Beer

But it also seems like a highly risky strategy. Forget about Wisconsin’s glorious labor history. Wisconsin’s love affair with beer dates back to the 1830s, when German immigrants brought their lager-loving tastes with them and ended up making Milwaukee into the beer capital of the United States. You simply do not mess with Wisconsin and beer. The entire beer-drinking United States owes Wisconsin a huge debt of gratitude: A Wisconsin senator, John Blaine, introduced the amendment that repealed Prohibition!

So what’s happening here?

According to a summary provided by ThinkProgress on Friday, the big players in Wisconsin’s beer industry, which includes MillerCoors, the Wisconsin Beer Distributors Association, the Tavern League of Wisconsin and the Wisconsin Grocers Association, are claiming that the law, which will prevent any brewer from owning a wholesale distributor, is intended to prevent another monolithic producer of watery pap, Anheuser Bush InBev, from swooping into Wisconsin and buying up distributors and creating its own local monopoly. But the law also restricts brewers from having more than one retail license to sell beer, which seems to mean a small micro-brewer would not be allowed to run more than one brew-pub to market and sell its own product.

ThinkProgress went even further, declaring that “Under the provision, it would be illegal, for instance, for a small brewer located near a restaurant to walk next door to deliver a case of beer. They’ll have to hire a middle man to do it instead.”

But that doesn’t seem to be true. Under the law, brewers who produce under 300,000 barrels are allowed to self-distribute.

What is true, however, is that nationally, the craft beer segment of the beer industry is continuing to register strong year-on-year sales growth even as the overall market shrinks — down 1 percent in 2010 after an even larger drop in 2009. Right now, craft beers only add up to about 5 percent of the Wisconsin beer market, but in the long run, taste and diversity seem sure to threaten an ever bigger chunk of the dollars currently spent on Bud Light and Miller Lite. If a group of small Wisconsin brewers wanted to get together and run their own wholesale distributor in order to compete more effectively with the big boys, the new law would prevent them from doing so.

The craft brewers are angry because they say they were not consulted before the law was sneaked through the Legislature. And it does seem odd that a governor who makes such a big deal of supporting small businesses would back legislation that restricts them from getting bigger, and potentially restricts Wisconsin beer drinkers from full access to the best brews available. What ever happened to the free market?  But blaming this particular piece of legislative maneuvering solely on Walker seems misplaced. The Joint Finance Committee voted 14-2 to approve the legislation — only one Democrat and one Republican opposed it. Apparently, in Wisconsin, when MillerCoors talks, everybody listens. 

So what’s a megabrand CEO going to do?

Improve the product? Don’t be ridiculous. Tweak the marketing!

On Monday, the Wall Street Journal published an entertaining interview with Carlos Brito, the Brazilian CEO of InBev, which caused a fuss among red-white-and-blue Bud drinkers when it slurped down Anheuser-Busch in 2008.

The first question:

WSJ: How will you shift your marketing of Budweiser to revive the brand in the U.S.?

Mr. Brito: We have to do a better job of reinforcing the foundations of the brand. We haven’t reminded people it’s a different brewing process than all other beers out there. In the U.S., we haven’t talked much about [beechwood aging] for years.

Beechwood aging! The miracle drug — it can cure everything, including the first annual sales decline in 28 years for Bud Light!

Before I go into full rant mode, let me try to nip the incipient beer war in the comments in the, uh, bud, by noting that I grew up in a household where Budweiser truly was the king of beers. I have a warm affection for the brand, and at certain times in certain bars, a Bud longneck feels like the right and only choice to me. However, as longtime readers know, Sierra Nevada Pale Ale won my heart almost 20 years ago (and director Judd Apatow’s too, apparently, considering how often the beer appears in his movies). I like a hoppy beer with lots of flavor, and I appreciate Sierra’s dedication to their craft. Recession notwithstanding, it is no surprise to me that craft breweries are thriving while the Budweisers and Millers of the world are floundering. What else would one expect when the bright idea to boost sales is to spend millions of dollars getting the likes of George Clooney to croon the words “beechwood aged.”

For the uninitiated, beechwood aging refers to a fermentation process that uses beechwood chips to increase the available surface area for yeast cells to adhere to, thus accelerating the process by which the yeast sucks various bad-tasting chemicals out of the brew. We’re not talking stately beechwood casks imparting deliciousness through the slow passage of time. The purpose of the technique is to speed up the brewing process and get beer out the door faster.

I’m sure the recession is probably villain number one when explaining declining megabrand beer sales. But there’s another narrative at work here: one in which Americans shake off the mindless brain-washing of mass marketing campaigns and seek out quality and authenticity. Yes, I will grant that there is an elitist, class-based element to the organic food, locally produced, DIY, home-made craft movements; I’m sure one reason why craft beers are surviving the recession better than Bud Light is simply that craft beer drinkers tend to have more disposable income. But we are also, in some sense, growing up culturally; we can’t be as easily swayed by the Mad Men as as we once were; we have more options to bypass the tastemakers and seek out information and distribution channels that deliver to us what we really want rather than what we are told we should want.

We’ve got a long way to go, but when I hear that the megabrands are in trouble, I hardly feel alarmed. Let the mighty fall, and let a thousand local microbrews take their place. Our tastebuds will thank us. And when we’re in a tight spot, PBR will always be around to offer up a cheap thrill.