Thursday, July 9, 2015

Quick Hit: Buoy Brewing in Astoria

180 degree panorama from Buoy Brewing - Astoria, Oregon
Astoria has been a popular destination for sweltering Portlanders looking for a respite from the unrelenting heat of the last few weeks.  So popular that when I visited Buoy Brewing on Monday in my own attempt to escape the Portland heat, they were out of about half their beers. Our server said the weekend had been 'nuts.'  Fortunately, she said, they have recently doubled the capacity of their brewery and soon such shortages should be a thing of the past. Nevertheless there was still lots of wonderful beer to be had: their exceptional Pilsner and IPA were on tap as were a nice session IRA and a lavender saison among others.

The space on a quay on the river is second to none, the interior is lovely and includes an amusing glass floor through which to see seals and sea lions (who were not in residence when we were there but we spotted at least six sea lions in the water just out front).  The atmosphere is wonderful in the art of the pub that faces the water and they can open a big sliding door when it is warm enough (as it was for us).  

The beer, the space and the location are all exceptional, but the food is just as good.  From the hot and freshly made pitas that came with their delicious homemade hummus to the salad, to the entrés that were excellent across the span of burgers, fish, and steak.  It was the nicest dining experience we have had in Astoria and anywhere else for a long time for that matter.  

Astoria is now blessed with an extraordinary beer scene and has a great partner to the wonderful Ft. George Brewing, whose outdoor patio on a sunny day cannot be beat, and the good old Wet Dog/Astoria Brewing which is always a great stop as well.   

Consider Buoy Brewing a must if you find yourself in Astoria.

Tuesday, July 7, 2015

AB InBev Craft Aquisition Binge Goes Global: AmBev Buys Cevejeria Colorado in Brazil


News from Brazil: AB InBev's Brazilian subsidiary AmBev is buying Cervejaria Colorado, a São Paulo state micro-brewery.  When I lived in São Paulo, Colorado was one of the most available beers in local shops and one I sought out as their Indica (pictured below) was my go to hop fix.  Here is a little review of Indica.


The article is in Portuguese but the script is familiar to followers of the AB purchases of breweries like 10 Barrel: Colorado founder Marcelo Carneiro will continue to run the brewery and the implication is that it will be allowed to continue to run as an independent subsidiary.


AmBev makes some of the most popular beers in Brazil like Brahma and Skol but clearly sees craft as a growing trend in Brazil.  What is most interesting is that this is an even bigger deal in Brazil than the US as in Brazil most bars and restaurants are tied to a major brewery and so it is very hard to find craft beer in Brazil.  Access to AmBevs distribution and network of tied bars and restaurants is potentially a game-changer that could really spark the rise of craft beer.  So it will be interesting to see the reaction among the craft enthusiasts as it has the reek of corporate sell-out but also the potential to really create a growing market for craft beer which currently is very niche.

Wednesday, July 1, 2015

Type 1, Year 1

Exactly one year ago, my older son was diagnosed with Type 1 Diabetes (T1D).  As with all such diseases, this one came completely out of nowhere.  It started typically, excessive thirst and frequent urination, and ended up with a four-day stay in the hospital.  He was healthy before and remains healthy to this day, in fact we caught it early enough that he was never sick with ketoacidosis, the potentially fatal complication from excessive sugar in the bloodstream.  We were lucky in that respect.

The reality of a life with T1D is difficult, it means a lifetime of careful management of blood sugars, of always thinking carefully about what you are eating and how to dose the appropriate amount of insulin, of carefully managing the carbohydrate demands of exercising muscle tissues when he plays soccer. But the emotional toll is far worse. A parent never, ever wants to hear that their child has a potentially fatal autoimmune disease and, as an adult you mind immediately wanders to the next 10, 20, 50 years of your child’s life and you feel overwhelmed and panicked.  I spent a week in tears, trying to me strong in front of my son, but feeling crushing panic, sadness and despair inside.  I would take bathroom breaks to go and cry.

Amazingly the center of strength in the family was my son himself.  Well, I imagine it is not amazing to anyone who has dealt with a similar issue – they know firsthand how amazingly resilient are kids.  He cried exactly once – when he was told the diagnosis – and has never felt sorry for himself save for a couple of moments here and there when the burden of having to deal with diabetes when his friends do not becomes too big a drag.  But from day one he took charge of his own care, began administering his own injections, calculating his carbs and testing his blood sugar.  He has risen to the challenge and his determination not to let it derail him has been an inspiration to us all.

 In the past year I have never stopped marveling at how well he has dealt with such a life-changing event.  Modern medicine and technology has helped.  He now has a sophisticated insulin pump that attaches directly to his body and allows him to be active and avoid needles, injections and having to carry around too much equipment.  He can even swim with it, which is good because he likes to swim more than anything.  We have, as a family, adjusted to the new reality and are now used to counting carbs, making sure he has his bag with supplies and emergency glucagon and helping with pump changes that occur every three days.

