Why we’ve retired Portsmouth Lager

Yesterday, Tyler Jones, assistant brewer at the Portsmouth Brewery, made entry in the Portsmouth Brewery Brewers Blog announcing that the very last keg of Smuttynose Portsmouth Lager had been tapped. Several readers asked what will replace that beer when that final keg runs dry, and they surmised, correctly, that it would be the newest Smuttynose offering, Star Island Single. I’m writing today to briefly introduce this new beer, but first I’d like to say a few words about Portsmouth Lager, the circumstances in which we introduced it back in 1998, and why we made the decision to retire it eleven years later.

1998 was a watershed year at Smuttynose. The craft/micro segment of the beer industry was entering the third year of a brutal shakeout phase, and we were taking a beating along with everyone else, having seen close to a third of our sales volume dry up during the previous two years. Small breweries left and right were falling by the wayside, and at the rate we were going, I feared our turn would come soon. Consumers, retailers and wholesalers had lost confidence in the craft segment, which in the early nineties had become flooded with shitty beer and phony knock-off products. Some of the wholesalers in our network had already dropped our brand from their portfolios; others were threatening to do so any day; and most of the rest wouldn’t answer our phone calls. It was a very bad time to be a small brewer.

In retrospect, it was also a time of great opportunity. 1998 was the year we introduced our Big Beer Series, a move that was universally hailed by our wholesalers (the ones that would still talk to us, at least) as one of the stupidest ideas they’d heard in a long, long time. Why were we proposing to make a series of big, exotic-sounding beers, they asked, when the market was moving towards light beers? Any why, they further asked, would we put those beers in a package - 22-ounce bottles - that no one - no one - wanted to buy? I like to tell people that, in the position we were in, we were a little like the mountain climber in the excellent book and film Touching the Void who had fallen down a crevasse and was clinging, broken and bloody, to a narrow ledge. Climbing up out of the crevasse was not an option; the only choices were to die on the ledge or go down, deeper into the darkness. (You really need to read this book or see the movie, at the very least, to see how that decision worked out for the stranded climber.) So, like the climber, down deeper we went, and the Big Beer Series was born. Ten years later, with the extreme beer movement in full bloom, it looks like a prescient decision. At the time, it was folly, an act of desperation.

At the same time, we also hedged our bets and introduced Portsmouth Lager. One of the strategic decisions we made at the time was to pull out of several outlying markets and refocus on our home turf. Portsmouth was due to celebrate its 375th anniversary that year, and I thought honoring our home city with an eponymous beer would be a smart move, in a pandering sort of way. Looking at our portfolio of brands, we believed that it would be a good idea to offer an accessible, user-friendly product that would be a nice counterpoint to our hoppier, heavier and darker ales. We further reasoned that a continental style lager would fit that bill nicely, since it was a style that was under-represented in the world of craft beers (with the notable exception of Samuel Adams Boston Lager).

I believed, naively as it turns out, that the name Portsmouth Lager would enjoy some of the same romance that Sam Adams benefitted from, and that it would be embraced by visitors and locals to our Seacoast region as the definitive “local” beer. This was not to be the case. New Hampshire, despite its puny size (ranked 46th out of 50 in land mass), is one of the most Balkanized states in the country. For reasons that have always eluded me, one of the dinkiest states in the Union defiantly parses itself into “seven distinct cultural and geographical regions.” The result? Well, to quote Gertrude Stein, “there is no there there.” The Granite State is sandwiched between two neighbors - Maine and Vermont - that have done a fantastic job of cultivating their brand identity, yet in between, our own New Hampshire “brand” remains a mystery. Try a word association test: I’ll bet you can rattle off a list of features and products that you associate with the states to our east and west - blueberries, lobsters, rocky coastline, maple syrup, dairy farms, covered bridges, fall foliage and so on. Here in New Hampshire? Velcro, Pitco fryolators, the Old Man in the Mountain (whoops), Segways & tax free shopping (and don’t get me started about that First in the Nation bit). We’ve got our own blueberries and lobsters and dairy farms - tons of ’em - but no one seems to know it. I have come to believe that there is a good reason that New Hampshire, despite all its incredible natural advantages (and there are many), has launched very few successful comsumer products. It’s not an accident that a company that got its start at the Portsmouth farmers’ market - Stonewall Kitchen - moved its operations across the river to York, Maine, so it could benefit from the “made in Maine” cachet. And one of the most widely known consumer products manufacturers in the Granite State, Stonyfield Farms, doesn't mention New Hampshire on its website’s homepage or “about us” page. Back to 1998, when we proudly presented our new Portsmouth Lager to the sales staff at one of our local wholesalers, one of the salesmen said derisively “nobody in Manchester is ever going to buy a beer named after Portsmouth.” Mind you, Manchester is located exactly 46 miles from Portsmouth, but as it turns out, he knew what he was talking about. We had to learn it the hard way, though.

