Beer Week Guide

Is brew taking over wine and cocktails? Or is it a gateway drug to more refined quaffing?

At Nugget Markets, Hank Beal says that at first it seemed like beer was taking over. “Now wine, beer and spirits are all strong. … Craft beer has only helped us.”

At Nugget Markets, Hank Beal says that at first it seemed like beer was taking over. “Now wine, beer and spirits are all strong. … Craft beer has only helped us.”

photos by lisa baetz

At The Kitchen, one of Sacramento’s premier dining spots for sometimes extravagant food and wine pairings, there is a special cellar. It belongs to Josh Nelson, who runs the place. Nelson is a wine guy.

“That’s where I keep special beers,” Nelson said. “That’s my personal stuff.”

At Pangaea Bier Cafe in Curtis Park, one of the pioneers in Sacramento for exploring the booming, shifting, ever-morphing supernova of craft beer, owner Rob Archie had to upgrade his list. His wine list.

For California-based Wine Warehouse—one of the largest distributors in the country and a company known, as its name says, first for wine—business is strong. One reason: They’re a go-to distributor in this region for, you guessed it, beer.

At Hook & Ladder Manufacturing Co. in Midtown, a restaurant/bar/hotspot that’s been at the forefront of cool in Sacramento since it opened in 2012, owner Kimio Bazett says they get streams of people asking for every kind of craft beer. And what sells most? Wine.

And at the Unified Wine and Grape Symposium in Sacramento this January, the largest wine industry trade show in North America, experts spent an awful lot of time talking about beer.

What is going on here? Are cats marrying dogs? Is rain falling up? Has the world of food, drink and nightlife gone into the bizarro universe? Well yes, at least on the last one.

As Sacramento sprints into its sixth annual Beer Week, craft beer has exploded across the beverage scene in America, and at an even brighter intensity in California and Sacramento. Craft beer is as Big Bang hot as any alcoholic beverage in decades.

But craft beer is something else, too. It’s genuinely interesting and, you know, good. Craft beers come in a vast range of styles now, and so many pack in enough nuance and depth that people can spend hours dissecting flavors and textures and brewing techniques the way they might with beer’s friend and rival, wine.

Ella Dining Room & Bar is all about wine and cocktails. But owner Josh Nelson says he and staff recently added craft beers to the menu.

And craft beer’s growth and continuing attraction to consumers has sent concussive waves across the worlds of restaurants, bars, markets, wineries, eating, drinking and just hanging out.

Its impact, however, may be even more forceful on the culture than on the market. That’s not to say craft beer isn’t selling well or growing insanely, but as a share of the market it’s still small—about 8 percent of all U.S. beer sales in volume and about 14 percent of the dollars spent on beer.

On the other hand, as a share of the communal, going-out-to-eat-and-drink psyche, craft beer is enormous.

How beer changed the game

Besides creating a market for the marginally useful skill of punning with the word “hop,” craft beer transformed the guy-ordering-beer-with-dinner from a lunkhead to an in-the-know foodie.

And in some places, it’s made wine seem like your grandparents’ drink, or something for snooty places like France (though, actually, research company Euromonitor International says craft-beer sales are up in France, too).

But some ripples from the boom of craft beer in recent years are not as obvious, and in some cases they’re almost counterintuitive.

Craft beer may be as good for the wine industry as it is a challenge. It may be as demanding for restaurants and bars as it is a draw. One of its great attractions—the local, hands-on, authenticity of many craft beers—may also keep many breweries from growing.

Here’s a short list of current and potential impacts:

• Sales of inexpensive wine (under $7) and of mass-market beers like Budweiser and Miller are down. Craft beer’s rise isn’t the only reason, but it’s a major one.

“Craft beer has taken much of wine’s pizzazz, especially among younger consumers,” said Jon Fredrikson of wine industry analysts Gomberg, Fredrikson & Associates. He spoke at a press conference at the Unified wine trade show. “Beer used to have none of the enticing charisma wine had, but that’s flipped at some levels.”

• Restaurants like The Waterboy, Ella Dining Room & Bar and Mulvaney’s B&L, and retailers like Nugget Markets and Corti Brothers say craft beer is an add-on, not something cutting into wine sales.

“At all of our houses, wine outsells beer tremendously,” said Nelson, who’s a principal in the Selland Group that includes Ella, The Kitchen and Selland’s Market-Cafe. “If I had to guess, I’d say by 8-to-1. I was worried it would hurt the check average, but at The Kitchen we’re just selling more beer along with wine.”

