Monday, August 16, 2010

On New Hampshire's 14% ABV Limit

This morning I noticed a thread on Beer Advocate in which the original poster lamented the 14% alcohol by volume limit on beers sold in the Granite State. I posted my two cents' worth:

I've been following this thread and thought I'd weigh in with some background on this topic. When my partners and I arrived in the Granite State in 1991 to open the Portsmouth Brewery, the alcohol limit for beer sold in the state was 6% abv. In 1995, the year after Smuttynose opened, I met with with our local state sentator and the director of the state's wholesale beverage association to discuss a number of possible changes to the state's beer laws, including raising the 6% limit. The wholesalers' representative thought raising the limit was a political nonstarter, since he was convinced the neo-prohibitionist lobby would crawl out of the woodwork to oppose it. We pressed ahead anyway, forming a group of small brewers and sympathetic legislators. After a good deal of discussion, it was decided that a 12% limit might be sellable, but we weren't even sure about that. (Politics, remember, is the art of the possible.)

As it turns out, organized opposition to the bill never materialized. During testimony, the thing many legislators were most curious about was how many great beers were not available in the state, due to the 6% limit. Commerce, it turns out, won the day. 

Interestingly, in 2007 the wholesalers, who in 1996 were mildly opposed to raising the limit from 6 to 12%, brought forth their own bill proposing raising the limit to 15%, arising from their interest in selling high-octane flavored malt beverages. I didn't want to spend any of my own political capital promoting Mike's super-extra-hard lemonade, but I didn't want to pick an unnecessary fight with the wholesalers (with whom I've built a good, productive relationship), so I sat on my hands and didn't support or oppose this bill. My recollection is that the proposed 15% limit got reeled back to 14%, with the special approval provision added in. 

So that's how we go to where we are at this point. And while I wouldn't discourage anyone from riding their ponies to the statehouse to exercise their rights of citizenship, I'll just point out that with respect to alcohol limits, at 14% most of the battle has been won. Any increases beyond that will be harder and harder to achieve, politically speaking, because the constituency served gets smaller and smaller.

There are lots of amazing beers that are not available in New Hampshire, and the alcohol limit has nothing to do with it. Our is a state whose retail landscape is dominated by three supermarket chains who favor big, nationally advertised brands. This fact influences the way our wholesalers do business: with relatively few retail outlets for truly specialized beers, they tend to shy away from them. If the readers of this forum are really interested in expanding the selection of beers in New Hampshire, the best place to focus their energy is not on the statehouse, but on the major retailers. Next time you are in a Hannaford, Shaw's or Market Basket, take a few minutes and drop a card in their suggestion box asking why many of your favorite beers are not available there. 

A number of people participating on the forum expressed that legislation should be proposed to raise the 14% limit, or do away with it altogether. To them, I say go for it. However, I hope I don't sound too cynical by adding that it is far easier for a single individual  to get in his or her car from time to time and drive to a store in Maine or Massachusetts to purchase beers unavailable in New Hampshire, than it is to become educated about the mechanics of legislation, draft a bill, locate sympathetic legislators, take time to travel to the state house to testify (sometimes multiple times), round up public support, persuade potential opponents to change their positions or at least keep quiet - in short to lobby for a change in the law that will benefit some consumers but have limited consequence in the grand scheme of things. 

That is why, in my opinion, legislation of any kind is generally promoted by those who have a commercial stake in its passage (or defeat), because they are the only ones for whom it is worth devoting the time and resources  required. Sadly, most of the time the voice of the consumer is absent from the discussion. 

Monday, August 2, 2010

On the Portsmouth Brewery's New Menu

Since the Portsmouth Brewery started serving its new menu about a month ago, we've gotten some nice press and a lot of feedback. Though most of it has been positive, a sizable minority has expressed disappointment at the disappearance of certain favorite items, such as our Rhode Island style calamari, steak bomb sandwich, meatloaf, crab rangoon, grilled chicken breast & basil sandwich, salmon sandwich. In responding to these comments, I've found myself touching on the same points, so I thought I'd publish a variation of a letter I sent recently to a regular customer who wrote lamenting the loss of some of her favorite items. Here's my letter. Please let me know what you think.

- Peter

Good morning,

Thanks for following up with me. I've passed your comments along to our chef and his staff, as well as the rest of the management team at the Brewery.

As I'm sure you know, the Portsmouth Brewery is in its twentieth year in business. Over time, we've made numerous changes to our menu, large and small. In fact, our menu, as it's evolved to this point, bears only slight resemblance to the one we opened with back in 1991. There are a variety of reasons why we make these changes:

• An item is not selling well. (It's always tough to be the slowest antelope in the herd!)

• Something has become cost prohibitive, and we would have to charge more for it than would be reasonable. This was basically the fate of our salmon sandwich, which we lost money on every time we served it. We could have kept it at a reasonable price by substituting a cheaper variety of salmon, but we have opted instead to offer salmon as a special when we can offer the best combination of quality and value.

• An item is not logistically feasible to produce. The Brewery does four times the level of business it did in its early years, and about twice as much as when we last expanded our kitchen fourteen years ago. We are constantly faced with the challenge of putting out a greater and greater volume of food from a kitchen that can not be expanded. All this without sacrificing quality. Again, there are easy ways to put out more food - mostly by purchasing pre-prepped boil-in-bag or drop-and-fry items - but we've never gone that route.

• We need to make room for new, interesting items we wish to try out. Due to the previous reason, any new item requires an existing one to be dropped.

• Sometimes, menu items have simply lived out their lifespan and it's time for them to go. When we first opened in 1991, we served fajitas and overstuffed California-style burritos (my sister and I are both from southern California, so this was a natural for us). A few years later when we saw fajitas featured at McDonald's and burrito joints popping up everywhere, we decided it was time to move on.

