Two weeks ago, Siebel Institute of Technology Chairman and CEO Bill Siebel stunned the brewing world by announcing that his 128-year-old school and laboratory would close its doors.
The Chicago-based icon of brewing education has launched or boosted a lot of brewing careers- both at traditional "big" breweries and at the smaller craft beer start-ups of the last 20 years. The current catalog of more than 25 programs ranges from draft systems and bottling technology to flavor analysis and brewing theory.
Noting a "sharp decline in enrollments," Siebel stated that he was "unable to cope with further losses." With the exception of the Draft Skills Workshop scheduled for the week of February 14, he said, "all courses, programs and other educational activities conducted by the Siebel Institute of Technology have ceased effective January 14, 2000."
Siebel announced this news to the Institute's faculty on Friday, January 14th and quickly issued an electronic letter to the industry explaining the events that led to the closing. The news soon became the main topic of conversation among those in the craft brewing industry and - not surprisingly - a number of rescue strategies have been hatched. Here's a run down of the issues and some of the plans for a bailout.
Demand:
Enrollment in Siebel's programs declined due to several influences, including:
While these factors have produced a devastating reduction in current enrollments, many believe that demand will return to more robust levels within a few years. As today's craft brewers mature and grow, they will have a greater need for quality education resources. At the same time, the economic factors pressuring foreign and even domestic brewers should abate.
Competition:
Let's face it, Siebel isn't the only game in town. The Master Brewers
Association of America has implemented two-week programs in
brewing and bottling that sap students from the more established
Siebel setting. Then there is UC Davis - while more oriented toward
training cogs for the big-brewers' wheels through a multi-year
on-campus program, they have pursued craft brewers with specialized
short programs. Then there was the American Brewers Guild- a start
up school established just a few years ago and itself recently
down-sized to a distance-learning-only format. And then there are
also options in Europe- even for those who only speak English - at
Doemans, Weihenstephan, Harriot-Watt and Sunderland.
Against these challenges, Siebel maintained a unique positioning with a full-time faculty that delivered an extraordinary quality of instruction and a facility that was tricked out to be the perfect brewing school. The variety of programs ensured that everyone could find a class to meet their needs. They have also provided on-going support to graduates, a great research library and contributions to industry conferences and meetings. Personally, I doubt we'll find this whole package from anyone else now or in the future.
Saving Siebel:
Within hours of the Siebel announcement, wheels big and small
started turning. From all this mental friction a number of possible
bailout scenarios have emerged.
A Non-Profit Institute: Bill Siebel is willing to donate the intellectual assets of the Institute so that the school could continue to operate independently. Several options exist for such an operation. First, the faculty themselves could take over the school. Second, an industry association could become the Institute guardian, perhaps making discounted classes a benefit for its members. Third, a local university - both Illinois and Wisconsin support graduate level Food Technology programs of note - might serve as home for the Institute.
As of this writing, none of these options seems strong. Although discussions have been held at various industry associations, no one has stepped forward with an offer to carry the ball. The faculty-led effort seems hampered by a shortage of funds and no one has yet approached the universities - presumably because of doubts that they could react with the necessary speed.
White Knight:
What the Siebel rescue really needs is a knight in
shining armor- one who can do six-figure side deals in a hurry. One
major maltster has sniffed the deal and another party un-named has
flown in to Chicago "on the company plane" to view the goods. These
groups could provide the $200,000 to $500,000 needed to put some
solid feet under the school and keep it moving in the right direction. At
the moment, these efforts are being coordinated by Siebel Institute
President David Radzanowski. Still, none of the possible suitors have
yet had an audience with Bill Siebel to discuss the principles and
terms that would be required for a hand-over. Only after that happens
can any sort of deal be considered a "warm" prospect.
Will Siebel sell to some one who wants to use the school for their own commercial purposes? I think not.
"I don't want to sell the name to the highest bidder," he said recently. "If a company wants to buy it, I want to be assured it will be run properly and independently, otherwise why should I bother."
At age 53, Siebel jokes that he would be giving himself a raise by closing the Institute. He hasn't drawn a salary for two years and he has covered the operating losses in addition. He has kept the Institute open for a least a year longer than his advisors felt he should have, feeling that he owed the faculty and the industry his best efforts for the continuation of the school.
"Personally, I was willing to work until the 150th anniversary in 2022," he said. "But people vote with their dollars and we just aren't getting enough votes."
No matter what happens to the educational side of the Institute, the
laboratory services and microbiological media business seems
destined to survive. Here too, there is the possibility of an
employee-led operation or acquisition by another company in a related
business. Through this mechanism, the Siebel name it seems will
continue, although perhaps as "Siebel Laboratories" or something
similar.
