This is a guest post from Christine Zhang, a freelance journalist and data analyst who loves stats, stories, spreadsheets, sandwiches, and stouts (but not stilettos). You can find her on Twitter at @christinezhang or at the next meetup for the L.A. chapter of Girls Pint Out.
A “strategic partnership” between a craft brewer and a multinational beer conglomerate—or in less PR-friendly circles, “selling out to Big Beer”—is never a quiet affair.
Just look at the two biggest beer stories this month: Lagunitas, which sold its remaining shares to Heineken, previously an owner of a 50 percent stake in the California-based brewery, and Wicked Weed, the local brewery from Asheville, NC, which was recently bought out by Anheuser-Busch InBev.
Some of the post-sale fallout feels like déjà vu. When Elysian Brewing Company sold to Anheuser-Busch in January 2015, fans felt betrayed by the Seattle brewery—not least because it was the creator of Loser Pale Ale, which sports the (now ironic) tagline “Corporate Beer Still Sucks.”
Living in Los Angeles, I hadn’t tried Elysian’s beers until a few weeks ago (they’ve only been here for about a year and a half), when my friends and I were invited to a launch event for Superfuzz Blood Orange Pale Ale, Elysian’s latest seasonal, at the historic Moonlight Rollerway. Full disclosure: we went because there was free beer and a retro roller-skating rink. But for what it’s worth, “corporate beer” or not, the overall consensus was that Superfuzz was delicious—not sucky. Going off of the name alone, I had expected it to be a light, cirtrusy-sweet beer, kind of like a Blue Moon. Superfuzz Blood Orange might be sweet-smelling, but I was pleasantly surprised to find that it packs an unexpected punch (its ABV is 6.4%) and bitterness due to the use of dried blood orange peel as well as purée from the fruit; as one friend quipped, “it’s Blue Moon with a bite.”
I sat down with Elysian co-founder and CEO Joe Bisacca before joining my friends on the rink. The conversation took place before the news about Lagunitas and Wicked Weed broke, but Bisacca was ready for some real talk about the industry.
In addition to chatting about Superfuzz and his plans for Elysian in L.A., Bisacca opened up about why he made the sale to A-B, his beef with the Brewers Association, and how he plans to appeal to female beer consumers, including why he once named a beer “The Men’s Room.”
The interview has been edited for length and clarity.
Why have this launch event in L.A.?
We’ve spent the last year building capacity up with the beers that we do in L.A., working with chain stores to get access, doing all that grunt work. And now it’s like, we gotta tell the story.
I think there’s three things that make a beer brand work well. What’s in the bottle: the innovation, the consistency, the quality of the beer that you do. It’s gotta be really good. It’s gotta be balanced, it’s gotta set itself apart. The juice has to be awesome.
Another is what’s on the bottle: the label, the branding. You’ve seen Superfuzz and Space Dust [the other beer on tap at the event], and they’re pretty cool. In about 30 or 45 days, you’re going to see Dayglow. And I’m re-doing Immortal IPA. I like the fact that each of our beers have personalities in and of themselves.
And the third thing that I think is equally as important as the first two, is who you are. Not as in, you’re a group of fun brewers. Fuck that. Every group of brewers is fun. We’re brewers!
Tell me your story. Tell me something a little deeper. And [for us], that’s events. That’s sort of experiential things like this. So for an entrance in the market, we want to describe to the media, from the perspective of Superfuzz, who are we? From that beer’s point-of-view, this is what Superfuzz is. It’s a 70s rollerskate party.
When we do pumpkin beers—the next seasonal beer that’s out—it’s a whole different thing. When we do Bifrost Winter Ale, again it’s a whole different thing.
Mixing it up and changing it and getting that story out—not by brewpubs, not by things like that, but by events. And one of the most important things for me is the customer interacting with the brand and being able to make some decisions about the brand.
Like today, we have Space Dust, a big West Coast IPA, and SuperFuzz, a Blood Orange Pale Ale, on tap. The reason I chose those two is because you should make a Fuzzduster.
Oh, I saw that. It’s half Superfuzz, half Space Dust, right?
You put the Superfuzz in first, you blend them half and half, and it’s a delicious third beer. Our brewers did that. That wasn’t a marketing thing. Our brewers were having fun blending it, and they loved the beer. Some breweries would look at it and say, “Oh, blending is taboo, it’s bad” and whatever. Fuck no. Wineries are stuffy. Beer is to have fun with. You should enjoy yourself.