• But perhaps the most important reason we make periodic changes to our menu is to remain fresh and interesting to our customers, both old and new. Operating a new restaurant is a very different proposition from running one that's two decades old. We are tasked with being both comfortably familiar and fresh and interesting at the same time - it's quite a challenge, but one that we have a lot of fun taking on.

We try not to be too sentimental when it comes to making these decisions. Some of my personal favorites have gone by the wayside over the years (including those burritos, our pizzas and a great fresh avocado & roasted turkey sandwich with homemade red pepper mayo that we used to offer). And when we do make changes, we are always bound to disappoint customers who have grown attached to items that we no longer serve. It's a difficult situation to be in, because in the hospitality business, we here to say yes, not no.

So, now that you've had a look behind our curtain, perhaps you'll take another look at our new menu and regard it differently. We're really happy with it, and the reaction thus far has been overwhelmingly positive. Yes, we've definitely heard from people who've seen a favorite item go away, but I think we still offer one of the most wide-ranging, interesting and creative selections of food around.



Tuesday, February 9, 2010

On the Smuttynose Big Beer Series Release Schedule

Like many beer fans, I am an avid reader of Beer Advocate. And if you're reading this blog, and you aren't a Beer Advocate already, you should be. I'm going to leave the room for a few minutes to give you time right now to sign up.

All set? No on to my post...

As owner/operator of two small breweries, I also read Beer Advocate to see what people are saying about Smuttynose Brewing & the Portsmouth Brewery. (Kind of like googling yourself, I guess) This morning, I noticed a post about our Big Beer Series release schedule and felt compelled to weigh in, which I don't do very often. Here's the initial post in the thread:

Smuttynose big beer schedule?

So being a big fan of the smuttynose big beer series I was quite excited to see the line up for 2010 line up. And even more excited to see the first beer sceduled for Jan was a barleywine. So here's the question, needless to say were a week plus into february and I have seen no sign of the barleywine. Am I the only one or has this for some reason just not made its way into VT? Any thoughts?

Followed by my lengthy response:

Peter from Smuttynose here, weighing in on a subject that's near and dear to my heart - our Big Beer Series. First of all, let me say how great it makes us at Smuttynose feel to see how highly sought after these beers have become. It doesn't seem that long ago - back in 1998 when we began the series - that we had pallets of the stuff gathering dust in our warehouse, with wholesalers and retailers alike telling us that "Big Beers in Big Bottles" was a really stupid idea. "Why don't you make beers that are more 'drinkable,' like Corona?" we were told. We didn't agree, and, thankfully, beer lovers didn't, either.

But on to the subject at hand. Our Big Beers appear at different times in different markets for a variety of reasons, several of which have been pointed out above. Let me begin by stating that we offer each new Big Beer edition to every market in which we have distribution at the same time; we don't release in one place and hold back in another. I can't think of a good reason why we'd do that, yet we've been accused of it nonetheless. We have altered our release schedule from time to time, sometimes delaying the release of a particular edition because the previous edition is moving more slowly than anticipated and it is backed up in our warehouse. In 2008, during the worst of the hop shortage, we reshuffled our release dates to match the availability of certain hops.

In addition to that, a number of our wholesalers have the maddening practice of only keeping one edition in stock at a time, not even allowing for an overlap. They wait until one edition has been completely depleted before ordering the next one. That means that an entire market, or even a whole state, can be devoid of Farmhouse Ale, for example, because half dozen cases of Maibock are sitting on a distributor's warehouse floor. This can result in our Big Beers drying up throughout an entire market, just because of those half dozen cases.

Most successful independent retailers, and a few chains actually prefer to feature several editions of our Big Beer Series simultaneously, but it's hard to convince some wholesalers, who are terrified of being "stuck" with unsold stock. In fairness, a growing number of wholesalers are getting more comfortable and skillful at managing multiple SKU's of smaller brands. In that regard, they are becoming more like wine distributors (which some of them are) than conventional beer wholesalers, who have traditionally succeeded by moving massive volumes of boxes at a high velocity, with razor-thin margins. Many retailers are evolving their business models to keep up with changes in consumer demand, as well. This "back to the future" model - smaller volume, slower velocity, higher margins - is an interesting alternative to the Big Box retail landscape that's emerged globally over recent decades.

Remember, too, that the chain of communication in the beer business is complex and fragile, involving as it does management, sales and production at the brewery, and management, warehouse operators, sales managers, and street level sales rep's on the wholesale side. At the retail level, the players involved are purchasers & category managers (in the case of chains), and store-level managers. All of these parts rarely make for a well-oiled machine, especially when you're a tiny supplier like Smuttynose. Sometimes our products don't reach the consumer in a timely fashion because of a simple failure of communication somewhere along that chain.

Our home market in New Hampshire is dominated by three large supermarket chains, which impacts that market profoundly, as they tend to focus on nationally advertised brands and have less focus on small, local suppliers. The handful of independent stores do the best they can, but there aren't enough of them to form a critical mass, and the consumer ends up with far fewer choices than in neighboring states. (At Smuttynose, we are beer drinkers as well as brewers, and we lament that fact as much as any of the rest of you!)

It's worth mentioning that as consumers, we are in the driver's seat. In my view, that is the best thing about the Beer Advocates, they (we) are, well, Beer Advocates who have driven massive changes in the beer industry, which is very different today than when I started 23 years ago. And it continues to change. We're not done yet!

OK, I've killed way too many pixels writing this, so I'll call it quits now. Thanks for listening.