After a slow launch in a down market, and encountering indifference from our local wholesalers and retailers, Portsmouth Lager never gained traction in the market. Cut out of the sets in the supermarket chains, where 80% of the beer is sold in New Hampshire, it became nearly impossible to find in our home state, except on draught at the Portsmouth Brewery, where it has been consistently one of our most popular offerings. People would discover it in a Variety Pack and write to us asking where they could buy it, and we’d shrug helplessly. So while all of our other brands were growing, Portsmouth Lager numbers remained static, buoyed up artificially by the significant volumes that were served at the Portsmouth Brewery and placed in Variety Packs. And the warm embrace we anticipated from Portsmouth's bars and restaurants never happened; most of them remained perfectly content to offer up Boston Lager as their local beer.

Truth be told, we started to discuss phasing Portsmouth Lager out of the lineup several years ago. Our brewers felt that, given our limited capacity, we could not afford to tie up valuable tank space with an underperforming brand that took twice as long to brew. They were correct, of course. So what held up that decision? Me. I was having a very hard time letting go of an old friend. Of the beers we’ve made at Smuttynose, Portsmouth Lager has always been one of my favorites. It’s unpretentious, easy to drink and flavorful - stuff I like in a beer. When David Yarrington took over as Executive Brewer in 2001, one of the first things he did was tweak the recipe, making it more authentically European in its hopping and malt, which, in my opinion, made a good beer better. Finally, though, arithmetic and common sense prevailed over sentimentality.

Joanne and I have speculated that perhaps a different package design or name might have yielded different results. I tend to think that’s true, up to a point, but I also believe that our timing was poor for this particular product. With a few notable exceptions (Victory’s Prima Pils comes to mind), the number craft breweries producing successful lager beers, especially light continental lagers, is relatively small. It’s been a tough nut to crack for all of us, though I believe that this is changing.

At the end of the day, our decision to retire our Portsmouth Lager was based on our belief that we could replace it in our lineup with a beer that will serve a similar role, namely an accessible, user-friendly beer that will complement to the rest of our lineup. For over a year, we’ve been playing around with draft versions of what has finally evolved into our Star Island Single. Some of you may have tried an early iteration, the lamely named TBD Blonde, at festivals and bars that like to play with us. We're very happy with the final product, which we’ll be bottling for the first time on Monday. Let us know what you think.

By the way, since I know people will ask, the spice referred to in the Statement of Composition (“Session ale brewed with spice”) at the bottom of the label is coriander, which we add in a tiny amount, just above the detection threshold, to give the beer a little je ne sais quoi.

Some time when I've got a few minutes, I’ll write about creating our Star Island Single label. In the meantime, you can check out our lovely model, Dixie von Trixie, on her Myspace page.

Cheers,

Peter

Kid Rock Beer

A couple of weeks ago I noticed in one of the trade newsletters I get a link to an article in the Detroit Free Press about the deal made between a brewery in Michigan and Kid Rock to produce a Kid Rock “craft” beer.