We did a Cherry Lambic a few years back. You blend it with our Dragonstooth Stout—awesome. Experimentation is what drives us. That leads us to discover these other beers. I think customers should do that, too. And if you find something good, tell us. Because we’ll try it.
Going back to this idea of “story,” I know that Elysian has had a somewhat complicated relationship and history with the craft beer movement. What are you thoughts on that?
There’s been a lot of that lately. We were founded in ’96. I was one of the founders, with my partners Dave [Buhler] and Dick [Cantwell]. And we hit a point where as partners weren’t seeing eye-to-eye on things [Cantwell resigned from Elysian in April 2015]. I was CEO, so I was leading us in a direction, but there was a lot of arguing. And there’s that thing of like, “What do you do when you want to sell? What are your options?” Well, there’s like another big brewery. Like an Anheuser-Busch or a Sam Adams, there’s Alchemy and Science, there are some other options. There’s private equity. There’s ESOPs [Employee Stock Ownership Plans]—selling to your staff. We researched them all.
Anheuser-Busch was not the top dollar, by any means. But they painted this picture for me: “We don’t have the internal skill level to do craft. That’s what we’re looking for you to do. We can do increased capacity, we can distribute your beer, we have a legal team to do all the legal work for all the states when you open up. We can do all the nuts and bolts stuff that’s a pain in the ass. We need to you to do the creative side. Create the beers, create the brands, create that whole package, unencumbered by the other side.” And that sounds good. And the packages that they were going to be offering our own staff were really good.
When we went through the merger, it was tough. The thing that I’ve always hated, not just with the merger but prior, too, is polarization of the industry that we have.
There’s a maturity of the craft industry that’s happening. When we first started, grocery stores had a beer section that had macro. And then craft came on, and the grocery store chains said, “New product line, we’ll allocate them more space.” Suddenly, the shelf space expanded into a vacuum that we could go fill. And they kept expanding it for a decade for us. But they didn’t make the store bigger. They shrunk potato chips, they shrunk non-alcoholic beverages, to give us room. Because our SKUs [stock keeping units], our individual items within those stores, were selling at a greater velocity than those other items were.
As we’ve matured now, the grocery stores aren’t expanding anymore. It’s not up to Anheuser-Busch, it’s not up to MillerCoors, it’s not up to the wholesalers. [Shelf space] is up to Kroger. And ideally the consumer, who’s choosing what they want to pull off the shelves.
We need to be bringing awareness to beer. We’re fighting against cider, we’re fighting against non-alcoholic, we’re fighting against kombucha. We’re fighting against all this other kind of shit that’s out there. It’s sort of a “share of throat” thing. We’re more powerful collectively as one voice.
As we’ve matured, we’ve grown up. We need to rethink how that whole relationship [between big and small breweries] goes. At the High End Team at AB [the company’s business unit for its craft brewery holdings], we’re definitely trying to be more collaborative, more inviting with smaller breweries. Helping them out.
What do you mean?
So that’s the breweries that make under 25,000 barrels a year. They don’t package, they’re not going on shelves. They’re just doing draft. We’re not competing with them down here. They’re going to rule the landscape.
The local landscape.
When you go into chain stores, when you’re above that range, and you’re kind of a regional brewery, and you’re packaging and going into markets, like Stone, Ballast Point, Coronado—those are the guys that we’re butting heads with. Bigger guys. And that’s a level playing field, you know?
You have some disagreements with the Brewers Association (BA). What are you referring to?
So we have the Brewers Institute and the Brewers Association. The Brewers Institute is all beer, and the BA is craft. I wish we were one thing with two segments.
There’s one view for beer that should be beer as a whole, how we want to advance beer. Like changing weird laws states have. In Washington state, we can’t clean draft lines. My beer goes on tap at a bar with old draft lines that are skunky and weird—I don’t want that. I should be able to clean my own lines.
But then there’s also a voice for those small brewers, those under 25,000 barrel guys. They need different help. The Feds have a lower tax rate for your first 60,000 barrels. Absolutely, we want to maintain that, we want to protect that for them. Everybody does. We want to help them out. They don’t have the muscle, they don’t have the money to really be in the market, in a strong sense. So I think collectively we should give them deference.
The BA has always looked at it as, Anheuser-Busch, and Constellation, and MillerCoors—we’re all the evil guys, right? And it’s like, “No. Let’s focus on the things we have in common. Let’s work on the things we have in common. And then let’s create a specific agenda for these small guys.”
