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Coffee shops are serving up even tastier cold brew by treating it like beer

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cold brew coffee infused with nitrogen guy gallard RTX1MSHU

Nate Armbrust, a food scientist at Stumptown Coffee Roasters in Portland, Oregon took on a lofty side project in early 2013: Figuring out how to infuse cold brew coffee with tiny bubbles that would make it rich and creamy without sacrificing its flavor.

So he decided to try pumping nitrogen gas into the brew.

Turns out this was a very good idea.

After a few months of playing around with the right balance of bubble infusion, according to Chemical and Engineering News, his nitrogen-infused cold coffee became creamier and richer than regular old cold brew — an instant hit after putting it on tap at his Portland cafe.

Nitro taps aren't new. In fact, they've become notorious in the craft beer scene after getting their start in Irish breweries. They've imbued ales, stouts, and lagers with a lush, rich-tasting froth ever since.

But how does it work?

When someone says that a beer is "on nitro," they're referring to the type of gas bubbled into the drink. Breweries typically use carbon dioxide to give a beer its quintessential bitter fizz. But sometimes a drink calls for a sweeter, silkier experience. So brewers commonly infuse darker, smoother stouts and ales — like Guinness and Old Speckled Hen — with nitrogen rather than carbon dioxide.

The creamier taste — either in beer or in coffee — is due, in part, to the smaller nitrogen bubbles.

Nitrogen gas doesn't easily dissolve in water, giving the brew a thicker, more velvety "mouthfeel." To get nitrogen into the liquid, the tap needs a "restrictor plate" to squeeze the drink through tiny holes, giving the beverage a particularly smooth and frothy head.

The tiny bubbles make the drink feel thicker when you gulp it down.

guinness pour

Some say that cold brew is already inherently tastier than conventional hot coffee because of its deeper, less acidic flavor notes. And some coffee snobs suggest a nitrogen tap process makes it even more amazing.

On the other hand, scientists aren't really sure why this might be, other than the improved mouthfeel.

One theory is that the nitrogen-infusion slows the degradation of coffee compounds. These compounds break down in in a way kind of like how iron rusts when it's exposed to too much oxygen — giving the coffee a sour and bitter taste.

This oxidation is cumulative. When coffee sits for too long, the coffee's compounds continue to become oxidized, getting more and more bitter the longer it sits.

The nitrogen is likely making coffee more stable by "pushing oxygen out of the liquid,"Matthew Hartings, a professor of food chemistry at American University, told Chemical and Engineering News— thereby extending its shelf life and slowing this oxidation.

nitro coffee 2

Since a delicious cup of coffee depends on many factors — including the type and roast of the bean, how the beans are ground, how long you brew the coffee for, and the temperature and purity of the water used in the brewing process — nitrogen is not going to magically save the flavor of a batch of coffee that tastes bad to begin with.

That all being said, coffee snobs are loving this new way of drinking cold brew.

A company called AC Beverage is selling proprietary "nitro tap" systems for coffee, called JoeTap, to anyone that wants to infuse nitrogen into their coffee (and has $4,000 to $5,000 sitting around to pay for each unit). They claim that the nitrogen from their tap makes black coffee taste as if they've added sugar and cream.

If you want to give nitrogenized coffee a try, Stumptown, select Guy & Gallard locations, and small coffee shops have begun selling their nitro brews in stores. We've also seen it advertised at some Whole Foods stores.

Happy drinking!

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What craft beer could look like in 2030

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beerThe resurgence of craft beer in recent years has led to an explosion of options for beer lovers. As of 2012, there were nearly 2,400 small-scale breweries in the U.S. 

This is a good thing for people who want all the India pale ale, Belgian-style saison, and smoked porter options they can get their hands on. But it also plays into a larger issue in our globalized economy: the so-called tyranny of choice— the overwhelming number of options, in other words  that presents itself every time we step into a grocery store.

You better believe there will be a backlash to all of this choice eventually. You can already see it in the craze around tiny houses: People are getting exhausted by all the choices around them, and are starting to consciously down-size their options. 

When it hits the beer sector, it might look something like this ad:  a call to get back to basics with a good old-fashioned "working class lager" that is presumably from a local brewer (The made-up Manchester Beer Company, in the case of the below mock-up).  

The ad comes from the TBD Catalog, a "catalog of the near future's normal everyday," in which a group of researchers and designers imagine what a future would look like where all of the ideas percolating in the present become reality. 

Check out the ad below.

 

TBDCatalog_8

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4 of the world's best hotels for beer drinkers

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If you’re a fan of the frothy pint, you probably seek out local beers and beer-themed adventures during your travels. 

We do too, and not only have we hit up destinations that are famous for their brews, but we've also stayed in hotels that are beer destinations in their own right. 

These four unique beer-inspired hotels will make you oh-so-hoppy. Check them out and then let us know, are there any other beer-friendly hotels you love that should make our list?

McMenamins Kennedy School, Portland

kennedy_school

It probably comes as no surprise that our first beer-aficionado-friendly hotel can be found in Portland, a city widely-recognized as being among the best for beer. And the McMenamins Kennedy School is one of the area's most unique hotels, as the properties 57 rooms are housed in an historic elementary school. Some rooms have chalkboards that serve as decor, and there’s a theater in the old auditorium. Oh, and the on-site Concordia brewery is located in what used to be the little girls’ room. Have fun in detention with the King’s Landing IPA.

Check out another school-turned-hotel in beer-friendly Dublin >>

Trapp Family Lodge, Vermont

Trapp_family_lodge

If your family is anything like some of ours, you’ve seen The Sound of Music about 100 times. But while you may know every word to Edelweiss, you may not know that the descendants of the von Trapp family (who inspired the movie) run the Trapp Family Lodge, an Austrian-inspired lodge in Vermont. This family-friendly resort is a top pick among beer lovers, because the von Trapps also own von Trapp brewing, a local brewhouse associated with the resort; the signature Vienna-Style Lager and Golden Helles brewed there are a few of our favorite things.

You Might Also Like: Actors to Chef to Sultans: The Most Unlikely Hotel Owners

Augustine Hotel, Prague

augustine_hotel

The Augustine Hotel, a luxury five-story Starwood property, may come with a hefty price tag (rates start around $400/night), but it packs quite a bit of history, which adds to its appeal; part of the complex was once a 13th-century monastery with an attached brewery that would serve local monks. Though you’re unlikely to see monks walking around the premises today, you can (and should) check out the on-site St. Thomas brewery bar, which sits in what was the former cellar of the old brewery; the classic St. Thomas beer is worth a swig.

