Just occasionally, brewers have really crazy ideas. I remember once, when working in Big Beer, someone presenting this idea for beer slushies. It didn’t make the cut. Then there was the ultra-caffeinated beer that boosted your mojo. Or the one infused with tequila (oops – bit late to the party on that). Then this crazy sh*t springs up in my instagram feed, courtesy of @maltjerry. Beer purists may object, but not me. If you don’t push at the edges everything gets boring. And besides, this beer, a Passionfruit Cheesecake Extra Sour from Omnipollo in Sweden has a rakish air of 1950s beehive hairdo, crossed with Mr Whippy, crossed with bleached-out squirty dog turd. What’s not to like? Now, where did I put my slushy machine…
There’s been something of a furore over Carlos Brito, AB Inbev’s top dog, over his comments about beer drinkers being tired of choice – and for balance, it’s important to mention that he was specifically talking about distributors and retailers, and how much choice they could actually carry on shelves. Yet customer and consumer are umbilically linked, so by default he is saying the consumers too, are tired of choice. And according to ABI’s earnings release briefing, craft beer sales in the U.S. are slowing, hence it must be so.
As you can imagine, a furore. Because surprise, surprise, here are AB Inbev, now commanding one third of global beer sales, concerned about any affront to their brands, their competitive edge, their ability to dominate the market. An agenda of consumers ‘tired of choice’ means ‘you don’t need to stock unusual craft brands, but you do need to stock nationally / globally recognised brands‘ – ooooh, and look – we have lots of them.
The thing is though, the provocation from Brito does have more than an edge of truth about it, depending on how you view the world. Take the U.K. beer scene at the moment. ‘Explosion’ is not too dramatic a term for the number of breweries that have opened and continue to open. Each month sees a closure, but each month see many more openings. The leaky bucket overfloweth. Go one level below this and there are serious implications. Each brewery will have, say, a minimum of three brands, probably three of four core brands and then a selection of in / out products too. So let’s say that there are now (round numbers), 2000 breweries, each selling five beers. That’s 10,000 brands of beer minimum (someone I’m sure will have the actual numbers on this, providing they’re watching the press releases daily.). There are about 150,000 licensed premises in the UK. In theory that means most bars can carry an entirely different range from one another (OK, there may be 14 other ones carrying the same range nationwide).
Now clearly, this is theoretical. Because the truth is more stark. In fact, most bars have a limited number of taps and lines. Choice, in draught in particular, is not finite. Many of these lines will be keg, a small number hand pull. And of the 10,000 brands of beer on sale, probably 9,800 are craft and cask brands. The number of mainstream, keg dispensed, national brands is slight in comparison, dominant in sales though they are. 9,800 beers competing for, say, one of three hand pull spaces on a bar or God forbid, one of the keg lines owned by a multinational.
You can’t build recognised brands in this environment, unless you own an estate and demand they carry your range.
And there’s the rub. The truth is that there’s so much choice now that the market isn’t saturated, it’s super-saturated. Just like the supermarkets have bred a generation of deal junkies, rather than being tired of choice, we have a spoilt generation of beer drinkers who are trial junkies. You can see it where every you go. Looking along the bar. Spotting the new beers. Examining ABVs. Asking for recommendations, a sip, a third. Buying a flight of different beers. Every beer a different beer during the session. Switching between styles. Ever more choice at home.
Oh sure, there are implications for drinkers. It can be bamboozling. So many choices, where to start? Which style between the many I like? Which strength? Colour? Hoppiness or maltiness? Sweet, sour, bitter, dry? How to make sense of that, goodness knows.
There are implications for customers too. If you are in some way tied in to a brewer or supplier, how to offer the choice? How to run a business based on strong sellers with the roller coaster of guest beers being so important? How to manage the tensions (under the bar) between keg and cask, cider and lager, craft and real ale, spirit vs wine, whilst all the time having to deliver a stonking food offer. I love pubs, but it’s a hell of a job to get right, particularly with those damned drinkers constantly demanding something new every week.
