Are Beer Bars Dying?

As the number of craft breweries continues to balloon — growing to nearly 9,000 in 2020 — craft beer bars are going extinct. The New York Times explores why: brewers are turning into competitors. Few people want to drink at a bar when they can instead go to a brewery’s own taproom.

Bars helped the craft industry grow, but now what was once “a prime way of bringing people into bars was gradually taken away by the breweries themselves,” says Chris Black of Falling Rock Tap House in downtown Denver. Black was forced to close his bar this summer, as the COVID-19 pandemic caused sales to plummet.

The pandemic accelerated closures for numerous failing bars across America, a big loss for locals who found community at their hometown establishment. But brewery taprooms aren’t the only culprit. The article notes craft beer used to be found only in bars — now it can be purchased in stadiums and supermarkets.

(Pictured: Joann Cornejo and Eddie Trejo, who run Machete Beer House in National City, Calif. It’s a community-focused bar that offers brews from America and Mexico and features pop-up vendors selling birria tacos and paletas.)

 Read more (The New York Times)

Primeval Poop Profiles

Studies of ancient poop found “humans as long as 2,700 years ago in the Iron Age were already using sophisticated techniques in flavoring the fermented foods.” They especially loved pairing pale ale with blue cheese.

A paper published in Current Biology detailed how researchers used paleo fecal samples  found in salt mines in Austria to analyze the food ancient people were consuming. Their stool dehydrated in the salt, creating an ideal, preserved sample.

Researchers from the Institute for Mummy Studies, the University of Trento and the Vienna Museum of Natural History also found industrialization transformed the Western diet. Humans used to have healthier, more biodiverse gut microbiomes “because they were eating unprocessed foods.”
Frank Maixner, one of the paper’s lead authors, believes combining archaeology and microbiology could “illuminate the greater puzzle of human history.”

Read more (Popular Science)

Bow & Arrow Brewing in New Mexico is part of two small but growing groups in the U.S. — it is both female- and Native American-owned. 

Bow & Arrow locally sources their traditional Native American ingredients (blue corn, Navajo tea, three-leaf sumac) for their seasonal sour beers. The hops they use — subspecies neomexicanus — were used for their antiviral properties by the Navajo people in the Southwest,who put them in teas and salves. The brewery owners — Missy Begay and Shyla Sheppard — forage for hops in the mountains near Albuquerque. They also give their spent brewing grains to a local Native American family for use as feed for their livestock. 

Begay, pictured left (who is Diné [Navajo]) and Sheppard, pictured right (a member of the Three Affiliated Tribes [Mandan, Hidatsa, and Arikara]) met at Stanford University in 2000. They took different career paths, but both fell in love with craft beer and homebrewing. They opened Bow & Arrow Brewing Co. in 2016.

“There is a sweetness to the land here, and all of this is sacred. We hope, as Native American women brewery owners, that people understand the story we have to tell,” Begay says.

Read more (Outside)

Beer’s Complex Makeup

German scientists have found at least 7,700 different chemical formulas — translating to tens of thousands of unique molecules — in 467 commercial beer types.. Researchers with Technical University of Munich (TUM) and Helmholtz Zentrum München, Neuherberg, Germany (HZM-Neuherberg) used state-of-the-art mass spectrometry techniques to reveal the vast metabolic complexity, according to a study published in Frontiers in Chemistry. 

The beers tested came from all over the world — U.S., Latin America, Europe, Africa and East Asia — and were brewed with barley alone or from a mix of barley and wheat, rice or corn. 

Of the distinct molecules discovered, 80% had not yet been described in chemical databases. 

“We show that this diversity originates in the variety of raw materials, processing, and fermentation,” said first author Stefan Pieczonka, a PhD student at TUM. “This complex reaction network is an exciting focus of our research, given its importance for food quality, flavor, and also the development of novel bioactive molecules of interest for health.”

Read more (Tech Radar)

Farming with Beer Waste

In a  study published in Frontiers in Sustainable Food Systems, researchers detail how they have created an eco-friendly pesticide using beer bagasse (spent beer grains), rapeseed cake (byproduct of oil extraction from seeds) and fresh cow manure. 

Chemical pesticides have been proven harmful to the environment, damaging soil and water. Pesticides are also easily consumed, and many studies link their use to multiple diseases and birth defects. Researchers from the Neiker Basque Institute for Agricultural Research and Development in Spain hope that farmers will use these organic byproducts from beer production to kill parasites, preserve healthy soil and increase crop yields. 

