In Tolkien’s ‘Ring’ trilogy there’s a scene in the first book, The Fellowship of the Ring, where Frodo, the hairy-toed hero challenged with destroying the Ring, is attacked by the Ring Wraiths, the Nazgul. Mixing our genres a moment, let’s just say that these former Kings have gone over to the Dark Side. The Ring is their Force; slaves to its power, it determines their destiny. Unsurprisingly, they’re pretty keen to get the ring back, and run old Frodo through attempting to do so. Frodo, being stabbed by a cursed blade, a Mordor blade, begins to transform. Mixing our film genres yet again, it’s rather like a Dementor, sucking not just the happiness out of him, but his will to live too. He’s becoming a shadow-human; living somewhere between the dark world of Mordor and the ‘real’ world of Middle Earth. His eyes glaze over as if he’s wearing those freaky Halloween contact lenses and he becomes all pallid and sweaty; but a couple of Paracetamol won’t sort him out, he needs Elvish medicine, and there’s no Co-op pharmacy anywhere to hand.
Frodo should be a warning to us about the real impact of these brewing mega-mergers. As I wrote in my last post, there’s a lot of debate about the potential implications of ABI buying SAB. Will it be an opportunity for the small guys? Will the middle-rankers be able to pick up some tasty titbits that fall from the table? We will see in due course of course, as a period of intense restructuring will be catalyzed across the industry by the deal, should it go through.
Despite the huge resources of these mega-brewers; people, time, money, the truth is all these businesses want to do is focus. Focus on simplifying hugely complex operations; focusing on managing families of brands; focusing on cutting back; focusing on maximising profit from doing scale activities. Fewer brew streams; fewer breweries; fewer priorities with fewer people throwing off more and more and more money. My concern is for the brands that don’t make the cut; neither one of the (very few) global focus brands; nor a big local leader. I have experienced first hand great brands – important brands – being virtually exterminated by mega-mergers. At the start of the noughties, the leading cask ale in the UK was Draught Bass, that lovely nutty pale ale that characterized great Burton brewing. But then Interbrew bought the brewing assets off Bass plc… and suddenly a treasured jewel becomes a bit-part portfolio player, its value not in the legacy and heritage it represents but the profitability it throws off in one market (the US). Immediately the brand tumbles; immediately daft marketing put in place by daft leadership fills a void that needn’t have existed in the first place. Where is Bass today? Probably on keg in a golf club selling a dozen pints a week, if you’re lucky.
And I was reminded of it again the other week on a trip to The Netherlands. Heineken, the dominant Dutch brewer have a range of riches to call upon there: Heineken itself; Amstel, Brand (originally from the south of the country), Affligem… and a wheat beer, Wieckse Witte. There’s a wraith brand if I ever I’ve drunk one. In the all-consuming push for growth; these marketing companies forget the product truth; forget what made the beers great. They push for the centre-ground and while they may win an election or two, they lose the distinctiveness. That’s Wieckse Witte for you: thin; bland; no bananary-ester character, no clovey yeastiness; no malt-accented body nor hoppy aroma. It’s a hazy pale lager poured from a bottle that’s had the character designed out of it. A brand that’s passed form the land of the living into a brand of virtual reality; of focus groups and social content; of believing that what people tell you on Twitter is actually true or that ‘Follows’ or ‘Likes’ amount to something. It’s a brand that’s barely concealed in its shallow grave; colour washed from its cheeks as it slowly turns into a zombie, all personality lost, just a tool, a puppet, for delivering profit. And that’s the thing with the centre-ground. You may win an election, but eventually you become unelectable. No one knows what you stand for. Everyone has forgotten what made you great. You’re just magnolia paint on unremarkable walls.
And that perversely, is the real benefit of the mega-mergers. Tread warily around the ‘profit-opportunity’ sirens that call. There may be pickings to be had, but they won’t be easily won. But, these mega-companies, with their ever-blander mega-brands, are a constant beacon to remind independent brewers and characterful brands why they exist, and why it’s a future worth scrapping for.