Since this announcement, there has been a fair amount of commentary on the merits of this project, pro and con, but that's not what interested me. Novelty products have a long history in the beer business. Some are clever, some witless and exploitative, and others downright tasteless. Here are some of my favorites:

And who could forget the immortal Nude Beer, which made its appearance in the late eighties. For a brief time I was the proud owner of a complete set of mint-condition labels that I had

received from a friend of mine who was doing a contract brew at the Lion in Wilkes-Barre. I had them pinned to the bulletin board in my brewery in Northampton until a vandal saw fit to “disrobe” them by removing their scratch-ticket brassieres when I wasn't around. Without their silvery garb, the women on the labels just looked kind of sad and embarrassed, so I took them down and they've been lost to time. But I digress...

I'll leave it to others to figure out where Kid Rock's entry fits into the novelty beer pantheon. Being numbers-obsessed, what caught my eye about the article was the math. Somehow, the numbers didn’t add up.

According to the article, Michigan Brewing makes 100,000 barrels and employs eight people to do it. Last year Smuttynose produced one fifth of that - 20,000 barrels - and employed twenty-two people. Wow. I thought we worked pretty hard, but we must be incredibly lazy and inefficient here in New Hampshire.

Strangely, that efficiency evidently goes by the wayside when it comes to Mr. Rock's new beer. Anticipated annual production of 100,000 cases - about 7,250 barrels - will create 161 new jobs at the brewery, according to the article. So, let's recap: currently, the brewery produces 100,000 barrels with eight employees, or 12,500 barrels per employee. Kid Rock's 7,250 barrels of beer will require 161 new employees - that’s one employee for each 45 barrels of production. This must be one special beer!

Let's drill down a little farther. Say that new employee makes a modest ten bucks an hour and works a forty hour week. That's $20,800 a year. Toss in employer tax contributions and minimal benefits, and you’re up to $24,000 a year. The 45 barrels of Kid Rock beer that this employee is going to produce translates into 620 cases. Divide that into $24,000 and you get a labor cost of $38 a case. Add in cost of goods and operating expenses, plus state and federal taxes as well as wholesaler & retailers markups, and you've got one expensive beer!

I know Mr. Rock has got some loyal fans, but they are going to be sorely put to the test.

I'm thinking that the reporter who wrote this piece must have misplaced a few decimal points or couldn’t decipher his interview notes when he got back to the office. If not, Kid Rock’s novelty beer may take the prize as the world's most expensive beer, probably not what they had in mind.

Cheers,

P-

The Dumbest Letter I Ever Wrote?

A few weeks ago, on the way home from an out of town conference, I stopped by a cafe for a beer with some colleagues. I ordered a bottle of Old Brown Dog and watched as the bartender opened the bottle and calmly set it down sideways to drain in the sink before reaching for another bottle, which she opened and handed to me.

“What was wrong with the first one?” I asked.

“The lip of the bottle broke off in the cap,” she replied.

“How often does that happen?”

“More than you’d think. Sometimes they just break that way when you open them,” she shrugged.

When we sat down, I told my friends about what is surely one of the dumbest - or at least the most impolitic - letters I've ever written, which arose from similar circumstances. 

Some years ago, we received an oversized envelope in the mail which contained a single piece of lined notebook paper with a Smuttynose bottle cap taped to it and the words, handwritten in pencil in big block letters, "WHAT THE HELL?" Fitting neatly inside the bottle cap was a jagged brown ring, obviously the rim of the bottle which must have broken off as the bottle was being opened. That was it - three words and a cap - nothing more. 

I was puzzled by the letter and unsure how to respond. The envelope had a name (which didn’t appear in the phone book) and a return address close to where the University of New Hampshire is located, about twenty minutes away. I showed the letter to the crew at lunchtime, and we all agreed that it must have been written by a college student, probably hoping to score some free beer. We decided to have some fun crafting a response, which I have attached here:

Now in retrospect, it is probably obvious to anyone that writing the letter was not a bad idea, but sending it was a terrible one. I should have been content with simply printing it and posting it on the staff bulletin board, along with the original letter, but I could not resist dropping it in the mail. 