“Initially,” said Hank Beal, who oversees adult beverages for Nugget Markets, “it looked like beer was taking over, but that’s leveled out. Now wine, beer and spirits are all strong. Maybe people are feeling better about the economy, but craft beer has only helped us.”

• The growth of craft beer means stores need more space, restaurants and bars need more taps, and servers need more training.

“We’ve added new refrigerated space,” Beal said. “In one store, we have a whole new cold box. And customers are so much more inquisitive now. Beer used to be just pointing out what they’re looking for, now, our guys on the floor have to be completely knowledgeable.”

“We’re definitely doing more training of our staff,” said Bazett, Hook & Ladder owner. “There weren’t tasting notes for Miller High Life.”

• There’s a seemingly unlimited thirst for anything new in craft beer. But everyone in the industry—everyone—thinks that will cool down. Not soon, but eventually, and people will settle on styles and breweries.

“So many people come in asking, ’What’s new? What’s new?’” said Rick Mindermann, the store director of Corti Brothers. “At some point, there won’t be enough people to support unlimited growth. It’s not slowing anytime soon, but Darrell [Corti], in his wisdom, is holding his breath, because eventually people will just buy their favorites and some breweries are going to crash.”

• Most craft breweries have limits on how large they can grow, because the pipeline—the distribution system and retailers—only has so much room.

“A brand has to have a certain production level to make sense for a distributor,” said Dan Hagan, a beer specialist for Wine Warehouse. “You don’t want a distributor to take on a beer and run it out of stock. That’s horrible for a brewery. They’ll lose shelf space and they’ll never get it back.

The beer selection at Corti Brothers in East Sacramento has grown in a big way in recent years. But owner Darrell Corti is holding his breath, “because eventually people will buy their favorites and some breweries are going to crash,” says store director Rick Mindermann.

“Guys like Hank only have so much space to put new beers. Craft is a developing market, but it won’t always be one,” Hagan said.

• It seems most wine people like the craft-beer enthusiasm. They believe the more that people pay attention to what they drink, whatever it is, the better for everyone in the beverage business.

“People are thinking about what’s in the glass,” said Jonathan Klonecke, an independent Sacramento wine broker who deals with many major Northern California restaurants. “They’re talking about hops and grass and citrus. They’re accepting new flavors, and that’ll lead them to wine. Not instead of beer, but in addition to it.”

“Young people are exploring,” said Paul Wagner, who runs Balzac Communications and Marketing in Napa, one of the wine industry’s top marketing firms. “We already see craft-beer drinkers coming to wine because it’s another thing to try.”

• Part of craft beer’s attraction is an authenticity—the cliché of the moment in food and beverage but still one that applies—of the people behind it. Many craft breweries really are small, local and earnest. However, it might be a bubble-burster when the Buds and Millers buy more of them, the way Bud’s parent company Anheuser-Busch InBev bought 10 Barrel Brewing in Oregon.

There are more, but first, two stories about how things are changing.

Ella on K Street in downtown Sacramento is considered one of the region’s class acts, and they have a focus on craft cocktails, and even more on wine. Ella opened in 2007 and within a year stopped carrying beer in bottles.

General manager Joe Vaccaro and Nelson were talking about beer a few weeks ago. “We decided we need to add some bottles back,” Nelson said. “We need some nice 22s [22-ounce bottles, also called bombers] to broaden our selection. People are asking.”

Pangaea has been a go-to beer spot almost since it opened in 2008, and these days has 30 beers on tap and another 320 in bottles. By mid-2013, something was happening. People liked the beer so much, they started hanging around all night.

“They wanted better food,” owner Archie said. “We’d grown from a beer hall to a beer hall and restaurant.”

Just before Beer Week last year, he hired chef Robb “Rossi” Venditti, a man with serious kitchen chops. “Then, I had to get a legitimate wine list,” Archie said. “Sometimes our customers come for dinner and the wine. My wife sometime wants wine.” Now, about 10 percent of Pangaea’s sales are wine.

For a larger view, look at nationwide sales (The beer stats are from the Brewers Association, which represents small and mid-size brewers nationwide; for more details, see the accompanying chart.):

• In 2013, the latest year with sales available, overall U.S. beer sales dropped 1.9 percent from the year before. Most of the loss was in mass-market beers. On the other hand, craft-beer sales were up 17.2 percent.

• By comparison, total wine sales in the United States rose 1 percent in 2014, according to Gomberg, Fredrikson & Associates, though wines costing under $7 were down 2.4 percent. Wines $7 and up grew 6 percent, and wines costing $10-plus had double-digit growth.