But what’s the alternative? Take London just 10 years ago. I was in beer sales down there at the time. Most bars had some combination of Heineken, Kronenbourg, John Smiths and Strongbow, or Stella, Boddingtons, Becks Vier. Becks, Budweiser in the fridge. Everything else scrapping for space round the edges. Ok – so perhaps this picture is a little dramatised, but even if it’s only half true, compare it with today. Bars bursting with choice. Beers on rotation. New breweries introducing new styles. Rarely a Stella or Bud to be seen, at least in a place where you’d want to be seen too. Do we want to go back to a world of Stella, Becks, Corona wherever we go? Do we want to see Mr Brito’s thin, assassin smile widen further?
Give me the tyranny of choice any day.
This week The Campaign for Real Ale (CAMRA) announced their ‘Revitalisation Project’, called ‘Shaping The Future’. The subtext describes it as a review of their purpose, focus and strategy and has been brought about by the raft of changes and issues that have occurred since the consumer group founded in 1971.
Issues such as scope and purpose: should CAMRA be about real ale only, good beer, real ale, cider and perry or any number of potential combinations and additions? How widely should CAMRA campaign and on what issues?
Issues such as their frame of reference: should CAMRA be about beer drinkers, all alcohol drinkers, pub goers or frankly anyone with an interest? And should CAMRA focus on the on trade, with challenges around declining and closing pubs, often in rural communities and / or should it focus more on the increase in drinking in home?
Issues such as the changing nature of socialisation. In their data, they claim that there could be more coffee shops 10 years from now than pubs, and many of these coffee shops could be serving beer (and unlikely, you imagine, to be serving real ale, cider or perry).
Issues such as governmental pressure: actually it only gets a brief mention, but when you have the Chief Medical Officer and anti-alcohol pressure groups both making (many have argued, deeply spurious) claims about what constitutes a healthy level of alcohol consumption, then whether you’re Big Beer or craft beer, you need to consider your response.
The review needs to be root and branch. The issues are existential, or, at least, they are fundamental to what CAMRA is all about.
Possibly the biggest issue, wide ranging in scope and for some pernicious in nature is rooted in the rise of craft beers that came about following the introduction of Small Brewer Duty Relief in 2002. A brief background: the increase in the number of breweries was something to be celebrated by CAMRA, they played a pivotal role in the policy and there’s no doubt that the increase in small breweries went hand in hand with the increase in number of cask beers available, not just because of our brewing and drinking culture but also because the process of brewing and packaging cask beer is more straightforward (which is not to say it is easy) and fundamentally, cheaper. There’s no need for pressurized kegs, expensive pasteurisation and filtration systems, automated filling machines and all the paraphernalia that attends filling kegs. With beer in casks, the ability to keep, handle and deliver a quality product is as much the responsibility of the publican as it is the brewery, if not more. And there in a nutshell, is the rub. Many craft brewers, not just the more ambitious, but also those dedicated and passionate about quality soon have an issue with cask. Put simply, that precious quality is just too variable. The result: more investment in kegging; more stimulus from the U.S. brewers (untroubled by the cask / keg question) and more ‘craft keg’ beers available.
Skip back 40 odd years to see the parallels. The ‘Big Six’ breweries actively managing down and phasing out their cask beer due to, you’ve guessed it, the variability in quality (amongst other things, like cost), often put down to the lack of training and skills of publicans. There were, of course, many publicans then, just as there are now who could serve a cracking pint of cask. And there were many, probably more, who find keeping cask, fettling it, tapping, spiling, broaching – all of that – troublesome and perhaps not worth the effort.
Another issue for cask is seemingly prosaic but critical – yield. In a keg, the central spear reaches down through the inside of the keg and almost touches the base. The beer is propelled out using a dispense gas. Finish one keg; wrench off the coupler, attach to the new keg, carry on serving. Industry estimates of waste from a keg put it at around 5-8%. Not so with cask. More beer is left in the cask (some because it is the yeast sediment, the remainder due to the cask shape) and more is lost as the last drinkable beer splutters through from the old cask and the first draughts are pulled through from the new. And then there’s the beer left in the pipes overnight, which (you hope) is pulled through and discarded. How much is lost? Well estimates vary from 15% up to 30% and more (that’s from an industry source by the way, not an arbitrary guess). Put simply, it’s very easy to pour 30% of your profits from cask down the plug-hole.