The Fairmont, San Francisco

fairmont

The Fairmont has no shortage of beer-drinking history within its walls; the Cirque Room was the first bar to open in San Francisco following the end of prohibition -- and we wouldn't be surprised if some bootlegged boozing went down there even before the ban was lifted. These days, the hotel sets itself on a higher level with the honey saison beer, brewed with real honey gathered from the property’s personal beehives in its culinary garden. Grab yourself a pint on draft, available exclusively in the Laurel Court Restaurant and Bar. 

SEE ALSO: The 21 best trips for foodies around the world

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8 ways to open a beer without a bottle opener

The truth about 'the most interesting man in the world'

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Jonathan Goldsmith worked as a journeyman actor for over 40 years, with hundreds of IMDB credits to his name.

In 2006, he booked the role of a lifetime: the spokesman for a Dos Equis beer campaign that soon made him known to millions as "The Most Interesting Man In The World."

Goldsmith lived and worked in Hollywood for years, but he now prefers the quiet life with his wife, Barbara, and their two dogs in Vermont.

He talked to Business Insider about how he landed the role that turned him into a cultural icon.

Produced by Graham Flanagan. Additional Camera by Justin Gmoser.

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17 breweries to visit in your lifetime

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Church Brew Works

Every country has its local beer with its own local flavor.

Often the best way to experience the beer is to go straight to the source: the brewery where it's made.

We found some of the most scenic and interesting breweries around the world.

Every beer lover should add these 17 spots to their bucket lists.

SEE ALSO: 21 US destinations where it's legal to drink outside

FOLLOW US: BI Travel is on Twitter!

Founded in 1040, Weihenstephan, outside Munich, Germany, is the world's oldest brewery. To put it into perspective, 1040 is 736 years before the Declaration of Independence was signed. The ancient monastery — which has burnt down four times since its founding — sits atop a scenic hill and has a beer garden featuring epic views of the surrounding area. Like most Bavarian breweries, the specialty here is hefeweizen and weissbier.

Check out Weihenstephan here »



Pittsburgh's Church Brew Works is inside a former Roman Catholic church that was built in 1902 and officially deconsecrated in 1993. Drink award-winning beers like Celestial Gold or Pipe Organ Pale in converted pews under stained-glass windows.

Check out Church Brew Works here »



LeVeL33 — named for the floor it's on — claims to be the world's highest urban craft brewery. This super-modern and swanky brewery and restaurant, set inside "Asia's best business address" in the the Marina Bay Financial Centre in Singapore, overlooks the sparkling city skyline through floor-to-ceiling windows and serves wine alongside its five craft beers.

Check out LeVel33 here »



See the rest of the story at Business Insider

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We put cheap beer to a blind taste test and were surprised by the results

We went to a rapidly-expanding restaurant chain with 550 beers on the menu

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World of Beer Chelsea

Whether you want a Polish Pilner, a Brazilian Schwarzbier, or a Brooklyn Lager, you don't need to travel the world over —  just head to World of Beer.

This national chain of beer taverns started in 2007 and has grown to over 70 locations in 21 states, including its first New York City tavern which opened Monday.

World of Beer boasts an impressive international selection of over 500 bottled beers and 50 on tap, ranging from well known brews to uncommon oddities. 

Also on their menu is an array of pub fare as well as craft cocktails. They even offer a weekend "BEERunch", serving a beer-inspired brunch with items like Belgian Beer Waffles and "Beermosas". 

We got a sneak peek of World of Beer's new 5,000 square-foot location in Chelsea, and here's what we found.

FOR BEER LOVERS: The 17 most sought-after beers in America

SEE ALSO: This spring marked a huge leap in craft beer production

Their newest location is at 26th and 8th Ave in the Chelsea neighborhood of Manhattan.



It's a huge space, with ample seating and countless big-screen TVs.



There are comfy chairs at the lengthy bar - no awkward stools.



See the rest of the story at Business Insider

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10 unexpected places where you can now order booze

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Beer mugs cheers

"Would you like a beer with that?"

Many retailers and fast food places are beginning to incorporate booze into their mixes. For fast food restaurants, this is often to help attract a late-night crowd.

You probably already know that you can order a margarita with your burrito bowl at Chipotle, but there are other places where you can sip on a glass of wine while eating fast food — or even taking care of daily tasks.

A lot of these places are very unsuspecting. 

Not all of these stores have secured their liquor licenses yet, but consuming beer while shopping very well might become the next big thing.

SEE ALSO: Starbucks is transforming coffee shops into bars — here's what it's like to go to one

Target

Target recently disclosed that a forthcoming Chicago unit was applying for two liquor licenses — one was a "Packaged Goods" license and one was a "Consumption on Premises" license, according to USA Today. Chicago locals might be able to sit down and have a beer when shopping for furniture gets too exhausting.



Some hair and beauty salons

Beauty Bar— with several locations across the United States — has made the "manicure and martini happy hour" famous.  The Blind Barber also serves up a free drink with every service — it's also a speakeasy. Other salons occasionally serve up beers with their haircuts, too.



Starbucks

When Starbucks announced that locations would be adding wine and beer to an "Evenings" menu, some people probably couldn't wait to request a venti pinot noir. Turns out Starbucks doesn't serve venti wine glasses, but the new nighttime menu isn't bad at all.



See the rest of the story at Business Insider

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Traditional beer companies are copying craft brewers, but the wine industry isn't interested

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Gather and Brew, Boston

Imagine this scenario:

You're sitting at the dark mahogany counter of a craft brewpub. Exposed bulbs are dangling from a thatched roof, aluminum pipes snaking across brick walls to red copper conditioning tanks.

The building is a repurposed garage, and the doors open onto the outdoor seating area strung with fairy lights.

On the handwritten 20-by-10-foot blackboard, you have more than three dozen choices, but it's clear what you're not going to get at a pub like this.

Heineken, Coors, and Miller Lite.

It's in places like this that craft beer has managed — perhaps by happy accident — to bridge the demographic gap between beer and wine. So far, the effort has contributed to craft brewing's success.

While the traditional beer industry has been losing both market share and the interest of millennials— who are turning in part to wine but largely to spirits — a report from the Brewer's Association showed that craft-beer volume is up 16% this year.

Nearly 700 craft breweries, which operate at a smaller scale than the traditional brewers and put a stronger emphasis on experimenting with flavors, have opened this year.

And this week, a global mega-brewer, Heineken International, announced that it would acquire half of Lagunitas Brewing Co., valuing the sixth-largest craft brewery in the US at a rumored $1 billion, according to the Press Democrat.

The craft-beer industry has marketed itself as different from the large brewers: tasty, interesting, and elevated, as well as casual. Perhaps even more important, craft brewing is a local experience for consumers. In many cases, the beer is made close to where it is consumed.

