Category: The Business End

| Beer, IPA, Marketing

Bass Ale is back. I wish I were more delighted.

A new press release about the rejuvenation of Britain’s most famous ever beer brand causes more problems than it solves. 

Oh, you shouldn’t have! No, really. 

I don’t go out of my way to be pissed off by Anheuser-Busch Inbev, but they always seem to be able to trigger me when they announce the launch of a new beer. A few years ago I did a presentation on how and how not to do innovation, and when I gave bad examples of crap launches, it started to look like a vendetta against the world’s biggest brewery. It wasn’t meant to be. They just gave me more examples of all that was wrong about marketing hype, more consistently, than anyone else did.

And so we come to last week’s announcement that Bass Ale is returning to the UK, and a launch which is pretty much a perfect case study in corporate bullshit being sprayed over something the corporation in question neither knows nor cares about.

A bit of background: Bass found fame in the early 19th century as the quintessential IPA (when IPAs tended just to be called ‘pale ales’.) Brewed in Burton on Trent, it superseded Allsopp’s, the town’s original big hitter in India, and went on to become the first ever global beer brand. Its distinctive red triangle was famous all across the British Empire and beyond, and became the UK’s first ever registered trademark, narrowly missing out to German brand Krupp’s in being the world’s first, in any product category. Bass was so admired that less talented, less scrupulous brewers would simply steal the label and pass off their own beers as Bass, necessitating the move.

By the mid-twentieth century the allure of IPA had faded, but Bass was still one of the biggest and most famous beer brands in the UK when a period of rapid consolidation began among breweries. The second wave of this consolidation in the late 1990s saw Inbev acquire Bass – by then a massive conglomerate still based in Burton on Trent – only to be referred to the Monopolies and Mergers Commission. They ended up having to sell most of Bass (the company) to what is now Molson Coors, but confusingly held on to Bass (the beer) and proceeded to largely ignore it in the UK for the next twenty years. When approached and asked if they didn’t want it, A-B Inbev replied they would sell UK licensing rights (inaccurately reported as being for an outright sale) for £15 million – essentially a massive ‘fuck you’ to anyone who thought the world’s most legendary beer deserved better than the neglect they were showing it.

So now, instead of selling or ignoring it, they’re relaunching it. I should be happy about this. I don’t think I am. With reference to this article, here’s why.

1.The headline: AB-Inbev announce they are ‘bringing back’ Bass ale to the UK on-trade.

Bass Ale never left, despite appearances. It’s been brewed under licence by Marston’s for years. It’s simply been given no support by its owners. Where  you occasionally found it, it wasn’t bad – if it had been treated right. So the headline is factually inaccurate, and merely draws attention to the fact that if it ever felt like Bass had disappeared from the UK, this was entirely A-B Inbev’s fault.

2. The picture: ‘Imported Pale Ale’.

The same visual used above has accompanied every story about this launch in the UK drinks trade press, so it is obviously the image that was sent out by A-B Inbev themselves with the release (I’m assuming – for some reason they no longer send me their press releases directly. Can’t think why.) The reason they won’t sell Bass to anyone else is that even though they may not care about it in the UK, it makes a lot of money for them as an exported beer to markets such as the US and Japan. The image accompanying the story about relaunching Bass in the UK clearly shows a bottle of Bass saying that it is ‘imported’. So either:

(a) They’re planning on brewing UK Bass abroad, for some unfathomable reason, or

(b) They’re going to dishonestly sell beer brewed in Britain as a beer imported to the UK, for reasons I cannot possibly fathom, or

(c) They couldn’t even be bothered to find an image of what UK Bass will look like to accompany the announcement of its relaunch. If it’s launching in December, the new label – if there is a different one – will have been signed off months ago. But they couldn’t even be arsed to find a reference to it.

