“We want to be one of the top 50 craft brewers in the world,” said Dr. Pearse Lyons. It’s as simple as that for one of Ireland’s most successful entrepreneurs. His ambition knows no bounds. It’s been a busy few years for Alltech in terms of growth. The company has sold off particular business units that were no longer of key focus and has also acquired a number of other companies to accelerate its growth. However, last week’s announcement was the first time that it purchased a brewery or two for that matter to boost its beverage division.
Alltech announced on 21 July that it has acquired The Station Works Brewery in Newry Co. Down and Cumberland Breweries Ltd, in Great Corby, Cumbria, England. The two breweries had been operating under the same ownership and had been positioning itself in the Irish market over the past number of months, on foot of its Finn Lager brand. Station Works had invested well on the branding and big hopes were being placed on its new Foxes Rock ale.
So what’s in it for Alltech? It gives them a foothold into Europe in terms of production and adds a few more beers to their portfolio. The distribution chain for Alltech is quite strong in Ireland but this deal potentially opens up the British market too. The Finn Lager could even be an attractive brand State-side. Foxes Rock could prove popular with the horsey-set (e.g. Leopardstown Races), which fits in with Alltech’s sponsorship strategy. More importantly it gives them two breweries with a combined output of 40,000 hectolitres. This gives them a platform to develop a new range of products or brew existing ones in Europe that could be sold to the local market as well as exporting further afield.
Some craft beer enthusiasts may find it difficult to accept Alltech as a “craft brewery” due to the fact that it’s part of a very large company. They’d point to the typical caveats of small, independent and traditional. As far as I’m concerned the brewery is craft. Yes, it may have corporate leanings but it’s also part of one of the biggest Irish family-owned start-ups. It’s a company that follows a path of increasing organically and through acquisitions, it’s the latter that mightn’t sit easily with everyone.
The big question is where next for Alltech? In order to achieve the target of being in the top 50 of craft breweries worldwide, surely more take-overs can be expected. Wonder if any will come from those that have participated in the Alltech Brews and Food in recent years? There were more than a few of them that came from far and wide.
This year saw the passing of a true revolutionary, Jack Joyce, co-founder of Rogue Ales and patriarch of Rogue Nation. He was a firm believer in “freedom of expression, absence of bullshit, variety, and the pursuit of beer with taste” even challenges the conventional craft beer mantra of small, independent and traditional. A former lawyer for Nike and who had negotiated Michael Jordan’s early shoe deals, Joyce was committed to “doing things differently, a desire and a willingness to change the status quo” and be believed that being a “leader doesn’t mean you have to be the biggest”. He like Fritz Maytag, Ken Grossman and even Jim Koch and Steve Hindy (although he reportedly didn’t agree with contract brewing) left an indelible mark on the US craft brewing scene. So when he checked out on 27 May 2014 what shape was the US craft beer industry in?
There are now 2,768 craft breweries in the US out of 2,822 total breweries. This represents the continued upward trajectory of craft brewing. There was an increase of 15.3% in number of craft breweries n 2013 than the previous year. In keeping with year-on-year growth in market share and production output, there was a significant increase in the number of regional craft breweries in 2013.
US Craft Brewing Facts:
There are 2,768 craft breweries in the US (overall 2,822)
Craft breweries increased by 15.3% in 2013; regional craft breweries (+22.6%), microbreweries (+22.8%) & brewpubs (+7.1%)
Slight decrease in total number of microbreweries opening in 2013 (304) to 2012 (340)
Sales up 17.2% in 2013 (overall beer sales down 1.8%)
Market share stands at 7.8%
49% increase in US craft beer exports
18% increase in craft beer volume production (overall beer down 2%)
This time last year, I posted a piece on Fritz Maytag in Revolution in Red, White & Brew because I wanted a US feature for July 4th. He was a pioneer not only in terms of what he did in saving and transforming Anchor Steam but more generally what he did for inspiring independence in US brewing. A group of us were only discussing his contributions to the revolution during the European Beer Bloggers Conference (EBBC 2014). This year, I’ve decided to focus on an Irish-American connection in Dundalk-native and now resident of Lexington, Kentucky Dr. Pearse Lyons.