This has allowed craft beer to slot itself between wine and traditional beer as a beverage option. What had kept beer and wine separated was their disparate demographics. If wine were the dress donned for glitzy parties, beer were the pair of khakis worn for a Fourth of July barbecue. Wine was for women, while beer — along with spirits such as whiskey and bourbon — was for men. And while wine could be drank for a quiet night in, beers was for loud and rowdy pubs.

Craft beer offers a third choice. Traditional beers, many of them mass-produced pilsners, are criticized for being bland. According to Tripp Mickle at The Wall Street Journal, craft brewing has embraced flavor and a wide range of beer-making styles, experimenting by adding ingredients such as chamomile, chocolate, and orange peels.

craft beer brewers associationThis overlaps with what consumers have usually associated with wine, that it has "delicious taste" and "pairs well with food," according to Nielsen.

Goes with food

"The number one objective of the craft-beer association is beer-food pairings," said Kellie Shevlin, the executive director of the Craft Beverage Expo, which brings together makers of wine, beer, and spirits in an effort to share knowledge among industries.

The Brewer's Association also released this chart of food and beer pairings, while a 2011 Demeter Group analysis of the industry showed that craft brewers met a consumer demand for "extreme flavor" and "high alcohol content."

Craft breweries are also tapping into a key demographic that has money to spend, a demographic that is stereotypically associated with wine: women. According to the Beer Association, women between the ages 21 and 34 now consume 15% of the craft-beer volume.

Screen Shot 2015 08 07 at 12.21.16 PM

Young consumers love local

Nielsen reported last year that 54% of millennials said buying a locally made beer was important.

Craft brewing plugs into this preference because many of the beers are made locally and consumed close to home.

For Anthony Accardi, who owns Transmitter Brewing in Queens, New York, producing just 700 to 800 barrels a year, staying locally owned is important for him as a founder. (For perspective, regular old Budweiser, not Bud Light, sold 16 million barrels in 2013.)

"It's pretty hard to make money," Accardi said. "We're constantly chasing the cost of goods sold, which is always rising.

"But we don't have investors," he added, "because we don't want it to take away too much equity right now."

The brewery has managed growth through money from Accardi and his business partner, Rob Kolb, but also through community programs, such as the Community Supported Brewery Program, which for $175 gives each customer two bottles of beer a month for six months, along with T-shirts and glasses.

The program supplies the brewery with immediate capital for ales that could take four months to brew, and it helps to create a community around the business.

Transmitter Brewing"The customers are pretty loyal," Accardi said.

Many breweries — though not all— hold the same business philosophy as Transmitter Brewing. They have avoided big-time investors and are trying to grow with the capital they have on hand.

The process may be slow, but Accardi said it was worth it to maintain control.

So what are craft breweries doing that the wine industry isn't?

Craft Beverage Expo's Shelvin thinks about the differences as similar to those between an adult and a child.

"The wine industry is 60, 70 years old, and the beer industry is 30 or 40 years old," she said. "The spirit industry are teenagers. Which makes the sake and meads industry infants. They've just entered kindergarten — or they're just learning to walk."

So the wine industry has a been-there-done-that attitude when it comes to marketing. But the craft-beer industry's relative youth translates into a willingness to try new things and to learn from other industries.

"Beer is killing it right now," Shelvin said. "Wine is like, 'We're great ... what can we learn from breweries?' And beer is like, 'We're new, try us, high-five!'"

Craft breweries are reaching out through social media to connect with their customer bases and provide news and information about products. And that speaks to millennials. Fewer players in the wine industry have done the same, Shelvin said.

Beer

Millennial consumers have different drinking habits than their parents

Shelvin said "Gen X is plastered to categories," meaning there are wine drinkers and beer drinkers, with little overlap.

Millennials, meanwhile, are "equal-opportunity drinkers."

"What's happening now is a lot of people who drink wine are also drinking beer," Elizabeth Thach, a professor of wine and management at Sonoma State University, said. "Beer is not the enemy."

Thach said the wine industry was nervous about beer taking market share, but craft beer is a tiny fraction of the total beer industry (again, craft brews just surpassed Budweiser in sales in 2013, with 16.1 million barrels to Bud's 16 million— but that's the entire craft-brew industry, versus a single brand of macro-brew). Consumers are drinking differently, and drinking more variety, but they haven't decisively shifted the traditional beer-wine balance of power.

But Big Beer has noticed. Anheuser-Busch InBev and MillerCoors have jumped into the craft-brewing business with brands such as LandShark and Blue Moon. Consumers and experts dispute whether these are authentic craft brews, but the point is that Big Beer now sees craft brewing as a business opportunity, rather than a local curiosity.

Some observers are worried that the nascent craft-beer industry is headed for a bust, primed for oversaturation before it has a chance to be a real contender with wine. But for now, no one knows how it will all end — or even if it will end. We could be witnessing the beginning of a permanent change.

Bart Watson, the chief economist at the Brewer's Association, says the industry is "certainly growing."

"The need for brewers to differentiate and produce world-class high-quality beer," Watson said, "is more important than ever."

SEE ALSO: The 20 best beers in the world

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The craft beer wars are heating up

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Lagunitas

The theme: An international brewing conglomerate famous for watery beers that are losing market share buys an American craft brewer. If it’s not a brewing conglomerate, it’s a private equity firm. Big Money rules. And valuations of craft brewers have soared.

It’s a dream come true for founders, early investors, and some employees. It’s American entrepreneurialism. Guts, grit, years of hard work, luck, stick-to-itiveness, Yankee marketing, and a passion to produce the best suddenly turn into mega-dollars.

The response from beer lovers has been something close to revulsion: How could they sell out?

Now it happened to me. I love IPAs (India Pale Ales) for their complex hoppy flavors. They’re perfect when you’re just sitting there, ruminating about the rigged markets. They’re perfect with food. They’re particularly perfect with a good steak.

So today, Lagunitas Brewing Company announced that it too sold out.

The original brewery is in Petaluma, Sonoma County, about 40 miles north of San Francisco. They brew all kinds of beers, but the one that ranks on my list of favorites is their IPA.

And they’ve done an excellent job marketing the IPA. It’s broadly distributed in Bay Area grocery stores, bars, and restaurants. I drank my first Lagunitas IPA a decade ago on a ferry across the Bay. Today, our local Costco even carries it. And Lagunitas has become the sixth largest craft brewer in the US.

Four years of drought in California have been hard on the water-intensive brewing business. So it just opened a second brewery in Chicago, which has plenty of water. Both breweries combined have a capacity of 1.2 million barrels. These folks have done a lot of things right for a long time, beyond brewing beer.

And today came the payoff.

A plastic container with empty bottles of Heineken beers are pictured among beer kegs outside a restaurant in Singapore August 29, 2012.  REUTERS/Tim Chong Heineken International, the world’s third-largest brewing conglomerate, is buying a 50% stake. Even in its press release, Lagunitas couldn’t curtail its irreverent manner: its hometown turned into “PETAFUKINLUMA.”