3. AB-Inbev is launching Bass is to ‘reinvigorate’ and ‘reignite’ the UK’s premium ale category. 

The sheer, Trumpish arrogance of it. The UK’s premium ale category is doing just fine, thanks. The astonishing growth of craft beer means that nearly one in four pints in the UK on-trade is now cask ale or craft beer in other formats. Even when you take craft out, ‘premium’ ale is doing way better than ‘standard’. BBPA data shows ‘premium ale’ is more or less steady in volume terms in the on-trade. But here comes A-B Inbev to the rescue of a category they haven’t cared about since they arrived in this country. The category doesn’t need ‘reigniting’! Its already on fire. Which is of course the real reason they’re now relaunching Bass after all this time, to exploit a healthy category rather than altruistically reigniting a struggling one. 

The press release also reminds us that A-B Inbev owns Stella Artois and Budweiser. Without disclosing the actual figures, the Marston’s On-Trade Beer Report shows that in the on-trade, Stella Artois is in single digit decline, Budweiser is in double-digit decline, and so is Stella 4%. Maybe ‘re-ignite’ your core brands first, eh guys?

4. ‘The beer will be made at A-B Inbev’s brewery in Samlesbury, Lancashire.’ 

Because in this market, who gives a toss about provenance and locality? Bass pale ale made Burton on Trent the most famous ale brewing town in the world. Across the planet today, pale ale brewers still ‘Burtonise’ their water to give it the unique mineral profile that made Bass so famous. Bass is being brewed right now under license in Burton, by Marston’s. But yeah, let’s relaunch this premium, iconic brand that’s indelibly associated with the world’s most famous pale ale brewing town by making it in a factory in another county. While we’re at it, let’s make Cornish pasties in Croatia, Roquefort cheese in Slough, and vintage champagne in Barnsley, . 

5. ‘Bass was the world’s first pale ale.’/’Bass is a pale ale pioneer’.

Oh fuck off. I’m sorry (I’m trying to rein in the bad language and anger and be more professional) but fuck the fuck off. Even the most cursory reading of the history of pale ale/IPA shows this simply isn’t true. Bass was not even Burton on Trent’s first pale ale, let alone the world’s. Records of ‘pale ale’ go back at least 160 years before Bass was even founded.  Allsopp’s were sending pale ale from Burton to India for almost a decade before Bass got in on the act.  There are only two possibilities here: either A-B Inbev haven’t even been bothered to read about the history of the brand they are relaunching, or they are knowingly lying. The problem in this press release – as in any other by this company – is their clear display that all this stuff is just marketing copy to them, to be used in the moment as they see fit, whether it’s accurate or not.

6. ‘We can’t wait to reintroduce shoppers to this historic brand.’

Bear in mind that this is a story specifically about reintroducing Bass to pubs. They could have said ‘pub-goers’, ‘people’, drinkers’, even that lazy catch-all ‘consumers’ – given that beer is actually consumed – but they choose to describe punters at the bar in a pub as ‘shoppers’. To my mind, this suggests that that’s all A-B Inbev see people as – things that shop. All that matters is that you buy the beer and hand over your money. But even if that’s true, it’s still a weird thing to say. No one else describes pub-goers as ‘shoppers’ – it just sounds wrong. It makes it sound like you don’t understand what a pub is. A halfway competent PR might have said, “You know what? This may be typical of the eerily robotic language we use internally, but maybe we should change to something that sounds more normal and human if we’re speaking publicly.”

They didn’t.

7. “5.1%” 

I don’t mind that Bass ale is 5.1% ABV. That sounds good. What I do mind is that this is the only detail they see fit to mention about the beer itself. We get stuff about its illustrious history (which A-B Inbev had nothing to do with.) We get stuff about its success as an export beer. But true to form for the world’s largest brewery which in fact cares nothing whatsoever about beer, there are no details at all about what ‘shoppers’ can expect if they drink Bass pale ale as opposed to just buying it. Is it brewed to a traditional Bass recipe? Given the focus is on bottles, will it be bottle-conditioned or not? What hops are in it? Will it differ at all from the existing cask version? Is it brewed with traditional British barley or has it been re-worked? FOR GOD’S SAKE WHAT DOES IT TASTE LIKE? These are the things that people who are truly interested in the premium ale category care about. They seem not to have occurred to the company that thinks it is going to ‘reinvigorate’ that category.

