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How good is Budweiser, Coors, and Miller?

I've been reading Maureen Ogle's book, Ambitious Brew, which is a history of beer in America.  It is a great book, full of interesting stories about Pabst, Busch, Schlitz and others.

One of the most fascinating discussion relates to how we Americans came to think of substituting rice and corn (or "adjuncts" as they were called in the brewing industry) for barley in beer.  

There is a common mantra that the main selling beers in the US (Bud, Miller, Coors) are "low quality", and that drinking them is akin to drinking "horse piss."  Ogle shows that this perspective - particularly the perspective the adjuncts are low quality - rose out of the "pure food movement" in late 19th century, and is as much a result of sensationalist journalism than anything else.   

Ogle writes that the "The [prohibitionist] crusaders also used the "pure food" crazy as a means of attacking brewers."  There were people like George Angell, who wrote Jungle-like reports on the nation's food supply and stirred up  (much unsubstantiated) concern about glucose, a sweetener made from corn.  Realizing that some brewers used corn (and thus somehow must use glucose) provided the "in" that many prohibitionists needed to sell sensationalized stories to the media.

The owner of a struggling Milwaukee newspaper in search of a scoop had used the moment to attack the city’s beermakers. “It is well known,” the investigating reporter informed readers, “that the brewers are a poor, struggling heaven-forsaken class” who, when faced with rising barley prices, turn to “cheaper substitutes.” As proof, the reporter listed the amounts of corn and rice recently published by several of the city’s brewers . . . Over the next few weeks, the newspaper blamed Milwaukee’s high infant mortality rate on “spurious beer” . . . A local physician informed readers that beer brewed from rice caused diarrhea, upset stomach, and brain damage.

A second local newspaper, not to be robbed of this episode of high drama, had chimed in with charges that rice and corn beer caused “temporary insanity”

There were rumors that Emil Schandein, one of the owners of what became Pabst brewing, operated his brewery as a

“secret drug store,” where a “French practical chemist” was paid a “fancy salary” to teach Schandein the secrets of chemical adulteration.

Yet, as Fredrick Pabst pointed out at the time, rice cost fifteen or twenty cents more per bushel than barley.  He argued that "[w]e are not aiming to make the cheapest beer in the market; we are trying to make the best beer."

The reality is that the new adjunct-based beers were much higher quality than what previously existed.  Ogle writes:

Beer aficionados today scorn lagers made with corn or rice as inferior to all-malt products, believing that brewers adopted the use of other grains only to save money. That was not true: It cost Adolphus Busch more to make his adjunct-based beers than his all-malt brews, and those lagers sold for higher prices than did their conventional Bavarian-style counterparts.

Nor were the beers inferior. If any one fact lies at the heart of the stunning success of Busch, Pabst, and the Uihleins, it is that by the 1880s, they were brewing some of the finest beers in the world, beers that stood up against competition with anything made in Europe. the Uihleins [owner of Schlitz] knew that: In the fall of 1880, they shipped some of their bottled Bohemian to relatives of a Schlitz employee in Zeitz, a city in north central Germany. The recipients took the beer to a local chemist for analysis. The man expressed astonishment at its purity. Its flavor and character, he reported, compared with the finest Bohemian lagers.

The sole use of American barley produced cloudy beers that had short shelf lives.  Ogle documents how the use of adjuncts increased the clarity, purity, consistency, and shelf life of the beer. 

Just a little something to keep in mind as you're selecting which beverages to imbibe over the 4th of July holiday . . .

Agricultural and Food Controversies: What Everyone Needs to Know

My good friend and frequent co-author, Bailey Norwood, has a book coming out with Oxford University Press entitled Agricultural and Food Controversies.  

He and his co-authors provide a badly needed, balanced, science-based perspective on some of the most contentious food and agricultural controversies of the day.  I read early drafts of several of the chapters, and I highly recommend it.

The bad news is that you'll have to wait till December until it officially comes out.

The good news is that you can already pre-order the book on Amazon.

By F. Bailey Norwood, Michelle S. Calvo-Lorenzo, Sarah Lancaster, Pascal A. Oltenacu
Buy on Amazon

Rising food prices and social unrest

Worldwide, food prices have been rising over the past decade.  Here, for example, is the UN FAO food price index.

In real terms, the world food price index is higher today than it has been in 40 years.

Enter this new paper by Marc Bellemare just published in the American Journal of Agricultural Economics.  He finds:

for the period 1990–2011, food price increases have led to increases in social unrest, whereas food price volatility has not been associated with increases in social unrest.

As is typical of Marc's work, this is a careful analysis of the issue.  He takes issues like endogeneity seriously (do higher food prices cause social unrest or does social unrest cause higher food prices or does some third factor case both?) and he considers the sensitivity of his results to the data he uses and model specification.  

A couple excerpts from the conclusions:

Do food prices cause social unrest? The results in this article indicate that the answer to this question is a qualified “yes.” While rising food prices appear to cause food riots, food price volatility is at best negatively associated with and at worst unrelated to social unrest. These findings go against much of the prevailing rhetoric surrounding food prices. Indeed, whereas many in the media and among policy makers were quick to blame food price volatility for the food riots of 2008 and of 2010–2011, the empirical results in this article indicate that rising food price levels are to blame and that increases in food price volatility may actually decrease the number of food riots.

and

the objective of keeping prices low would be best attained by policies aimed at increasing the supply of food where it will be the most helpful, whether this means investing in agricultural research aimed at increasing agricultural yields (Dorward et al. 2004), encouraging urban or peri-urban agriculture (Maxwell 1995), liberalizing the international trade of agricultural commodities, increasing access to and the use of biotechnology in developing countries (Paarlberg 2009), eliminating farm subsidies in industrialized countries, and so on.

Effects of fat taxes and thin subsidies on the poor

I've been working on a paper with some French colleagues (Laurent Mueller and Bernard Ruffieux) using data from a food purchasing experiment in Grenoble and Lyon France looking at the effects of  "fat taxes" and "thin subsidies" on poorer vs. richer households.  The paper is still in review, so I won't yet go into the details of the results, but I can say that they closely align with the results of this new paper by Richard Tiffin and Matthew Salois that was just published in the European Review of Agricultural Economics.

They write that their:

results reinforce the finding that a fiscal food policy based on a tax on saturated fats and a subsidy of fruits and vegetables is socially regressive

 

and

not only are the poorest households more negatively effected by the policy, but that even a subsidy is regressive because of the distribution of consumption of fruits and vegetables

As they discuss, and we are finding in our work, such effects can occur through a number of channels.  Take a subsidy on fruits and veggies.  If richer households are already eating more fruits and veggies, who do you think receives the largest gains from the subsidy?  Fat taxes are regressive because the poor spend a larger share of their income on food (so taxes take a proportionally bigger chunk of their income) than the rich, but also because they are often eating more of the foods that will be taxed and because they may be less responsive to such price changes.  

The social and distributional consequences of these sorts of price policies are seldom discussed with any seriousness by those who promote the policies.