After an immense acquisition spree, Heineken shines with stagnant revenues. But it has breweries around the world – “180 of those buggers everywhere,” as the press release put it. So it’s finally trying to buy into the only vibrant sector of the otherwise morose US beer market.

American craft brewers are a phenomenal growth story, going from one craft brewer in the 1970s to some 3,200 last year, including brew pubs and microbrewers, according to the Brewers Association. Sales rocket higher at double-digit rates year after year – nearly 18% last year to $19.6 billion – in a market where per-capita beer consumption has been declining for decades.

The press release didn’t disclose the financial terms of the deal. But The Press Democrat reported that, “according to people familiar with recent acquisitions in the craft beer industry,” Lagunitas’ valuation would be about $1 billion.

Founder and executive chairman Tony Magee explained that the deal would allow him “to return some money to my shareholders who have displayed the patience of Job while letting me run the company in the way and the directions that we felt were most important.” They invested from 1999 to 2001 and weren’t “big money guys,” he told The Press Democrat, but people he knew, including a veterinarian, a dentist, a retired Navy chaplain, a police officer, and a retired school teacher.

For them, this is a great day. It’s hard to have your money stuck in illiquid shares. Countless craft brewers have gone out of business, taking their investors’ moolah with them. It’s tough out there. Brewing a great beer isn’t nearly enough. Competition is fierce, barriers to entry small. The risks are huge. And so should be the eventual rewards for the lucky ones.

It’s by no means a sell-out, Magee emphasized. “What thrills me? The idea of taking this name Lagunitas, the flavors of the IPA and our other beers, and presenting them to other communities around the world. That’s exciting.”

This deal follows numerous other deals.

firestone parabolaFirestone Walker Brewing Company in Paso Robles, CA, recently sold a stake to Belgian brewer Duvel Moortgat. Duvel already acquired Kansas City’s Boulevard Brewing Co. two years ago; and Ommegang in Cooperstown, NY, in 2003.

Oskar Blues Brewery sold a majority stake to PE firm Fireman Capital Partners in May. SweetWater Brewing in Atlanta sold a stake to PE firm TSG Consumer Partners. Unita Brewing in Utah sold a majority stake to PE firm The Riverside Company. Southern Tier Brewing in upstate New York sold a stake to Ulysses Management. Full Sail Brewing in Oregon was acquired by an investment group formed by San Francisco PE firm Encore Consumer Capital….

PE firms don’t do this for the long haul. They’re looking for an exit either via IPO, or more likely via a sale to a brewing conglomerate.

The most infamous deal – because it triggered a mini-revolt – was when 10 Barrel Brewing Co. in Bend, OR, was acquired by the world’s largest brewing conglomerate, Anheuser-Busch InBev whose Budweiser sales, among others, have hit the skids. In total, InBev has recently bought four US craft brewers.

Lagunitas tried to reassure its nervous beer lovers.

The press release promised that the joint venture would “operate independently in the US, maintaining the integrity of its brews and culture.” Magee would “remain at the helm, with the same leadership and staff, same brewers, same recipes and same suppliers and distributors helping to drive the brand forward.” Nothing would change, not for the moment at least. Which is what they all say.

And it’s good for everyone: Lagunitas will get access to the world markets via Heineken’s distribution network; and Heineken will get “the opportunity to build a strong foothold in the dynamic Craft Brewing category on a global scale.”

There was only a tiny reference to the Heineken-izing process that will eventually set in: Lagunitas would “share in the best quality processes in the world….”

In these kinds of deals, most often, founders and executives who have done such an awesome job starting the company and ramping it up to size, and who have rewarded their investors lavishly, eventually move on to the next great thing.

But once a brewing conglomerate creates a global brand out of a craft brew, the exigencies of markets and money, of shareholders and bondholders, begin to exert their influence. Corporate cost cutters step in. Cheaper varieties of hop will eventually make their way into the IPA. To reduce the delicious hoppy bitterness that turns off Heineken or Dos Equis drinkers, and to make the beer more of a mass-market product, the company might even whittle down the amount of hop in the recipe.

By then, I will have moved on to other wonderful creations of the amazing craft brew scene.

Processes will be improved. Efficiencies and synergies will be obtained by combining certain elements with existing corporate structures. This is all part of the American craft brew revolution. And in the end, Lagunitas, the brand, may well thrive, but the beer will be Heineken-ized.

This is what has happened with another local brand. It only took three years. Read…Starbucks Machinery Lurches Forward, Runs Over My Croissant

SEE ALSO: BUFFETT: Earlier this year, I made an acquisition that served as an ad announcing I was shopping abroad

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How to pour beer like a German

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Sylvester Schneider at Zum Schneider, beerPouring beer is more than getting the liquid from one vessel to another: it's an art form, as well as a science that has its own methodologies, constants, and variables.

Of course, no one has perfected pouring liquid gold quite like the Germans, famous for their expertise in all things beer, as well as their stringency in, well, everything. We tapped a real live German — Sylvester Schneider, owner of German bar and restaurant Zum Schneider in New York's Alphabet City, and expert pourer and drinker of beer — to show us how it's done correctly. 

Know what you're drinking

Zum Schneider restaurant, beer tapsAccording to Schneider, how you pour your beer depends on what you're drinking. There are three styles of beer: lager, pilsner, and wheat beer (weissbier), and each is poured differently. It also helps to know that there are different wheat beers, some of which have more yeast than others. Schneider Weisse for example has a lot more yeast than Paulaner or Franziskaner beer.

Embrace the foam

"The thing with German beer in general is that you want a nice head. We've been getting this complaint for 15 years, since we opened, that we're not giving people enough bang for their buck. But we're very stubborn about this: if you don't like it, go somewhere else," says Schneider about the American versus the German way.

And indeed, an around 1.5 inch head of foam is standard in Germany, where a beer without foam is just wrong. "Beer needs to look appetizing just like a plate of food needs to look appetizing," he says, "and a beer with two millimeters of foam is not appetizing, at least not in my world." He further explains that most German glasses have markings denoting where to fill the glass to: if you fill it all the way to the top, and the little bit of foam melts, you've given away too much beer. 

Yearn for yeast

Sylvester Schneider, pouring beer at Zum SchneiderGerman weissbier has chunks of yeast at the bottom, which are essentially a delicacy that you shouldn't let go to waste. Make sure to loosen said yeast and pour it into your glass with the rest of the beer (see below). 

Ditch the fruit

In general, Germans are anti fruit in beer. "There is only one exception, and that's a kristallweizen. A kristallweizen wants to have a lemon. A lot of people ask for a lemon for their regular weissbier and we tell them no. Blue Moon started that orange bs. I think the owner of Blue Moon has a huge orange plantation," Schneider jokes.