At EBBC 2014 I had the opportunity to have a beer with Brian Yaeger and it was in his 2008 book Red, White and Brew that I first came across Pearse Lyons and what he was setting out to do in terms of brewing in Kentucky. The Southern US states, with a couple of exceptions (e.g. Texas, Florida etc), were fairly late to the craft beer revolution. Today the State of Kentucky is only 39th in number of breweries and 45th in terms of breweries per capita. On this side of the Atlantic, few had heard of the Lexington Brewing Company up until recently.
Over the past two years, the awareness of the Alltech, Dr. Lyons and the Kentucky brands both in terms of beer and whiskies has grown. He may have left for the US in the 1970s but he has always kept one foot on the island, just look at the Alltech investment in Dunboyne. He’s even building a distillery in Dublin. There’s a great team at Alltech and I’ve gotten to know a few of them over the past couple of years. However, one can see Dr. Lyons as the driving force behind all that they do and he describes himself as an “entrepreneur, salesman, marketer and scientist all rolled into one”.
The Alltech Lexington Brewing and Distilling Co. produces a number of beers, all ales. Their flagship is Kentuck Bourbon Barrel Ale, which is the result of aging their 6% Kentucky Ale in bourbon barrels for six weeks. I’m not that much of a whiskey drinker and always found bourbon a unique prospect but I must say this beer has grown on me, especially when it’s served in a snifter. It tastes of good ol’ Kentucky bourbon. They have followed suit with a stout also aged in a bourbon barrel with the added addition of Haitian coffee (also owned by Alltech), which maries well with the bourbon smoke. They produce a good value IPA (although would love to see them bring the cans to Ireland) and a Kölsch-style beer, which when I first saw the beers on sale a couple of years ago in Nashville, was branded Kentucky Light. As a sign of encouraging new craft beer consumers, this name was thankfully dropped. They have produced three seasonals but only one of which has arrived in limited quantities in Ireland, the Kentucky Peach Barrel Wheat. The others being two collaboration brews, a bourbon barrel maibock (with Blue Stallion Brewing Co.) and the other being a blend of barrel aged stout that has been specifically aged for two years and Country Boy Brewing’s Black Gold Porter, oh and of course the blend is then barrel aged for good measure.
A year ago this July, Alltech held the first International Craft Beer and Brewing Convention in Dublin and a second edition was held earlier this year. The good news is that the event (rebranded as the International Craft Brews and Food Fair) will return in February 2015. The first focused on entrepreneurship (see Brewing up new businesses) and the second had growing the market for craft beers (targeting customers and publicans) as a theme. There’s even the Dublin Beer Cup and opportunities for brewers to introduce their wares directly to consumers. N17, Rascals, Stone Barrel Brewing and Independent Brewing made their beer festival debuts in Febuary 2014.
The two Dublin editions afforded valuable opportunities for people in the trade to network and form new connections, some of which have resulted in new business for Irish breweriers. For example, Galway Bay Brewing has just done a collaboration brew with Chicago’s Begyle Brewing, a conference alumnus. Hardknott from Cumbria got added opportunities to visit Ireland and ahead of this year’s conference, brewed Yerba with Metalman. Alltech has rolled out this conference in Kentucky and I’m sure a number of Irish brewers are itching to be invited.
For what he has done in terms of brewing and for what he’s doing in terms of promoting the industry more widely through conferences and numerous events, this is the reason I chose to feature his contribution to the craft beer revolution.
With the publication of last week’s report of the Sean O’Sullivan-chaired Entrepreneurship Forum the second annual Alltech International Craft Brews & Food Fair (6-8 February in the Convention Centre Dublin) couldn’t come at a better time. Last July’s event featured an enterprise pillar because let’s face it Ireland needs to do more in terms of new business start-ups. Renewed attention is being put on getting growth back into the domestic economy and craft beer is clearly bucking the trend.