Which is not, in any way, to say ‘give up on cask’. But to not recognise – and in this case, for CAMRA to not fully recognise – that today, the situation is wholly different that it was when they founded. We are not talking about replacing Draught Bass with Worthington ‘E’. We are not replacing Courage Directors with Watney’s Red Barrel. We are not talking about getting rid of John Smith Magnet and shoving on Webster’s Yorkshire Bitter or Trophy Best. We are talking about a bar or pub having a crack at selling any one of thousands, literally thousands, of exciting, tasty, experimental, classic, not-quite-right, full on, challenging, mundane, surprising beers that just so happen to be packaged in a container called a ‘keg’.
As someone who runs a brand building company as my day job, there’s an interesting parallel here and something for CAMRA to consider. Whatever they do, they mustn’t believe that ‘the job on cask is done’. The revival of cask beer has been sensational, but despite appearances to the contrary perhaps, it remains fragile. Most beer drunk in the UK is keg lager. Pubs are closing at 27 per week (according to CAMRA) and many, many more remain unsustainable. In a typical bar, there are only a few cask lines, and now with the amount of new breweries, there is so much choice for the publican that running a small cask led brewery is horrendously tough – commercially in particular. Lay on top of that all the issues with keeping cask, serving a high quality product and lower yields and the odds remain stacked against it. We need cask champions still. We need a consumer group fighting its corner. We need to keep on educating publicans to the wonders of cask beer and the criticality of quality. We cannot afford to get bored or distracted. CAMRA must keep the core of what they do – protecting real ale (and for me real cider and perry too – they probably need the help even more) – keeping it alive and fundamental to their central purpose. Great brands keep their core dynamic and fresh. CAMRA’s core is cask.
Yet great brands also focus on what’s coming up – what’s new and may be the ‘core of tomorrow’. So CAMRA must have a duel focus on cask and great beer, no matter how the brewery chooses to package it. Of course, ‘great beer’ is subjective. Pilsner Urquell, served from the tank at The White Horse in Parson’s Green is delicious. It is ‘great beer’. But PU, like many others is now a cart horse in the stable of a large multi-national, consolidating brewery. Not only do they have enough money to look after themselves, they are also only driven by profit. If PU proves to be a challenge to grow, it will sadly be reprioritised or even discarded and the focus will move elsewhere. So we are talking about a different form of ‘great beer’. CAMRA must champion beer from independent brewers, who are fashioned as much from sharing their passion, championing brewing and brewing heritage, making products with integrity not just efficiency, as they are from making a decent wage. And not just small brewers either – but independent brewers. From Elgood’s to Fuller’s, from Brew By Numbers to Magic Rock, from Marston’s to Skinner’s – even, whisper it – to BrewDog too.
Because let’s be clear. CAMRA have done a terrific job saving cask beer. But the independent craft beer ‘movement’ has done a significantly better job in making the whole beer category fresh and vibrant and attractive to people wouldn’t have even considered beer in the past at all. It might not have been directed nor seem coherent, but it’s done it – and in a quarter of the time. If CAMRA isn’t willing to stand for that, then it deserves to lose its relevance.
© David Preston, Beer Tinted Spectacles, 2016
For the third largest global economy, the fourth largest exporter and a population of almost 130 million people, the influence of Japan on global brewing has been slight. It’s been, in broad terms, a follower rather than a leader, perhaps reflecting the influence of other nations on Japanese identity and culture since the nineteenth century. And as with many beer cultures, which Japan surely is, its brewing scene was (and is) dominated by large national players; and in a similar parallel, only comparatively recently has a new wave of start ups and craft brewers started to make an impact. Despite this the craft scene is slower to emerge and in quantity at least (overall volume, share of market and number of craft breweries) behind other ‘beer nations’.
Part of this is cultural and behavioural: the Japanese are very proud of the achievements of their companies and traditionally the mutual bonds of paternalistic management with the honour and pride of working for these companies strengthens this. When it comes to beer therefore, Sapporo, Kirin and Asahi have been the mainstays on the islands of Japan for many years. And their interests stretch more broadly across drinks, particularly into distilling (whiskey), sake brewing and soft drinks.