Know the three finger rule

At Oktoberfest, there's something called the three finger rule. Essentially, this means that foam should be about a three finger's width from the top down. The next three fingers should be the beer you drink, and the next three fingers should be thrown out because if you're drinking from a mass and thus a whole liter at a time, those last three fingers will be warm by the time you get to them. "I think the owners of the tents made up that rule," Schneider laughs. 

Never, ever consolidate

"One of the most important rules is don't ever pour your old beer into your new beer. People like to do that here very much."

How to pour a wheat beer

Sylvester Schneider, pouring beerAccording to Schneider, wheat beers and pilsners are more "explosive" than a lager, meaning that they are more carbonated. This means that you need to pour it at an angle, or with the bottle inside of the glass, as well as pour it slowly. "Even back home there are people that don't know how to pour a weissbier" Schneider says, before walking us through it.

  1. You have probably heard of the 45 degree tilt when pouring a cold one, but Schneider explains that his preferred way of pouring wheat beer is to tilt the weissbier glass much more than 45 degrees, holding it almost horizontally.
  2. Slowly stick the bottle's neck into the glass.
  3. Tilt the bottle up — the tip should be inside of the liquid while you pour it out slowly. Pouring it slowly is imperative, as the highly carbonated beer will otherwise explode into a foamy mess.
  4. Pull the bottle out, still slowly, once you've filled the glass with about two thirds of the beer.
  5. Now start pouring the rest a little faster to create a nice head of foam.
  6. Don't pour the whole bottle into the glass. Keep a little bit of liquid in the bottle in order to loosen up the yeast, which is at the bottom. The yeast is where the flavor is, so unless you can't digest yeast well (in which case you can either skip these next steps or order a kristallweizen — a filtered and yeastless wheat beer that's clear in color) you'll either want to roll the bottle on the table to loosen said yeast, or swivel the bottle in circles with a roll of your wrist, which is what Schneider does.
  7. Pour the yeast into the glass.
  8. Enjoy.

How to pour a pilsnerSylvester Schneider, pouring beer

  1. Hold the glass tilted to a 45 degree angle.
  2. Pour the beer relatively quickly, but stop when you've poured a little over half of the bottle's contents into the glass.
  3. Let the foam settle for a bit, ideally a minute.
  4. Pour a little more, let the foam settle, repeat until the bottle is empty. In Germany, local lore has it that a good pilsner takes seven minutes to pour. "Your typical pilsner in Germany is a seven minute pilsner, but that's from a tap, really" Schneider explains. "You will not find anybody in this country, or this city, who has the patience for a seven minute pilsner." However, Germany is loosening up. Today, most Germans understand that the seven minute rule is archaic, and will now accept a three minute pilsner to obtain the ideal level of foam and carbonation.
  5. Enjoy.

How to pour a lager

Sylvester Schneider, pouring beerSchneider explains that in a weissbier, you basically stick the whole bottle into the glass, but with a lager you only want to put the tip of the bottle into the glass. Unlike wheat beer and pilsner, a lager can be poured relatively quickly because it's less carbonated.

  1. Hold the glass tilted to a 45 degree angle.
  2. Stick the tip of the bottle into the glass.
  3. Pour the beer relatively quickly, and in a fast and steady stream down the side of the glass.
  4. Start straightening the glass when it's about two thirds full to create a nice head of foam.
  5. Let the foam settle for a few seconds.
  6. Enjoy. 

 Want to see how it's done? Visit Sylvester Schneider at his Oktoberfest on the East River event where liter steins will be poured to perfection to live oompah music.

SEE ALSO: How to drink espresso like an Italian

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A Budweiser-Miller brewing company would be a monster

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Budweiser Clydesdales

On Wednesday, SABMiller confirmed that its rival beer giant Anheuser-Busch InBev was planning to buy it.

If the two companies indeed join forces, they will dominate the global profit pool.

According to a chart shared by Bank of America Merrill Lynch analysts, in 2014 the two companies alone controlled about 58% of the industry's $33 billion in global profits.

By comparison, the next biggest company in terms of profits is Heineken, with only 11.6% of the global profit pool, followed by Carlsberg with a mere 4.6%.

screen shot 2015 06 24 at 1.19.41 pm

AB InBev is the world's biggest brewery by revenue, and its beers include the popular Budweiser, Corona, Stella Artois, and Becks brands. Cidre, which was launched in 2011, is also a growing franchise.

AB InBev, however, doesn't have much horsepower when comes to local brands, according to BAML analysts. Furthermore, its light lager category is struggling, especially in the US market.

In terms of geography, AB InBev has high market shares in Brazil, Mexico, and North America, as well as a strong presence in China. On the flip side, it has limited exposure to the Middle East and Africa, according to BAML.

SABMiller is the second-largest brewer by revenue. Its major beers include Fosters, Peroni, Miller, and Grolsch. It also does well with local brands including Snow in China, Castle/Impala in Africa, VB in Australia, Aguila in Colombia, and Tyskie in Poland.

Overall, SABMiller has a "good balance of territories with no dominant territory or country," though its two biggest arenas are the US and South Africa, according to BAML.

It has "no major exposure," however, to Brazil, Argentina, and Mexico.

Given the possibility that a Budweiser-Miller brewing company could come into fruition, it's worth pointing out that AB InBev fills in some of SAB Miller's geographic weaknesses, and vice versa.Screen Shot 2015 09 16 at 10.27.00 AM

Taking a step back, the brewing industry is facing some major headwinds.

For starters, consumers, especially those in the US and the EU, are increasingly interested in craft beers, or experimental beers produced at a much smaller scale than the major brands. Additionally, some brewers are losing market share to spirits and even to wine in some developed markets.

On the positive end, however, continued growth in per-capita consumption in emerging markets is good news, and there's a big opportunity in Africa, according to BAML.

"Global volume growth for beer has broadly halved to 1.4% on average in the past two years from the 10-year average of 2.8%," according to BAML analysts. "We are seeing an ongoing low-growth environment given the influence of these structural challenges."

SEE ALSO: The 27 scariest moments of the financial crisis

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Wall Street is racing against the clock to close the biggest deal of the year (BUD, ABI, SAB)

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digital clock timebomb

A bid for SABMiller by Anheuser-Busch InBev could be one of the top six corporate takeovers in history.

The deal would create a merged group with a value of around $275 billion and serve as a fee bonanza for the bankers providing advice and financing for the bid.

But AB InBev is in a race against time, thanks to rules governing deals in the UK, where SABMiller's shares trade.

The clock started ticking today, when SABMiller was forced to disclose AB InBev's interest by the UK Takeover Panel, which polices mergers and acquisitions in the UK. That came after a spike in SAB Miller's share price.