• In 2013, craft beer sold 15.3 million barrels (a barrel is 31 gallons). That’s 7.8 percent of all U.S. beer’s 196.2 million barrels. (Budweiser alone sold 16 million barrels.) The value of craft-beer sales in 2013 was $14.3 billion. The entire U.S. beer industry had $100 billion in sales.

One more relevant number: A Gallup survey in 2013 of Americans who drink alcohol found a pretty equal amount preferred beer (36 percent) and wine (35 percent). In 2014, Gallup said 41 percent preferred beer and 31 percent preferred wine. (About 23 percent preferred spirits.)

So what does all that mean? Back to the original point. Craft beer is hot. And how it got that way says a few things about both the evolving American culinary scene and about what it used to be. It also shows the paths that craft beer, and craft beer drinkers, might be headed down.

Beers next frontier

A huge factor was, and still is, the apparent ease at getting started with beer. For one, getting the bottles open is a snap. And no one has to learn grape varietals and countries and three European names for one American wine. No one seemed required to pick out cherries or berries or something named cassis (it’s a blackcurrant liqueur and an acquired taste at best; some wine people love saying it). For a majority of beer drinkers, there just seemed to be light, dark and IPAs, with a few shades in between.

Once you get into craft beer, of course, you find out there are layers and tones and flavors and uncountable intensities of hops. But you’re already into beer by then, and it doesn’t seem so complicated.

Just as much, the cost of exploring is much lower than with wine or cocktails.

“People are way more likely to explore beers than wines,” Bazett said. “Part of it is the money commitment. If you don’t love it, you didn’t spend $12 for a glass. And people aren’t afraid they’ll be wrong about a beer, they just want to keep trying new ones.”

That desire to explore is a huge driving force in craft beer’s growth, and that gets back to the changing culinary scene.

For decades with food and wine, mainstream consumers were searching for favorites, a wine they’d love and stick with, a restaurant they could go to over and over. That is still true for many folks. But many others, especially younger diners and drinkers, get their joy from new discoveries—in food, in drink, in life.

“It’s part of the iPod shuffle world,” said Wagner, the marketing pro. “People are used to exploring the world at an extremely broad spectrum. Information is more diversified, music is more diversified, coffee is more diversified. My generation grew up drinking Miller or Bud, chard or cab. My kids don’t have any constraints. They’re always looking for something different.”

Jan-Erik Paino is an owner of local brewery Ruhstaller. He likens craft-beer drinkers at the moment to “happy children exploring the big, wide world.” To explain that, he starts with his parents.

“My dad’s generation drank red, white or rosé,” Paino said. “Then they learned there was more. They went to wineries, joined wine clubs, visited wine regions. They discovered parts of California, then France and Italy. Pretty soon, if a restaurant didn’t have a good wine list, they wouldn’t go.”

That discovery is happening now with beer, but the difference is that craft brewers added some things that had been missing from the Bud and Coors—intensity, diversity and, here’s a good one, flavor.

“People who’d been drinking Coors their whole lives tasted hops and went, ’Wow, that’s good, I want more,’” Paino said. “Right now, consumers are like a joyful child trying everything. Beer drinkers finally have choices and they can’t get enough.”

But that discovery stage causes some difficulties for the people selling beer. It is not easy staying current, constantly offering something new, rotating beers on tap and keeping new, intriguing bombers in stock. That’s a whole new layer of work, time and expense, not to mention risk.

“We get lots of people who look for something new every time they come in,” said Rick Mahan, owner of The Waterboy in Midtown and OneSpeed Pizza in East Sacramento. “We’ve got six taps, which doesn’t seem like enough anymore, and down at OneSpeed we have to change constantly. We have space considerations that keep us from going crazy, but we don’t want to disappoint anyone.”

Even supermarkets like Nugget have a constant juggling act, and despite carrying about 600 different beers, sometimes they can guess wrong or miss something.

“It’s a moving target to stay on top of what’s hot,” said Beal, the Nugget adult-beverage boss. “People count on us to have everything they’re looking for. A couple times, we thought something was hot and got stuck with it. [Nugget beer buyer] Michael Taylor has a big job. He really has to hustle.”

And in Taylor’s hustle and Mahan’s limits are clues to when the craft expansion might slow. The craft-beer thirst won’t end, but there is only so much growth in any market. If an exploding star is the metaphor of the moment, the inevitable pull of gravity on that star is waiting in the future.

“If there’s a beer out there, people want to try it,” said Corti Brothers’ Mindermann. “But that’s a two-edged sword. You can bring it in and you can sell it, but it has to sell more than once. We have a lot of room for beer, but there are limits on everyone.”