There’s no reason why us big guys can’t help fulfill the agenda for the small guys. And I definitely think working to gather as beer as a whole totally makes more sense. And that’s from procurement of raw materials to sharing information on quality, on safety. Anheuser-Busch, the first thing they did when we merged was, they spent a shit ton of money on safety. So the work environment for us got way better.
I would love us to do seminars [on safety]. I want to work with the BA to do that. And right now there’s a wall. I hate it, because we were part of the BA. Actually the stupid thing is, we’re still members of the BA.
I thought that breweries had to be at least 25% independent in order to be considered “craft” by the BA.
So, ownership has become a big deal. If you buy Sam Adams Boston Lager, that money goes to [Boston Beer Company founder] Jim Koch. If you buy an Elysian or a Budweiser, it goes to InBev. If you dig into that mutual fund in your 401k, you’re probably holding some Anheuser-Busch InBev. It’s a publicly-traded company. You probably own some of it. Constellation Brands is publicly-traded also; they own Ballast Point.
What you are doing with the beer, I think, is the more important thing. Is ownership by Anheuser-Busch InBev “bad,” because we’re focusing on safety, on innovation, on quality and all this other kind of stuff? A private equity firm that’s unknown, that’s behind the scenes, trying to build the brand up as big as they can get to sell off to the highest bidder—I think that’s worse for the industry than anything else.
It’s less transparent.
Sam Adams is losing some volume, New Belgium is losing volume, Sierra is losing volume, and so they’re pointing the finger at us. The barrel growth that our High End team has had total is 10% of what those guys lost. It wasn’t from us from us; it was the other 2,000 little guys that came up. That’s where they’re getting it.
What’s changed, due to your ownership by InBev?
I’m CEO still. I have a General Manager to do the nuts and bolts and run HR, but whatever direction I want to go, goes. There was a lot of flack last year about the merger. Everybody was saying that AB’s prohibiting us from doing anything. So I’m like, “Okay. Fuck you. I’m going to show you I can do whatever I want.” So I did the Hawaiian Sunburn, which was a pineapple habanero sour in six packs in major chains as my spring seasonal beer. Bad idea. Not only did I do that, I had three different labels on the bottles.
AB got behind it, let me do whatever I wanted to do. No issues and no hesitation. All the wholesalers got onboard. And that kind of shut everybody up. Like, “Oh, shit. That’s crazy.”
Do you still have that beer?
I’m bringing it back in the summer in 22 ounce only. I’m not putting it in six packs again.
What about “Corporate Beer Still Sucks” [Loser Pale Ale]?
As a matter of fact, when I went into [the merger], Anheuser-Busch CEO Carlos Brito was [in Seattle]. And I said, “We could change the tagline.” He goes, “No. absolutely not. You can’t change that. You have to keep everything you’ve got going on. You are your brand, we’re a brand family, and so the most important thing is that you’re consistent with what you’ve always done. So I don’t want anybody ever telling you what to do.” And that was from the CEO down.
I’m curious to hear your thoughts on appealing to the female demographic specifically.
Obviously, Blood Orange Pale is a great beer for that demographic. Jasmine IPA, I think, is the most feminine beer that we do. It’s a very soft, 6.1% ABV beer. The jasmine is beautifully floral. It’s gorgeous, it’s delicious.
I think, you know, 50% of the humans out there are female. We’re kind of stupid not to. And not everybody is going to want to gravitate towards a big, huge IPA.
I think if there’s anything about Elysian, it’s that we’ve always tried to be as inclusive as we can. And we want to make sure that everybody finds a home in something that we do.
Well, you did have a beer called “The Men’s Room.”
So, those are drinking buddies of mine. And their radio show is called The Men’s Room.
It’s still called “The Men’s Room”…
You can’t sell the beer without the show present. Because it’s like “The beer’s called “The Men’s Room. What the fuck does anybody want that for?” When you hear the show, it totally makes sense.
I’ll have to check it out.
It’s a very approachable red ale.
What are some other plans for female consumers?
I have two in the works right now. I can’t let the cat out of the bag. But I’ll leave you with this: hops present us with some qualities that we like. We like the bitterness, we like the aromatics, and the floral nature that they give. There’s other things that bring that to the table. There’s hibiscus, there’s jasmine, there’s all these other things. We’re constantly experimenting with other adjuncts—not just hops—to bring some of these qualities over. Citrus peel, like in Superfuzz, blood orange peel, brings that bitterness, brings that effect. So in some of those beers, that’s the sort of road that we’re chasing.