Hydrostatic Pressure

Siphoning liquids between vessels is a common process in homebrewing. Yesterday evening, I was unlucky enough to discover another use for it: stopping a basement flood. To illustrate, here's a typical view of the northeast side of my lot:


This is a cross-section of the space between the dog and the house, which shows what happens during a heavy rainfall or snow melt (or, in the case of yesterday, both):


After wasting some time trying to bail out the window well with a pitcher and a bucket, I decided to try my luck with a garden hose. Here's what I did:

1. Routed the hose from the patio to the low side of my lot.
2. Put a nozzle on the downhill end of the hose.
3. Attached the other end of the hose to a spigot near the window well.
4. Opened the spigot and nozzle. Once the air in the hose was pushed out, I closed the nozzle.
5. Closed the spigot, removed the hose and submerged its end in the flooded window well.
6. Opened the nozzle.

To my surprise, it totally worked! Controlling the flow of the water was a minor problem, though (if it's too fast, the window well temporarily dries up and the siphon loses its prime). It was too slow with the nozzle and too fast without it, so I partially restricted the flow by attaching the 'water in' tube from my wort chiller to the hose. Yet another reason to brew your own beer.

Nerd Convention

About a month ago, a startup brewery out west asked me to help them prepare their financial projections. My instinct was to do it for free out of the goodness of my heart, but Rachel helped me realize that sharing the work I've already done is completely different than working specifically on somebody else's project. So a couple of weeks and a couple hundred bucks later, I became a bona fide brewery consultant. In the course of doing the job, I made a generic financial spreadsheet for packaging breweries. You can download it from The Institute of Needing to Get Out More.

Meet and Meat

My friend Lizz, who was in town from New York City last weekend, briefly mentioned using LinkedIn as a tool in her animal rescue efforts. Until then, I thought LinkedIn was one of those automatic websites that tried to create profiles of businesspeople by compiling search engine information. Despite my hatred of social networking websites, I accepted a coincidental invite from my lawyer yesterday. Today, I imported the address book from my email server and sent a mass invite to the 50 or so people who already use the service. Within two minutes of hitting the 'send' button, I had eight confirmed contacts. After ten minutes, I was in the upper teens. It was a grisly spectacle. I think I found the virtual water cooler.

To bring closure to the excise tax storyline, I leave you with a letter from PETA to an Oregon legislator. Even though I'm a flaming carnivore, I'll give PETA credit for being deliberately hilarious on this occasion. Common ground is everywhere.

Mistakes Were Made

I wrote my last post under the following misconceptions:

-Oregon breweries pay Oregon excise taxes on all the beer they sell, including beer shipped to other states.
-Oregon excise taxes don't apply to beer shipped into Oregon from elsewhere.

Both of those statements are false. Here's how it really works:

-Oregon breweries pay Oregon excise taxes on beer they sell in Oregon.
-Wholesalers (aka distributors) pay Oregon excise taxes on beer shipped into Oregon.
-Wholesales pay the excise taxes of other states where Oregon beer is sold.

As such, Oregon beer won't be taxed at higher rates than out-of-state beer. Instead, the price of beer to consumers will simply increase across the state. If you assume resale markups of 30% for wholesalers, 30% for liquor stores and 350% for bars, an excise tax increase of $49.61 per barrel (the tax would increase by that amount, not to that amount as I had previously thought) will result in consumer price increases of $1.52 per 6-pack and $1.17 per draught pint.

If you're a brewery manager, how do you lessen the blow? Simple: focus on selling really strong beer to Oregon residents. Excise taxes apply to volumes of beer, not volumes of alcohol, so the amount paid on a 12-oz glass of 10%-abv barleywine is less than the amount paid on a 16-oz glass of 6%-abv pale ale. The same holds true for 40-oz bottles of St. Ides vs. 6-packs of Miller Lite. You can probably see where I'm going with this.

If you're a problem drinker, how do you lessen the blow? Simple: switch from beer to Five O'Clock Vodka. If you hadn't already done so, welcome to the next level of alcoholism.