Wine Warehouse’s Hagan said he’s convinced the constant churn of new beers will slow eventually for a handful of reasons, and most have do with the business of selling beer.

“For the retailer, it’s so much work and logistics rotating kegs and tracking sales,” Hagan said. “If you’re a restaurant or bar, you might have five distributors in a week say, ’You have to take this now or it will be gone,’ and if you take them, you’re backed up in the cooler and can’t handle the guys who come in next week.

“Because of the price, beer is a volume game. Retailers and distributors will focus on their best sellers.”

That’s on top of the sheer limits of distributors to get beer to retailers and of retailers to clear shelf space.

Just as much, Hagan and others believe the exploration—the “happy child” phase as Paino called it—will eventually give way to people settling on favorite styles and flavors, especially since the differences between new beers will become smaller and smaller as the market gets more saturated.

“Some brewers think wherever they go, consumers will follow,” Paino said. “That’s sort of true now, because we’re in that phase. But the music will stop eventually. We need to be aware of that, or we’ll drive over the cliff.”

But Paino is the first to say his mixed metaphor could be years away. And the thing is, the free-wheeling, push-the-envelope beer-making that may eventually overtax the market is also one of craft beer’s biggest draws. It’s exciting, and inventive, and, maybe most of all, connects to that notion of authenticity, of real people making beer they love just because they love it.

“We all look for that unique experience,” said Pangaea’s Archie. “None of us wants to be a clone. To just stand in line to get the same thing, there’s no story to that. People want some kind of understanding of what they’re involved in. They want to know that there’s a soul behind what they’re buying.

“If you have a favorite brewery, it’s like having a favorite artist or singer. You know their style, you follow along to see what they’re going to do.”

But what happens a brewery starts to lose its cool-indie-brewer cachet?

“That’s why you keep seeing new items from Sierra Nevada, which was one of the original crafts,” Hagan said. “It’s harder and harder to sell that green label [for its once monstrously popular pale ale], so they have things like Hop Hunter.”

One possible future for craft beer might be a series of small and mid-sized regional brewers, and that rare company that finds a way to get big without appearing to.

“We may end up with a lot of beer pubs, and beer will be different everywhere,” Paino said. “The distribution chain is a mess, and the market will settle down eventually. Growing large will get hard.”

Paino’s point is echoed by a company called Guestmetrics, which tracks sales in more than 10,000 bars and restaurants in the country. Guestmetrics said craft-beer sales growth for the first four weeks of 2015 was 0.9 percent, down from 1.9 percent for the same period in 2014. That could be a blip, or a slowdown. But Guestmetrics said that, considering the continual increase in the number of new craft beers, it raises “issues about the sustainability of this growth.”

As the market settles, whenever that may be, there’s a sense among wine folk that many craft beer drinkers will spread their taste buds

“My guess? Beer could be the gateway drug to wine,” Nelson said.

“Eventually beer and wine drinkers will be the same people,” Beal said. “A lot already are. Anytime you get people asking questions, thinking about flavors, really enjoying what they’re drinking, they’re going to try something they hadn’t before, and realize that’s interesting, too. That’ll be good for all our businesses.”

If there is one thing everyone in the region agrees on, it’s that the craft beer culture fits the Sacramento zeitgeist of paying attention to what we eat and drink and caring about where things come from—a.k.a., a farm-to-fork attitude. That’s one reason a new California Craft Beer Summit will have its first convention in Sacramento in September. There’s also a healthy dose here of rooting for the underdog—the indie brewer, the small hop farmer, the person with, as Paino called it, beer dreams.

One of the people in the forefront of Sacramento’s farm-to-fork embrace, restaurateur Patrick Mulvaney, said the interest in exploring craft beer is a natural piece of Sacramento’s regional DNA.

“That’s what we do here,” Mulvaney said. “We talk about what we eat and drink and who’s growing it or making it. That drives that artisanal, smaller focus.

“I was in Phoenix a couple weeks ago and I was thinking, ’Where’re the farms? Where’s the good beer?’ Looking at a wine list in Arizona is time warpy. There’s nothing unique. We’re a little different from the rest of the world here. We still like finding something undiscovered.”

And that gets back to Beer Week. Just ask Dan Hagan. He’s spent the past two months trying to stay on top of what is a natural, common and impossible request.

“All my retailers want a rare beer,” Hagan said. “They want something no one’s seen before. I keep telling them, if I’m carrying something no one’s seen, I’m not doing my job very well.”