Last call for a Celis

Whether you blame the beer big boys, Texas tastes or marketing mistakes, a great little Austin brewery is gone

American-Statesman Staff

Wednesday, February 21, 2001

Deep in a damp Belgian cave near the Dutch border town of Maastricht rest barrels of a dark, strong, slightly spicy ale brewed by Pierre Celis.

He is the same Pierre Celis who once brewed barrels of light, strong, slightly spicy ale in a lovely brewery with imported copper kettles here in Austin — a brewery that has been locked up since December. Call the brewery, and a recorded message forwards all calls to a Miller Brewing Co. lawyer in Milwaukee.

Celis is a happy man. In partnership with the De Smedt brewery, the world-renowned Celis will sell 4,000 barrels of his special brew, Grottenbier Bruin, or Grotto Beer, this year. He can never hope to satisfy the demand for the beer throughout Europe. Michael Jackson, the pre-eminent beer critic of this generation, has pronounced Grottenbier one of the finest beers of any kind in the world.

He has regrets about Austin. For very nearly his entire brewing life, Celis possessed an unerring instinct for creating delightfully inventive brews that were successful in the marketplace. Here, he spent millions in a failed effort to make his Austin beers national favorites. He would like nothing better than to resuscitate a brewery he built to his very exacting specifications with his life savings. This will almost certainly never happen.

Many folks here aren't even aware that Celis is gone. Six-packs of the Celis line — White, Pale Bock, Raspberry, Dubbel, Pale Rider and Grand Cru — are still on some grocery and liquor store shelves. But when they are gone, they are gone. Miller executives are hoping someone might buy the brewery and the rights to the Celis names and recipes. That isn't likely to happen anytime soon, if ever.

What happened to Celis says a great deal about the beer business in Austin, in Texas and in the United States. That he rebounded so quickly and effortlessly in his home country says something, too. That so few have noticed is discouraging to people who care about good beer.

"It's a huge loss to Austin," says Chip McElroy, owner of Live Oak Brewing Co. in Austin. "It's like if you had an internationally recognized symphony and no one came to hear it. Among beer people, the fact that Austin couldn't support Celis is like Kennedy being shot in Dallas."

It wasn't all Austin's fault. Maybe a little. There is no shortage of fault to go around in this story. Celis took some of it with him back to Belgium. It was there he had emerged a full-fledged international beer star in 1991.

As a boy in his hometown of Hoegaarden, Pierre Celis enjoyed and from time to time helped brew witbier, a light-bodied, refreshing beer brewed primarily with wheat. This white beer, so named because the yeast suspended in the liquid made the beer look cloudy or milky white, had been losing favor locally to German-style beers made with malt that were filtered clear of yeast. By the end of the 1950s, not a single brewery in the Province of Flemish Brabant produced the 500-year-old witbier style.

In 1966 Celis, a milk distributor at the time, decided to make a witbier for himself at home. He used the traditional ingredients, water, yeast, wheat, hops and coriander and dried Curaao orange peel for spice. So satisfied was he that he eventually opened a small brewery. Witbier was a forgotten pleasure Belgians eagerly welcomed back.

The beer's international popularity was such that when Celis' brewery burned to the ground in 1985, Interbrew, a Belgian brewing conglomerate, offered to rebuild it. Six years later they bought him out.

Celis was eager to begin anew, although he was almost 60 years old. He looked at what he could afford to do in Belgium. He had also been on promotional trips to the United States and saw the number and the variety of small craft brewers was growing rapidly. "With my money I could do more in this country," he says.

From a business standpoint, choosing Austin to build a brewery seemed sound. A state capital and university city, Austin had the right kind of market of educated transients. Austin did not have a single microbrewery. Brewpubs — which brew and sell in the same building — wouldn't be legal in Texas until late 1993.

Austin benefited from a fine highway system for distribution, linking it within a three-hour drive to three of the biggest population centers in the country. One of them, Houston, had a world-class harbor for the shipping of raw materials and beer. Celis admits he was planning early on for the kind of success few other microbrewers in America had had by 1992.

