Only $50 Billion to go!

Schlafly Beer is dedicated to taking pride in our hometown brews. Not only do we enjoy beers brewed by our neighbors, but it allows us to give back to our community and our local economy. To that end we can not exclude one of our larger brewing brethren, the St. Louis-based Anheuser-Busch.

So...the portending purchase of the storied business by InBev means that many of the beers quaffed in our fair city will no longer be from a local brewer.

In order to remedy that, Schlafly Beer is attempting to raise the capital to purchase the Belgian-based InBev.

We may have fallen short of our bid to purchase the St. Louis Cardinals when A-B sold the franchise in 1994, but maybe, just maybe, we can bring a St. Louis institution back to St. Louis.

Latest News on InBev Takeover Of A-B

Here's a few recent articles looking at the–now potentially inevitable–takeover of A-B.

The most intriguing are unconfirmed reports that Warren Buffett is supporting the deal. If the Yoda of the investment world backs the buyout, it's likely shareholder support for the Busch family will evaporate.

Potential purchase of Modelo still out there. A-B may purchase Modelo in a move to try and put the company out of the reach, financially, of InBev.

A-B warned against the Modelo deal by InBev.

InBev will likely need to up its offer from $65 to $70 a share.

Missouri Governor Matt Blunt and Senator Kit Bond ask for FTC to intervene in the deal. Analysts quoted in the article doubt any action forthcoming because A-B is already the sole distributor of InBev products in the United States.

InBev Makes Its Bid

The international beer conglomerate made it official this week that they are making a bid to purchase Anheuser-Busch. If successful, the new company would control approximately 1/4 of the world beer market.

News reports so far indicate that A-B may have a difficult time fending off the unsolicited offer.

InBev is offering $46 billion for the company, about $65 cash for each share of A-B's stock. When the market closed on Wednesday, A-B stock was selling for $58.35. An 11% return on the stock would be hard for the shareholders to turn down, especially a cash offer versus a stock swap or other instrument.

More coverage is available on the Post-Dispatch's website. P-D columnist Dave Nicklaus offers some first thoughts about the offer.

This is the beginning, not the end. The Microsoft-Yahoo drama took three months to play out — Microsoft launched its bid Feb. 1 and formally abandoned it May 4 — and it may not be over yet. The plot could take many twists and turns from here, so stay tuned.

Other coverage from the New York Times and the Financial Times.

Also, here's InBev's own take on their move.

"We have the highest respect for Anheuser-Busch, its employees and its leadership, who have built the leading brewer in the U.S. and grown the iconic Budweiser brand. Together, we would draw on the collective expertise of both companies' management and employees...The combination will create a stronger, more competitive, sustainable global company which will benefit all stakeholders."

And here is A-B's response to the unsolicited cash bid.

"Anheuser-Busch said that its board of directors will evaluate the proposal carefully and in the context of all relevant factors, including Anheuser-Busch's long-term strategic plan. The board will review the merits of the proposal consistent with its fiduciary duties and in consultation with its financial and legal advisers. The board will pursue the course of action that is in the best interests of Anheuser-Busch's stockholders."

Craft Beer Growing Strong, 12% in 2007

The Brewer's Association detailed the 12% growth in the craft beer market, everything from the local brewpub over to the growing number of regional and larger breweries.

The print edition of the BA journal, The New Brewer, has the detailed breakdown. For a quick look at some of the stats, the BA has posted some of their numbers on the website.

As the macro breweries are finding trouble expanding their share in the U.S. market, craft brewers are still growing. The difference? Education. As the consumer learns more about the craft beer available to them, they begin to expand their buying habits. There is no one brewer benefiting over others, a rising tide as it were.

How long can the craft industry experience double-digit growth? It's hard to say. Economic instability hasn't been felt too strongly in the industry yet, but if trouble grows, it just might.

For now, however, it's time to raise a pint of your favorite craft beer pint!

Top 50

In the most recent edition of The New Brewer, the journal published by the Brewers Association, the association broke down the stats for the 2007 craft beer market.

Near the end of their detailed report is a list of the top 50 breweries by volume.

And....squeaking in at #50 is Schlafly with just over 18,000 barrels sold last year.

Thanks to all of our loyal fans and friends. If you didn't keep drinking it, we wouldn't keep brewing it! Although if we didn't brew it, you couldn't drink it, and on we spiral down an infinite circle.....yikes. It's time for a Kolsch to sooth my spinning mind.

First Day of Heritage Festival

Following on the success of last year's festival, this year's Heritage Festival is off to a rousing start. Despite increasing capacity for the event from last year, the Friday evening session sold out.

Today's Post-Dispatch has the story.

For more information on the breweries and restaurants involved, check out the Heritage Fest website.

There are only two sessions left today: noon to 4 p.m. and 6 p.m. to 10 p.m. The forecast is calling for some rain to start in the evening, but that didn't dampen spirits last year, or slow down the enjoyment.

We will try and grab some photos of today's events. Music food and over 60 beers, what a day!

Fun Facts...

Via the Brewers Association.

