Out of the Mouths of Financial Experts

Industry analysts more concerned with stock prices than flavour have not traditionally be the best of friends to craft brewers. (Remember the Wall Street Journal’s memorable mid-1990’s prediction that the whole microbrewery fad was over?) So when the likes of Goldman Sachs attends a brewing industry conference and walks away singing the praises of craft beer, it’s worthy of note.

After attending the 17th Annual Beer Insights Seminar, the financial mavens at Sachs reported five “key takeaways,” including the following at numero uno:

(1) The solid growth in the craft category was a main topic at the event with smaller craft brewers growing sales double-digits. Industry participants expect this trend to continue as the category is winning the “hearts and minds” of consumers by offering them innovation, choice, and high quality products at an affordable price.

But you already knew that…

 

That Would be the B in BRIC

By now, I expect most people have heard of the BRIC countries – Brazil, Russia, India and China – which are cited regularly as the emerging economies that will power the global financial world further into this century. And here’s proof positive that for at least one international brewer, one of those nations is proving to be most vital to its bottom line.

Judging by several reports in the international media, just-drinks.com and the Wall Street Journal included, the global brewing leviathan Anheuser-Busch InBev has strong reason to be grateful to one of their three home markets, Brazil. According to the WSJ story, “a strong performance in Brazil offset weakness in the U.S. and Europe” lead to an increase in third quarter profits for ABIB, prompting optimism also for the fourth quarter. And exactly how strong was that performance? How about a 12.5% growth in volumes?!

Now here’s what interests me about all this. I couldn’t care less how Brahma and Antarctica are doing in Brazil, where ABIB controls an astounding 70% of the market, but I am fascinated with how overall volumes are growing in South America in general and Brazil in particular. Because last summer I discovered that there is a relatively small but thriving craft brewing scene in Brazil and elsewhere in the southern American hemisphere, and my sources there tell me that demand for premium beer is growing as fast or faster than they can manage.

Think about it: A still-growing major brewery market feeding off tremendous economic growth, a small but enthusiastic cadre of craft brewers, and growing demand for beers “outside the norm.” Remind you of anything, like North America a few decades ago?

Okay, so the majors in the 1980’s weren’t posting double digit growth, but still, there are parallels. Exactly to what degree I intend to find out later this month when I travel to Sao Paulo and elsewhere to host a few beer dinners, culminating in an all-Brazil beer festival in Blumenau. I’ll let you all know in December.

Stuff You Need to Read

One of my rigid rules about blogging is not to repeat info detailed on other blogs unless I have some sort of insight to add. Which in both cases below, I don’t. Because you have likely read here or elsewhere about these topics, however, you should visit my colleagues and read what they have to say about…

1) That Westvleteren in the grocery store kerfuffle, courtesy of Stan “Brew Like a Monk” Hieronymus; and

2) The pseudo-science study about alcohol being allegedly more harmful than crack and heroin, thoroughly and entertainingly debunked by Mistah Jay Brooks.

Go. Read. I’ll have more here later on today.

In Trappist Beer News Today…

The seven Trappist monastery brewery in Belgium and the Netherlands are, as you might expect, pretty conservative institutions, and so it’s seldom that we have game-changing news from the Trappist brewing world. Except for this week, however, when arose not one, but two tidbits of surprising Trappist-related info.

First, courtesy of the Flemish news website HLN.be, interpreted for me by my Belgian friend Joris, comes word that the renown Trappist monastery brewery at Westvleteren is in negotiations to sell their beers through one of the largest supermarket chains in the country, Colruyt. According to the story, the deal has not yet been finalized but appears to concern gift packs of the monastery’s ales, presumably one each of the three brands the brothers make, including the much, much, MUCH lauded Westvleteren 12.

This deal, if consummated, will immediately vault what are now some of the rarest beers in Belgium to the status of some of the most ubiquitous. As for what it will do to the abbey’s near-legendary status among certain segments of “beer tickers,” well, we’ll wait and see on that front.

