James Dgullsoch has written an article in response to the online beating he took on the MSN Money website after saying all beer tastes the same and idiots like me just try different styles of beer for the experience. If he just substituted "beer" for "women" he would... um, moving on.
Anyway, here's his article professing his guilt and trying to drum up support for a beer business of sorts. He went from saying all beer tastes the same to saying that we're a bunch of broke chumps.
Join me for a beer stock summit
Posted Jul 31 2009, 04:21 PM by James Dlugosch
Filed under: beverages, Molson Coors Brewing, James Dlugosch
OK, beer nation. You commented, and I read every word.
In my post earlier this week regarding the testing of "beer in a box," I offended many by stating that "all beer tastes the same." I could not have been more erroneous.
All beer does not taste the same. I repeat: All beer does not taste the same.
I would have been much better served making my point by specifying that the big-name beers made by the large brewers taste the same -- and they do, as far as I am concerned. My mistake was suggesting that microbrews and varietals taste the same.
They do not, and for those words I was wrong and rightly chastised by the MSN community. For my penance, I am now hosting my own "Beer Summit" in an attempt to win back the graces of beer nation.
Since this is an investing blog, I want my beer summit to take a look at the beer industry from a public market perspective. While it may be true that the microbrewers craft a wonderful-tasting product, it's not so certain that they make money.
In fact, the only microbrewer to really make it as a publicly traded company is Boston Beer Company (SAM). Credited with the renaissance in small breweries, Boston Beer, maker of the Samuel Adams brand, has had to fight hard for its 1% market share since its founding in 1984.
Since the birth of Sam Adams, a large number of local breweries across the country have gone defunct. Fierce competition and very low margins require breweries to sell lots of beer in order to survive.
That's why the landscape is now dominated by a few very large brewers that have managed to gain economies of scale. Fortunately for consumers, very small or micro-breweries have filled the vacuum by those brands that have departed the scene.
As many of you noted, we are all the better for it. Even the big breweries have gotten in on the action by attempting to deceive the market with their own supposed handcrafted offerings.
Yes, you were right. Not all beers taste the same. What I wonder is if the market can support those true handcrafted labels that many of you mentioned on anything but a local level. Specifically, can they make money, or are we forever destined to the very large and the very small?
From an investment perspective, I see no reason to be excited about the prospects of a Molson Coors (TAP), but I can see the merits of owning a SAM. Clearly there is room for an upstart to grab market share even if that upstart has now reached middle age.
We'll learn more about SAM when the company releases earnings next week.
With so many of you having opinions about microbrews, I'd like to see you all choose your favorite names and comment here with more of that witty repartee. I'll make sure I do the same with my selection over the weekend.