Business

<< Previous   of   Next >> Associated Press  (click to enlarge) Don Younger, owner of the Horse Brass Pub, serves up a pint of a Framboise, a raspberry-wheat beer, in Portland, Ore. Sales of premium beers, such as Budweiser, Miller and Coors Light, have been flat, but craft beers are the fastest-growing segment of the $8.6 billion beer industry.   ADVERTISEMENT   Related Stories • Not as pretty as it sounds 7/26/08   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Saturday, July 26, 2008 Craft beer brewers are grabbing more market share Associated Press BEND, Ore. -- Tucked in a corner at the Deschutes Brewery, barrels that once aged fine wines and whiskeys are nurturing beverages that are challenging drinkers to think of beer more like wine. High-alcohol brews such as Black Butte XX and The Abyss, known in the trade as big or extreme beers, are among many craft beers grabbing a growing market share in the United States from their mass-produced and heavily-advertised counterparts. Even at prices ranging from $4 to more than $100 for a single bottle. "We are looking for what we like to term that 'Wow Factor,'" said Deschutes Chief Executive Gary Fish. "We want somebody to take a drink, stop, look at the glass and say, 'What was that?'" Sales of premium beers, which include the household names of Budweiser, Coors Light and Miller High Life, have been nearly flat -- up just 1.9 percent last year, according to Information Resources Inc., a retail research firm. As consumer tastes change and rising costs for ingredients pinch their profits, the nation's biggest brewers are looking for relief in consolidation. No. 1 Anheuser-Busch is being taken over by Belgian beverage giant InBev SA. No. 2 Miller Brewing Co., and No. 3 Molson Coors Brewing Co. are combining U.S. operations. Meanwhile, craft brewers are grabbing more of the market as they reshape the image of beer. They posted 17.1 percent growth last year from 2006 and accounted for 6.5 percent of the $9 billion in supermarket sales of beer in the U.S., up from 4.5 percent in 2003. Many in the craft beer industry expect their products to continue tugging at "premium" beers' share of a market valued at $95 billion, including sales in bars and restaurants. "It is not a fad," said Julia Herz, director of craft beer marketing for the Brewers Association, a Denver-based trade group that represents more than 1,000 of the 1,400 craft breweries in the nation. "It's a solid direction the market is going." It is uncertain how fast craft beers will continue to grow, but Herz said the indicators are good. After a shakeout in the mid-1990s, the nation's remaining 1,400 craft brewers have a stronger hold on shelf space and restaurant menus. Anheuser-Busch and Coors are making their own line of full-flavored beers. And the Brewers Association's book "Start Your Own Brewery" has sold more than 1,000 copies. "A brewery in every town is not so crazy to think about in the future," she said. "It all goes back to the movement of consuming products that are locally produced. "Who would have ever thought that Denver, Colo., would become the Napa Valley of beer?" she said. More than 60 breweries lie within in a 100-mile radius of Denver. Their small size gives craft brewers the freedom to explore the outer limits of beer, and they are being rewarded by consumers who value good flavor, said Sam Calagione, founder of Dogfish Head Brewery in Milton, Del. "This hasn't happened because of some half-billion dollar advertising campaign on behalf of the big brewers," he said. "It's truly the consumer becoming self-educated. "It's a kind of a blue-collar connoisseurship. Anybody can afford to buy the world's best beers. But if you wanted to buy a bottle of the world's best wine, you'd have to spend thousands of dollars." Growing out of homebrewers' efforts to emulate British and German beers, craft beers started showing up about 30 years ago, and bigger varieties bubbled up in the mid-1990s on both coasts as brewmasters chased their fantasies to the outer limits. That's when Vinnie Cilurzo, a former wine maker, made his first double India pale ale at the bygone Blind Pig Brewery in California. It's when Rogue Ales in Oregon packed extra hops into its Imperial Stout, Calagione opened Dogfish Head and Boston Beer Co. founder Jim Koch started brewing Samuel Adams Triple Bock, which evolved into Utopias. The market's strongest beer at 27 percent alcohol, Utopias is also its most expensive, at $140 for a 24-ounce bottle. "They are not lawnmower beers," cautioned Don Younger, owner of the Horse Brass Pub in Portland, who has been a close observer of the craft beer scene from its beginnings. "Your average run-of-the-mill lager will in most states come in around 3.8 or 4 percent alcohol. These have got something like 10 or 11 percent, so you are getting two and a half times the alcohol delivery with them. "You've got to be careful with them. But they are self-limiting. They are very rich. It would be like trying to drink a quart of whipping cream. Your body will reject it because they are so rich." The wine-level prices may limit their mass appeal, but plenty of people are still interested, brewers say. "I sell beer for $15 a bottle and I can't make enough of it," said Natalie Cilurzo, who co-owns Russian River Brewing Co. in Santa Rosa, Calif., with her husband, Vinnie. Unlike wine, which is just grapes, beer is generally made from three or four ingredients. Malted barley delivers the body, yeast ferments with the sugar in the barley to make the alcohol and hops deliver the bitterness. Some are flavored with offbeat ingredients, such as coffee, chocolate, spices and fruit. Wooden barrels that formerly held wine or whisky can add nuance and structure. At Elegance, a wine and antiques shop in Grants Pass, owner Carl Raskin recently bowed to entreaties from local beer distributors to add high-end beers. He found them a refreshing change from wine, which, besides being pricier, seems more serious. "To me, beer is just fun," he said. "Drink it. Enjoy it." Lynn and Rich Hughes, a local retired couple still primarily interested in wine, have attended the tastings to explore beers, which they became interested in after their daughter worked at a brew pub. "It is amazing how many varieties you have, tastewise," said Rich Hughes. "You can find whatever you want, that's for sure."

1. Lawsuit blames county and weed inspector in man’s death 2. Cost of dispute falls on Monroe 3. Salish Sea: Huge body of water now has common name 4. Mind if I smoke? 5. Boeing says 787 fixes are done 6. Worker dies after falling 4 stories from Lynnwood building 7. FOOTBALL FORECAST: Battle of unbeatens highlights first week of state-playoff action 8. Granite Falls-area fire chief placed on paid leave 9. Everett dentist travels world to help 10. Benefit to help injured soldier, his family 2 - Top 10 Stories Most Talked about 3 - Top 10 Stories Most Emailed

• Memorial for Peggy Pritchard Olson set • Bazaar Fever • Hawks proud of historic season • Olson always put Edmonds first • Honoring student veterans • ‘Wheedle' author comes to Lynnwood bookshop • Mavs build early lead en route to easy win • Prep football games of the week (state playoffs) • Tears of laughter, tears of grief • Boeing will build, flight test and deliver 787s in South Carolina to spe ... • Snohomish County EDC promoting job growth in key industry clusters • $4 million grant to advance brain tumor research has Everett links • Providence medical center construction tops off its 12-story steel frame ... • Tulalip affordable housing project to be financed by KeyBank, Raymond Ja ... • Arlington's Lak of Ink has a growing following for Luke Kooyman's creati ... • Bank of the Northwest formed • Cascade Bank earns $1.6 million