Time passed and the letter was quickly forgotten, until months later when Kevin, our sales manager, was about to walk into an important meeting at the corporate offices a large regional convenience store chain. The purpose of the meeting was to present our products to the chain’s purchaser, seeking authorization for placement of our beers in their stores across several states. Our wholesaler’s representative had arrived a few minutes earlier than Kevin, and greeted him in the hallway, his face ashen. 

“Ms. Smith, the purchaser,” he told Kevin, “is really angry at you guys. She says that her husband wrote to you several months ago to point out a potentially very dangerous situation with your beer, and the president of Smuttynose wrote back and insulted him. I can’t believe Peter would do something like that. She’s really pissed.” Kevin had no idea what this was about, but he assured him that this did not sound like something I would do and that I generally handled customer complaints very diplomatically. The subject did not come up in the meeting, which went about as well as one would expect, in the circumstances. 

When Kevin told me later what had happened, I was baffled. I did not recall receiving such a letter, much less responding to it. Then it dawned on me: it must have been the bottle cap letter and my smart-ass response that she was referring to. So Ms. Convenience Store Executive was married to Mr. What-the-Hell! 

After spending a few fruitless minutes speculating about Mr. WTH’s character and the state of his marriage to Ms. CSE, given the tiny amount of information I had about both of them (which you now have, too), I realized that my only course of action, if I wanted to salvage any hope of seeing our beer available in that chain's dozens of outlets, was to knuckle down and eat a huge platefull of crow. I could not find it in me to write back to Mr. What-the-Hell, however, so I wrote to his wife, the convenience store chain executive. 

Here's my response:

Six years later, the convenience store chain has a new purchaser, and some of our brands are available in a few of their stores. We’re still working on the rest. I hope Mr. WTH is having better luck opening beer bottles, though I doubt they are Smuttynose bottles.

On Portsmouth's "Notorious" Barment Letter

I've been reading with great interest the coverage and commentary regarding the "barment" letter that has been initiated by a number of downtown Portsmouth's bars and restaurants. 

Here are some articles and letters on the subject: From September 18th's Portsmouth Herald, Bars get tough: Thrown out of one; banned from 15. Similarly, from the next day's Foster's: Portsmouth bars won't tolerate drunks, will ban them. The the pushback, from September 24th's Foster's: 'Barment' may be more of a headache for bars than violators. The Herald's September 23rd editorial and, predictably, letters to the editor of the Herald, including one from the police lieutenant tasked with overseeing this program.

As the proprietor of the Portsmouth Brewery, a busy downtown restaurant, I have chosen not to participate in this program, and I would like to share the reasoning behind my decision. It is quite simple, actually: at the Brewery, we prefer that the matter of whom and whom not to serve remains ours and ours alone. When another licensed establishment has banned a patron from its premises due to unacceptable behavior, we certainly want to know the details and circumstances of that decision and hope that information will be forthcoming. In certain situations, we may wish to follow suit, but there may be times when we do not. There are a variety of situations that may cause a customer to no longer be welcome in a given establishment. I am thinking of a certain former customer of ours whom we "uninvited" this past summer from our premises. Would I like to see that individual banned from fourteen other places in town? Absolutely not. In her case, that would be punitive and retaliatory on our part and would not serve the interests of the community. I am not comfortable with a system that allows wholesale barments, because it does not account for circumstances and removes face-to-face accountability from individual operators.

Much of the discussion surrounding this issue has been connected with alcohol service, and it must be noted that when patron misbehavior is alcohol-related, both the patron and the serving establishment share responsibility. Nonetheless, it has been said before, and it bears repeating here that the vast majority of adults who consume alcohol do so responsibly, while the majority of those in the beverage alcohol business are committed to serving it responsibly, as well.

