Zoomelier

Welcome, everybody, to our periodic sessions of ZoomLEA about wine and tech, and today we're taking a break from wine and tech to have a surprise visit from a craft beer maker to do beer and tech. So, Devin, just before we get started talking about beer, can you tell us a bit about your background and how you got into beer? Why we're talking to you about beer in particular? What is it that you know? I'm one of the craft beer pioneers in Asia. I started a place called Brew Works in 1997. It was back in the dark ages. It was about the only small brewery south of Japan in all of Asia at the time. There were some smaller breweries that did a lot of German beers and pretty traditional stuff, but we were the first one that you'd call kind of the new wave, that we did IPAs and gold nails and pilsners and wheat beers and stouts and a whole range of things. That was in Singapore? Yeah, the breweries in Singapore. Singapore was kind of the hotbed of craft brewing for a while for that. Actually, it was a very slow start to craft brewing out here. It had already been churning around in America for years. Although, when we started, it was about 5% of the beer sales in the United States. So, when I say we pioneered, we had to bring everything in from someplace else. There was nothing here. Now, there's about 35 breweries in Singapore, another couple dozen in Hong Kong. So, we've really seen it grow and change over the years. I left Brew Works in 2013 and bought Hong Kong Beer Company, which was actually older than Brew Works. It had started in 1995, and it was literally about to go into the scrap heap. So, we moved it, put it in a new place in Hong Kong, changed all the recipes, redid all the branding. I'm drinking one of the Hong Kong beers here today. It's literally Hong Kong beer. You can see our logo, the new logo there. We changed that and got it back into good shape again. It was the only craft brewery in Hong Kong when we bought it. Now, we're doing a new brand in Singapore called Specific Gravity Beverage Company, and SG Beer for short. You can see my logo there. There's HK Beer and SG Beer. SG Beer and HK Beer. Just make it easy that way. Are we envisioning MY Beer and TH Beer and AU Beer? It could happen. It could happen. We've been brewing up in Malaysia right before the shutdown occurred. We found a little brewery up there that had two licenses, is all I've known about Malaysia. We found a third one. They make rice wine, but their license actually allows them to brew beer. We were going up there. We brewed a wheat beer up there before they closed the causeway for us. We've also been brewing lately in Cambodia and in the Philippines. There's a couple breweries there that we've used. We're not actually making any beer for Singapore for SG yet. Hong Kong is still going along. It's been a tough time up in Hong Kong because of first the riots and then COVID has shut down a lot of nightlife. That's made things hard up there. Here, we're working on getting this new brand done. It's goodness. It's kind of strange to have been out of the Singapore market for seven years and then coming back into it. It's a very changed environment. In fact, four new breweries have opened since the COVID lockdown started. It's a changing environment. It was kind of funny for us when we were the one brewery around. Now, all of a sudden, I go out to a beer bar. As I was telling you earlier, this is from Good Luck Beer House, which is one of the places that's kind of fun to hang out. They do almost exclusively local beers now. They're in Haji Lane. When I go out to a place like that, I really feel like a grandparent. People come up and say, oh yeah, I remember when I was 16 and drinking your beers. It's like, what are you, 35 now? Well, our kids grew up with that. Brew Works is a place you went for a burger. Can you tell us what a craft beer is? I'm not sure everybody on here knows what a craft beer is versus regular beer. What makes it craft? Is it just small amounts? Small amounts is one of the things. It's amorphous. There was a definition. I'm trying to remember who the Supreme Court justice said about pornography. I know it when I see it. Craft beer is a little bit like that. Big mass-produced beers, they'll do millions of hectoliters a year in volume. For instance, Tiger, the APB plant in Singapore, Asia Pacific Brewing, is Tiger and Heineken. They make about 700,000 hectoliters of beer a year. Brew Works, when we were at the top, and the same with Hong Kong Beer Company, excuse me, I'm beer burping. We made about 3,000, 3,500 hectoliters a year. It's an enormously much smaller category. Also, craft breweries tend to make a wide range of beers. Mass-produced, mass-market beers, they focus on one or two brands. They get really good at making them. They make them really cheaply. I like to compare them with the Giordano T-shirt or the Gap T -shirt of the beer industry. They're good and cheap, but they're always kind of the same. I challenge most people to pick their favorite light lager out of a lineup of light lagers. It's always a fun party trick to line those up. You say, Budweiser is my favorite, and then not be able to pick it out. I once did a panel with Carlsberg and some Japanese light lagers and German light lagers. They couldn't pick out the Carlsberg in the lineup. I think mass-produced beers, they're all pretty much the same. Whereas craft beers, they're smaller, they're more bespoke. It's almost the difference between, as I said in the clothing analogy, the difference between a T-shirt and something that's custom-made for you. They're small, but look, the craft brewers in the United States, the definition is under 6 million hectoliters, 6 million barrels a year, which is a huge amount of beer. That's 10 times what APB is making. How much of the market is craft beer? In Singapore, it's