The statement said:

"The Board of SABMiller notes the recent press speculation and confirms that Anheuser-Busch InBev SA/NV ("ABInBev") has informed SABMiller that it intends to make a proposal to acquire SABMiller. No proposal has yet been received and the Board of SABMiller has no further details about the terms of any such proposal."

That announcement triggered something called Put Up or Shut Up, or PUSU, which gives a potential bidder 28 days to either make a firm and fully financed bid or make clear that it doesn't plan to. That runs out October 14. If AB InBev walks away it will not be able to return with a bid for six months.

"It’s called the anti-siege rule — that a target can’t be under siege indefinitely," A New York-based deal lawyer told Business Insider. "If you can’t come up with a firm offer then the company should be free to go about its business without distraction ... US practice could not be more different."

AB InBev has said it plans to work with SABMiller's board toward a recommended transaction. That means the maker of Budweiser is racing against time to either secure an agreement with SABMiller, or, at the very least, be a position where SABMiller can ask for an extension to the deadline.

And this isn't just any ordinary deal. The two companies combined would account for 58% of global beer industry profits, according to research from Bank of America Merrill Lynch, and that is likely to mean antitrust regulators will take a long, hard look at the transaction.

RTR14XUVConsider the checklist that goes into reaching a deal: The companies need to agree on price, leadership of the new company, and what assets they might sell off in order to appease regulators around the world. Those issues have sunk less complicated situations than this.

The deal lawyer said: "The bidder has a lot to do at this point. The fact is that when they make the approach they tend to assume it is either going to be announced or leaked. They would have been cognizant about that, and I assume they would have done the necessary homework to move forward."

It's not yet clear how willing SABMiller is going to be to reach a deal. Last year SABMiller made an approach to Heineken that Bloomberg reported was an effort to stymie AB InBev's advances.

AB InBev and SAB don't have to agree on everything within 28 days, but the buyer's decision to make this a "friendly" deal does make getting some accord on the broad outlines important. In the past, buyers like Pfizer have chosen to walk away because of the takeover rules.

There's a lot at stake for the investment bankers working on the deal. Fees could be as high as $235 million, based on a deal worth around $100 billion, according to Freeman & Co. There's even more to come for the banks that wind up financing the deal.

PUSU was introduced by the UK's Takeover Panel in 2011, in part as a reaction to an earlier bid for a UK-listed company by a US giant. That time it was Kraft bidding for Cadbury's, a deal that led to complaints in the UK that the country's biggest companies were easy takeover targets.

There is some wiggle room if AB InBev can't get a deal together in time and is asked to walk away for six months. It could be invited back to the table by SAB Miller, or it could come back with an offer that’s sure to be accepted.

Neither of those would be as ideal as a deal reached in just 28 days, especially for the companies' bankers. 

SEE ALSO: Meet the investment banking dealmakers working on a $275 billion mega-merger

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What a beer will cost you at every NFL stadium this season

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The average cost for a small draft beer at NFL games this season is $7.42, according to data collected from each team by Team Marketing Report. That's actually down from $7.53 in 2014.

Fans of the Oakland Raiders, San Francisco 49ers, and Chicago Bears will all have to shell out at least $9.25 for a beer at the stadiums for those teams. Meanwhile, seven different teams offer a beer, albeit at a smaller size, for $5.00.

Here is a look at how much a small draft beer costs at each stadium. (The beer size in ounces is in parentheses.)

NFL Beer Prices 2015

It is not going to help you once you are at a stadium, but things look different if we consider which teams offer the best beer deal for their small beer in terms of price per ounce.

Now we get a better idea of just how expensive it is to drink beer at Lincoln Financial Field for Eagles games, where it will cost fans $0.71 per ounce — $0.08 per ounce more than any other team.

At $0.36 per ounce, the Bengals' 14-ounce beer for $5.00 is the best deal in the NFL.

NFL Beer Prices 2015

Data via Team Marketing Report based on information reported by each team during a survey.

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This might be Heineken's last chance to become a global beer giant

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A barman pours a beer produced by brewing company SAB Miller at a bar in Cape Town, September 16, 2015. REUTERS/Mike Hutchings

A tie-up of brewing giants Anheuser-Busch InBev and SABMiller would reset the global brewing industry, allowing a fierce competitor to extend its lead and ringing last call for smaller rivals to snap up meaningful assets.

AB InBev said on Wednesday it had approached SABMiller's board regarding a friendly combination that would marry its Budweiser, Stella Artois and Corona beers with SABMiller brands like Peroni, Grolsch and Pilsner Urquell.

A deal, likely worth over $100 billion, would be complicated and among the biggest in corporate history as well as the crowning achievement of the Brazilian financiers behind private equity firm 3G Capital, known for ruthless cost-cutting and high profit margins enabling them to play extra hard against rivals.

"If this deal goes ahead, there will really be one global beer company. The sector will be pretty much done," said Ian Liddle, chief investment officer of Allan Gray, a top 10 SAB investor. "This is the deal of deals and it is one of the reasons why ABI can justify paying a high premium."

No offer has been made, but analysts estimate a price of 40 to 45 pounds per SAB share, which would be a 35 to 52 percent premium to the stock at the start of the week.

Liddle welcomes the opportunity to assess any offer, and said that for any consideration paid in ABI shares, he would like to see a listing in Johannesburg, where SABMiller started out in 1895 selling beer to gold miners.

But given the footprints of both companies, divestitures are likely, presenting opportunities for the likes of Heineken, Carlsberg and Molson Coors .

The company would almost certainly have to sell SABMiller's majority stake in U.S. joint venture MillerCoors. Partner Molson Coors is the obvious buyer, so would likely get an attractive price. With a price tag of around $10 billion, it would be a big deal for Molson, whose market value is $15 billion after its shares surged following news of the approach. Having it in flux could be an opportunity for others.

"It's very strategic for anybody. If Heineken want to be a leader in the world, this might be their one and only chance to step change their business in the U.S.," said an industry banker.

In China, the combined brewer could also end up selling SABMiller's 49% stake in CR Snow. Partner China Resources Enterprise may wish to take full control or may be open to another entrant.

Further assets, such as in eastern Europe, may also come up for grabs. 

Hard Life

Exactly one year ago, Dutch brewer Heineken rejected a takeover approach by SABMiller, whose move was seen as a defense against advances from AB InBev.heineken, cyclone, coney island, luna park, march 2012, bi, dng

Family-controlled Heineken at the time said it wanted to remain independent, but with a combined rival some three times its size, analysts say the solo route is about to get tougher.

"I don't think it's a good idea. They'll go head-to-head in Europe and Africa," said Morningstar analyst Phil Gorham. "Life is going to be difficult for the likes of Heineken and Carlsberg."