Read more (Frontiers Science News)

Running a food or drink business is challenging in today’s market — there’s increasing competition, fast-paced trends and challenging access to retailers. If you run a fermentation-based business with a long production cycle, those market forces are compounded.

“A lot of businesses in this sector are in it because of the passion, they love what they’re doing, and sometimes the finances can feel very mysterious, there’s an aversion to dealing with it, and they aren’t taking the time to really look and understand the numbers,” says Maria Pearman, a principal with Perkins & Co., Portland, OR-based professionals in food and beverage finance and accounting. She shared her expertise during a TFA webinar, Best Practices for Cash Flow Management

“Cash flow forecasting, it’s not rocket science. It’s not hard stuff. It is just very foreign to a lot of people and they avoid it,” Pearman says.

Matt Hately, a TFA Advisory Board member who moderated the webinar, agreed. Hately is an investor and advisor in fermented food and beverage brands.

“Managing cash…I would argue that it’s even more of a challenge for fermentation companies where your production cycles aren’t instant, they might take a week or three weeks or six weeks and, when you’re starting, your suppliers are probably demanding to be paid up front, your customers want 30-day terms,” he says .

Fermented Financials

Pearman, author of the book Small Brewery Finance, shared an overview on cash management. Fermentation businesses need to closely manage their cash conversion cycle as production cycles lengthen. The cash flow conversion cycle is the period between when money is spent to purchase ingredients to when payment is received from the sale of the final product. 

Fermented products — which can take anywhere from a few weeks to even years to ferment — have a long cycle.

Pearman shared the example of a whisky distiller. After fermentation, whisky ages in barrels for years. All the while — before the product is ever sold — there are ongoing overhead costs for the distillery, like rent, utilities and staff.

“The rhythm of your cash flow is not going to match the rhythm of your income, and cash flow management is about bridging that gap,” Pearman says. 

Cash Flow Forecasting

There are three primary financial reports that make up a business’ financial statements: 

  • Balance sheet (snapshot of the status of a company at a moment in time)
  • Income statement (performance over a period of time)
  • Statements of cash flows (sources and uses of cash over a period of time)

Often overlooked is cash flow forecasting, the expected inflow and outflow of cash over future periods. 

The cash flow forecast, Pearman notes, is not standard in business financial records. It is usually kept outside of an accounting system as it’s information management generally uses. It’s important because a business can’t rely on just their income statement or bank balance to manage cash flow — labor, overhead and cost of inventory must be part of the expenses. She compared managing cash without a cash flow forecast to “building a house without a hammer.”

“One of the biggest pitfalls that I see with businesses is chasing profitability instead of cash flow,” Pearman says. “It is completely understandable because we’re all hardwired to try to do things as efficiently as we can, get the best deal, but truly in the early stages of a company, it’s way more important to manage cash flow than profitability.”

“It’s a high cost for bringing a new product to market. Cash flow issues are going to be prevalent regardless of where you are in your life cycle, and the best way to guard against cash issues is to have a cash flow forecast.”

During the webinar, Pearman shared a detailed look at a sample business’ financial workbook. She noted that it seems arduous to manage that level of detail but, without it, “you’re really flying blind.”

“It will force you to be highly in tune with the rhythms of your business,” she continues. “It will force you to learn it at such a level that it starts to become innate knowledge, you know it like the back of your hand and there’s no shortcut to that.”

View Pearman’s video presentation, companion presentation and companion spreadsheet.

A Yeast Primer

Brewers, winemakers and cidermakers are continually on the hunt for the ideal flavor profiles for their fermented beverages. And the key to manipulating those flavors is yeast.

“With beer, you’re taking this kind of gross, bitter soup of sweet barley and hops, and the yeast makes it taste good. Depending on the yeast that gets put in it, it can make it taste like 400 different things, so there’s so much potential there. I think that’s really exciting,” says Richard Preiss of Escarpment Laboratories. Priess was joined by Doug Checknita from Blind Enthusiasm Brewing and Patrick Rue from Erosion Wine Co. to discuss the world of yeast in TFA webinar, A Yeast Primer.

“If you’re invested in vegetable fermentation, yeast might be sort of clouded in mystery and something that is unwanted,” says Matt Hately, TFA advisory board member who moderated the webinar. “It’s what you live by in beverage fermentation in wine and beer and it’s the key to unlocking flavors to make that magic happen.”

Domesticated vs. Wild Yeasts

Just as dogs and cats were domesticated by humans, yeasts have been as well, says Priess, whose company makes and banks yeasts. They are microscopic organisms that adapt, “so if someone’s making beer for over the span of hundreds or thousands of years then the yeast is going to change to kind of get better at fermenting that beer and maybe it’s not going to be so good at surviving out in the wild, just like our toy poodle versus our wolf.”