about 3%. What about in places like the U .S.? In the United States, it's 14% of volume and about 21% of sales. One of the things about craft beer, you can see with that statistic, is that it tends to be more expensive because you're using more expensive ingredients. You're using malt as opposed to malt extracts. You're using hops or whole hops, hop pellets, as opposed to hop oil. We don't use a lot of adjuncts. We're not using a lot of sugar. Tiger, for instance, not to slam Tiger, it's a good consistent beer. But they use an awful lot of sugar in their beers because it's a cheaper fermentable than malt is. They use hop oil instead. They can get that price down to where in Singapore it's under $2 a can. Whereas it's really hard for us in the craft beer industry to get under $6. A lot of it's just the ingredients. The other thing that the big brewers tend to do is they brew high alcohol. They'll brew 13%, 14%, 15% beer and then water it down. Whereas we tend in the craft brewing industry to brew right to the alcohol that it's supposed to be. What is it supposed to be? Well, it depends. Most of the beers are around 5%. But you can have them up 7%, 8%, 9%. Triple IPAs at 9%, 9%, 2%, that kind of thing. What are some of the interesting craft brews or beers in Asia? We'd love to know some names. If you want to, you can show us one or two of yours. I'd love to see the bottles. I think you're sort of in stealth mode. I'm not sure if you're willing to show us. We're a little bit in stealth mode. We haven't registered our trademarks yet and all of that kind of stuff. We're still a little bit under. People are starting to know that we're out there. We're brewing actually. I had a little brewery up in Hong Kong. Actually, during the lockdown, we sent it down from Hong Kong. It's about the size of most people's dining room table. We can brew about 20 liters at a time. We've been brewing. We've brewed three times now over the last three or four weeks. That's been a lot of fun. Nowadays, there's a tremendous amount of interesting beers. Here, we know that John Wee is putting up a new brewery called Brewlander. He's been very successful making some interesting beers. I think his most popular one is what he calls a wild IPA. It's called Love. You can find that at Cold Storage in the grocery stores now. Pasteur Street in Vietnam is doing some absolutely phenomenal stuff. You can find it actually in the United States. Shelton Brothers brings it in. They have something called a Seaglow Stout. It's high alcohol. I think it's 8% or 9%. That won the World Beer Cup two years ago. They didn't hold it this year because of COVID. Two years ago, that won the World Beer Cup Best Stout in the world. They make a phenomenal Jasmine IPA. A lot of people are very happy with the Heart of Darkness beers. Heart of Darkness is just about to open a new pub here. They've changed their place. They've changed their location. Young Master opened about the same time that we moved Hong Kong Beer in Hong Kong. They're all over the region now. They're making some very interesting, very good beers. As I said here, we've had four new little breweries open in the last three or four months. Alive, Sunbird, Sunbird Clive used to work for us at Brew Works. Actually, a lot of the places a brewer who's running John's Project used to work for us at Brew Works. Like I said, I was kind of the grandfather of the industry. I think just about everybody has worked for me at some point. You mentioned the impact of COVID. I want to talk about COVID and then I also want to ask you something about technology in beer. You mentioned the impact of COVID and you also said you're not brewing much here. Is that because we can't get ingredients? What happens? I understand that many global supply chains have been interrupted. A lot of that, part of it's due to trade wars. A lot of it's due to COVID. I know that in the beginning of lockdown here, everybody was bread baking. I guess in the U.S. too, right? Everyone was talking about sourdough. I was bread baking. You couldn't get yeast or you couldn't get flour. I know you need hops and malt. We just talked about that for beer. Where do those things come from? Can you get them here? Is there a challenge in Asia for brewing beer? Are the ingredients blocked at the moment? No, things have actually been pretty good. Often with beer, you'll buy a container at a time. One of the things that makes beer expensive when you make it in a place like Singapore or Hong Kong or Tokyo, you see in the United States too, there aren't a lot of big craft breweries in the big cities, is it's expensive. You bring in a 40-foot container of malt at a time to make it economical. A lot of times, it doesn't take a lot of hops to make beer. Maybe you're talking two or three, depending on the size of your brew house, five kilograms of hops. You can brew an awful lot of beer. You can take an order of hops one time a year and keep it in your cold room. People would have brought that in. Most of the hops come from Europe or the United States. They're in the warehouses by September or October. You take delivery of them in January. They come in cryo-backpacks, so you've already got that. You've probably already done the same thing. You would have been down malt at the end of about a quarter. A quarter, goodness. About 75% of all alcohol sales generally occur in the fourth quarter of the year. You stock up a lot in the summer. You start brewing a lot of beer so that you can get through the holiday seasons. Then you don't have any ingredients, so they would have already bought those ingredients in to prepare for the spring term because they would have been wiped out with everything that they'd had. I haven't heard of anybody having any trouble getting ingredients. Do you know how you just said it happens at the fourth