As the big get bigger, what do the small get?

The potential acquisition of South African Breweries (SAB) by their larger rival Anheuser Busch Inbev (ABI) has got many commentators gasping for breath: not at the audacity of it – that was reserved for when InBev (as was) took down Anheuser Busch – but rather the implications of the sheer scale. The scale, both of the deal (the fourth biggest corporate takeover) and the ultimate beast it will become (who we shall call ABSAB).

Interestingly, a stock response of commentators is ‘Don’t Panic Mr Mainwaring!’ The deal, as these deals do, will create opportunities for smaller operators. Drinkers, reviled by the deal and the inevitable consolidation / loss of brands in the shake-up, will vote with their wallets and support the little guy. New market niches will open up, too small for a goliath like ABSAB to spot, yet alone exploit. David will win the day! Fleet of footedness, quick decision-making will out!

And there will be some of this. Of course there will. But on balance, it’s a romantic notion and one that, in truth, isn’t borne out by precedent.

The first issue is growth. In most western, mature consumer markets beer is flat-lining or declining. Drinkers are drinking less. This pressure rolls through to licensees: what to stock; how much space they can give to beer and ultimately what brands end up on the bar. What licensees want is a range of guaranteed strong sellers and a ‘something interesting’ selection. ABSAB (Stella, Peroni, Budweiser) can fulfil one side, craft can fulfil the other (in fact, increasingly, ABSAB can fulfil this other side too). In less mature markets, there is underlying growth in beer consumption – in central and South America for example – and that growth is driven by brands. Big brands; famous brands, foreign brands; often American or European: brands that are a status symbol. ABI and SAB are getting together because growth in their core markets is slowing (or has stopped). They’re getting together because in emerging markets it’s about brands. The deal allows more consumers to access their brands in more markets, efficiently and cost effectively. And most consumers won’t react negatively. They won’t even think about it.

The second issue is craft. Craft beer, however you define it, is exciting, interesting and inspiring. It’s been brilliant for beer in many markets. But craft beer is, what? At best 10 – 15% of market volume. Most of us, most consumers, simply aren’t in the franchise or drink it infrequently. Most of us, in short, drink the sorts of beers that ABI and SAB make.   Now, clearly there is growth and clearly craft is slowly, steadily impacting consumer perceptions of the market. But if we assume that the basis of the ‘Innovation-Adoption Curve’ is correct, then most of us are fairly unadventurous. We’ll follow. And what will this mean in terms of brands? It won’t mean opportunities for spontaneous fermented wild beers hitting the mainstream. It will mean the likes of Blue Moon, Goose Island, Meantime, Lagunitas, Kona becoming more widely available, and if we’re lucky the larger – independent – craft brewers – Sierra Nevada, Brooklyn, Boston Beer will be available too. But the real opportunity if for the crafty beers under the umbrella of brewers like ABSAB. They offer the rationale of differentiated choice, with the convenience of a single and efficient point of supply.

What ABSAB appreciate is that currently global brewing is over-supplied. There are two responses. One, consolidate to ensure supply over time reduces and is done cost effectively. Two, build brands. This deal does both and will be successful.

For smaller brewers, given that they can’t consolidate to the same level, the real opportunity is the second option. To build brands. Take the UK beer market. There are now 1,700 breweries. The UK is the most breweried-per-head country in the world. Yet the beer market has been declining at about 4% a year since 2005. Per capita consumption of beer is falling, despite the noise of craft. There will be a fall out, even with the UK Government’s small brewer duty relief (perhaps because of it). Now is the time to build brands not supply product. Look at Camden Town, only three years old, but already widely available throughout the capital. Why? Good beers (with broad appeal); tremendous branding. Look at Beavertown. Good beers (with more challenge to them), impactful branding.

No, the opportunities presented by ABSAB getting together are twofold. For consumers, it’s in the truly niche operators, who make more complex, highly differentiated and challenging beer styles that they can supply effectively to the market. For small brewers who don’t, the real opportunity is to build your brand. And the real money is to be made when the likes of ABSAB buy them from you.

