be worth it, if it prevented styles from going extinct due to increased ingredient costs. How should small brewers prepare for the next spike in commodities prices?

Thanks to Howard for the news tip.

Beer Photo of the Day

London's Canary Wharf, through a glass, in today's beer photo.

Review: Dark Star Sunburst

Dark Star Sunburst from Dark Star Brewing Company Limited
Rating: B

Appearance: Out of a cask, appears bright and light. Aptly named, it looks quite "sunny" in the glass. Smallish head, and poor retention, but decent lacing.

Smell: Refreshing hop aroma, but fades quickly and is thereafter replaced by a (somewhat boring) light honey note, which I often associate with bitters.

Taste: Fresh hops, nice, slightly sweet, solidly bitter backbone. Honey and citrus notes.

Mouthfeel: Light-medium body, good carbonation for style

Drinkability: Nice and sessionable. Another good brew from Dark Star.

Schlitz Restoring 1960s Recipe

While Bud may be leaving St Louis, Schlitz may be returning "home" to Milwaukee in a slightly different way, restoring its 1960s recipe:

Schlitz Park may be the last hometown presence for the "Beer That Made Milwaukee Famous," but Schlitz beer is now coming home, in a sense, with what it calls its "Classic 1960s Formula..."

Based on the original formula concocted by August Krug in 1849, the beer will be available in the classic brown glass long-neck bottles that Schlitz introduced in 1912 to prevent light from spoiling the beer. Even the old labels are back.

Unfortunately, there doesn't seem to be any indication of how the recipe differs from the one currently in use.

Beer Photo of the Day

Some "fireworks" make for an appropriate beer photo of the (Independence) day.

In Search of the Perfect Independence Day Beer

In searching for the perfect Independence Day beer, I made a list of criteria it should fulfill. Such a beer should:

• be from one of the original thirteen colonies
• have some tie to the Mother Country
• belong to a quintessentially American style
• scream citrusy American hops to the rooftops
  
• be bold, brash, delicious and sessionable
  

In fulfilment of these criteria, I submit for your approval Smuttynose "Finest Kind" IPA. It even has a photo of some old codgers in blue jeans and a trucker hat sitting on their lawns. It is puckeringly bitter and full of delicious, grapefruity hops. The American IPA is undeniably a uniquely American style, based on an English original, and it's from New Hampshire! Live free of bad beer, or die!

Any other nominations? What other criteria should the Perfect Independence Day Beer fulfill?

How Taxes Work, a Beer Parable

An oldie but a goodie: this beer parable on taxes was passed on to me, and I had might as well pass it on in honor of Independence Day:

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this: The first four men (the poorest) would pay nothing.

The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20." Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so:

The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings. "I only got a dollar out of the $20," declared the sixth man. He pointed to the tenth man," but he got $10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I!" "That's true!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!" "Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!" The nine men surrounded the tenth and beat him up. The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill! And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

As Professor Mankiw points out, it is not clear who penned the parable, but its continuing circulation is a testament to its quality.