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02.2009

Massachusetts Beverage Business

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Article By: Andy Crouch

Born in Germany and raised in the Upper Midwest Dick Cantwell developed his passion for beer as a homebrewer living and writing in the Boston area in the late 198Os.  By 199O he decided to move once again, this time to Seattle, where he became the head brewer for the Duwamps Café and Seattle Brewing Company.  He eventually left to work as a brewer at the nearby Pike Place Brewing Company before spending time at the Big Time Brewery and Alehouse.  By 1996, Cantwell was ready to break out on his own and with the help of partners Joe Bisacca and Dave Buhler, formerly of the Rogue Ales Brewery of Oregon, he founded Elysian Brewing.

Taken from a Greek word of varied meanings, references to Elysian can be found in a wide variety of literary works, which makes sense considering Cantwell’s background as a writer.  The partners’ original location in the Capitol Hill neighborhood of Seattle boasts a 2O-barrel brewing system that has provided the backbone for an operation that now extends to two other locations in the city, Tangletown and Elysian Fields (a reference to the final resting place of the souls of the heroic and the virtuous).  These smaller operations, three and four barrel systems respectively, allow Elysian’s brewers to experiment, resulting in more than 6O different beers.  In order to manage its growth, Elysian has announced a unique brewing arrangement, in the form of a cooperative, with the New Belgium Brewing Company of Fort Collins, Colorado.  I recently spoke with Dick Cantwell at his Elysian Fields restaurant and pub.

ANDY CROUCH Tell me about your recent announcement of collaboration with New Belgium Brewing.
DICK CANTWELL One of the things that I’ve been working on over the last six months is this New Belgium thing.  That’s taking a fair amount of time and I’ve been down there four or five times and I’ll be heading down there soon to make post-fermentation decisions  about the beers I brewed recently.  Can I say that I brewed them?  I was there, I contributed information but I didn’t actually – well that’s not true – I did dump pumpkin into the mash tun.  Dropped the bucket into the mash tun actually (laughs). 

AC What was the genesis of that arrangement?
DC I think that it came from a number of things.  For one, we’ve always been friendly.  Peter [Bouckaert, New Belgium’s brewmaster] and I have been kicking around the idea of brewing together for four or five years and actually had it scheduled at one time and we had to cancel.  It really started picking up some steam when I got on the Brewers Association board and I became friends with Kim Jordan [New Belgium’s CEO].  During the course of board discussions, we found ourselves agreeing about not necessarily what the solutions were, but over our concerns for the future of the craft brewing movement.  One thing that we talked about independently, and with our own little spin on it, was the notion of cooperatives in the future.  There are a lot of people my age and older who have been in this business for fifteen or twenty years – they’re getting to the point where they are thinking about what they’re going to do.  Are they going to sell their places or get their kids to try and become brewers and take over the business?  It’s not a matter of urgency for me because I’m not that old but it’s something to think about.  That is a real area of concern.  I think we’re going to see a lot happen in the next ten to fifteen years and we’re seeing the big breweries take interest in what we’re doing, especially with Anheuser-Busch.  Those of us who don’t want to take those avenues have to come up with some creative ways to not just survive but to go into the future.  I see a lot of different combinations for how people can come together.  One thing that has really kind of intrigued me over the last year has been the deal between Pabst and Southampton.  There was no portion of ownership changing hands, it was just a creative arrangement to try and make more beer from a reputable source.  That’s not exactly what we’re doing – we’re trying to figure out a way we can make more beer and grow our demand and market to the point when in two or three years we’ll think about taking the plunge with a new bigger brewery.  In the meantime, we don’t have to make that enormous capital investment.  And we haven’t worked out the fine points yet but I’m really looking forward to having some of their people here to brew some specialty beers and to give some of our local customers a chance to try some of New Belgium’s really great beers.  A lot of people around here just think of them as the Fat Tire brewery and we all know that they make some really terrific stuff in these smaller batches. 

AC What are you guys expecting for the next three to five years?
DC I think we’ll definitely increase our brewing capacity.  We opened in California in September and that is enormous for us.  We don’t want to get too far ahead of ourselves.  We’ll do that for a while and examine what makes sense.  We need a bigger brewery to serve this region so we’re trying to set that up.  We’re trying to decide whether we want to do a stand alone thing or, as I’ve talked about, some kind of cooperative.  We’re exploring all of these options. 

AC Are you thinking of including other breweries in a cooperative?
DC I don’t know if we will but I think that is the sort of cooperative that we will be seeing.  There is precedent for this.  In Denver, about twelve years ago, Broadway Brewing, Flying Dog, Wynkoop, and Crested Butte were together.  I don’t see why it won’t happen.

AC What are your thoughts on the business partnerships between craft breweries and large entities, such as Anheuser-Busch?
DC I’m sort of glad that we weren’t at that point when Anheuser-Busch was really looking around for the next place to acquire.  I’m glad that the whole movement has matured and that we’ve grown to the point that the deal that we’ve made makes sense for us and we’ve totally escaped the notice of . . . Well, not totally – a little more than a year ago we had a Brewers Association pow-wow with August Busch IV in DC.  We all sat down in a room with him and his posse and his sort-of right hand man shook my hand and said that he had enjoyed our beer for years.  It was like the touch of death (laughs) that someone at Anheuser-Busch had taken notice.  It turns out that Mr. Busch has a house out on Lake Washington and so they had stayed in the area.