In Kansas, for in-state breweries of 15,000 barrels or less no less than 50% of the agricultural products going into their beer must originate from the state of Kansas unless they are given a waiver due to the fact the products are not available in the state. Also, their label must spell out the proportion of Kansas' products used.

A bill currently before the legislature would remove this requirement. (Bill Text in pdf)

While requiring a brewery to obtain a certain percentage of their ingredients from its resident state may seem heavy-handed, the idea of adding the origin of the ingredients may tweak some interest. There is a move to emphasize locally grown and harvested agricultural products and craft breweries and have been a part of that move towards local and sustainable products.

Previously I pointed out the fact that we were experimenting with wheat supplied to us from a local farmer. It hasn't moved beyond some basic tasting trials, but it's a step in an interesting direction.

As rising grain and hop prices force brewers to re-examine their approach, some brewers may begin looking at alternatives to what they have done in the past. Recently the references to gruit, meads and other malt beverage styles have gone through the roof.

As for brewers incluing the origin and makeup of their ingredients on the label, that probably falls on TTB's don't list when it comes to labeling regulations. The data-gathering and management that would likely accompany such a move would swamp most brewers. Best to keep it light, and to keep the sales folk educated.

Hops increase, so does the industry

ProBrewer reports that hop production is up this year.

Hop production for Idaho, Oregon, and Washington in 2007 totaled 60.3 million
pounds, up 4 percent from the 2006 crop of 57.7 million pounds and 14 percent
above the 2005 production of 52.9 million pounds.

While not an enormous jump, the increase is a good sign that there is light at the end of the tunnel when it comes to the hop shortage.

The increase comes on the heels of continued growth in the craft beer industry. Also from ProBrewer:

Information Resources said craft beer sales rose 16.7 percent from $493 million in 2006 to $575 million in 2007, marking the second straight year of double-digit increases. IRI tracks sales only in the off-premise trade.

The report also notes that price increases made necessary by the jump in malt and hop prices is only now beginning to reach customers.

Increased prices hitting customers just as the economy dallies around the edges of recession may put a damper on growth as consumers look for bargains. That said, a slightly more expensive craft beer may still be perceived as an affordable luxury to those who have become craft beer drinkers.

Bière de Garde is back

Bière de Garde will shall return to store shelves soon.

Schlafly's first foray into the world of bottle-conditioned beers, the September 2007 release of the Bière de Garde, topped with its jaunty orange crown, has been well received.

This past week, a fresh batch of BdG was krausened and bottled at the Schlafly Taproom. This cousin to the Saison will now spend the next two weeks conditioning at about 70 degrees (give or take a few), before we cool it down to age.

Provided we hit the mark and the dash of freshly fermenting wort added to each bottle doesn't cause the CO2 to exceed the bottle's pressure rating, thus making small rockets out of the Bière de Garde bottles, we should have them back on sale within the month.

For those of you unfamiliar with bottle conditioned beer, a quick primer. A staple for homebewers seeking to carbonate their creations, the method has been used for centuries in brewing.

Bottle conditioning is often used as a finishing touch in the brewing process to provide carbonation, character or add stability to the beer.

The bottled beer is condition through the addition of yeast and sometimes priming sugar or wort to add carbonation.

By measuring the amount of sugar in both the fermenting beer and the amount of residual sugar in the beer to be conditioned, we know how much yeast/sugar mix to add to achieve our desired goal. In this case, a particular carbonation level as well as a certain finished character.

In addition to giving a well carbonated pour, the additional active yeast provides other benefits. The fermenting yeast consumes much of the remaining dissolved oxygen in the beer. Oxygen, of course, being one of the great enemies of beer quality. It can also consume some of the other compounds like diacetyl and acetaldehyde that may be undesired in a beer, depending on the style.

Bottle-conditioned beer continues to age and mature when kept at cellar temperatures of around 50° to 55°.

Schlafly Bière de Garde is ready to drink in a few weeks following bottling. While bottle-conditioning can give a beer the ability to age for some time, Bière de Garde is best consumed before too long. In the Belgian and French regions, the farmers would brew their Saisons and Bière de Gardes in the winter and then drink them while tending their fields from the late spring into early fall. Fortunately, Schlafly Bière de Garde will be available most of the year.

Anheuser-InBev?

Probrewer.com is reporting that talks between Anheuser-Busc, the U.S.'s largest brewer, and InBev, the world's second largest brewer.

The Post-Dispatch's Jeremiah McWilliams has more on the background.

"Although this is speculation, we think the potential for an InBev bid (for Anheuser-Busch) will dominate the discourse on A-B," Bear Stearns analyst Justin Hott wrote Friday in a note to investors. He said he does not believe Anheuser-Busch's management wants to sell the company.

Though cryptic about the company's strategy, A-B executives say they would consider buying a foreign brewer if the right option comes along.

"We are interested in international beer acquisitions that would enhance our growth profile," W. Randolph Baker, A-B's chief financial officer, said Thursday in a conference call with analysts. "If we have an opportunity, we would certainly pursue it."