quarter, which I assume is very North America, Thanksgiving, Christmas, getting cold, people watching sports. Is that true in Asia as well where some of those traditions are different? No. We see it. It's very strong here. It's Chinese New Year. A lot of Asia is northern and it's cold. In Australia, I guess you would know. I think it's pretty much the same thing because of Christmas and people are off and the school's off and they're having barbecues and all that kind of thing. We've got two big times in the north generally. You've got the summer when people get to go outside and drink a lot of beer and enjoy themselves, have barbecues. Then you've got the right around Christmas time where people are celebrating and doing all kinds of fun things. In Asia, people tend to be very family-oriented. We saw it at brew works over the years. Even at Chinese New Year, we did a lot of business. You'd see the younger kids coming in, kids. You'd get out of your family reunion dinner and want to get to someplace where you could interact with somebody besides your grandparents. We didn't have any business for dinner, but we certainly did fill up in the evenings. It's funny. Those patterns stay pretty true here. We've noticed it. We noticed it in Hong Kong. We noticed it here. Absolutely. That's really interesting. You mentioned not having beer with dinner but afterwards. Can you tell us how, and you also mentioned barbecues, but what are the patterns of beer consumption? Is it mostly drunk at bars? Is it mostly bought in grocery stores and consumed at home? Is that different for craft beer versus the larger manufacturers? One of the things that happened with COVID for the craft beer industry is there had to be an enormous pivot because most small brewers, the majority of the production goes out into the F&B world. All of a sudden, that stopped. I just saw some stuff about North America, some stats that I think craft beer is now volumes only down about 10% because they've made this quick pivot. People are supporting them, and they're getting their beers into people's homes now. But prior to that, they thought that there was going to be a tremendous decimation of the craft beer industry. You saw it here. People went very quickly, whether it was Brew Works or people getting into Red Mart or getting online, setting up their online stores very quickly. You really had to do that. You had to be technologically oriented. You had to get out there because there's no other way you're going to sell your beer. If you're carrying it over to Smith Street Taps or to Good Luck Beer House, you were dead. There was no offtake for you. That COVID has really changed the way people have had to do business. You see what's been interesting here in the grocery stores in Singapore is Tiger. It's impacted the big guys enormously as well. Tiger is now under two Singapore dollars for a can. Those cans are usually $2.53, somewhere around that. Anybody who's listening from someplace else, the Singapore dollar is about $1.40 to the U .S. dollar, so multiply it by 70%. It's incredibly expensive, in other words. One of the things that we've seen is 60% of Tiger's, the big brand's offtake was going into the 640ml bottles in hawker centers. The hawker centers were closed. Even the big guys were really affected. What we've seen, you were asking about some of the shortages. One of the big shortages I've been reading about is aluminum cans because it's a cheaper way to get the beers out. Boston Brewing that makes Sam Adams, for instance, in the United States, they've just put up a new $20 million canning facility because they had enough brewing capacity, they just didn't have enough packaging capacity. What's happened is they've taken all this that went into stainless steel reusable kegs that went to F&B. They can't do that any longer. They haven't lost any volume, but they've got to put it in a different package. It's been interesting to see that change. It wasn't that they couldn't get tin cans from wherever they were getting them from before. It's that they literally had to put more liquid into tin cans than they had been putting into tin cans. Aluminum cans. You'll see the aluminum. What they actually do is they actually put the factories for these aluminum canning factories, they put them next to where the big breweries are. In Singapore, for instance, Crown has an aluminum can factory that sits between Coca-Cola bottling and APB, Asia Pacific Brewing, because it's cheaper to bring in the aluminum and you turn them into cans, because otherwise you're just shipping a bunch of air. If we're really lucky, we might open a Coke can and get some beer instead. No. They would go to different places. I would hope not. Good try, though. Before COVID, what percentage, do you know, is there a percentage of beer that was drunk at restaurants? I know you said F&B and I don't know if you separate F&B where you're having F&B and then F&B where you're just having B and then home. It's hard to do here. There aren't that many bar bars in a place like Singapore. You see that in the United States, too. A lot of the ways the liquor licenses are set up is that you serve food. It's really hard to break that down there. Here, what's closed are karaoke places and music venues and things like that. That's not nearly as big an offtake as you would see for beer. A lot of the beer goes into whether it's hawker centers or restaurants or bars that serve pizza and burgers and chicken wings and things. As I said, for craft beer, that's probably 75%. Whereas it's the opposite for big beer. Somebody like Budweiser, they've got about 75% is going into grocery stores. What about our favorite topic on Cloudflare TV, technology. Can you tell me anything about the technology that's used in making beer, whether it's setting temperatures or figuring out the mix of what's