Asahi have always intrigued me: for many years they languished behind Kirin as the leading brewer, with beers dating back to the late 1800s (Asahi Gold is one still brewed today). Traditionally, Japanese beers were heavily German inspired and were frequently malt-accented, leaning towards the Bavarian helles style (only maltier) as well as other German styles too, including black lagers and dunkels. But what propelled Asahi forward was their launch of ‘Super Dry’ in 1987. Pernicious whispers suggest that it was actually based on the recipe of an American light beer that they had been partnering with, but in body it is more like a north German pils: not as hop forward as Jever, but extremely well attenuated, flinty and crisp. I’ve never found it a beer that forms and keeps a good head, but in Japan this is not seen as a particular signifier of quality and for Super Dry less so, often drunk from the bottle as it is, or served in a small glass – it’s high carbonation cleansing the palate well when drunk with food – as beer in Japan so often is. So, a fairly typical, mass produced lager then? Well, yes, but also much more – the beer that saved Asahi in fact. Their performance and share had been falling relative to their peers, but Super Dry was an instant hit – so much so that it changed the character of the Japanese beer market, and Asahi’s competitors struggled to copy it and catch up.
For a brief period, I marketed Asahi Super Dry in the UK. Success with the brand was reasonable over here, albeit, it was always more ‘push’ than ‘pull’ and the relationship with the team from Asahi themselves was always an interesting one – a ‘quick dip’ into some of the differences of business conducted Anglo-Saxon style from that conducted Japanese style. The contract, for example, was always used as a guide by the UK team (de facto) – whereas for the Asahi team it was always ‘de jure’. One year, slightly behind the contractual volumes, the Japanese team decided to deliver the remainder to the UK depot anyway, even though it hadn’t been ordered. Twenty trucks rolled into Burton on Trent carrying enough Super Dry to keep shelves stocked for – well – let’s just say, you could over-winter pretty easily on it. But as far as the Asahi team was concerned, we had committed to a given volume in a contract and we had to find a way to sell it (no B&M Bargains in those days).
Overall though, the Japanese have played it close to home with their expansions beyond the shores of Japan. Kirin invested in Australia and New Zealand; Sapporo, in possibly the most ambitious move, bought Sleeman in Canada whilst Asahi opportunistically snaffled up a stake in Tsingtao from Inbev when it sold that company to oil the wheels of the Anheuser-Busch mega deal.
It’s now a mega-mega-deal that sees the first real expansion of Asahi out of Asia. Should it go ahead, one of the wheel greasers for the SAB acquisition by ABI is European crown-jewel selling. To overcome anti trust rules in the US and to free up cash to reduce the borrowing required, ABI put Grolsch, Peroni and Meantime up for sale. There were many suitors apparently, but Asahi were successful. It’s an interesting move: there are no real synergies (efficiencies or cost savings) as Asahi have no European operations. Shepherd Neame will probably have to find another brand to replace the volume they brew for Asahi in time, but other than that Asahi will be operating three stand alone businesses: the second largest in Holland, second largest in Italy and a significant London craft brewer. And you can forget the Japanese and Anglo-Saxon business culture differences – they’re going to be nothing compared to Dutch vs. Italian approaches. It’ll be a Bitterballen vs Bolognese bun fight.
But this isn’t a synergy play. This feels quite different and is possibly one of three moves. The first is desperation. It could be that Asahi see the global brewing world consolidating at such a rate of knots that they felt they had to move. An option, but unlikely – these are, after all, wonderful brands and whilst they have paid a premium, they’ve not over paid (about £2bn – chicken feed compared with the £70bn ABI are forking out for SAB). Second, and most likely is that this is an export move. Suddenly, Asahi have a premium portfolio of brands that they can take to most markets: Italian style, Dutch substance and the trendiness of one of the world’s largest brands. Add in, over time, Tsingtao, Meantime and anything else that they can bring to the party, and here is an interesting and powerful range for potential customers. A range that could perhaps nip away at Heineken, or Molson Coors, or even ABI here and there. Thirdly, and the most difficult to gauge is whether this a more strategic growth play. Are we now seeing Asahi build a platform for further consolidation? Will they now use their European base to target mid tier independent brewers (or unloved brands)? Will they use their base to buy into craft brewers (as they have in Australia)?