Other fermented drinks, like wine, sake and cider, use different yeasts with their own specific sets of traits. This is why a wine yeast can’t be used in a beer and vice versa, “though there are some opportunities to experiment.”

Fermenting with wild yeasts has become increasingly in vogue with beer brewers. Aspirational brewers are finding yeasts on the skin of fruit or the bark of trees. 

The panelists on the webinar praise experimentation, but note there is risk. Priess says yeasts designed to survive in the wild can be challenging to use in a beer. Checknita points out the safety factor in using yeasts directly from nature as well, “you can get stuff that’s harmful to human health so you have to be careful with your pH levels and what controls there are.”

Traditional winemakers, on the other hand, have long used the wild yeast on grapes to ferment. Rue notes that 10 years ago winemakers began to deviate from this tradition to use pure cultures instead. This process is how many large-scale, industrial producers operate today. But smaller winemakers, who often want to emphasize the specific traits of their terroir, generally use native yeasts and traditional winemaking techniques.

“It’s amazing how wine is how God intended wine to be made because you let nature happen and you’ll probably have a pretty good result with natural fermentation,” Rue continues, “where beer, it’s very touch-and-go, you have to have the perfect conditions and I’ve been able to do spontaneous fermentation with those yeasts.”

The Yeast Family Tree

There’s a large and continually-growing family tree of yeasts, with branches forming for genetic diversity and specialization.

Priess sees three new trends emerging in yeasts: traditional yeasts (like Norwegian kveik) being rediscovered, yeast hybridization (similar to cross-breeding a tomato) and genetic engineering to enhance certain traits of yeast.

“That’s the exciting part of what we’re doing is no one really knows the best approaches to using beer yeast yet, but there’s a lot more new science that’s happening, a lot more brewers that are experimenting, and together we’re collaborating to understand how to work with yeast better and kind of unlock new flavors and new possibilities,” Priess says.

Checknita agrees. He says new yeasts are forming new family trees through spontaneous fermentation, which is taking the base of a beer and experimenting to “push and change those yeasts to do what we want and get that clean flavor that’ll make a beer that tastes good to the human palate.”

Archaeologists from NYU and Princeton have uncovered the world’s oldest industrial-sized brewery. Located in southern Egypt near the Abydos ruins, the facility dates from 3000 B.C. Many of Egypt’s early kings were born in Abydos, so it’s assumed the brewery made ceremonial beer for ritual offerings and royal funerals.

“The fundamental significance of the Abydos brewery is its scale relative to anything else in early Egypt,” project co-leader Dr. Matthew Adams said. The brewery likely produced about 22,400 liters with each batch (possibly weekly.) “That is a huge amount of beer by any standard, even in modern terms. It’s absolutely unique.”

Read more (Wine Spectator)

Wild Yeasts & Sour Beer

As sour beer becomes more popular, more producers are foregoing traditional kettle-sourcing processes to inoculate their brews with wild yeasts, often found in unusual places. Pennsylvania-based Levante Brewing Co. has developed a yeast called Philly Sour, which was found on the bark of a dogwood tree in a local cemetery and is now sold worldwide. 

“I don’t know if the enthusiasm for hops will ever really wane, but with so many beer options available, there is definitely the space for some breweries to focus more on other ingredients,” said Gerard Olson, owner of Forest & Main Brewing Co. in Ambler, PA. That brewery every spring forages for yeasts from flowers on the property and uses them for that season’s saisons.

The Philadelphia Inquirer calls Philly Sour (and Norwegian yeast called kveik) “beer’s mostly unsung heroes.” The professor who isolated the Philly Sour yeast, “sends students into the neighborhood with Ziploc bags to collect samples, leaves, scrapings from bark, and other materials that might have yeast on them. Those materials are tested for fermentation.”

Read more (The Philadelphia Inquirer)

Chocolate’s Beer Roots

Chocolate beer sounds like a faddish flavor, but its roots run deep. Pre-Columbian Mesoamericans fermented cacao fruit to make a beer-like drink called chicha.

Chicha is usually made from corn, but there are regional variations made from other new-world plants like potatoes, peanuts and cacao beans,” reads an article from The Seattle Times. Chicha was studied by archaeology professors at Cornell and Berkeley who found “The roots of the modern chocolate industry can be traced back to this primitive fermented drink.”

Read more (The Seattle Times)