What clinched it for Austin was its lime-suffused water, almost identical in composition to the water in Celis' hometown. Water, 97 percent of beer's makeup, is as crucial to a brewer as the quality of his grains.

But what might have seemed like other advantages to locating in Texas were not. True, Texans love beer. They drank 18 million barrels of it last year, making Texas the second biggest beer-drinking state behind California in the United States, according to the industry trade journal Beer Marketer's Insights. Two of the top five beer distributorships in the country are in Texas. Ben E. Keith Beers out of Fort Worth, with locations all over Texas, sells more than 28 million cases of beers a year. Silver Eagle Distributors in Houston sells more than 20 million.

But the kind of beer Texans overwhelmingly prefer is the antithesis of the kind of beer Pierre Celis spent his life perfecting. Light, thirst-slaking beers for a hot climate have always been popular. Regional beers like Falstaff and Pearl gave way to Schlitz and Miller. Then, beginning in about 1990, Anheuser-Busch took over Texas. The maker of Budweiser and Bud Light sells 50 percent of all the beer quaffed in Texas, compared to 23 percent for Miller and 14.6 percent for Coors. Shiner sells less than 1 percent, according to Beer Marketer's Insights. The two biggest distributorships in Texas are Bud houses.

"There is a perception that Texas is not market receptive to the craft brewing industry. I would agree with that perception," says David Edgar, director of the Institute for Brewing Studies, in Boulder, Colo. "We did an analysis last summer by region, considering Texas to be part of the South to Florida. The region had the lowest success rate in the country for microbreweries and brewpubs."

After opening in 1992 at 2431 Forbes Drive, Celis did his best to fit in. He and his daughter Christine, who still lives in Austin got heavily involved with local sponsorships. And perhaps most significantly, Pierre says he made his first brewing compromise. He produced a pleasant, inoffensive dark amber beer he called Pale Bock to compete against local favorite Shiner Bock.

Celis did not intend to rely solely on the Austin or even the Texas market. He really could not afford to. Celis had spent more than $11 million on a brewery that had the capacity to produce 15,000 barrels of beer a year. By comparison, The New Belgium Brewing Co. of Fort Collins, Colo., the maker of Fat Tire beer, recently completed an $8 million brewery with an 80,000-barrel annual capacity.

"A lot of brewers start small, with used equipment, make a few hundred barrels a year and work up to it," McElroy says. "He needed to push beer out the door. I think he needed a bigger part of the market than was there."

In just two years, Celis was over capacity and making distributors anxious with its inability to supply beer.

Celis needed a partner that could support its strung-out distribution and to help finance an expansion of the brewery in Austin. Miller Brewing Co. was also looking for partners, eager to share in the 40 percent annual growth rate for the upstart craft brewers. Miller bought a 50 percent share of the Celis Brewery in 1995. The contract included a clause that at the end of five years, Celis would have the option to buy out Miller.

"I made the mistake. No one else made the mistake to go with Miller," Celis said in a recent telephone interview from his Belgian home. "It is dangerous because a big brewer has a different idea. They sell their beer by the trailer, by the pallet. It is too much trouble to sell by the case. They want to manage a small brewery like a big brewery, and this you cannot do."

Miller dispatched a corporate team to oversee the brewery, and the displeasure began almost immediately, Christine Celis says. While Pierre insists the quality of his beer never diminished, there was talk of Miller tampering with the recipes, to make each of the brands accessible to a wider audience.

The management team concluded that it would pull Celis out of all its markets other than those in Texas, California, New York, New Jersey and Arizona. However, the short-term strategy appeared to have succeeded. By the end of 1997 Celis produced a record 23,000 barrels of beer, 8,000 barrels more than when Miller bought in two years earlier. That year, Celis produced Pale Rider, a beer that drew national attention for purportedly being brewed to the specifications of Clint Eastwood. This was Celis' second and last major brewing compromise.