A key focus of this year’s event will be on supporting and expanding an essential part of the craft beer industry – the pub trade. A dedicated conference will be held over a day and half discussing measures at reinvigorating the sector, principally through craft beer and ultimately greater choice for the consumer. We have seen a lot of media attention given to the pub trade, which has not just focused on closures but also on those that are turning around distressed pubs, new high profile entrants to the market such as Wetherspoons and those hoping to redefine the distribution business to pubs through a dedicated craft beer focus. Given the importance of pubs to communities and the part they play in our overall tourist offering, it is heartening to see that approximately 300 pubs have registered to attend. Changing the model for the Irish pub through an expanded beer range, quality Irish food or for the more ambitious, prepared to brew onsite will further reinforce the overall Irish craft beer industry.
The mainstay of the event will be “Craft Brews and Food Fair” itself featuring over 50 breweries from around the world paired with 15 of Ireland’s finest artisan food producers. It will be open to the public on the Friday (5pm-9pm) and Saturday (12pm-9pm), as well as there being set trade sessions during the event. Tickets are €15, which include four free drinks and there will be lots of food to sample as well. They can be purchased on the door or in advance here.
There will be a number of sensory sessions throughout the fair in which participants will get the opportunity to learn about tasting beers, matching beer to food, whiskey and gin tastings, as well as of course learning more about Alltech’s very own Kentucky beers from head brewer Ken Lee. For those more enthusiastic, Tim O’Rourke will be back and along with a panel of beer experts will be running a separate day-long Alltech Academy Sensory Class on 6 February with the opportunity to take an exam to become an “Alltech Certified Beer Taster”. This course has to be booked separately here.
It will be interesting to see the beers that will be on offer during the fair. I’m looking forward to trying beers from new Irish breweries such as N17, Independent Brewing Co and Rascals Brewery. Also, the fair will feature a number of international breweries (such as Coisbo Beer from Denmark) that soon could be featuring on shelves of off licences or on draft around the country. Last year, attendees had the good fortune of encountering Hardknott’s Queboid and Beavertown’s Gamma Ray. Hardknott have an excellent array of beers on sale in Ireland and Beavertown thankfully are due here momentarily.
The Dublin Craft Beer Cup will be awarded for a second time, with the trophy making the short trip down the M1 from Lisburn, home of Hilden Brewery. The inaugural winner was of course Twisted Hop. The number of entries in the Dublin Beer Cup 2014 is expected to be 200 beers from at least 100 breweries in 16 countries, which goes to show that there’s prestige to being successful in such competitions and there’s a real opportunity to establish this as one of the premier competitions out there. The calibre of the beer entered last year was exceptional so it will be interesting to see the full list of entrants and the medal winners at the conference. Judging is expected to get underway on Tuesday 4 February with the winner being announced at lunchtime on Saturday.
Thinking back, it was at July’s event that I met Sam Black of Kinsale craft brewing fame and the lads from Brú brewery, as well as hearing about plans for a new brewery in Wicklow. I wonder by the time the third incarnation of this event comes around not only what the brewing landscape will look like but also what changes pubs will make on foot of what they will discover next week. All anyone will have to do is to heed Dr. Pearse Ryan’s three-day pep talk.
With the International Craft Beer and Brewing Convention being held last month in Dublin, there’s no more appropriate time to talk about beer entrepreneurship. The Convention was the brainchild of Dundalk-native and now resident of Lexington, Kentucky Dr. Pearse Lyons.
Entrepreneurship and people who created their own businesses has always been an interest of mine and it was a natural fit to mix in beer as the dynamism in the explosion of microbreweries really embodies the spirit of entrepreneurs everywhere – combining a passion for their craft together with a sense of collective togetherness and striving for success against big beer’s marketing muscle. I first heard about Pearse Lyons in Brian Yaeger’s book Red, White and Brew. It’s amazing but in Ireland we don’t really celebrate our successful entrepreneurs. Perhaps this is down to our character or perhaps down to the fact that we have so many multinationals in this country but we undervalue the role that the likes of Naughton, Quinn, Smurfit, Ryan and co have played in Irish life.