I hope the relaunched Bass ale is a phenomenal beer. I truly do. I’ve probably written more about this brand than any other beer. In the history of food and drink, it is comparable to champagne or cognac in its significance. If it tastes great, I will buy it (can’t imagine there’ll be samples in the post) and I will publicly say that it tastes great. But when the most interesting thing they can say in the press release is that a beer with the same name (I doubt it’s actually the same beer) went down with the Titanic, I only get a sinking feeling.

| Beer, Craft Beer, Journalism, Media bollocks, Social Trends, The Business End

The Premature Demise of Craft Beer: How Fake News Really Works

You may well have seen recent news stories on how craft beer is over, that it’s entered a period of decline. There’s just one problem: this is completely untrue. 

Remember the olden days, when these guys were reporting annual volume growth of 55%? How times have changed since, er, 22nd March this year.

 

“Have you noticed a decline in the demand for craft beer? Why do you think this is?”

I stared at the question, cognitive dissonance making me feel momentarily floaty. Was it a trick question? That ‘why do you think this is?’ implied the person asking the question was obviously expecting me to say yes. This was confirmed by a follow up question that asked me to comment on possible reasons why craft beer is “not as popular as it once was.”

A professional journalist working for Munchies – the foodie bit of Vice.com – had somehow become convinced that craft beer was over, and was asking me, via questions posed to the British Guild of Beer Writers, why I thought this had happened.

The reason I was confused is that it hasn’t happened – not yet. When I got these questions, I’d just delivered the keynote speech to the SIBA conference. To write it, I’d had to do a lot of digging. I’d discovered that craft beer volume increased by 23 per cent last year, and that analysts are predicting continued growth until at least 2021. I’d learned that business leaders in the food and beverage industry had named craft beer the most important trend across the whole of food and drink – comfortably ahead of low alcohol drinks, artisan coffee and craft spirits – for the fifth year running. I’d found that seven million British people – equivalent to 14% of the total adult population, or one in four people who drink any alcohol at all – claim to drink craft beer on a regular basis when they’re out in pubs, bars or restaurants. And yet here was a food and drink website believing that craft beer was in decline.

I decided to work out how this had happened.

Munchies was basing its story on a trade press article in the Morning Advertiser, which ran with the headline, ‘Craft Beer Fatigue is Setting In.’ No ambiguity there: no ‘claims so-and-so’, just a simple statement of fact. The leading trade magazine for the beer and pub industry was categorically stating that we’re tired of craft beer. And the MA wasn’t alone: in the same week, Beer & Brewer magazine ran with ‘Craft beer fatigue sends APAC [Asia and Pacific] consumer elsewhere‘, while Catering Today ran ‘Craft Beers Fail to Impress Consumers’.

Read these articles, and none of them actually say that craft beer has gone into decline. But a cursory skim of the headline and opening lines of copy, without going into the detail of the claims, could reasonably lead to the impression that craft beer is in decline.

The basis for all these stories is a press release from a market research company called GlobalData, which runs with the title ‘Craft beer fatigue is sending beer and cider consumers in APAC in search of new options.’ Again, that seems pretty definite. The first line of the press release reads, “Alcoholic beverage consumers tend to be novelty seeking, but constant bombardment with craft launches and unusual flavors has led consumers to feel that they are overloaded with choice.” But once again, while a cursory reading of the headline and first few lines of copy would cause any reasonable person to assume craft beer is now in decline, the body of the press release – which is published to promote a new report that costs $1450 to access – doesn’t actually contain any data that supports the idea that craft beer is in decline.

So what does it actually say?

Well, there are certainly some interesting points, even if none of them are exactly news to anyone involved in craft beer.

