Photo by kynan tait

Mild nausea isn’t a feeling I expect while discussing the habits of some of the world’s top brewers, but it does occur on some rare occasion. The last instance I can recollect was upon learning that Brooklyn Brewery was adopting a process known as “fat-washing” to create a bacon flavored beer. The fat-washing process includes soaking heated bacon fat in beer before it congeals at which point it’s removed while the flavor and only the bacon flavor supposedly remains.  We wrote about it on Trappist Punks a while back. LINK

Well last night it happened again, and this time caused by one of my favorite brewers, Rouge… Rogue is in the process of trying to find new wild yeast strains from their hop yards to create new truly local beers, a very honorable effort.  While they’ve succeeded in uncovering a new strain it wasn’t from their hop yards. Here’s two quotes that sum up the discovery process quite nicely, “In cooperation with White Labs, samples were collected from Rogue’s hopyard and sent to White Labs for culture and testing.” OK quite normal, but then, “As a joke, nine beard follicles were carefully cut from the beard of Rogue Brewmaster John Maier. The follicles were placed in a petri dish and sent in for testing.”

By now you’ve probably figured it out, the samples from the hop yard, all negative, the sample from John’s beard, which he has been growing since 1978, positive.  The result, “The beard yeast is currently being used in test brews to determine the perfect style & yeast combination. The beard beer, New Crustacean, will be released in early 2013.”  Possibly more disturbing than my original bilious reaction is that I still wanted to try Brooklyn’s bacon beer, and now I look forward to tasting a brew from the yeast discovered sitting in John’s 34 year old beard…  Luckily Rogue is available here in Hong Kong thanks to HopLeaf.  The article: Beard Beer

*I spent about 15 minutes trying to figure out if Guinness really built a submersible pub to celebrate its 250 year anniversary, or if this is some sort of strange internet marketing prank, so far it seems legit. In any case you can judge for yourself here is one of the articles from Arch Daily. It is being billed as a “Deep-Sea Bar”, photos are included, there may even be a video.  According to The Drink Nation, ”The steel-shell sub is stationed in the Baltic at Stockholm, and has already made its maiden voyage.”  Go figure.

*Beer may help lay in-roads for trade between India and Pakistan. According to an article on the NY Daily News website, less than 2% of Pakistan’s trade was with India in 2009, but thanks to a Pakistani beer now becoming available India this figure may soon grow. Apparently Pakistani beer, which does exist, hasn’t been sold in India since the countries where partitioned in 1947.  The article goes on to discuss how this trade may also improve ties between the nations given their sometimes volatile relationship, but I think for the brewer it should do wonders for demand.  Take this point from the article, ”In Pakistan, people ordering beer via room service in smart hotels have to sign a form declaring it is “for medicinal use only”. Officially, only Christian and Hindu Pakistanis (about 3% of the population) are legally allowed to drink.”  While I haven’t tried this Pakistani beer, Kingfisher hasn’t set the bar too high leaving the Indian market ripe for the taking.

*A beer crime may have been committed at this year’s Preakness–I don’t mean the reported thirty minute waits to top up the $20 refillable beer mugs–apparently the mugs were being filled with Budweiser: Baltimore Sun

*Speaking of crime and beer, Darrin Annussek, a protester who apparently walked to Chicago from Philadelphia to take part in a NATO summit protest, was arrested this week.  During the raid the home brewing equipment of the out-of-towner’s host was confiscated by police, seemingly being confused for a Molotov cocktail workshop.  According to Kris Hermes, of the National Lawyers Guild, “There is absolutely no evidence of molotov cocktails or any other criminal activity going on at this building.” (Home brewers beware.) CBS Chicago (NBC Chicago also had coverage with a great headline “Beer Not Bombs”)

*Twelve upping Darrin’s walk to Chicago, 12 beer fanatics in the U.K. have undertaken a 16,337 pubs 28-year pub crawl, and I can’t imagine they’re done.  The best quote for the article comes from one of the fanatic’s girlfriends, “When I started my relationship with Kelvin, it was clear from the start that beer was part of the package.”  Mirror

* In a story from Africa, a beer shortage received first billing in a set of calamities striking Harare, Zimbabwe beating out electrical blackouts and water stoppages. Well ahead of any quotes or mentions of the importance of electricity or water conservation was this, “What we are getting erratically are quarts and cans. Pints, which many drinkers prefer, are not available.”  The word disastrous was also applied, to the beer situation.   The Herald

* Finally an item from Taiwan has me ready to book a ticket across the Strait.  Apparently until around 2002 the Taiwanese government had a monopoly on alcohol production, which they had to give up in order to join the WTO; creating the genesis of the country’s micro-brewery movement. Today, while the the old state owned company combined with imports make-up 99% of the beer market, craft brewers like Quentin Yeh should soon change that statistic.  A quote from Quentin, “Our craft beer, unlike its filtered and pasteurized cousin that comes in cans, preserves the distinctive taste of yeast with a fresh finish,”     Taiwan Today

I hope you enjoyed the headlines.

