Archive for March 2013

Day 567

March 28, 2013

Rick Mercer’s visit to the Teaching Brewery was aired on CBC last night, and yours truly was a star, dahling. Yes, I was on camera for at least 8 seconds! And Rick chugged my Blackheart IBA straight from the bottle while I stood watching. Amazing.

Alas, my agent failed to return my calls this morning, so it was back down the QEW in time for Promotion & Sales. We had a special guest: Phil Kerwin of Chimpanzee, a marketing and communications firm. Chimpanzee actually started in the Niagara region in 2003, but over the past decade, they have expanded to places as disparate as Sturgeon Falls (Northern Ontario), the UK, New York, and Serbia. They count among their clients Pimm’s, Archer’s, Guinness, Smirnoff (Black Ice) and Fielding Estate Winery.

They were also the marketing agency chosen by Niagara College to brand and market the college beer when the Brewmaster program started up two years ago. Apparently they were given permission to go “edgy”–dangerous words for a marketing agency, and judging by some of the, uhhh…. interesting…. ideas Phil showed us, they certainly were skating close to the edge. However, what they didn’t realize is that the people who told them to go edgy were not the people who would be approving their ideas. In the end, all of the innuendo was replaced by the relatively tame “First Draft”, “Certified Originals” and “Brewmaster” series of college beers.

We Brewmaster students can certainly commiserate with Phil–when we create our own beers in the Teaching Brewery, we also name them. However, when the beer hits the campus store, more than a few racy names and clever double entendres have been arbitrarily replaced with something a bit tamer. Even my own Vice Populi–which I thought was pretty innocuouswas renamed something fairly gormless.

To avoid this problem at a professional level, Phil did suggest that a valuable strategy for a marketing team–and a great way to reduce wasted time and energy–would be to sit down with the actual decision-makers right from the start of the creative process and find out how far they want to push the envelope.

In Brewery Management, it was all about planning a brewery expansion. This project can break a brewery into very small pieces if done wrong, or if done for the wrong reasons, so the first step is to establish a need for expansion.

The most obvious one is sales demand–people want to buy more beer than you can make. There may be other reasons, though: lack of space in the brewery, equipment limitations, keeping up with the Joneses, customer demand for new styles, and a belief that future trends are pointing towards a need for greater production.

Those are all good reasons on the surface, but before you start getting quotes on a new brewhouse, do a bit of cost-benefit analysis. This is going to be the biggest project since you opened the brewery, so make sure your reasons are long-term (more than 2-3 years). Remember that increased production may trigger higher taxes–how will that affect your bottom line? In addition, will all the ancillary equipment play nicely with your new equipment, or will you find yourself replacing steam and water lines, buying larger diameter hoses or replacing the brewery electrical? What about storage–do you have a place to keep all your new beer? Will you have to hire more people? Do you have the logistics in place to deliver all your new beer? Do you have proper quality control in place to make sure your new beer has shelf stability? Can your current ingredient suppliers keep up with your increased needs? Will the municipality be happy with the increased Biological Oxygen Demand (BOD) going down the drain?

Mike Arnold raised an interesting strategy. You want to delay expansion for as long as possible due to the cost, so instead of simply increasing supply by expansion or contract brewing some of your beer elsewhere, why not try to dampen demand? If you have a popular beer that isn’t very profitable, and a much more profitable beer that sells less well, make more of the profitable beer at the expense of the cheaper beer–sales will drop off, but you will probably make as much or more money because of the higher profit margins.

As a matter of fact, don’t expand because of demand for a cheap, low-profit beer–it will take too long to see any cost-benefit. Do expand because of demand for an expensive, high-profit beer.

The bottom line seems to be: expand only if absolutely necessary, and only expand to your planned needs.