The main point – the one that seems to be offered in direct support of the headline claims – is that “words such as craft and artisanal are just an excuse to charge extra.” In the Asia-Pacific region – and in North America – 46% of survey respondents agreed with this statement. What none of the UK-based publications who reported the story will tell you is that in Europe, this figure falls to 38% – the lowest of any region in the world. Now, those are, as report author Thomas Vierhile told me in an email, “significant percentages”. But they are still minorities. And as anyone who has been involved in a craft beer discussion on social media or been below the line of a beer story in any national newspaper can attest, it’s hardly new – people have been grumbling about this for years. I first wrote about it for the Morning Advertiser three years ago. At the time, I said that it was a threat to the growth to craft beer, and I still believe it is. But it’s quite a leap to get from there to the claim that people are already walking away from craft beer because of it. This wasn’t true then, and I doubt it’s true now. The research data released by GlobalData’s does not show it to be true, but their press release claims it is.

The press release and summary for the report make two further solid claims. The report states that consumers are becoming more interested in experiences that simple products, citing that 57% of consumers (in Asia Pacific) prefer new experiences to new products. I totally agree, and have done since I worked in advertising twenty years ago, when we said this regularly to our clients. Craft brewers understand this perfectly which is why, instead of building their brands with flashy TV ads (which they couldn’t afford anyway) the most successful craft brewers over the last ten years have built their popularity with experiences and events such as meet the brewer evenings and tap takeovers, limited edition and rare bottle launches, and the growing number and range of beer festivals and other events. The experience economy is a driver of craft beer’s growth – not a threat to it.

Finally, the GlobalData report states that healthier lifestyles and a growing interest in lower alcohol alternatives is a major threat to craft beer. In the Asia Pacific region – it’s not clear why this is the geographic emphasis for a report that did its research globally, unless it could be that this is where the highest figures are – 51% of consumers say health claims influence their choice of alcoholic drinks (hang on – I thought alcoholic drinks weren’t allowed to make any health claims?) and 53% say they plan on cutting down on booze for health reasons. These figures fall to 38% and 37% if you look at the global data, but never mind that. I doubt anyone would disagree that this is a significant trend. That’s why, unless craft brewers start to develop lower strength session beers, explore concepts such as table beer and start to make some decent tasting low/no alcohol beers,  they could be heading for a fall. Oh no, hang on – my mistake – these have been some of the most dynamic trends driving craft beer’s development for several years now. Never mind.

So: a level of cynicism about the appropriation of the term ‘craft beer’ to charge higher prices, growing interest in experiences over products, and growing interest in healthier drinks – all of which the craft beer industry has known about and acted upon for years – are being added together by GlobalData to create the claim that drinkers feel ‘overloaded with choice’ and that this has led to a ‘devaluation of the “craft” concept’ which is now ‘sending beer and cider consumers… in search of new options’. This, in turn, has led drinks trade press journalists to state definitively that we are suffering craft beer fatigue, and this in turn has led at least one consumer food and drink publication to ask why craft beer is in decline before eventually running with the headline ‘Is Craft Beer Dying?

I hope my answers to the questions I was posed by Munchies helped get that title turned into a question rather than a statement. But still, this is how fake news happens. In researching this piece, Google took me to articles going back several years claiming that the craft boom is over, when hindsight shows it wasn’t. GlobalData was behind a similar flurry of these back in August last year,  but they’re not the only culprits. I chose the picture of BrewDog, above, because on the same day Munchies asked if craft beer was dying, the Scottish craft beer pioneer posted results showing 55% volume growth in 2017. Some commentators pointed out that this is lower than in previous years. As if 55% growth in a year is somehow a bit shit.

“We are not necessarily saying that craft beer has gone into decline,” admitted GlobalData’s Thomas Vierhile when I challenged the company over their claims. “But we are saying that the category is edging closer to thin ice as the craft concept becomes stretched, leading more consumers to express skepticism toward the concept.”

I think that’s absolutely fair enough.