Yesterday, while engrossed in beer conversation at the launch party for a new Hong Kong beer distribution company, this Trappist Punk sadly made two realizations: 1) We’ve allowed this site to become terribly dilapidated; & 2) I have an intense hankering for almost any Dogfish Head or similar top notch east coast brew.  This led me to ask the owner of what seems to be a very promising distribution company about the chances of acquiring said beer in a corner of the world mostly devoid of America’s finest brewed creations.  Sadly, he informed me that not only did this seem unlikely, due to capacity limitations Dogfish has actually stopped distributing in his home state, Wisconsin.  (This should be in another post, but if you are ever in Milwaukee, make sure you give the guys over at Lakefront Brewery a couple hours of your time.)

Well, I thought, at least I asked, and to the company’s credit their repertoire includes a robust selection of Rogue beers, which I quite enjoy.  For those reading this in Hong Kong, the company is called Hopleaf and they sell retail.

Today, sitting at my PC, I came across a headline that gave me a glimmer of hope that one day (albeit probably not until I move back to the U.S.), Dogfish may finally be able to service Hong Kong — and Wisconsin again, for that matter.  The headline read, “Dogfish gets OK for warehouse build.”  I know — not that startling. But the catch was deeper in the article:

“The brewery will produce 171,000 barrels of beer in 2012. While it hopes to expand to 500,000 barrels of production within the next 10 years, Benz said there are no business plans to do so at this time.”

That’s quite an increase and maybe enough to get a few bottles out to Hong Kong.  The bottom of the article also indicates that Dogfish recently received approval to expand their current facility, which maxes out at about 200,000 bottles of beer a year.   While I am not expecting to taste Dogfish Head at next year’s Beertopia festivities in Hong Kong, I do think that as Hong Kongers continue gaining a better appreciation of American Craft beer, in no small part thanks to the guys at Hopleaf, Hong Kong may become an attractive lucrative market for all those beers I miss so dearly. By 2015, Euromonitor data — quoted by the Canadian government, strangely enough — suggests that Hong Kong beer consumption will rise to 75 million liters from 73 million this year; I suspect with availability of the right American craft beers this could easily rise above 80. Here is a link to the original article.

Earlier this year H.R.836 was introduced to the House of Representatives, if approved this bill would it would reduce the federal excise tax on beer from US$18/barrel to its pre-1991 levels of US$9/barrel.  In order to better understand the history of beer excise taxes the Punks contacted our Capitol Hill liaison Jeffrey Last, and this is what he had to say on the matter:

Excise taxes on alcoholic beverages are amongst the oldest in the history of the United States.  The first federal tax was established in 1791 as a short lived budget measure to pay off our debts from the Revolutionary war.  This tax has been reinstated several times in our history, not surprisingly either after wars, i.e. the War of 1812, to pay off debts or in the run-up to arms, i.e. the Civil War, as a means to finance them.

It was when the tax was reinstated during the antebellum period, the years just prior to the Civil War, that it was extended from just spirits to all fermented beverages including those we know and love as beer and ale.  Additionally, this tax has prevailed to the present day (minus prohibition); where today it exists at a rate of $18 per 31 gallon barrel for large producers and at $7 per barrel for smaller producers, ones that produce less than 60,000 barrels a year.  This tax is universal, so foreign and domestic brewers are equally impacted by it.

While I am in no position to determine what impact this tax has on the domestic brewing industry, I can give you the numbers on the revenue it creates and leave the judging to you.  In fiscal year 2007 the federal beer excise tax generated $3.8 billion with $3.3 billion coming from domestic brewers, and $500 million from imports.  Keep in mind these are just revenues from the federal tax of $18 per barrel.  Each state has its own excise tax that ranges from the lowest in Wyoming of $0.62 to the highest in Alaska of $33.17(ouch).

While the federal tax isn’t earmarked for anything specific other than a revenue stream, the state taxes are usually levied as a means for paying for certain state programs and initiatives.  For example, Arkansas uses their excise tax to fund education and child care development funds.

There have been many justifications for having an excise tax, both federal and local, on beer.  Some argue that these so-called “sin taxes” are a great tool for curbing habits that are deemed less than healthy, while others see them simply as a tax on a luxury item.  However, there are those who feel the rate adversely punishes lower-income individuals and feel it should be lowered or repealed.  In fact, there have been efforts by Congress recently to halve the federal excise tax on beer.

Regardless of your personal views on the matter, keep this in mind. When you go out to the bar and order a pint of your favorite brew, between 40 and 44 percent of what you pay is the various excise taxes being passed on to the consumer.

Thanks Jeff!

I just spotted an article on CNN’s website about the success story of Guinness in Nigeria. I didn’t expect to find anything amazing here, just another affirmation of Mike’s hypothesis about the amazing international growth opportunities for brewers as the developing world’s growing middle class acquires a taste for beer (and frankly they could do much worse than Guinness in my opinion, I salute Nigeria’s good taste!) It turns out that Nigeria now consumes more Guinness than Ireland, and is second only to the UK in consumption of this most renowned of dry stouts. That’s not to say that Ireland is slouching here; Nigeria is a nation of 150 million people, the UK about 60 million, and Ireland only about 6 million…I’d say they’re pulling their weight, for sure.