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Day 563

March 26, 2013

I’m not usually on campus on a Saturday, but today was the college Open House. As part of our Sales & Promotion class, we have been in charge of planning how we would present the Teaching Brewery. A couple of months ago, we split into four committees–Tours, Education, Food and Logisitics–and seperately made plans for the day. Today all those plans got brought back together.

Visitors to the brewery first entered a tent with an educational display about the various ingredients we use. From there, they got a 5-minute tour of the brewery–we had set up a sample mash, vorlauff and boil on the three pilot systems to demonstrate the brewing system, and two 1st-year volunteers were bottling college beer. Our guests were then ushered into the hospitality tent set up behind the brewery, where we had 15 different student beers on tap (including the mostly full cask of Blackheart, which had survived its blown bung in fine form). We also offered fresh-cooked beer sausages, as well as waffles with hop-infused syrup.

I had the opportunity to meet several incoming Brewmaster students, as well as some students who were still a year away from applying, and had an enjoyable time talking to them about the program in between tours.

The only improvement we could have made was to arrange for warmer weather. On the other hand, the cold March day with a frigid wind out of the north encouraged guests to hang out in the hospitality tent longer–no reason to waste all that beer, right?

 

Day 562

March 25, 2013

Beer can be a symbol for life. I only say that because in Creative Writing, we had a presentation on symbolism.

In Human Resources, the not-so symbolic design of benefits packages for your employees.

In Sensory, a presentation from Paul Dickey on the Beer Judge Certification Program (BJCP). Paul is uniquely qualified to talk about this since he is currently the the only BJCP Grandmaster Judge in Canada. In addition to judging, Paul has brewed for Denison’s, has been the brewmaster at the Pepperwood Bistro brewpub in Burlington and at Black Oak (he’s still an associate brewmaster there), and is currently the brewmaster for both Double Trouble and Cheshire Valley .

Paul believes that being a BJCP-qualified judge can help us to recognize how the flavours in our beers are being developed by ingredients and processes, and can also help us identify how taints and off-flavours are being caused.

Becoming a BJCP judge used to be fairly onerous. The entrance exam was a 3-hour marathon that involved 10 essay questions interspersed with four tastings, and required fairly in-depth knowledge of the proper flavour components, appearance and general statistics (original and final gravities, alcoholic content, etc.) of all the beer styles recognized by the BJCP, the effect of  malting procedures and brewing processes on beer flavours, as well as the ability to recognize and categorize taints and off-flavours and the processes that caused them. If the exam was a marathon for the would-be judge, it was doubly so for the volunteer exam grader, and often grading the exam took upwards of six months or more. The backlog on grading was so long that severe limits were placed on how many people could take exams.

For that reason, BJCP has recently announced changes in its exam procedure. Now, you take a one-hour on-line exam of 200 true/false and multiple choice questions. Passing that gives you the opportunity to move on to the next step, a tasting of 6 beers that must be completed within 90 minutes. If you pass, your mark on that portion then determines your judging rank: Apprentice, Recognized, or Certified.

Bonus: If you get over 80% on the tasting portion and have 10 Judging Points (you get these by either judging at a competition, or organizing a judging competition), you earn the right to take the Beer Judge Written Proficiency Exam, which consists of 20 true/false questions and 5 essay questions that must be answered within 90 minutes. Passing this exam opens the door to the rank of National Judge or even higher.

Paul was kind enough to give us several hints about how to write the exams; chief among those was time management–don’t spend so much time answering one question that you don’t leave yourself enough time to answer anything else.

Time management is also crucial during beer competitions. Often you have no more than 3 minutes to write out notes for each beer, including any problems you detected, and any suggestions for the brewer on how the product could be improved.