As an economist I marvel at how difficult this diagnosis must be for families without excellent insurance, stable jobs and local medical expertise.  We are incredibly fortunate to have the time, the resources and the help near at hand.  Something like this makes one appreciate the need for universal access to health insurance.  This is a disease that is unpreventable.  A bad RNG as my son calls it, referring to the random number generator code that determines the bonus prizes he gets in his favorite video game.  [This has led to the discussion of how it is not possible to program true randomness, and whether there is any such thing in the world anyway – but I digress]

I have learned to be patient with those who don’t know the difference between Type 1 and Type 2 Diabetes, as I was completely ignorant of it prior to my son’s diagnosis as well.  For the record, they are entirely different diseases common only in the fact that they both involve your body’s ability to deal with sugar.  T1D is an auto-immune disease where, for reasons still unknown, your body’s immune system decides to attack the cells in your pancreas that produce insulin – eventually destroying them all. Insulin is the hormone that allows your body to process the sugars in the bloodstream and move them to the cells where they are converted into energy.  The key with T1D is that the body processes the insulin just fine; it just doesn’t make any itself.  My understanding of T2D is that the body commonly does not process insulin effectively so even though the pancreas is making it, the body cannot metabolize the carbohydrates.  Thus, while people with T1D can essentially eat as they normally would, taking insulin injections to match the amount of carbs, people with T2D often have to heavily restrict carb intake.  So yes, my son can have the cake at the birthday party, but thanks for asking.

I write this all here because after a year of minimal blogging I felt I should explain the inactivity.  My inattention to the blog has a lot to do with time – management of my son’s diabetes at first was very time consuming.  It also has to do with energy, when my son switched to his pump I was waking up three times in the night to check his blood sugar for three months.  But largely it has to do with priorities.  I am chair of the OSU economics department, I am a full-time professor, I have numerous ongoing research projects, I am writing a textbook and I am, most importantly a dad who puts his kids ahead of anything else.  So the blog suffers and I regret it, but not that much.  I keep it alive because I do hope to return to regular blogging someday – it is something I enjoy a lot.

In the meantime, I hope you can all enjoy the podcast Jeff Alworth and I have begun.  This allows me to take a two-hour lunch break and record a conversation primarily about beer but also about the business and economics of brewing.  Please check it out.

I thank you all for your support of this blog.

-Patrick Emerson

Thursday, June 25, 2015

Beervana Podcast #4: Session IPAs

The Economics of Scarcity


Today I was on Vermont Public Radio's "Vermont Edition" talking about the economics of craft beer.  [Here is the link to the audio - my bit starts at 32:10] All good fun and thanks to the good folks at VPR for having me as a guest.  They did throw me a curve ball, however, as they had told me to expect for the conversation to be focused on the Heady Topper phenomenon. The Alchemist's Heady Topper, as you may know, is one of those 'it' beers in the craft beer enthusiast world - you simply have to try it if you are a self-respecting enthusiast.  And so the buzz is created and people do crazy things to get their hands on some.

Another similar beer for left-coast folks is Pliny the Elder, the Russian River creation that is similarly a buzz beer and has been for a remarkably long time.  Both beers are big double IPAs, both are very good (though I can only vouch for Pliny the Elder personally - but I have it on good authority that Heady Topper is similarly wonderful), and both are extremely scarce.

So how does the fact that it is scarce contribute to the popularity and demand for the beer?  Well there are a number of economic factors that come in to play. The first is that since beer is an experience good (a good you cannot put a value on without actually trying it) you have to look for signals of its quality.  I have talked before about how price can be a signal of quality, and so can visible excess demand.  If people are willing to drive hundreds of miles and wait for hours, it must be an exceptional beer.  So scarcity can actually drive up demand.

Psychology also plays a factor as well: it turns out that scarcity/excess demand can actually cause you to enjoy the good more.  If you believe the good is exceptional it actually changes the way you perceive it and you are more likely to think it is excellent.  In economics terms, you get more utility from drinking Heady Topper simply because it is scarce!

Finally, buzz is still a mysterious and perplexing thing to economists (despite lots of fancy modelling with information trees, information cascades and the like) but it is elusive and when you have it it is hard to maintain it.  One way to maintain it is to keep the good scarce and so scarcity has another benefit it that it can sustain the demand for a good. 

Having said all of that, I don't think in either The Alchemist or the Russian River Brewing case there is a master play to maintain scarcity.  In many cases, the allure of making a profession in craft beer is the ability to be a small businessperson doing something you enjoy and can share with others while feeding your family.  They are not out to maximize profits but their own utility. But if they were crass capitalists, either one could have the beer contract brewed in mass quantities and flood the market for a quick payout (or more likely these days - sell the brewery to a big conglomerate or venture capitalist firm). However, this would likely be self-defeating in that the scarcity would be gone, the mystique of the beer shattered (let's face it, we are spoiled for choice with exceptional big IPAs these days) and the buzz that surrounds the brewery name lost.