What was surprising to me is that in Nigeria, Indonesia, and other markets in which Guinness is brewed under contract this way, Guinness is apparently an extract beer.

Without getting too technical, there are two ways to brew beer, all grain or extract. An all grain brewer steeps malted grains like barley in warm water (a process called “mashing”), which creates a sort of tea by dissolving sugars and other compounds out of the grain and into the water. This “tea” is then called wort. Hops are added, the mixture is boiled for sanitization and to trigger certain chemical reactions, then the result is cooled and the yeast are unleashed, creating beer. All grain brewing is like making soup from scratch, if you will.

Extract brewing on the other hand can be thought of more like making condensed Campbells soup. A manufacturer of malt mashes the grains at the factory, then dehydrates the wort, extracting as much water as possible, which improves the shelf life. Sometimes hops are added, sometimes not, and then the dehydrated mixture is diluted by the brewer and boiled.

Homebrewers usually start out with extract brewing because it is easier, but then switch to all grain when they feel they can handle the challenge and want to increase the quality of their brews. However, this doesn’t mean that all extract beers are bad; I’ve heard of many extract homebrews going on to win awards at major competitions, and have also heard of professional brewpubs that make extract brews exclusively, among them two in Canada (one in Calgary, the other in Nova Scotia) and another in California (Pacific Coast BC in Oakland). I haven’t been to any of the three but have always been secretly skeptical, even though I’m sure that a good brewer can make proper use of any ingredient to make good beer, so long as they are smart about selecting and using it.

As for Guinness Nigeria, they use an unfermented, hopped extract shipped in from Dublin and add it to unspecified local ingredients. My guess is that certain ingredients are easy to get locally, the others are not of the same quality (or quantity) as those available in Dublin, so the extract replaces those that are harder to come by.

The Nigerian brewery was the first outside of Ireland and Great Britain and has seen torrid growth despite a global economic recession and challenging operating environment (including failing infrastructure and unpredictable governance according to CNN). I’d love to get my hands on their product and see what extract Guinness tastes like, but I don’t think it’s distributed in the US, so I’ll have to wait for now.

I was perusing the internet the other night, as I usually do, and began to notice a trend.  It all started with this headline: “SABMiller Halts Beer Volume Drop on Chinese Demand”.  At first I didn’t think too much of it, so I moved on.  Several minutes later, on a completely unrelated site, I come across this headline “Net profit in China’s major beer producer Yanjing up 25% in first half”.  Now I was convinced something was up, and I wanted to know more.

To my surprise, it turns out that by volume China is the world’s biggest beer consumer.  But, on a per capita basis China’s beer habit appears far less impressive at just 22.1 liters per year, this compares to 81.6 liters per year in the US.  However, both pale in comparison to the Czech Republic, whose residents imbibe an astounding 156.9 liters per capita–that’s roughly 41 gallons of beer per person per year!

This chart shows 2004′s annual beer consumption by volume for the top 15 countries, along with their per capita beer consumption:

Source: Kirin

Once my mind synthesized the headlines I mentioned earlier, and these beer statistics, I realized the global beer industry could be at the dawn of a new age, especially in China.  China’s population is currently estimated at around 1.3bn, compared to just 0.3bn in the US.  China’s rapid economic expansion has created a burgeoning middle class, whose tastes have shifted as incomes have risen.  Not only does this expanding middle class palate now crave things like pork over just vegetables, but also beer.

With this in mind lets run a simple exercise; let’s say as China’s economy develops, its per capita beer intake catches up with its nearby neighbor South Korea at 38.5.  This means China’s total beer consumption would rise to   50,050 ML–more than 2x the total US consumption…  Taking it one step further, if China’s per capita consumption catches up to that of the US, then China’s total beer consumption could equal that of the rest of the world combined.  I won’t event get into what happens if they catchup with the Czech’s, but I hope you have a stockpile!

My point is that the Chinese beer industry’s potential is far from being realized.  In fact a recent report by Citigroup pointed out that China’s beer sector has bucked the recent economic slowdown with volumes up near 10% y/y in May. Major players in the domestic Chinese beer market include Tsingtao, Zhujiang, and Yanjing.  Tsingtao should stand to benefit quite nicely from increased consumption, based on its strong domestic brand name–I’ve thrown back more than my fair share while living there.  Numerous local brewers are also spread out across the country mostly catering to smaller geographical regions; consolidation is inevitable as the industry continues to develops.  Potential for brand-name foreign brewers is also off the charts, whether through local acquisitions or other types of investments.  I can’t imagine anything will slow this trend down, so just in case, here’s how to order a beer in Mandarin:

“Wo yao yi bei píjiu”

In case you need two…

“Wo yao liang bei píjiu”