To give us a taste of what that was like (pun intended), Paul had us score two beers using BJCP scoring sheets. The first was a student-made pale ale, using British grains and yeast but American hops. The result was a beer with the mushroomy esters and biscuity flavour of a British pale ale, but some of the citrus notes and assertive bitterness of an American pale ale. This quickly illustrated a problem with BJCP’s judging guidelines–beers are judged on how well they adhere to the description of the category in which they were entered. This hybrid beer was tasty and well-made, but would have done poorly at a BJCP-sanctioned event. If entered as a British pale ale, it would have been marked down because of the American hop notes and bitterness. But if entered as an American pale ale, it would have been marked down for not having enough of a citrus nose, and too much biscuit flavour.

The problem with hybrid beers is that the BJCP guidelines are only revised every few years–the latest guidelines were released in 2008–so there’s no real way to judge them properly until enough examples have been entered into competitions to justify a new category and then the guidelines are updated to make a new category.

A good example of this is the new style known as “Cascadian dark ale” (aka black IPA, India Black Ale, etc.), which made an appearance in 2009, a year after the current BJCP guidelines were released. The result is that if I entered my Blackheart Black IPA into a BJCP-sanctioned competition, I would have to place it  into the catch-all “Category 23: Specialty Beers”, where it would be judged with all the other hybrid mongrel brews instead of just other black IPAs.

Afterwards, we had a reception for Paul, during which several students commented that the Brewmaster program would benefit from making the BJCP on-line test and initial tasting test part of the curriculum.

Cheers to that!

Day 561

March 22, 2013

I was scheduled to be in the Teaching Brewery today; since I had brewed my specialty beer three weeks ago, I was going to be cleaning kegs, bottling, etc. However, my summer brewery wanted me to come back and brew up a one-off, and a group of us students also needed to brew up a small batch of beer for a tasting assignment in Sensory. Since there was no available time on the Teaching Brewery systems to brew the Sensory assignment beer, I got permission from Jon Downing, the college brewmaster, to go forth and brew elsewhere.

So early in the morning, I was heading east along the north shore of Lake Ontario towards Toronto, rather than east along the south shore towards the college. Golly, a lot more people drive to Toronto in the morning then drive to the college. And they drive very slowly. And stop. And go. And stop. And go.

"Call-of Brew-ty: Black Hops" version 2.0

“Call-of Brew-ty: Black Hops” version 2.0

I finally got to the brewery and readied the pilot system. First up was a re-creation of “Call of Brew-ty: Black Hops”–regular readers might recall that this was the smoked chipotle black beer I created for Cask Days last October that turned out to be mind-meltingly hot.

There’s no question that due to a small miscalculation when adding the chipotle to the cask last October, the heat was turned up to 11. This time, I tried to dial it down a bit. I also added the smoked chipotle to the boil ten minutes before flame out rather than waiting to add it into the cask of finished beer. This way, I figured I’d have advanced notice if it was still really spicy, since I’d be able to taste it several times on its journey from wort to beer.The verdict? Well, I may have added less chipotle, but adding it to the boil seems to have integrated more capsaicin. Despite my efforts to be a bit more conservative, the wort that went into the fermenter was still pretty “wow!”

As I was cleaning up, a couple of my fellow students arrived  to help make a beer for our Sensory assignment. (In essence, what we have to do is make a beer, use the class as a tasting panel to get their opinion of the beer, then use the data from the tasting panel to recommend whether this beer should be put into production.)

Because the beer isn’t the point of this exercise, we whipped up a British-style pale ale–easy, simple, not too many ingredients.

It was a longer day than usual, but the end result was two different brews fermenting away.

Day 560

March 21, 2013

We spent most of Sales & Promotion making final plans for the Teaching Brewery tours at the college Open House this Saturday. Free beer. Free beer sausages. Free waffles (while they last). Come on down!

In Brewery Management, Mike Arnold warned us about a fraud making the rounds of small brewers and wineries. Some guy phones up and wants to buy $3000 of beer for a family reunion. He uses his credit card to pay for it, then has a delivery truck come by and pick up the beer the same day. Anywhere from a few hours to a few days later, the brewery gets a call from VISA that the real owner of the credit card has just discovered it has been stolen. VISA cancels the transaction and the brewer is out $3000.