NEW YORK, Jan. 26 - Economists at the National Bureau of Economic Research
think they've hit upon a way for states to raise money and help keep college
students out of trouble at the same time: Raise taxes on beer.
The two economists determined that for every 10 percent rise in the price of
beer, the percentage of students who commit such infractions would be
lowered by 4 percent overall.
A DETAILED analysis of data conducted by economists at the nonprofit
National Bureau of Economic Research, based in Cambridge, Mass., suggests a
straightforward cause-and-effect association between the price of beer and
student misbehavior:
Alcohol consumption increases the likelihood of mayhem on college campuses.
Beer is the alcoholic beverage college students are most likely to drink.
Imposing a tax hike on beer to raise the cost of each glass, six-pack or keg
will reduce consumption.
Fewer drunken students mean less violent and nonviolent campus crime.
Economists Michael Grossman and Sara Markowitz reached their conclusions by
analyzing data on 122,416 students attending 191 institutions of higher
learning between 1989 and 1991. The information was gathered by Core Alcohol
and Drug Surveys of College Students. The price of a six-pack varied within
the 29 states represented in the survey, from a high of $5.53 to a low of
$3.25, largely because of differences in state beer taxes.
In their paper, Grossman and Markowitz correlated those price differences to a variety of behaviors, such as getting into trouble with police or other campus authorities, arguing verbally or fighting physically, damaging property, pulling a fire alarm and sexual misconduct. In their analysis, the two economists determined that for every 10 percent rise in the price of beer, the percentage of students who commit such infractions would be lowered by 4 percent overall. Boost the price of beer 10 percent, they argue, and the percent of students who get into trouble with police and campus authorities drops from 12.3 to 11.7 percent; who cause property damage, from 7.5 to 7.1 percent; who fight, from 31.2 to 30.2 percent; and who are involved in sexual misconduct, from 14.3 to 13.8 percent. Theoretically, these seemingly small differences would add up to a surprisingly large number of students, the economists say. According to statistics, about one-third of the 14.5 million students in U.S. colleges and universities will be involved in some type of campus crime or violence this year. So, they say, having to pay just 10 percent more for beer could potentially keep 200,000 of them out of trouble. The change would be most noticeable for students living in a fraternity or sorority, Grossman and Markowitz said, because the data showed they have about six more drinks a week than students who live off campus and five more drinks a week than students living in a dormitory.
WOULD IT WORK?
College officials expressed guarded agreement with the economists' thesis connecting alcohol and violence. "I agree that if students drank less, there would be less problems," said Tom Evans, director of public safety at Drew University in New Jersey. "But I don't know if you can raise the price of beer enough to stop violence." Alcohol is involved in "about 99.9 percent of our discipline problems," Evans said, "but most of it is hard to describe as truly violent behavior. It's mostly students getting into arguments with campus police, often at 2 or 3 a.m. after a night of imbibing beer. "That's a very broad definition of violence [Grossman and Markowitz] used," Evans added. "If you use that kind of broad definition, almost every student would be involved." But Grossman countered that even apparently trivial incidents are part of a broader picture of on-campus violence. "We used four separate indicators of potentially violent acts," he said. "Those measures are fairly highly correlated with each other. Doing one might be related to getting involved in more serious kinds of things." "There is some violence that is alcohol-related," said Capt. Bill Cooper of the police department at the University of California at Berkeley. "If alcohol was less accessible, that might reduce violence, but you would have to raise the price significantly."
TAXES VARY
Beer costs less now than 10 years ago, and there's the rub. A noteworthy increase in the price of beer occurred in 1991, when the federal government raised the sales tax on a 24-can case of beer from 64 cents to $1.28. But adjusted for inflation, Grossman said, "the real price of beer has fallen by about 10 percent, mainly because the federal excise tax has remained the same."
The same is true on the state level. The variation in state taxes on beer remains as wide as it was in 1985, when the per-case tax ranged from $2.04 per case in Alabama to just 8 cents per case in New Jersey. But raising the price may not be the only answer to campus violence, Grossman conceded. He would like to see a cost-benefit analysis to determine the relative effect of expensive beer as compared to other policies, such as "policing actions by the colleges themselves and alcohol counseling aimed specifically at actual violence." For now, the numbers seem to add up to this straightforward equation: Less booze equals better behavior.
"Hops Kill Bacteria"
from the BeerWire Mailing List
Ten years ago Michael C. Barney, manager of microbiology and fermentation at Miller Brewing, discovered that certain acids in hops are bacteria-killers, able to sanitize food, clear acne, reduce cavities and sweeten your breath. Miller may soon license the commercial use of these acid hops. Barney has patented beta acid in hops as an inhibitor of Listeria monocytogenes, a food-poisoner in meats, to be used directly on food or in packaging. Patents also exist to use the acid in toothpaste, mouthwash and tooth powders to kill Streptococcus mutans, a bacteria that causes dental cavities, Staphylococcus, a bacteria that causes food poisoning and acne and Clostridium, a bacteria accountable botulism poisoning.