AC How did you get involved with the Brewers Association and the Board?
DC Well, I’ve judged at the Great American Beer Festival every year since 1995 so I’ve been doing that for quite a while.  I’ve written for several magazines and wrote a book on barleywine for the association.  After we won the Small Brewpub of the Year Award, that sort of brought us more into the fold right there.  A couple of people suggested that I should try and get on the board.  It’s been a good experience and I’ve learned a lot about administration and gained knowledge that works well in the business.  And of course it’s helped cultivate this new association.

AC How has your experience been on the board with some of the industry politics?
DC The people on the Brewers Association board will do things without being self-interested.  Jim Koch is able to separate himself.  He’ll say, “What I’m saying now is completely at odds with the policy of Boston Beer but here is what I think this organization should do.”  I think we see that from everyone who is on it and that they operate with the view that we all have to hang together or we’ll all hang separately.  Over the last four years, the melding of the Brewers Association of America and the Association of Brewers was absolutely essential for the success of our industry.  Here we were, an industry segment commanding 2-percent of the national market at that point yet we had two trade organizations? 

AC Did you have any involvement in the definition of craft brewer and the controversy that went on with that?
DC (Laughs) Oh yeah, I was part of that.  I wasn’t on the committee that came up with it but that is such a tough thing.
At times, I’ve argued about every possible point of view and have been on both sides of this issue.  The most recent thing I think I’ve said is that we should just give up and not have a definition and trust the consumer to make the right choice.  But that was admittedly a rarified position being as small as we are.  I got reactions from other people on the board saying, “You know, you’re wrong.”  I guess at this point we’re just trying not to make too much of it.  I do, however, see some positive effects even though there is disagreement, and there is disagreement, even among members of the board.  There are absolutists who think that if you even have any ownership by someone else that you couldn’t be considered independent.  And I don’t even know if we would qualify because we have like six percent foreign ownership, depending upon where you draw the line.  I mean it’s like, “How much of a vegetarian are you?” I do see some positive effects.  Take Starr Hill for example.  I remember at the Craft Brewer’s Conference in Austin there was this enormously contentious members’ meeting where everyone was arguing over whether we should kick the Widmer’s [of Widmer Brothers Brewing] out and wasn’t it a shame about the Hall’s [of Goose Island Brewing] and that we shouldn’t cut out any of our pioneers.  And that is tough.  At the same time, they do gain advantages by their associations – so I don’t know.  After that meeting, I went out and spoke with the guy who owns Starr Hill and his wife and they we’re grilling me about it.  And they had no indication or announcement of anything they were going to do and we talked for quite a while.  And then when the announcement came that they had reached a deal with Anheuser-Busch and that it was only twenty-five percent, I kind of felt like that was a victory.  That people were actually taking into account where they would fall in the camps of designation and that they had taken that to heart in determining how to forge their deal.  What does that mean?  I’m not sure. 

AC And what of Boston Beer and its production nearly reaching the threshold amount of two million barrels.
DC Exactly.  It’s inevitable that they will go above two million barrels and this was my point in saying we should dismantle it.  The definition of our success ensures our failure.  All of a sudden our market share would drop.  And yes, Blue Moon, or what we are now calling it, Blue Moon by Coors, their success and the decency of their beers – I mean twenty years ago wouldn’t all of us have considered that a good thing, that one of the big brewers is actually making a beer we can drink, it is a victory in terms of sensibility but it’s scary in terms of the inroads it makes on our more purely defined arena – but I still think it’s a victory.

AC Blue Moon by Coors?
DC We’re going to do a whole campaign of ‘Who makes your beer?’.  So that it is right out there.  It will be right out there that this percentage of our beer is made at New Belgium and I’m okay with that.  But it’s also going to be, ‘How much of your company is owned by Anheuser-Busch’ and ‘Who makes this’ and what the Plank Road Brewery really means.  We want consumers to go to the website or generally have it forged into their consciences so that they pay attention and give a damn where it comes from and who does it.

AC What brought on the move to New York?
DC We knew we wanted to open some new markets and when we started thinking of New York, the New Belgium deal wasn’t even on the horizon.  The way it has worked out, we know we want to increase our profile in markets where we haven’t been before and New York is the media market.  The week after we went to New York, we received a query from men’s journal wanting to do something on our ESB and other beers.  That’s a victory right there.  Eric Asimov of the new york times won’t write about beers that aren’t available in New York.  There have been tastings there that I just wish our beers could have been a part of.  I wish our ESB could have been in the Bitter category as we’ve won three gold medals with that beer.  It’s for exposure as we grow.  I think we’ve always had a larger profile than we are.  We’ve just grown to being a five thousand barrel brewpub with distribution in a cluster of states.  I think there are a lot of people who would be surprised to realize that we are that small.  We’ve had a good profile at national events.  We’re trying to create a profile that we hope to grow into.  It’s an area we have strong ties to and as I have strong ties to Boston, I hope to get there soon as well.

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