Stealing a man’s identity is one thing. But stealing his beer? That’s beyond the pale.

Mike went on to talk about a grab bag of stuff today, including what type of sales rep to hire, depending on where the majority of your sales are going to be. If all your beer is going to the LCBO, you need one kind of rep–probably wearing a suit and tie. If you’re selling to bars, you probably want someone young and hip.

He also covered the basic types of insurance you need, and some others you might want, including basic commercial fire and theft, liability, key man, vehicle, liquor liability, employee practices, non-owned auto, indemnification for third parties, utility interruption, boiler & machinery, employee dishonesty, etc.

Which brought up “when things go wrong”. Your brewery sells the Beer Store $250,000 worth of beer, you use the money to pay your bills, then you find out your beer has gone bad. A disgruntled employee deliberately opens the drains on all the fermenters. Someone sues you. The landlord decides your grain silo is attracting mice and arbitrarily removes your grain mill. A restaurant owing you $30,000 goes out of business.

The most import thing is probably, in the words of Douglas Adams, “Don’t Panic.”

Look at the problem, look at solutions, draw up a plan, execute the plan.

My current problem is that I am thirsty. I believe have a plan.

Day 559

March 19, 2013

Attendance was a bit light today, perhaps a casualty of St. Patrick’s celebrations two days ago, or perhaps a sign of student exhaustion near the end of the term.

In Human Resources, designing compensation packages. That includes financial considerations, of course (which can further be divided into direct rewards: wages based on your position; and indirect rewards: benefits that all employees of the company receive, regardless of position.) But rewards can also be non-financial–perhaps there’s an employee recognition program, or the availability of flex-time or job-sharing.

Determining wages will depend on how much can your company afford, what your company’s compensation objective are, the perceived worth of each job and the employee’s relative worth. This will be balanced by the current labour market, the level of wages in your business sector, the current cost of living, the possible effect of collective bargaining, and of course the legal minimums required.

In Beer Industry, we had a visit from Ted Moroz, President of The Beer Store (TBS), the Ontario entity formerly known as Brewer’s Retail. This venerable institution was founded in 1927 at the end of Canada’s Prohibition. While the Ontario government quickly passed laws giving itself the exclusive right to manage the sale of spirits and wine (a monopoly the Liquor Control Board of Ontario still holds, generating over a billion dollars a year in revenue to the provincial government), the brewers of Ontario–about 50 at the time–lobbied to retain control of beer sales. Over the years, the number of brewers shrunk as the larger ones gobbled up the smaller ones, until there were only two left–Molson and Labbatt. About ten years ago, Sleeman got big enough to buy a share of The Beer Store as well. What many Ontarians don’t realize is that all three of these entities–and the profits generated by The Beer Store–are  now owned by foreign multinationals.

Beer is big business in Ontario, and The Beer Store handles about 70% of that business, with 2300 full-time and 4600 part-time employees working in 440 stores and 8 warehouses, generating $2.7 billion in sales annually. Of those 440 stores, 254 are the old-style “In & Out” stores, so named for the signs on the curb marked “In” and “Out”, in case you can’t figure out how to get your car in and out of the parking lot. Inside, you walk up to the cashier, tell him what you want, he mutters something into a microphone, and a few seconds later, with an ominous thunder, your case of beer comes sliding through a curtain along a set of rollers. (For those of you outside Ontario, I am not making this up. Back when alcohol was considered a social evil, the shopping experience was designed to be as unpleasant as possible.) Almost 100 other stores have been redesigned as “Ice Cold Express”–the cashier at the microphone remains, but against one wall there are cases of the most popular brands that customers can now grab themselves rather than have to order from the man with the microphone. Another 83 stores are much more modern self-serve stores, often giant walk-in refrigerators stacked with cases of beer. And two new stores in Toronto are “beer boutiques” catering to the urban pedestrian crowd.