"Grasshoppers Taste Best With Beer"
from the BeerWire Mailing List
Tens of thousands of grasshoppers infest Uganda each December following the seasonal rains. In the capital city, Kampala, residents gather each night under streetlights to catch the insects that are attracted by the light. Once stripped of their wings and legs, the grasshoppers, high in protein and carbohydrates, are fried as a snack. The locals say they taste best with a beer.
"Salvator Beer Hall Destroyed By Fire"
from the BeerWire Mailing List
The Paulaner Keller, the Paulaner Brewery's century-old beer hall in Munich, was destroyed by fire last November, causing $12 million in damage. Arson was suspected as the cause of the fire. The Paulaner Keller is the site for Munich's annual SalvatorFest.
"A Yankee Beer At the Oktoberfest"
from the BeerWire Mailing List
When Sam Adams OctoberFest was served at Munich's Planet Hollywood during the last Oktoberfest, it became the first American-brewed Octoberfest beer served in Munich during the annual beer fest.
"Portland Brewing, Saxer Merger"
from the Real Beer Page Mailing List
Oregon breweries Portland Brewing Co. and Saxer/Nor'Wester Brewing Co. of Lake Oswego plan to merge. Specific terms of the deal have not been disclosed. But Saxer president Steve Goebel said Portland Brewing Co. now owns the intellectual rights to the 13 Saxer and Nor'Wester brand beers. In exchange, Goebel and his wife, Liz Goebel, become "significant shareholders," and gain a shared seat on Portland Brewing's board of directors, said Tony Adams, Portland Brewing Co.'s president, chairman and chief executive. The combined company has a brewing capacity of about 75,000 barrels. It will be the 12th largest craft brewery in the United States and third largest in Oregon.
"Increase In US Beer Sales Largest In 10 Years"
from the Real Beer Page Mailing List
U.S. beers sales increased 1.6% in 1999, the biggest jump since 1990, according to Beer Marketer's Insight, an industry newsletter. Anheuser- Busch was the biggest beneficiary, selling 96.8 million barrels of beer to increase its market share to 47.5%. Overall, beer sales rose from 196.6 million barrels to 198.8 barrels. Second place Miller Brewing gained 1.6 million beer-barrel sales, primarily because of its purchase of brands such as Henry Weinhard's and Mickeys from Stroh Brewery Co. Miller sold 44.6 million barrels and boosted its market share to 21.6%.
In order, the top selling companies were: 1. Anheuser-Busch (96.8 million), 2. Miller (44.1), 3. Adolph Coors (21.9), 4. Pabst (14.0), 5. Heineken (4.0), 6. Labatt USA (3.6), 7. Gambrinus (3.4), 8. Barton (3.1), 9. Guinness (1.6), 10. Genesee (1.3). Both Gambrinus and Barton import the popular Mexican beer, Corona.
"Wine Enthusiasts Sue For Right To Buy Over Internet"
from the Real Beer Page Mailing List
Wine enthusiasts in five states have sued to overturn state laws that prohibit adults from buying wine from out-of-state sources. Another in Kentucky launched a grass roots effort to get legislators to rescind a similar law. Those who buy beer through the mail or over the Internet would also be affected if the laws were changed. Suits have been filed in New York, Indiana, Virginia, Indiana, Texas and Florida. An Indiana judge ruled that state's law was unconstitutional, but the state has indicated it will appeal. In Florida, six Florida residents have filed a civil-rights complaint that the state is violating their constitutional right to engage in interstate commerce by preventing them from ordering fine and rare wines that are not available from in-state retailers. Lauren Abel, who collects wine, chose to try to change the Kentucky law through legislation rather than a lawsuit. That law prevents residents from ordering wine from out-of-state sources and having it shipped directly to their homes. She is circulating petitions in an effort to get the law overturned.
"Fuller's Goes Organic"
from breWorld BeerBulletin
Fuller's is to launch what it claims to be the world's first organic honey ale in March when it revamps its Honey Dew ale as Organic Honey Dew. "This is our first move into the organic sector and we were determined not to launch a 'me too' ale," said Fuller's beer and brands director John Roberts. "By using honey in the brew, we are able to offer consumers a distinctly different organic product and a delightfully flavoursome beer." Organic Honey Dew, brewed to 5% ABV, will be available in 500-ml bottles and as a limited edition spring beer in cask at a slightly lower 4.3% in selected pubs.