Whatever transpires, the move will be interesting for the European beer landscape as new morning rays from the rising sun shine down upon it.
© Beer Tinted Spectacles, 2016
Today, it’s perfectly reasonable to challenge the assumption that the future of British manufacturing is abroad. A conversation with a former colleague, now working in the pottery industry confirmed this.
It’s a subject very much alive and relevant when you live in a county that to a large degree defined the Industrial Revolution: Staffordshire. Stoke-on-Trent was and is synonymous with pottery of course. Through the trade network of the British Empire, it supplied the world. The Five Towns tend to get talked down and are seen as a victim of deindustrialisation nowadays. The truth though is that the pottery industry is not on life support; the pot banks still fire, they’re just a different shape from the ones of old. And beer came from Burton-on-Trent, still a town shaped by its malty legacy and still the home of one of Europe’s largest breweries, the majestic Burton Union sets at Marston’s and a small crop of craft brewers – but like Stoke, Burton too has seen decline and deindustrialisation as its rather scratty appearance is testament to. And this is to say nothing about the nails and screws and rivets and tools from the Black Country’s ‘workshop of the World’.
Why then is there hope – and why are skilled brand builders at the heart of this?
Added value skills – the base to work from. Whilst there is always of risk of losing skills during deindustrialisation, British manufacturers are getting their heads round relearning the added value skills. We may not need ale conners (*beer quality inspection officials) or saggar-makers bottom knockers (**the ceramic case used for protecting the fired pottery) any more, but there are skills that can’t just be outsourced and commoditised. Designers, brewers, painters…
And an onerous responsibility lies with these individuals. The responsibility to create the sustainable value that allows manufacturing to stay at home. Take Emma Bridgewater. You can argue, it’s just a range of pottery. Yet it is so much more. The brand value is in the consistent application of an appealing look, values you aspire to, a fit with your lifestyle. And where is the Emma Bridgewater range made? Stoke-on-Trent. And there’s an increasing range to choose from Denby, Portmeirion, Burleigh (located at Middleport, home of ‘The Great Pottery Throw Down’.)
The future is bright, the future is branded. In our “Millennial” infatuated marketing world, there’s a tendency to think that only products that eschew ‘marketing’ and tell an authentic story are the ones that will win. No. Brands that decide to use their truth in their positioning and communicate it single-mindedly have the better chance of winning. At the end of the day, the brand is where the value is. Take Camden Town Brewery, only 6 years old, but just sold to brewing giant Anheuser-Busch Inbev for £86m. “Brewery”? Well not really, for Camden Town doesn’t have a significant brewery at all – just some small mash tuns and fermenters under the railway arches, with the rest of their beer made in Belgium. Does that diminish it? Of course not, because it’s the brand that’s been bought. An instantly recognisable brand and tone of voice rooted in London (the larger brewery in London is to follow). A brand expandable here and highly exportable too.
Beyond the green and pleasant brand. British brands often struggle to use ‘Britishness’ domestically, yet it’s a real asset internationally and according to a recent piece in The Telegraph, there’s a premium of £2.1bn to be had by more clearly marketing a brand as ‘Made in Britain’. And it’s the brand that’s important: the quality conveyed by being manufactured in Britain is important, but it’s a point of parity, it’s expected. Today, we have so much more than just our ‘green and pleasant land’ perceptions of Britishness to leverage abroad. There’s more to how we’re perceived, brands like Mini have a contemporary edge that’s informed by our past yet fired up by our present, the edge from our music and creative industries – from our very culture in fact.
Category reinvention. Beer paints a stark picture of how British brewers failed to leverage their native beer styles to their advantage. It’s not that long ago – 15 years, no more – that British ale was a holed ship, sinking fast with the rats exiting at speed. It’s the reinterpretation of British beer styles – Pale Ale, India Pale Ale (IPA), Porter, Mild, Brown Ale, Stout – by American craft brewers that’s rekindled the brewing scene over here. IPA is now the second most widely consumed and recognised beer style after lager globally. The US craft brewers have shown that it’s possible to reinvent categories in a relatively short period of time – and with it, even towns, regions. But bravery and imagination are needed. The bravery to inspirationally re-purpose the past and the imagination to paint a view of what the future can be.