Staffordshire Mountain Time

Jens and I had just arrived in from a long haul schlep from Heathrow to Denver – seven hours time difference between Greenwich and my favourite time zone of all – ‘Mountain Time’.  Wouldn’t that be great? If all mountains shared the same time zone? From the Himalaya to the Andes, from the Urals to the Lakeland Fells, whenever you climb above 1500m you equalise with Denver, Colorado.  That way, we could drive up to the Lakes or the Highlands and drink beer simultaneously with the Great American Beer Festival, although perhaps in the dark…  On this occasion, sticking with current conventions, we had flown a quarter of the way around the world for this particular bout of jet lag, and we weren’t going to waste it on sleep.  The tactic of course: immediately assimilate yourself by going to a bar.

We headed for Blake Street. Just one block from Coors Field (with the most excellent, but sadly closed, Sandlot Bar / Brewery) we knew there were a couple of excellent bars.  Falling Rock Tap House earned the honours of slaking mutual first pint syndrome – I had a Fat Tire from New Belgium – an oldie but goodie which I perversely enjoy for its barnyard (read: cow muck) aroma, Jens something much darker (What? Than cow muck?) and inevitably featuring ancient grains or triple truck loads of hops, or something. I think Nelson Sauvin featured but my beer notebook wasn’t working at the time.   More beers and a light pre-order of kickers featuring, from memory, a magical set of buffalo wings and enough ‘nar-chos’ to fatten up this week’s Christmas Turkey (Note: not ‘Natch-os’ as I requested, creating much confusion.  Fortunately I didn’t request the ‘Toe-mar-to Solsa’ so we managed to navigate that tricky spot.  And heaven forbid if they are ever served with ‘Tune-a’ in the footure).  Anyhoo, the conversation became more animated and a heated debate opened up regarding the Cascade hop and its train – the other ‘C’ hops).  In the Blue Corner – the hop heads, who appreciated when the hops were treated delicately but generally, were seeking vast quantity. In the Biney Green corner, were the Purists, appreciative of the energy and momentum created by U.S. craft brewers but a little scathing of the indelicacy of hop quantity that many craft beers boasted. ’They all taste the same – it’s just too much hop, hop, hop’ was the refrain.  I was a broadly neutral voice in the debate between brewers, but at the time holding a candle to the Purists’ view.  Too many glasses of beer had been unfinishable; too many face-puckeringly astringent as opposed to lime-suckingly sharp and refreshing.

Yet those who have visited these pages before will know that I appreciate American inventiveness, particularly in the sphere of Pale Ales and IPAs fed to me on the lean diet that we enjoy on these shores. Of Goose Island and Sierra Nevada Pale Ale, enough has been said (quite justifiably) so I shall say no more today. But what a find the other day – one of those pleasant, out-of-the-blue surprises, that lifts your heart. And with it a touch of annoyance too – in the form of more beers in Sainsbury’s ‘Taste the Difference’ range. A Pale Ale (imaginatively entitled ‘American Pale Ale’) and also ‘Tap Room Brewing Company IPA’.    It seems from the blogosphere that I was not alone in being surprised by these beers’ appearance and it was only serendipity that allowed me to spot them in store. In the midst of the big Christmas shop, with the trolley losing its agility under the weight of festive groceries, I had carefully slotted some Goose Island and Brooklyn Lager into crafty niches between the bottles of Belvoir Presses (get me!) and the once-a-year parsnips when I decided to pause awhile over the UK range (actually to see if a friend’s beer had been listed yet). My eye was drawn to two slim 330ml bottles amongst the sea of 500ml pseudo-pints.  Naturally, despite the mechanically challenged trolley, I managed to engineer space for two bottles of each – the Pale Ale described as having ‘citrus aromas and malty flavours’ (no shit!) and an ABV of 5.3%; the IPA a more bullish yet still drinkable 6.3% and billed as ‘bold with spicy hop notes’.  Come on down!