The best thing that all of us in the hospitality business can do is to focus on the quality and responsibility of our own alcohol service, and to be good neighbors with one another. Communication is key. Seventeen years ago, when the Brewery first opened its doors, we made a list of phone numbers of every bar in town and taped it next to our bar's telephone. At the head of the list were these instructions: "Asshole Alert! Please help out your neighbors. Use this handy list and make a call when you think trouble may be heading their way." Why is this effective? Because, as most bartenders will tell you, when you refuse service to some belligerent jerk one of the last things he'll tell you on his way out the door is where he's going next, where he believes he's sure to be served. Eventually we copied the list, laminated it and mailed it to every other bar and restaurant in town. I'd venture to say that some version of that list remains taped next to many bar phones in town. That's a start, but it is clearly not enough.

It has been suggested in these pages that the establishments participating in the barment program be boycotted. That is a patently silly idea and a misplaced response to their sincere effort to deal with problems caused by a small number of individuals whose irresponsible and sometimes dangerous behavior adversely affects the comfort, enjoyment and safety of the rest of us. My managers and I applaud that effort and are confident that, with everyone's participation and input, it will evolve into a system the Portsmouth Brewery can participate in.

Cheers,

P-

Smuttynose Forced to Scuttle Granite Ghost Ale

Back in May, I sat down over a beer with Doug Bates, President of the Greater Portsmouth Chamber of Commerce. He told me he was Vice Chairman of the Community Committee in charge of organizing and raising funds for the commissioning of the USS New Hampshire, a brand new Virginia Class submarine named after the Granite State. Doug asked if Smuttynose Brewing would be interested in producing a special beer to commemorate and 

help raise money to support the event, which was scheduled to take place in late October at the Portsmouth Naval Shipyard. I told him that although Smuttynose as a rule does not produce special label beers, this project sounded worthy to me. (Similarly, in 1995, Shipyard Brewing in Portland, had brewed a commemorative ale in honor of the commissioning of the USS Maine, a new Trident submarine.) We discussed the prospect of brewing a special, limited-edition ale, to be made available in the Seacoast's local stores, bars and restaurants during the weeks leading up to the Commissioning, as well as to participants in the Commissioning ceremony itself.

Given the lead times for production of labels (including approval by the federal Tax & Trade Bureau), we knew that a number of things would have to fall into place quickly and smoothly. I was aware that regulations would not permit us to use an official Navy seal or insignia on a beer label, so a special design would be required. As it turns out, the Committee had designed their own logo, as they were not permitted to use official Navy insignia to promote the commissioning, either, and this, we felt, would make a great beer label, too. True to his word, Doug got the ball rolling in short order. The first task was to give the beer a name, a job assigned to the crew of the boat itself, who chose "Granite Ghost Ale." (Granite Ghost, I learned, is the ship's non-classified radio handle.) With the beer's name and the Committee's logo in hand, we approached a local communications firm to design a label that looked good and complied with the various federal labelling requirements. At the same time, at the brewery, we began planning our special batch of ale, one that would be both distinctive and friendly to the palate.

Within a short time, the word went out, and our Granite Ghost Ale project was receiving very nice press coverage in the Portsmouth Herald, Foster's Daily Democrat and the Navy Times. We received emails from active and retired service members all over the world inquiring about how to get a bottle. I even got a call from the office of one of our US senators inquiring about it.

Scheduling was critical. Working backwards from October 25th, 2008, the date of the commissioning, we'd need to have bottled beer ready to ship to our wholesaler during the first week of September. Our label company, which is located in Wisconsin, required finished, approved artwork by the third week of August in order for the labels to be scheduled on the press and completed for an early September delivery date. At the same time we sent artwork off to Wisconsin, we sent in our COLA (Certificate of Label Approval) form to the federal Tax and Trade Bureau (TTB) for approval.

A week later, we received the following email from a specialist at the TTB:

I have two concerns with this label.  They are based on 27 CFR Section 7.29 (d) which prohibits on malt beverage labels the use of seals, insignias, or decorations that could be construed as associated with the armed forces.  My first concern is the text “Portsmouth Naval Shipyard” as it is part of the U.S. Navy.  My second concern is the seal on the label and how close it resembles the seal of the USS New Hampshire.  Do you have written permission from the Department of the Navy to use the seal and text?  If you do, please forward that documentation to me to review with the label application.  If not, you need to contact the Navy as soon as possible to get that permission.