In this post-industrial world, where we increasingly define ourselves by what we buy and consume, it’s these brand-building skills that can fuel British manufacturing again.
Plug: originally posted by David Preston at The Crow Flies. It’s his ‘real job’. If you’re interested in beer and brands and how they interact get in touch. email@example.com; +44 (0) 1283 246260
Crikey – talk about the hissy fit in UK craft beer. Camden Town sell out to ABI, particularly following Meantime falling to SAB and Brewdog, most publically, have a meltdown, kick out Camden products and declare Perpetual Independence.
Let me tell you up front though. I put some money into Camden Town Brewery. This doesn’t make me anti-Brewdog nor pro Camden. In this case, it was an investment, nothing more. I believe now, as I believed when assessing whether to make an investment in them, that they were a sound place to put some hard-earned brass. Here is (was) my rationale:
Firstly, the owners were not the types to be in it for the long term; amongst them Sir John Hegarty. He’s an Advertising Man – he has helped companies build their brands to increase the value of their companies all his working life; he’s also built businesses himself and become a ‘Sir’ as a result. We’re not talking about fighting for a ‘cause’ here like Keith Grossman or Jack McAuliffe or Fritz Maytag were in the 1960s and 1970s USA. Back then, beer was on its knees; behemoth brewers with gargantuan breweries churning out identikit pale ‘lager’. There was something to fight for. London, 2010 – the year Camden Town Brewery was founded? Frankly the craft beer craze was maturing, or accelerating at least. You could well ask 5 years ago, just as much as you could now: do we really need another craft brewery?
Well yes, in a way – and here’s my second point. Camden Town was pushing for difference. It built itself around lagered beers, as well as some well brewed specialities – their Wit stands out in particular for me. Most other craft brewers – as much for practical and cost reasons than anything else – stick to ale and top fermentation. So do we really need another craft brewery? No, unless, like Wild Beer Company say, you do something that stands out. You can argue that Camden beers aren’t that different – but in a sea of craft brewed ale, there was little craft brewed lager in 2010; and even accounting for Meantime, still plenty of capacity to push into that space in London alone.
Thirdly, brand. Oh, I know what the purist will argue: the whole point that craft fights against is mass produced brands of non-descript lager: Carlsberg, Carling, Fosters, Stella, Peroni. But that’s an assumption based on a generalisation: that we all want something different. We don’t. Most of us, most of the time, want choices that are reliable and safe. That doesn’t – and I must stress this – doesn’t mean bland, everyday choices – but choices that we feel confident in; that we discovered, found ourselves, trust and that make us feel different. And it doesn’t mean niche. What the team at Camden did brilliantly is screw together an incredible brand: an amazing brand design and identity across the whole range that sings from the bar. A hellishly beautiful tone of voice that unites all their communication. Events, that bring you in to the Camden community and locality, yet which speak to us more widely. These guys didn’t set out to build a brewery, they set out to build a brand and they have done it incredibly.
And whilst I was in it for the long term – looking forward to my ‘Hells Raiser’ annual beer and trips to the AGM – equally, I fully expected Camden to sell; I just wasn’t expecting it to be in the first six months.
Throughout this, Brewdog’s behaviour has been fascinating – and two-faced. Immediately stopping-selling Camden products in their bars, because ‘they don’t sell anything by ABI’ (the small matter that the deal hasn’t gone through yet is a mere trifle) is one thing; but changing their origin story is another. Read their guff; it’s moving; it’s from the heart. But it’s a story. It’s economical with the truth. When Brewdog launched they were quite happy to trade with the mega-breweries they now despise to get their product to market. With Carlsberg. With Molson Coors. With Tesco. With Punch Taverns. I imagine that they still do. They were perfectly happy to buy into the hard work of these companies in building distribution channels and quite happy to grow their brands off the back of them. But that’s been deleted out of their official history now. But the real irony? Brewdog is a lesson in branding. Their beers are fine – nothing more. They’re no better or worse than other craft beers of their styles. The real difference is in the clothes that they wear; their attitude and use of the f-word like a teenager trying to impress his mates. If we truly drunk with our mouths and tastebuds and not our eyes we would all see Brewdog beers for what they are: great brand, average beer.