IMG_2454 IMG_2455Well, my! What a find.  The Pale Ale in particular is a little haughty starlet.  Enticing you from the moment you lever (TWIST!!) off the crown.  Citrus notes – sure, but also a spiciness, which I assume comes from the hops, and a body, befitting a mid 5s beer that is both delectably drinkable yet supported with chiselled broad-shoulders. The mash contains wheat as well as barley and the roundedness comes through in the mouthfeel.  And my sort of beer – a come-hither-young-man aroma, multi-dimensionsal on the first sip and a lingering after taste that rolls around the taste buds gently tinkling a fading percussive melody on your tonsils with its Xylophone beaters, until the next sip is called for and your hand unfailingly answers.  The IPA in comparison was a bit of a let down – a good beer, but not a great one.  For a bold strength it flattered to deceive a little, drinking under its weight and creating a stewards’ enquiry from Barry McGuigan’s corner.  But not a bad beer, with a bright orange colour and a dense, compact head that laced beautifully. Alas, no timpani on the tonsils this time round.

And it revived memories of the old debate in that Denver bar.  U.S. craft beers – all the same? All hops and no knickers?  Well not on the evidence here – the tantalising tastes enjoyed in Staffordshire of all places have me pining to go back Stateside to update the argument.

© David Preston, Beer Tinted Spectacles, December 2012

“I’m dreaming, on a jet plane…”

In the spirit of Radio 5 Live presenters who like to make awkward and apparently unlinked segues between pieces, here’s mine. Rod Stewart: sensationally weeps after Celtic beat Barcelona in an otherwise dull football match¹, although he has now declared himself “silly” for giving in to such emotional soppiness. Which are the beers you would “Dream about on a jet plane” (or in my particular case, ‘Virgin Train’).  Here are my contenders:

Sierra Nevada Pale Ale, which, after naming as my “One Beer to rule them all” in a recent post, would be rather remiss of me to leave off the list.  It is naturally a beautifully brewed, versatile, flavoursome and aromatic Californian beer.  It is also the one I genuinely think most about on my Friday nights – the most hallowed of all beer occasions.

Windsor & Eton Conqueror:  in my book, not a session beer, yet the whole concept of dark beers that don’t taste roasted or charred is intriguing.  Conqueror manages this – a beguilingly dark beer, with a fromage frais coloured head and only a lightly roasted note which you pick up in the sides of your mouth. So a burly beer but one which still allows the hop leaf character to show through – too much  so in some of their other beers, but judged nicely here.

Menabrea Blonda: someone who I used to work with would choke on her cornflakes knowing I put this beer on my list.  Brewed in picturesque Biella in the Piedmont region in Italy, the beer itself is a fairly ordinary pale lager.  But it’s the associations that swing it for me – a great match for Friday night pizza, a bar in downtown Milan, the brewery nestled up a tight street in the foothills of the Alps.  Shallow I know, but I can live with it.

St Austell Tribute: something has happened down in Cornwall.  I used to live in Devon and my recollection of St Austell (company not place, although it could have described both) was ‘good pubs, dodgy beer’.  And it was all acronyms like ‘St Austell HSB’ or ‘Bodmin PMT’ that sort of thing.  Perhaps it was Sharps.  Doom Bar taking off and being bought for nigh on £20 mill must have woken up the Cornish to their terroir as there are some cracking beers emerging from west of the Tamar now.  Tribute makes the list – I can get it in my neck of the woods, and it’s a drinker, but Betty Stogs would be on it too if it was more available.

Schneider Weisse: this is the daddy of the Bavarian wheat beers for me.  Erdinger is a little too clovey, a little too texturally thin and a touch too ethanolly in taste for me. Schneider though, nails it.  In decent distribution now in the UK too, which is handy.

Jennings Cumberland Ale:  another associative beer for me – this one is the Fox and Hounds in Threlkeld, the slopes of Blencathra looming behind. Or the Old Dungeon Ghyll in Langdale. Supping slow pints after a day getting lost on Crinkle Crags (again).