Assessing what happened to Celis over the next three years depends upon accepting either the big or small brewer perspective. Ron Acosta, a spokesman for Miller in Milwaukee, says the company determined that Celis, in its haste to reach a national market, failed to establish a strong enough base in its home region.

As growth slowed in the craft beer market, Miller concluded Celis was part of a fad or a trend that was rapidly running its course, Acosta says. "There was growth at that time in the light beer trend and away from the heavier beers," he says. "We made a conscious decision at that time to take care of our core brands."

"I was happy with my distribution in Austin but not happy elsewhere," Celis says. "If you went to the Miller distributor in Chicago, we were not important enough to him. He would not have been bothered."

Ironically, judges at the esteemed Great American Beer Festival awarded gold medals to both Celis Grand Cru and Celis White in the fall of 1998 as Celis beer sales plummeted. By the time the five-year clause came up for renewal last year, Celis told Miller he could not afford to buy them out and sold his half of the brewery to them. Sales had slipped below 15,000 barrels of beer for 2000. Celis returned to Belgium. "If I were 40, 50, 60 years old I would begin again," Celis says. "I will be 76 next month. To start a new brewery alone for me is impossible."

Breweries like Shiner and New Belgium, which produces a line of Belgian beers unlike Celis, have moved in to fill the small vacuum. Neither is celebrating.

"I'm not trying to invite more competition into our marketplace, but there there is room for a lot of players here," says Gary Hudman, brand manager for Shiner, which itself is owned by a corporation, Gambrinus in San Antonio. "Pierre Celis is a world-renowned brewer whose beers occupied a very interesting niche here. We are a small brewer. We never like to see small brewers go out of business."

Without Celis, Austin is also without a single craft brewer that bottles its beer. Real Ale Brewery in Blanco sells its beer in many Austin outlets. Live Oak in Austin, which brewed just 1,300 barrels last year, cannot right now afford to become involved with bottling, McElroy says.

Austin has six brewpubs, Bitter End, Copper Tank Brewing Co., Draught House Pub & Brewery, Lovejoys Tap Room & Brewery, North by Northwest and Waterloo Brewing Co. Brewpub business has been unaffected by the loss of Celis, Bitter End head brewer Tim Schwartz says. But Austin's reputation as a good beer town took a hit, he says.

"I think we took several steps down as a beer city," Schwartz says. "Michael Jackson used to rank Austin among the top seven beer markets in America. The reason was because of Pierre Celis."

Still, Austin holds its own in a state where the craft brewing business is tepid. Dallas and Fort Worth have a combined 11 microbreweries and brewpubs. Houston has just one micro and two brewpubs. In the most recent issue of the bi-monthly Southwest Brewing News, the newspaper outlines the recent failure of half a dozen Houston brewpubs.

Late to join the rush to craft beer because of antiquated state laws, Texas has been early to leave, says Edgar, of the Institute for Brewing Studies. After aggressive growth for a decade nationally, craft beer sales peaked at 5.6 million barrels of beer or just under 3 percent of total beer sales of 192 million barrels. In 1999, craft beer sales rose by 2 percent and Edgar estimates growth in 2000 at 3 percent to 5 percent.

Because of the peculiar circumstances, Celis probably should not be seen as a symbol for the beer business in Texas or across the country, Edgar says. But while the craft beer industry nationwide is expecting quiet and steady growth, the future in Texas is more precarious.

"I still think Austin is a good town for beer," says Hans Granheim, a co-publisher of Southwest Brewing News, who covers the Austin market for his newspaper. "But everywhere else, not just Houston, brewers are dropping like flies. This is a state where people drink light lagers. We don't have a beer history, a beer culture like the Pacific Northwest. It's a shame."

For his part, Celis isn't bitter, although he misses his Austin brewery. He holds out hope enough investors will join him in buying back the brewery, but he isn't naive. Where ever Pierre Celis is, he only wants to make outstanding beer.

"The beer I am making now, it is a pleasure to do," he says. "I must have pleasure making beer. This is the only reason to make it."


You may contact Mark Lisheron at mlisheron@statesman.com or (512) 445-3663.

 


 

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