And there’s an interesting footnote here too: Camden went for about £85m; Meantime about £115m. Molson Coors back in 2010 bought Sharps for £20m… £20m for a larger brewery; in a beautiful location that gives the brand romance, with a leading brand in Doom Bar. Molson Coors must be having a little chortle to themselves now. But it also shows that the money is to be made in great brands – and more interestingly it seems, in lager.
© Beer Tinted Spectacles, 2016
There’s a lot going on in beer at the moment: there’s a daily news narrative on craft beers; stories about old names being revived; people setting up breweries in shipping containers. Proportionately, there’s less about the corporate side: the 90% if you will. But it deserves some attention, particularly at this time. Particularly with the biggest deal in brewing ever being slated. Particularly with one of the biggest corporate deals ever, in fact.
That craft beer narrative is immensely strong. It is more than a story though; it is creating reverberations not just within beer, but across alcoholic drinks, across non-alcoholic drinks and beyond. The craft beer ‘revolution’ is the poster boy of reactionary consumerism; the proof that you can change the food industry not just from within but from the outside too. It is the manifestation of a growing consumer desire for authenticity, transparency, of personal stories over fabricated myths, or small over large – right across the food and drink industry. There’s a clear argument to be made that ABI buying SAB is a consequence of the rise of craft beer. Certainly if you look at their outputs it is supported: over the last few years ABI have bought ‘breakthrough’ craft breweries: Widmer, Kona, Goose Island amongst others; elsewhere they’ve been copying the rules of craft with brands like ‘Shock Top’. SAB have been concentrating more on strengthening their own brands and now have an incredible portfolio, with brands like Pilsner Urquell, Peroni and Grolsch. They too have bought into craft with the acquisition of London’s Meantime Brewery.
Let’s push beyond the “eazey-news” headlines though. What’s really going on here is polarisation. Yes, craft is growing but it’s growing disproportionately quickly in mature beer markets. Large scale, low growth markets; markets where consumers have had mass marketing rammed down their gullets for decades. But ABI and SAB have their focus elsewhere: to the places and the brands that they can drive long-term shareholder value growth. They’re focus is on central and southern America, India, Asia and Africa. ABI are clear that they want to be the first ‘global brewer’ and this deal gives them an incredible beachhead to push for conquest. As a deal, it will make South America a fortress; it will revolutionise their position in Africa; it will strengthen their footprint in Asia, in particular China, where they will acquire the World’s biggest beer brand, Snow.
Watching this form the side lines, what’s impressive about ABI is their utter commitment to the goal. The newswires yesterday were humming with the revelation that they would be prepared to sell off SAB’s prime assets, notably Peroni and it’s Nastro Azzurro brand. Grolsch too, was mooted as a candidate for sale. They have form here: when InBev acquired Anheuser-Busch they sold off Tsingtao in China – one of the few successful Sino-Anglo Saxon partnerships and a real crown jewel. This tells us a number of things about ABI. It tells us that they have a clear focus for growth outside North America and Europe where Peroni is notably strong – Peroni is a great brand but in the short term the only thing it is likely to do is give them issues with regulators (plus, the US rights stay with MillerCoors should the deal go ahead). It tells us that they have a purpose that is unifying and guiding their decisions. It tells us that they are willing to make not just choices but sacrifices – big sacrifices – in order to achieve their vision. And it tells us too that they believe in their brands – brands that craft beer lovers are generally scathing of (Bud Light, Budweiser, Stella Artois as well as an army of local brands – and they will back them to the hilt in markets outside our (European / North American) frame of daily reference. Whether you’re comfortable about the size of this deal and the global market share it will leave ABI with, it will be churlish – no, foolish – to ignore the business and brand building lessons that they teach us, again and again.