There are certainly advantages to being in TBS. You know everyone walking into the store is looking for beer (as opposed to the people entering an LCBO, who might just as easily be seeking out spirits, wine or cider.) The TBS also has an efficient warehousing and distribution service second to none. As Ted Moroz pointed out, they can deliver any listed beer to any store in Ontario within 24 hours.

This doesn’t come free, of course. First, you must pay homage to the gods of standardization–if you want to get your beer into TBS, it must be packaged either in industry standard 341 mL bottles with twist-off crowns and standard-sized labels or 355 mL aluminum cans. Then get out your wallet: there’s a listing fee of $2800 for each SKU (each label AND each size of package such as 6-pack bottles, 12-pack bottles, etc.). On top of that, there’s a store fee of $235 for each store you place your product in (up to 233 stores. After that, it only costs you $50 per store.) Then there’s a volume fee of $3.77 per case of beer for the first 25,000 hL. In addition, if you want some floor space in the middle of the store for a display, that’s about $200 per store.

So if I want to place cases of my beer in 6-pack bottles in 100 stores, it will cost $2800 listing fee + (100 x $235 store fee)  = $26,300 plus $3.77 for each case of beer.

As instructor Jason Fisher pointed out, this might be tenable for a craft brewer for the first label or two, but get into different sizes of packages and/or multiple labels and the fees will quickly multiply into six figures.

This may not be the case for much longer. As Ted Moroz admitted, public opinion is shifting from pro-TBS to anti-TBS. My feeling is that sometime in the next decade, the provincial government will end the Big Three’s 85-year-old beer monopoly and either come up with a new model of beer retail store, or simply allow beer sales in variety and grocery stores.

Until then, craft brewers will have to do the math and estimate if TBS or the LCBO is the best pathway to profitability.

Day 554

March 18, 2013

Fridays, as you may have gathered, are fairly straightforward, if somewhat long. Today it was made longer by the fact that a major brewery was coming to visit at the unfortunately early hour of 8:30 a.m. Not surprisingly, the email sent from the college to tell us this was amazingly uninformative–it is clear that the fine art of fully describing “who, why, when, where, and what” has been lost. In fact I have already told you precisely what the email said, except I have been less vague.

I won’t name the brewery, since actually it was not at fault. When I showed up–okay, when I dragged my butt in at 8:30 a.m., it turned out that we were meeting with a marketing agency acting on behalf of a major brewery.

First strike: no coffee, no muffins or doughnuts. Seriously, at 8:30 a.m.? How much trouble would it have been to stop in at the campus Timmy’s and pick up a couple of dozen honey glazed?

But no, right into the pitch. It turns out that the agency had the most amazing opportunity for us: to head out on the road for six weeks, crisscrossing the country from beer festival to beer festival, touting the qualities of a new beer being introduced by the major brewer they represented. Yes, for 42 days, from Halifax to Vancouver, we would be expected to look fellow craft beer drinkers in the eye and tell them that this was The. Most. Amazing. Beer. Ever. A game changer. A new beer that would make everything that had gone before seem old.

At this point I expected the marketing people to pull out samples of this ambrosia of the gods and have us taste it. After all, if I’m going to look people in the eye, I need to at least assure myself that the stuff is drinkable. But no, no samples appeared.

Strike two.

And when did this heaven-sent opportunity start? Well, starting April 1. Wait a sec, doesn’t this course go until the third week of April? Luckily, there was a respresentative of the college there to offer vague reassurances about our final assignments and exams–doubtless arrangements could be made, meaning that probably we would be expected to finish the final five weeks of work–and write all our final exams–in just two weeks. All that for six short weeks of temporary work.

Needless to say, strike three and time to find some coffee and get back to regular classes.

In Creative Writing, creative dialogue.

In Human Resources, the second of three tests.

In Sensory, tainted beer. And then… more tainted beer.

Thankfully, the end of a long day.

 

 


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