Carlsberg, which is in a state of management flux while it battles weak sales in Russia and Ukraine, would have limited overlap with the new megabrewer, but Heineken and Diageo , maker of Guinness, could feel the heat in Africa, where a rising middle class is increasingly drinking beer.

A combined megabrewer would soak up as much as half of the world's beer profits and with fatter margins than rivals, it could be more aggressive on price or marketing spend than rivals, such as in Nigeria where SABMiller's market share is around 10 percent.

AB InBev's operating margin last year was 32.5% versus a range of 14% to 20% for its major rivals.

In addition, Budweiser would likely make its way into a host of new developing markets, which would threaten the dominance of Heineken as an international, premium lager.

Lower returns

The merged entity's financial muscle will depend in part on the synergies it draw from its new businesses.

AB InBev Chief Executive Carlos Brito runs his empire in line with the notoriously frugal management philosophy of Brazilian investment banker Jorge Paulo Lemann, who with his partners in 3G Capital, orchestrated the brewer's rise. That philosophy, also in evidence at 3G-backed Kraft Heinz , relies on acquiring businesses and then cutting costs and rewarding hardworking employees with handsome bonuses.

"The CEO travels economy," said Holland about AB InBev's Brito.Carlos Brito

AB InBev pulled savings worth some 13% of sales after InBev bought Anheuser-Busch in 2008 and 18 percent from when it bought out Mexico's Grupo Modelo in 2012.

Analysts see lesser gains from acquiring SABMiller, due partly to its existing plan to save $500 million by 2018 and its generally efficient operations. Cutting costs would also be more complex, given SABMiller's global spread, particularly in markets where it works with partners, such as Castel Group in sub-Saharan Africa.

"This is much, much more difficult than anything they've ever tried," said another industry banker. "SAB is a really, really complicated beast."

In addition, SABMiller, for whom soft drinks represents 20% of volumes, is a major Coca Cola distributor, while AB InBev, with 10 percent of non-beer volumes, has ties with rival PepsiCo .

Bernstein analyst Trevor Stirling suggests there could be savings of 7.5% to 12.5% of consolidated sales, meaning a total of between $900 million to $1.5 billion.

"The financial returns are lower than before, but they're willing to accept it as it's the last deal in town," he said.

(Additional reporting by Sinead Cruise)

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The 17 best drinking apps for crafting the perfect night out — or on the couch

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cocktails

When you're getting ready to go out drinking, you just want to focus on fun. You don't want to have to deal with overpriced drinks, lines at the door, or closed liquor stores. And, of course, it's always fun to discover delicious new cocktails and drinks.

Thankfully with the wonders of smartphones, a carefree night of drinking is within your grasp. Just make sure you don't go too wild.

These 16 apps give you drink ideas, connect you with your favorite bartender, and even tell you your approximate blood alcohol content. They will tell you where happy hours are and even let you create your own personal happy hour complete with discounted drinks for you and your friends.

Read on for the best apps for getting your drink on, many of which have been featured by the good people over at Product Hunt.

Additional reporting by Kate Shapiro.

 

SEE ALSO: This genius app uses Uber and Yelp to whisk you and your friends away to a random secret bar nearby

Bar Roulette takes you to a mystery bar near you

Bar Roulette plugs into Uber and Yelp to whisk you away to a random (highly rated) bar, keeping the destination a secret until you arrive. It's for those times when you just need to get a little spark of adventure in your life.

Cost: Free

Get the web app.



Next Glass scans beer and wine bottles to help you find your favorite drink.

With over 23,000 bottles tested and in its system, Next Glass is a powerful tool for predicting whether you'll like that case of beer or new brand of wine. Once you tell the app what drinks you like, you can scan the label of the bottle and you'll see a personalized score and the nutritional information, including the alcohol by volume.

Cost: Free

Get it for iOS or Android



Mixtura tells you all the great cocktails you can make based on the ingredients you have on hand

Mixtura is a drink recipe app with a clever tweak. You enter whatever alcohol and mixers you have in your cabinet and the app will tell you what drinks you can make. Perfect for when you want to try something new but you don't want to go to the store.

Cost: Free

Get it for iOS.



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12 cultural faux pas you should avoid making in Munich

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Bavarian manMunich, most famously home to Oktoberfest, is part of Bavaria, in south Germany.

Bavaria, progressively conservative and traditionally modern, differs from the rest of Germany so crassly it may as well be its own country. 

But while it prides itself in its famous "gemütlichkeit," or laid back coziness, a decidedly un-laid back Germanness will rear its head should you make any of the following faux pas.

Luckily this Quora thread has you covered. Here are 12 cultural faux pas you should avoid making in Munich and Bavaria, Germany.

1. Not making eye contact

Cheers beer eye contactBavarians, and Germans in general, are firm believers in making eye contact while cheersing in order to avoid the curse of seven years of bad sex. Should you fail to make eye contact, people might think you're trying to sabotage their love lives. 

2. Not cheersing with enough gusto

In Bavaria, cheersing is an art. Eye contact alone isn't enough. In Bavaria you're expected to make eye contact while clinking glasses, and then also hit the glass or bottle down on the table before taking a sip (a heartfelt "prost!" helps too).

The history behind this is that back in the day the German army sneakily conscribed people by buying rounds of beer and hiding wages — then a coin — in said beer. Once someone touched the coin, he was committed to the army, thus hitting the glass on the table first was a way to check whether there was a coin hiding in the stein.

3. Clinking glasses the wrong way

When drinking weissbier (wheat beer), clink glasses at the bottom. Glasses are thin and may break, so bumping them from the bottom is the correct way of doing it. Bavarians will bump bottles this way too.

4. Eating a weisswurst breakfast sausage after noon or eating it the wrong wayWeisswurst white sausage

A traditional Bavarian breakfast consists of beer (wheat beer, specifically) and weisswurst: a pair of white sausages in a hot watery broth with a side of sweet mustard.

According to local lore, weisswurst is not allowed to hear the noon bells ring. In other words, you should never eat a weisswurst after 12. The reason for this is that these sausages are generally made fresh in the morning, and before the invention of the fridge, they would go bad by noon. Now it's just a faux pas to eat them after breakfast. 

There are plenty of other weisswurst faux pas: Don't order them in pairs. Ordering a weisswurst automatically means receiving a pair, so asking for two will out you as a foreigner. Also, don't eat the tough, rubbery skin. Instead, cut a lengthwise slit into your sausage, then pull the skin (Bavarians call it zuzln) off with your fingers.

5. Ordering a small beer

In Bavaria, beer comes in a liter mass. Only the Prussians or foreigners drink from little glasses. 

6. Taking up too much room

Beergardens communal tablesMost Bavarian restaurants, especially beer gardens, have communal tables and are seat-yourself, so don't be surprised should someone sit down at a table with you. Trying to claim an entire table for yourself or your group when there's still room is considered impolite. That said, always ask if the seats are taken before sitting down.