Meanwhile, over in Austria, the national news reports that the Trappist abbey Stift Engelszell is pursuing the creation of a brewery to raise money for the restoration of one of their buildings. (My thanks to Chuma on the Burgundian Babble Belt for the foreign language interpretation this time.) Evidently, the monks are waiting only on approval of their use of the Authentic Trappist designation.

A potential eight Trappist breweries in three, rather than two, countries, and the ready availability of one of the most prized Trappist ales, now that’s a big news week in monastery brewing circles!

Bad Beer Cocktails Redux

Oh dear, David Wondrich, what have you done, my friend? It’s bad enough when someone like Rachel Ray turns her ham-handed hand to beer cocktails and makes a farce of them, but when the same is done by one of our own!? Man, that hurts.

I refer, of course, to your April column in Esquire, which espouses five simple beer cocktails. ‘Nuff credit for including the Porteree, which is essentially a makeshift Baltic porter on ice, and for getting spicy ginger beer into the Shandy Gaff, in place of the all-too-often-substituted ginger ale or lemon soda. And throwing the Berliner Weiss into the mix was nice, even though it’s hardly “the kind of beer you can find at the local Kwik-E-Mart.”

But what’s up with your own creation, the Groundskeeper? Ardbeg and Bud? What a disservice you do to the fine spirit of Islay, dear sir. If you really can’t handle the peatiness of such a dram, may I suggest that you try instead a little water, or even soda? Please?

Women, errr, Wenches & Beer, a Continuing Study

Over at her own site, my new protégé/assistant/social media tutor, the inescapable Beer Wench, has declared war on a new U.K. brew – let’s not call it beer, okay? – being developed specifically for women by MolsonCoors and something called the Bittersweet Partnership. She don’t like it one bit, do the Wench.

To her great credit, Ashley, as the Wench is known in certain circles, has rattled a few cages with her post and prompted much discussion, including multiple responses from someone named Kristy McCready of the Bittersweet Partnership and one early reply from yours truly.

Reading through it all, I find most of the comments, although certainly well-intentioned, do tend towards the invective, and while I am certainly sympathetic to the sentiments expressed by many of the posters, including the Wench, I also feel that a certain balance is lacking. And so, rather than continue one with the ever-growing list of comments at her site, I thought I’d cross-link here and add a little moderation to the debate, to wit:

• I am no great fan of Coors Light or Molson Canadian, the two brands Ashley uses to illustrate her post, but neither should they be dismissed out-of-hand. They appeal to a big piece of the market, one which – contrary to what Ashley maintains – really does not care about what they put in their mouths. Or so dislikes the taste of conventional beer that they look for a brand with as little flavour as possible. (This has been shown true in beer market research, with most beer drinkers admitting to enjoying the social lubricant side of beer more than the actual taste.) Whether people dislike the taste of beer because of how companies like MolsonCoors have evolved it or companies like MolsonCoors have taken the taste of their brands in a given direction because that is what the consumer wants, well, that’s a chicken-and-egg argument we’ll never resolve.
• The new beer proposed by Bittersweet and MolsonCoors is a marketing endeavour seeking to address a demographic they currently see as being underserved, or not served at all. That’s what companies their size do. If their market data showed that the demographic they’re wanting to exploit desired an Imperial stout or IPA, you can bet that’s what they’d be brewing.
• That said, this experiment will most likely fail, as do most of the new brands the big brewers come out with. Occasionally one will stick around for a while and make a ton of cash for the company – hello, Bud Light Lime – but for the most part, new product launches spike and decline with astonishing speed. Speaking of which, anyone had a dry or ice beer lately?
• This is deviating from the topic a bit, but having just recently spent a day in the British brewing town of Burton-on-Trent, I can say that MolsonCoors deserve credit on two counts – the development and spring opening of the National Brewery Centre on the grounds of their brewery and the relaunch and promotion of the White Shield Brewery. The former is a move no doubt contrived at least in part to reverse the horrible press the company received when it closed the old Bass Brewing Museum/Coors Visitors Centre a couple of years back, but the latter comes because MolsonCoors sees a growing market for bottle-conditioned and cask-conditioned ale, just as they and Bittersweet see an opportunity in the young female market.
• And so, to close, this new beer launch is no more an attack on women than the reams and reels of beer advertising directed at males, portraying them as jocks and morons, is an attack on men. Which is to say, as insulting as it may be to those of us with senses of social responsibility, fairness and taste, both exist because they works.

