Craft Beer Steps Into Wine Country

Brewers Offer Vintage Dating and Tasting Events

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CHICAGO (AdAge.com) -- You're about to read a story about full bouquets, cellar reserves, chardonnay blends and Grand Cru.

But it's not about wine. It's about craft brewers -- whose sales have frothed even as beer loses market share to wine and other beverages -- who are increasingly cribbing vintners' marketing techniques in an effort to keep volume and prices buzzing.

Methods long synonymous with high-end wine marketing, such as reserve bottlings, vintage dating, future-allocation programs and even vertical tastings (in which drinkers compare multiple vintages of the same beverage) are becoming increasingly commonplace among craft brewers.

And, by all accounts, they're succeeding: Craft-brew sales grew 9% to 7.1 million barrels during 2005, following a 7% increase from the prior year, making craft beer the fastest-growing segment of the U.S. alcoholic-beverage industry.

"There's no question the people in this segment have looked to wine for lessons on how to market better," said Ray Daniels, director-craft beer marketing for the Brewers Association.

Mr. Daniels said the growth in winelike offerings recently prompted the Brewers Association to enter a partnership with Information Resources Inc. to measure sales of reserve and seasonal bottlings, but statistics aren't yet available.

Still, anecdotal evidence from individual brewers scattered all over the country suggests demand for reserve crafts is growing. The Wyoming-based Grand Teton Brewing Co., for instance, introduced a "Cellar Reserve" line in 2002, primarily as a means of letting its brewmaster experiment with longer-brewing beer. The "Cellar Reserve" name was meant to invoke the careful handling practices associated with fine wine. (Grand Teton doesn't actually have a cellar.)

But the silk-screened one-liter bottles gradually garnered a following among local beer aficionados, and they became so popular that the brewery created a future-allocations program similar to one used by top wineries in the Bordeaux region of France. "We were selling them before we could make them," said Chuck Nowicki, Grand Teton's sales manager. So during 2005 the brewery tripled production -- to 300 cases from 100 cases -- and sold everything it made.

While the 300 cases is only about 8% of 2005 volume for the brewery-which is on pace to grow sales 91%, to 7,000 barrels this year, the pricing on the reserve beers makes them worthwhile. A single one-liter bottle of the cellar reserve costs $11, almost twice as much as a six pack of the brewery's nonreserve offerings.

San Diego-based Stone Brewing Co.'s marketing emphasizes the difference in different vintages of its beers. The brewery's Vertical Epic Ale is released annually on the most redundant date of the year (02/02/02, 03/03/03, etc.), and the brewery posts tasting notes on its website to explore the differences.

Stone Brewing CEO Greg Koch says the brewery's emphasis on vintages has created a demand for older bottles. A 2002 bottle, which cost $4.99 upon release, fetched $400 on eBay last November. Mr. Koch says that degree of consumer enthusiasm has driven production from 300 bottles in 2002, the inaugural bottling, to 7,500 bottles this year, which is on pace to sell out.

Across the country, in Portland, Maine, Allagash Brewing Co. took the wine fetish even further: Its Victoria Ale actually contains chardonnay grapes. Separately, the brewery offers two "reserve" bottlings and another premium brew it calls "Grand Cru."

And Chicago's Goose Island Brewing Co. last summer introduced a "Reserve" line of beers that retail for between $11 and $18 for a pack of four 12 oz. bottles. Fred Rosen, who owns Sam's Wine and Spirits, the city's biggest alcohol retailer, says the special bottling has sold quickly, despite the lofty price tag. "It really is a lot like selling fine wine, very boutique-ish," said Mr. Rosen. "The beer and wine sections are looking more alike all the time."

While the percentage growth is impressive, craft beers remain a microscopic potion of the beer industry as a whole. Consider that the 7.1 million craft barrels sold last year is roughly equivalent to 7% of No. 1 brewer Anheuser-Busch's domestic shipments during the same period.

Still, the macrobrewers are aggressively moving into the space. Coors Brewing Co.'s Blue Moon wheat-beer brand -- which downplays its macrobrewed roots and, with its orange garnish, looks more like a cocktail than a beer -- has grown double digits during the last three years and saw sales climb 118% during the four weeks ending May 22 without any media support.

Taking notice of that trend, A-B has been moving forcefully into the craft space, buying a 35% stake in Goose Island; offering seasonal, regional draft offerings in bars; and even offering its own winelike reserve bottles.

Released last Christmas, the company's Brew Master's Special Reserve by Budweiser and a similar offering, Celebrate by Michelob, sold every bottle produced, although the company's VP-innovation, Pat McGauley, declined during an interview to say how many there. Both beers came in pear-shaped bottles usually associated with wine or champagne.

Describing Celebrate, the A-B executive sounded more like Robert Mondavi than Bud Light daredevil Ted Ferguson.

"It has a full bouquet of oak and vanilla," Mr. McGauley said. "The wine guys have done a nice job of romanticizing the selling of their products, and that's something that we see as critical for this segment."
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