7. Bringing your own beer to a beer garden

While it's totally ok to bring your own food to a beer garden, bringing your own drinks is a no-no.

8. Getting offended easily

Bavarians, and Germans generally, are honest and straightforward — perceived by many as rude. Germans are truthful and don't beat around the bush, but never with malicious intent, so don't ever be offended.

9. Staring at naked people

Topless woman outside, backBavaria has a thriving Freikörperkultur (a movement that endorses a naturalistic approach to life), and accordingly has a lot of public parks and beaches where nudity is allowed. You will see a lot of topless women and bottomless men in Bavaria, especially in Munich's English Garden, so try not to stare. In fact, Munich has six officially designated 'Urban Naked Zones.'

10. Bringing up anything Nazi-related

Germans are very aware of their past, but would like it to remain there. Don't say things like "Jawohl!""Ja mein Führer," or do the Nazi salute or pretend to have a Hitler mustache.

11. Being late

Being late to Germans is an insult. To them, it basically means that you think your time is more valuable than theirs.

12. Digging into your food before everyone else

First off, always wait until everyone has been served. Then, eat only once everyone has wished each other a "good appetite" ("Guten Appetit"). Not doing so is considered rude.

SEE ALSO: 12 things everyone gets wrong about Germany

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The best beer gardens for celebrating Oktoberfest in 16 US cities

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Oktoberfest entrance, Munich, Germany

The world's biggest folk and beer festival kicks off in Munich, Germany on Saturday. 

Oktoberfest is an annual celebration of German tradition that's defined by camaraderiehearty Bavarian cuisine, and lots and lots of beer. 

But you don't have to go all the way to Munich to get in the Oktoberfest spirit. 

Foursquare analyzed its user ratings to come up with a list of the best beer gardens in the US for celebrating Oktoberfest.

From a brewery in Seattle to a waterfront bar in New York, here's a list of the top places in the country to celebrate Oktoberfest the American way. 

SEE ALSO: 17 breweries to visit in your lifetime

SEE ALSO: Experts say these are the 20 best beers in the world

Lakefront Brewery in Milwaukee, Wisconsin

This microbrewery on the Milwaukee River serves its very own Oktoberfest beer– a traditional Marzen-style lager made with Munich malt. The menu also includes a selection of Bavarian pretzels and beer-slathered bratwurst. 



Founders Brewing Co. in Grand Rapids, Michigan

As one of the top-rated breweries in the world, Founders Brewing Co. has plenty to offer in terms of beer and atmosphere. The brewery is throwing their 12th annual Harvest party to celebrate the season and launch their wet-hopped Harvest Ale. 



Lagunitas Brewing Company in Petaluma, California

Lagunitas Brewing Company's Petaluma location (there's one in Chicago, too) is a Foursquare favorite. With dozens of craft brews, ample outdoor space, and live music five nights a week, it's the perfect place to get rowdy in the spirit of Oktoberfest.



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A multibillion-dollar beer merger could have huge ripple effects in America

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A bartender serves a beer produced by brewing company SAB Miller at a bar in Cape Town, September 16, 2015. REUTERS/Mike Hutchings

Anheuser-Busch InBev's prospective deal for SABMiller PLC is expected to ripple across other consumer industries in the next few years, from soda makers and bottlers to snack manufacturers.

If AB InBev's initial approach to SABMiller succeeds, the resulting brewer, with a $275 billion market capitalization, could eventually buy Coca-Cola Co or PepsiCo, analysts said. That would break down longstanding U.S. barriers between the manufacture and sale of alcohol and soft drinks.

AB InBev is backed by private equity firm 3G Capital, known for a relentless focus on trimming corporate fat.

Coke or Pepsi could represent a fresh source of corporate bloat for 3G and its Brazilian stewards to target while also opening up opportunities to combine distribution channels, analysts said.

More consolidation within the packaged goods industry is already expected following the July merger of Kraft Foods Group Inc and ketchup maker H.J. Heinz Co, backed by Warren Buffett's Berkshire Hathaway Inc <BRKa.N> and 3G.

While Coca-Cola, with a market value of $171 billion, is too big for AB InBev to buy, a larger, integrated combination of AB InBev and SABMiller could be well positioned to acquire Coca-Cola in three to four years, an industry banker said.

Coke's size would become less of a hurdle to a potential deal over time, analysts said.

"Because companies are getting bigger with this potential acquisition, they’re allowed to dream even bigger," said Ali Dibadj, an analyst at Sanford Bernstein in an interview. In an earlier research note, Dibadj also said the combined entity could buy Pepsi's beverage business, with Kraft-Heinz potentially buying its Frito-Lay snacks business.

SEPARATE MARKETS?

Such possibilities could put more pressure on the soft drink makers, already struggling with dwindling demand for traditional soft drinks, to cut costs and increase sales, or eventually risk getting acquired. Coke and Pepsi declined to comment.

"Should a (beer) deal ultimately be successful, the pace of consolidation that it symbolizes across the broader industry might well pressure Coca-Cola and PepsiCo to accelerate their own focus on delivering increasing top-line growth and cash productivity," UBS analyst Stephen Powers said in a research note.

While Coke has historically been averse to combining soda and beer because of a belief that they address separate markets, companies elsewhere in the world, such as Japan's Suntory Holdings, sell both categories as well as wine and spirits.

In the immediate term, the AB Inbev buyout of SABMiller may force soda companies to decide what happens with their bottling and distribution agreements with the two beer companies in international markets.

Coca-Cola, Coke, Coca Cola

SABMiller handles bottling operations for Coke in seven markets including El Salvador and Honduras. In November, the companies agreed to combine bottling operations of their non-alcoholic, ready-to-drink beverage businesses in Southern and East Africa.

Meanwhile, AB InBev has distribution agreements with PepsiCo in Latin America, including the exclusive right to bottle, sell and distribute certain Pepsi brands in Brazil.

Analysts said that it is unlikely that the combined entity would bottle both Coke and Pepsi products. "They're competitors, Dibadj said. "Sharing of info and analysis and people across the bottlers isn't typically supported by Coke and Pepsi."

A beer merger would also provide opportunity for Molson Coors Brewing Co to gain increased exposure to the U.S. market. Antitrust regulators are widely expected to oblige the new colossus to divest its stake in the joint venture created by Molson Coors and SABMiller, MillerCoors, to dilute what would otherwise be a 70 percent market share in the United States.

As stipulated by their joint venture agreement, Molson Coors has right of first and final refusal to acquire SABMiller’s holding. Market estimates value the remaining stake at approximately $7.4 billion.

(Reporting by Anjali Athavaley; Editing by Christian Plumb)

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