Oh, and one final note, what’s the difference between drinking PBR, as I’ve seen so many craft beer industry types do, and drinking Canadian or Carling or Coors Light? Answer: nothing at all!

Is the Economy Really to Blame, MillerCoors?

One of the web info services I subscribe to is just-drinks.com, a British-based site that covers drinks industry news primarily from a trade perspective. It’s a terrific operation and one occasionally gifted with razor-sharp insight. Like when editor Olly Wehring made the following observation this morning:

The continuing slide in beer sales in the US will not stop until more people are back in work – that has been the message since the turn of the year from industry leaders Anheuser-Busch InBev and MillerCoors.

“Until the economy shows some money in the pocket of our key beer drinkers, we’ve got a challenge,” said MillerCoors CEO Leo Kiely in the group’s full-year results conference call (http://www.just-drinks.com/article.aspx?id=99789) last month.

And yet, small-time craft brewers continue to report figures that are apparently untouched by the general market malaise. According to figures announced last week, sales of craft beer in the country rose by 7% in volume and 10% in value in 2009 (http://www.just-drinks.com/article.aspx?id=100081). That compares pretty favourably to 2% volume sales falls for A-B InBev and MillerCoors over the same period.

Granted, craft beers are working off a much smaller base and only constitute 4% of US beer market volume. But, looking at the disparity between the sales figures for 2009, is it really only the economy that is holding back the heavyweights?

(Note: You need be a registered member to follow the first link and a full member for the second.)

Indeed, it is worth asking why sales in one segment are falling while in another, albeit small segment, things are positively booming. Could it be, oh, I don’t know, maybe…taste!?!?

Good News From De Dolle

Thanks to a translation of the news from the De Dolle website, courtesy of Glenn Castelein of Picobrouwerij Alvinne, I can now report that the fire at De Dolle wasn’t nearly as bad as it appeared in the news clip linked below. Here’s the gist of it all:

A hot water tank caught fire.

Part of the structure has burned out; there is also damage to the new roof. The bottling and brewing are intact as well as the tank room.

It will delay bottling of Oerbier and Arabier. De Dolle Bos Keun and Oerbier Reserva are, however, available for sale.

The “oerbar” has smoke damage so the bar has been moved to the former brewhouse. Tours will continue (miraculously?!).

Spread the word.

P.S.: The “seriously injured” is already at home and will come back Monday.

Consider the word spread, Kris.

De Dolle Shocker

There has been an explosion and fire at the much-respected De Dolle Brouwers in Belgium. Apparently a fuel tank blew up, injuring one employee but to what extent is unknown. From the look of this video, however, the damage appears extensive.

Our thoughts are with Dolle owner Kris Herteleer, his family, his employees and especially the injured worker and his or her family. More details will be posted here as they become available.

What I Learned About Beer in 2009, Part I

The thing I truly love about this business is that I never stop learning as I go, even if the new knowledge is sometimes oh so inconvenient. Like…

1. Almost Everything I Thought I Knew About Beer History Is Wrong: Thanks a lot Ron and Martyn and the rest of you anally retentive lot. Now I have to rewrite a good chunk of my teaching materials.
2. Beer Style Is Almost Meaningless: Yeah, I knew this before, but this year really brought it to the fore. The sooner we start tearing down the old definitions and rewriting them in an entirely new fashion, the better.
3. Some People Get Quite Irritated at the Merest Mention of Beer and Food Pairing: For reasons I still can’t quite fathom, even if…
4. Sometimes I Can Get Quite Irritated by People Who Harp on About How Wonderfully Beer X Goes With Dish Y: As Stan says in Rule #5, it is only beer.
5. Beer Is Not the New Wine: But wine might just be the new beer! (Think about it; more tomorrow.)