In 1980 Lyons founded of Alltech, a global leader animal health product through its innovative use of yeast fermentation, enzyme technology, algae and nutrigenomics. Over that time he has not shied away from constant innovation and a drive to create new business. As such, he returned to his brewing routes to create Lexington Brewing and Distilling Co. which consists of brewery (four beers – Bourbon Barrel Ale, Kolsch, Pale Ale and a Bourbon Barrel Stout with coffee) as well as the Town Branch Distillery. He also found the time to have business interests in beef, coffee and a golf course.
It was with that spirit that Dr. Lyons brought the convention to Dublin. While it remains to be seen if the convention inspired many to just go and do it, their was definitely a sense that many more breweries will be popping up all over the country. Over the course of two days, delegates heard about issues in brewing and distilling, whether you were experienced in the trade or were dreaming of starting your own operation. What was particularly poignant was that an enterprise day was held as an individual track because let’s face it Ireland needs to do more in terms of new business start-ups.
A lot of attention in the discourse in Irish craft brewing has been placed on the 2005 tax break for brewing as a key driver of growth in the sector. Indeed it it had been in place in the 1990s, perhaps the initial wave of new breweries might have had a few more survivors. However, some of the other framework conditions for encouraging entrepreneurship also played a part such as the Business Expansion Scheme. It would be fantastic if the Enterprise Incentive and Investment Scheme will encourage new investment in the sector. It is unlikely that start-up or expanding companies will attract venture capital or angel investment (a lot of negative experiences from investing in US breweries during the mid-90s). Brewers continue to turn towards informal networks such as family and friends for investment. Thankfully the rise of crowd funding is proving to be an additional source of funding. This is all without discussing the issue of access to credit, which is a subject for another day.
Bord Bia and Enterprise Ireland have important roles to play. While start-up breweries can turn to the city and country enterprise boards, more can be done by the agencies to support the actor as a whole. While many breweries are too small at present for many of the direct support schemes operated by Enterprise Ireland, the agency should be encouraged to take a cluster approach to the sector to promote growth and exports, which ultimately will lead to job creation. Brewing is no different to other sectors in that sustainable growth needs to come through exporting. Perhaps the agencies can fund not only marketing initiatives and market entry support but also provide support to share export costs and minimising potential risks. This is not to say that Irish independent beers cannot be found in overseas markets but as the number of breweries grow, pressures on the existing channels in Ireland will increase.
Hopefully Budget 2014 does not bring any additional problems to Irish micro-breweries. Increases in excise duties as well as VAT in recent budgets were unwelcome but alcohol has been seen as a soft target by successive governments. The jury is still out on minimum pricing and it’s impact on craft beer. It is too simplistic to see it as just affecting cheap beer and the like. One of the particularly unwelcome proposals being out forward on behalf of publicans is the “lid” tax, a surcharge on off-sales. This is the latest in a long line of attacks on the off-licence trade in Ireland. If this measure is introduced it could significantly impact on the price and choice of craft beers by bringing them closer in line with the price of the pint. Such a strategy could discourage off-licences to take chance on new or unknown beers or even cause a few establishments to shit outright. pro-pub strategy is similar in line with the approach taken by the music industry in the face of online file sharing. They ignored the need to innovate at their peril. People cons be enticed back into pubs and a number of them have bucked the trend during this recession and can provide useful lessons. They have to acknowledge that people’s tastes have changed. Also, we are in the middle of yet another baby boom and as such people are staying at home, and I haven’t evenstarted on the impact of tougher drink-driving rules etc. Two definite area pubs need to improve on is their food and of course their beer selection. Look to the success of the Cottage Group, the Porterhouse and other specialist bars for showing that choice can safely coexist with success. I wonder if any new pub being established today does not offer a craft beer or two?
Ireland it on the right track in terms of the number of breweries being established. We need to ensure that the right environment is in place to help them survive and thrive. This will complement the passion of all those breweries who are also entrepreneurs.