Here, for the record, is the passage of the CFR (Code of Federal Regulatons) that the TTB specialist cited:

(d) Flags, seals, coats of arms, crests, and other insignia. Labels shall not contain, in the brand name or otherwise, any statement, design, device, or pictorial representation which the appropriate TTB officer finds relates to, or is capable of being construed as relating to, the armed forces of the United States, or the American flag, or any emblem, seal, insignia, or decoration associated with such flag or armed forces; nor shall any label contain any statement, design, device, or pictorial representation of or concerning any flag, seal, coat of arms, crest or other insignia, likely to mislead the consumer to believe that the product has been endorsed, made, or used by, or produced for, or under the supervision of, or in accordance with the specifications of the government, organization, family, or individual with whom such flag, seal, coat of arms, crest, or insignia is associated.

Given that the beer was scheduled to be brewed and the labels were due to go on press in a matter of days, we needed to act quickly. Doug contacted representatives at the Navy. After several days of back-and-forth, we received an answer from the Navy's lawyers. In short, although they were enthusiastic about the idea of a commemorative ale and applauded our efforts, they refused to provide us with the written permission that the TTB had required for fear that it could be construed as the Navy's endorsement of a Smuttynose product.

At this point, our choices were limited. Contesting the TTB's narrow interpretation of the statute was out of the question. I felt we had a good argument, especially with the precedent set by Shipyard Brewing's USS Maine label. (In 2005, we contested the TTB's rejection of our Wheat Wine label and eventually won, but it put off the release of that beer by nine months. We could not afford that kind of delay this time.)  We also considered redesigning the label so that it made no mention of the USS New Hampshire, the Portsmouth Naval Shipyard, or the commissioning date. Leaving aside the question of what sort of label we've be left with and the diminished value it would have commemorating the submarine's commissioning, time was still the biggest drawback. Given the time required to (a) design a new label (b) get print-ready artwork generated (c) schedule a new press date and (d) get federal approval for the new design, it was clear that, even in the best of circumstances, we would not be able to produce this beer in time for the commissioning ceremony, much less the weeks leading up to it. I am not opposed to pulling a rabbit out of a hat from time to time, but this would have required extracting entire flocks of bunnies from everyone's hats, with a couple of miracles along the way.

The window for brewing the beer itself was rapidly closing as well, due to our tight production schedule and limited tank space. Faced with these facts, I made the difficult decision to pull the plug on Granite Ghost Ale, which I know will be huge disappointment to the many people who have inquired about it. I was not happy about this decision, but none of us were equipped to do battle with two enormous federal bureaucracies - the TTB and the Navy - at least with the limited time that was available to us.

One could reasonably ask, why was a commemorative beer approved for the USS Maine's commissioning in 1995, when our application was rejected? Welcome to my world. The beverage alcohol business is highly, highly regulated, and those regulations are subject to a wide range of interpretation, resulting, sometimes, in wildly inconsistent readings of the law. Frankly, after being in the beer business for over twenty years, submitting many dozens of COLA applications during that time, nothing surprises me any more. (I'll make this the topic of a future blog post, if anyone's interested.)

Don't get me wrong. This is not an indictment of the folks at the TTB. Over the years, I have become acquainted with the specialist in Washington who rejected our application, and I consider him to be a reasonable and fair-minded individual. I know that he would have wanted to see us find a way to make this work and would have been happy to approve our application if he had received a note from the Navy stating in writing what they told us verbally, namely that they supported our project. The fault is in the way the regulations are written; the people who are charged with enforcing them do the best they can.

For those of you who would have wanted to purchase a Granite Ghost Ale to support the ship's October 25th commissioning, I recommend going to the Commissioning website to learn about other ways to support the Commissioning Committee's efforts. With or without Granite Ghost Ale, the New Hampshire's commissioning is going to be a terrific event, the result of the hard work of a group of dedicated people. Let's raise a toast to them, and a toast to the Granite Ghost!

Cheers,

Peter