in the beer? How is it used? Making beer, kind of like making wine, it's been going on for 10, 15, 20,000 years. That kind of technology, it doesn't change a lot. You heat up some water and you throw some ingredients into it. One of the things we can do now with probes, with computers, with valves, is we can be much more sophisticated in what we do. We hit better temperatures. We know exactly what they are. In fact, if you go to a big brewer, I was just talking about APB that does 700 ,000 hectoliters a year in production. They've got 20 guys. Most of them sit in a computer control room. They're all the valves, all the recipes, all the grinding, the malt, the hops, the dosing. It all gets done from a computer. You set the program up and then you just run it. These breweries, they have to be that way because successful breweries running three shifts four or five times a week. You really need to use a lot of that technology. A lot of things we see technology used for is beer has a tremendous number of skews. You've got bottles. You've got big bottles. You've got small bottles. You've got aluminum cans of various sizes. You've got stainless steel kegs of various sizes. You've got plastic kegs that are going overseas. Keeping track of all of that stuff, what you've got in the warehouse. If you think about 700,000 hectoliters, that's 70 million liters. We're talking 140 million pints going out basically of beer every year. That's a small manufacturing plant. In order to do those numbers, you're using technology all the time to track things. You've got different malts. You've got different recipes. You've got different yeast. There's 300 different types of hops now. There's probably that many different types of yeast that you're trying to keep track of. They still have to taste this stuff and test it? Yeah, tasting panels are a big deal. Because there are differences. The hops are different from year to year. The malt's different from year to year. We get stuck valves. I've had fermentation vessels where everything seemed to be going fine and I taste the beer and it was terrible. The reason was because the valve had stuck open. The ferment was too cold. My sensor probe wasn't working or my readout wasn't working correctly. The yeast was working too hard. The beer wasn't any good. We rely an awful lot. Look, you've got these great big huge metal things. You need probes and temperatures and you need to record a lot of that kind of data. That doesn't even get into the microbiology of testing and all that kind of stuff too. We're talking about COVID. These PRCs, we've been using that. The brewery, we started that in Hong Kong about 5 or 6 years ago. It's these rapid tests for bacteria, viruses, wild yeast, things like that. They're using that for COVID now. They talk about some of these tests about not being as accurate. Mainly they're PRC type of tests where you grow up the DNA, you shine a light through it, and you can tell exactly what the DNA is in that valve. We actually used to use that in brewing a lot. It's about $25 each test. Before an infected batch of beer, you could check it before it went out into the marketplace. You could check it with that kind of technology. Can we see if your beer has COVID? Not COVID, but wild yeast, lactobacillus, brettomyces yeast. There's a lot of different places. Your hoses can get... It's kind of like wearing a mask, right? If you're sitting your hoses on the floor, you can get something in it. Sometimes you just don't know. You don't know where somebody could do something wrong. You've got several guys working and they forget to clean out a tank. Pretty soon you've got a problem. It's just like anything you cook, right? We're getting close to the end of time. One thing I wanted to make sure to do was to ask you about what kind of beer you would drink with various tech occasions. A number of people who watch Cloudflare TV or have something to do with Cloudflare do a variety of things. One thing that a lot of us do is to get on Zoom calls like this. What kind of beer do you recommend we drink on a Zoom call? I drink... Let's see here. I'll do my shameless self-promotion. I think when we get it out... This is our style here. This is our new bottle. West Coast IPA is one of the things on a Zoom call. It's relatively high in alcohol. You can sip it. It's better as it warms up a little bit. It's not something that has to be drunk super cold like your regular lagers. On a Zoom call you don't want to have to get up and go grab a new one every once in a while because that one's not cold. You can sip it and enjoy it the whole time. Just keep smooth on that Zoom call. That's the one I'd recommend for that. We work with a lot of engineers who do software development or site reliability or systems reliability and they often have headphones on and they're coding away in the zone. What's the best beer to go with that? I like this wheat beer. It's a light beer. We always say about wheat beer it won't slow you down. It's 4.8% alcohol. It's got a lot of nutritional qualities to it. There's a little bit of yeast left into it to keep you regular and keep things moving along for you. That's probably a good way to go. Last but not least, because we have one minute, what do we do if we're celebrating? If we're in sales and we close a big deal or if we're running some part of technology and we've just put up a new system with no bugs and it's working well? How do we celebrate? Drink whatever you enjoy and drink a lot of it. I think that's probably the best thing. A lot of quality for that one. Why not? You might as well wake up with a hangover the next day. You've done a lot of work. That's all good. We're going to close this out. Our first Beer Zumelier with Devin Kimball, beer guru in Singapore. Thank you very much. My pleasure, Elisa. Good talking to you. Bye.