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Craft lightens up

Why some craft breweries want to make your next Bud Light⏤sort of.
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COUCH LAGERS

It’s fitting that I was at the Hawthorne Theater in Portland, Oregon, to see G. Love & Special Sauce, whose first big hit was “Cold Beverages”—I’d actually vowed never to drink beer there again because all the draft beers are served out of habitually filthy lines that make me sick and the canned beers are of the Rainier ilk, so if I need a drink: shots. But lo! What’s this? There’s a new canned beer available and it’s an even better deal than the $3 pounder of PBR: a 12-ounce can of Couch Lager from Burnside Brewing for a mere two bucks. Not only will the canned good not make my head feel like it’s filled with rotten porridge, but dagnabbit, it’s the most frugal option.

If $12 six-packs of IPA or $25 barrel-aged stouts don’t sound the death knell for Big Beer, will cheap lager do it? If the price of a craft lager six-pack at a music venue is cheaper than the price of, say, a bottle of Ballast Point Sculpin IPA even when it’s on special at a bottle shop, the world of American light lagers is about to get shaken up like a dropped suitcase of Keystone in a supermarket parking lot.

Even though Couch is pronounced “kooch” (like the street that parallels Burnside Street), Burnside co-owner Jay Gilbert describes it as “that kind of beer that you sit on your couch and drink.” He concedes that the beer’s cheap to make because it’s brewed with a relatively low amount of Noble-esque Sterling hops, but he also notes that even though he sells Couch to his distributor for the same price as Burnside’s other six-packs, the lager shows up at retailers for as low as $6.99, instead of the $9.99 that’s standard for the brewery’s IPA.

Clear across Oregon, Caldera Brewing rolled out six-pack cans of Lawnmower Lager in 2014 when founder Jim Mills decided the hundred-degree days of Ashland called for a light lager. Co-opting the term for light beers, Lawnmower Lager routinely hits grocery shelves for under $6.50 for a sixer. How? Reminiscent of the joke about what light beer and making love in a canoe have in common, to paraphrase the words of Caldera’s brand manager Ray Cato, it’s near water.

Cato adds that he wanted the 3.9% lager “to be right next door to Coors and Bud and put the hurt onto those guys. Go after the PBR trendy kids.” The hope is that it still appeals to hip millennials because it’s made in Oregon. “It’s an under-4% beer that’s good for everybody that either doesn’t like craft beer or wants to take a break from it,” says Cato, adding that the objective isn’t to undercut Caldera’s craft brethren.

Speaking of lawnmower beers, Houston’s Saint Arnold Brewing makes a kölsch called Fancy Lawnmower along with a hefeweizen yeast-fermented version known as Weedwacker, both of which are targeted at the same type of consumer but, in contrast, are actually sold at a regular craft price point. “We look at our beer as a competitor to traditional light American lagers, but we’ve never thought, ‘Hey, let’s brew this and price this to try to undercut something from Anheuser- Busch,’” says Saint Arnold marketing director Lennie Ambrose. According to IRI, a company that compiles sales data across various industries, sales of Fancy Lawnmower nearly reached $3 million in 2015; by comparison, sales of Bud Ice topped a whopping $300 million— just under Pabst Blue Ribbon. Saint Arnold’s lighter offerings, Ambrose adds, are “playing in a different stratosphere than those [industrial light beers] … . Our founder [Brock Wagner] has said he still believes that people correlate price to quality.”

That’s probably true. But that didn’t stop fellow Texan brewers Austin Beerworks from creating the ultimate value package: a 99-pack suitcase of Peacemaker Pale Ale that retailed for $99. That’s the equivalent of buying 16-and-a-half six-packs at $6 each.

The success of “value” or “economy” brands hinges on the price of the ingredients plus economy of scale. If AB-InBev brewed Natural Light using only pricier two-row barley and in only 10- or even 100-barrel batches, it would no longer retail for roughly $14 per 30-pack. Same goes for MillerCoors’ Keystone Light. Those are the seventh and thirteenth best-selling brands nationally, according to IRI.

Meanwhile, Rhode Island’s Narragansett, which dates to 1890, has grown into the 37th largest craft brewery according to the Brewers Association and owes its resurgence to the snappy, slightly bitter Narragansett or “Gansett” Lager. Six-packs of 16-ounce cans commonly sell for under $5.99. President Mark Hellendrung says sales of Lager account for 80 percent of production. He acknowledges that, pricewise, “We had this difficult decision. We had this volume and didn’t want to walk away from it.” Nevertheless, Hellendrung foresees “inching [pricing] up with the realities of the marketplace.”

Ultimately, the decision to keep craft lagers priced in line with the rest of the category’s mainline styles such as IPAs and other pale ales or to move toward discount pricing to become competitive with the light lager market is up to the respective brewing companies. What won’t work is if said brewers think they can, or need to, cut corners. “We’re not trying to dumb down craft beer,” insists Burnside’s Gilbert. “We’re trying to give macro drinkers an opportunity to move past drinking macro beers.”

 

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