As a responsible beer enthusiast, how do you lessen the blow? Aside from moving to another state, there isn't much you can do. Even though you're not a target for behavior modification through taxation because your relationship with alcohol isn't harmful to yourself or anybody else, one option is to drink less beer. Another option is to give more money to the government. Otherwise, I hope you like barleywine.

Some Math

Madison Beer Review dropped a doozy this morning: some brain donors in the Oregon state legislature just proposed raising the beer excise tax to $49.61 per barrel. Let's look at two examples that illustrate why such a move would destroy one of the top craft beer industries in the country.

First, let's assume a brewpub generates $1.5M per year in sales and that its net income is 5% of total revenue. In other words, the profit is $75,000. We'll also assume that 60% of revenue is from food, 30% is from house beer and 10% is from other stuff (wine, spirits, merchandise, etc). That means the brewpub's house beer generates $450,000 in revenue. At $4 per pint, that translates to 454 barrels of beer sold. Oregon's current beer excise tax is somewhere around $2.60 per barrel. By raising it to $49.61 per barrel, the brewpub will owe an additional $21,342.54 in tax revenue each year. That will drop the net income to $53.657.46, or 3.6% of total revenue. It would make economic sense for this pub to stop brewing and turn the brewery square footage into additional seating.

Next, let's assume a production brewery sells 10,000 barrels of beer at $80 per half-barrel keg. That's $1.6M in revenue. If we assume the brewery's net income is 10% of total revenue, it annual profit is $160,000. The change in excise tax would force the brewery to pay the government an additional $470,100 per year. Whoops, that's $310,000 more than the brewery can afford! If I owned this brewery and was suddenly faced with paying the government $24.805 for every keg of beer that I sold for $80, I'd liquidate the company's assets immediately and find another way to make a living. Seriously.

In short, brewpubs will suffer and production breweries will die if this bill is passed. Total excise tax revenue from beer will drop and people in the state will drink imported beer. I think public outcry will force this bill to be efficiently rejected. Oregonians, be ready to get on your legislators' cases as soon as some special interest whore slips this tax hike into your state's next budget proposal.

I'm a Neo-Wagonist

I've mentioned that my wife is pregnant, but I haven't mentioned that I've been on a self-imposed drinking sabbatical since we announced the pregnancy in mid-October. There have been exceptions - a full glass from each batch that I brew, occasional tiny tastes of other beers, diving off the wagon completely for my brother's wedding - but, in general, I'll be a brewer who doesn't drink beer until early June. I doubt that many people have been in my position, so I sort of feel like a rebel. I also feel like a tool, especially at homebrew club meetings. It's been difficult, but it's nothing compared with what Rachel is going through. Whenever somebody asks me why I'm doing such an idiotic thing, I think "because I'm a gentlemans" in Ry Cooder's voice. I have no idea where that came from, but it's enough to keep me enthusiastic about my decision.

Brewlog

I thought the Cardamom Coffee Stout would be a polarizing beer, but the "public" response has been overwhelmingly positive. The only real debate has been on the intensity of the coffee. I initially thought it was too much, but my mind is changing. Being a dry session beer that goes down very easily, it might be uninteresting without its assertive espresso sharpness. However I decide to brew the beer, I'm thinking about making it the pub's regular dark beer instead of a Chocolate Porter. I'm going to give the Porter a fair trial by brewing it next week, though.

In other pilot batch news, the Belgian Pumpkin Ale I bottled in the waning hours of 2008 has matured into a very nice beer. At bottling time, it tasted like a banana shat in my fermenter. Two weeks later, the dominant flavor was solvent. I was ready to ban Wyeast 3522 from my brewery, but cellaring the beer in my chilly basement for a couple more weeks erased the unpleasantness. I'm glad I gave the batch some time to itself.

Our final story is that I bottled my second batch of House Ale today. The Wisconsin Cascades provided a lot more citrus character than I expected, which is a good thing. The beer is looking, smelling and tasting like a winner.