Goose Island IPA – Chicago, 1999.  I had been in the US studying for my MBA international assignment and stayed over to meet my brother who was living in the US back then.  He flew to meet me in the windy city and we had 48 hours of tourist highlights.  These included a ‘Half Rack of Ribs’ (note: a half rack, between us) taken I think from a white rhino in the Anchor Chop House. And a deep dish pizza in Pizzeria Uno. An 8” being enough stodge for 3.  But hell, the beer was the revelation.  Goose Island beers in what we thought would be our crappy ‘Hospitality Inn’ bar, but turned out to be a drinkers’ honey pot. Glasses of IPA and Honkers: untouchable.

¹Football fans please forgive me. I did not watch this match nor any other.  Ultimately, it’s lots of grown adults getting all het up about kicking a pig’s bladder.

© David Preston, Beer Tinted Spectacles, November 2012

The Session #66: One Beer to Rule Them All

the session beer blogging fridayOne Beer to Rule them all.  Of course, for any lover of beer this is an impossible task, yet a beautiful, playful one at that.  So I saw the subject of this month’s Big Session blog and decided, no matter how difficult it proves to answer it.  To find the one beer to rule them all.

But why impossible?  For many drinkers, perhaps it is easy just to pick one beer and say, ‘that’s it, that’s the one. My beer’. Not for me.   It’s the seemingly infinite number of great beers available today, increasing seemingly exponentially that talks about the healthy future for beer.  There’s even new styles emerging, either inspired by the past or just the crazy playthings of brewers willing to mash concoctions into something drinkable.

What should go into consideration – what makes a Beer a pretender to the One Beer Crown?  How about balance?  That subtle interplay, that dance that a great beer has from the initial aroma, the dimensions of its taste, its appearance and its presentation.  I choose beers on each of these alone.   Then there’s moreishness.  I remember a great quote from a beer executive that I used to work for – “The great thing about our beer is, it’s drinkable”. I kid you not.  Actually, I know what he was driving at:  there is something great when you have a beer, and from the first sip it’s enticing you back to a second.  Often because that thing that attracted – the aroma, or the taste say – you want more of, or often because you can’t quite put your finger on what makes it great.  For me, this is a sign of a great beer, and narrows down my list.

And versatility.  I’ve lost count of the number of brewers who bang on about beer and food, and not really know why this is important other than a band seem to be on a wagon.  I like my beers to be versatile – fundamentally they must stand up on their own right. They must be intriguing, moreish, and damnably tasty. But I want it to go with my pizza on a Friday night and be able to stand up to Fajitas too. That’s a lot to ask – so it narrows the list further.

There are other variables. Patriotism is one.  I’m proud of great British beers. I am happy to admit there are beers in my repertoire that aren’t in my Top 10 best ever beers but that I want to drink because I want them to continue brewing what they do.  And memories. Budvar is a beer that I’ve drunk on some happy times in great places. So it’s up there for me….but that alone is not enough.

Ah, the tyranny of choice, and a spectrum of considerations from tangible on the one hand to seemingly irrational on the other. But I will get to it.  I’m not going to list my Top 10. I’m going for the jugular.

My One Beer combines complexity of taste with moreishness; multidimensional taste reward with just the right amount of alcoholic hit;  a bottle shape I love and a label design I wished I had designed myself. Its presentation invariably fires up my pleasure neurons with a thick, tight white head, and copper colour.  The story of the brewery – from start up to boundary pushing present day;  where it’s from and the appeal of the lifestyle.  In short, it’s got everything. It is Sierra Nevada Pale Ale.

This being the case, it is only fitting to finish in lamentable tribute to the inspiration for this month’s theme…

Three Beers for the Czech-kings under the sky.
Seven for the Belgian-Monks in their Abbeys of stone.
Nine for Bavarian Counts who would their beers lie.
One for Uncle Sam on his Hoppy throne
in the Land of Cali where the craft brewers vie.
One Beer to rule them all.
One Beer to find them,
One Beer to bring them all and in the hoppyness bine them
in the Land of Cali where the craft brewers vie*.

…and, of course, to reserve the right to change my mind next time round.

*JRRT: sorry.


© David Preston, Beer Tinted Spectacles 2012