He continued, “As popular as craft beer is, it does not appear to be moving the global beer consumption needle and it may not be the savior for the beer industry that some may perceive it to be,” citing the fact that while other categories of alcoholic drinks are growing, the total global beer market is shrinking. This means that either the growth craft beer is experiencing by recruiting new drinkers to beer is not enough to compensate for existing beer drinkers drinking less/switching to other drinks, or that craft is cannibalising mainstream beer, taking volume from the big boys within a declining market.

That’s certainly food for thought, and craft brewers should certainly take note of the report’s genuine findings stated above, if for some reason they weren’t already aware of them. But GlobalData’s press release – which I’m sure Thomas Vierhile didn’t write – categorically states that consumers are suffering craft beer fatigue and are going looking for something else instead. The data presented simply does not show this at all, says nothing about a ‘bombardment of new launches or unusual flavours’, and presents no evidence that consumers are walking away from the category. But these claims have been picked up and repeated, without question.

So why would a company that produces market research reports that cost $1450 a pop want to spread false claims about craft beer? Well I dunno, but who in the beer industry can afford to spend $1450 on a 57-page market report? And what would companies like that feel about craft beer? What would they want to happen to it? I’m just spitballing here, merely speculating to create specious claims. But that does seem to be par for the course these days.

| Beer, Beer Writing, Marketing

Under The Influencer

Exploring the tricky territory of free stuff and paid-for recommendations.

 

Last week, I was asked if I’d like to become an Amazon influencer. “The idea is pretty simple,” said the e-mail from the guy at Upfluence.com, “You’ll have your own page on Amazon.com where you can recommend your favorite products and earn money on qualifying purchases made through your page.”

This guy, Doug, approached me because he’d seen my Twitter profile and thought it made me a perfect candidate. I’m guessing he was looking simply at the number of followers I have rather than anything I actually tweet, because if he’d read my tweets he’d have realised pretty quickly that I live in the UK and therefore don’t have any dealings with the American Amazon.com. But that’s not the main reason I’ve ignored Doug’s emails.

Is its just me or is this a really odd concept? Is anyone reading this and thinking, “Ooh, I occasionally read Pete’s writing about beer or cider, I wonder what deodorant he’d recommend or what brand of toner refill cartridge he uses?”

I just find the whole idea of identifying as an ‘influencer’ really odd. I hope I am influential: I’ve spoken to several people who left their jobs and started working in beer or even opened their own breweries after reading something I’ve written. But it’s like being labelled a ‘consumer’ or ‘shopper’ – it’s something we do, not something we are.

I’m aware that some people make their money doing this, creating vlogs or Instagram feeds where they talk about the latest make up products they’ve been sent for free. It strikes me as a rather sad way of living, and I’m astonished that it works: if you know someone is recommending products purely because they are being paid to do so by the people selling them, why would you believe anything they say?

It reminds me of another disturbing trend in the beer world.

Each week, I get sent beer and cider for free by brewers or cider makers who are keen to hear what I think about it. I’m always grateful to receive it. If someone asks me for personal, private feedback, I always endeavour to give it, but sometimes fail if I’m too busy. I now review beers for Original Gravity magazine, and if I really like a beer, I’ll write it up for that. But I don’t do beer reviews on this blog: it’s not the aspect of beer writing that interests me personally, and there are a great many other people doing it perfectly well.

Increasingly, I’m getting e-mails from brewers – or more often, from junior PR execs working on their behalf – offering me free beer in exchange for a review. Sometimes, they offer free beer in exchange for a positive review. Each time I get an email like this, I write back thanking them, and explaining my approach as outlined above – I can’t promise a good review, or any review at all, but it might get one if it’s really good, so if that sounds OK, here’s my address. And every single time, I never hear from them again – no response to my email, and no beer in the mail.

I don’t do this job to try to get free beer, and I think there’s something dodgy about people for whom that’s a main motivation. But there’s also something dodgy about brewers or PRs who see this as a transactional relationship. I guess the reason they never write back is that they’d have to admit in writing that they’re only interested in sending beer out to people who promise to write something nice about it, and that really doesn’t look great on paper. If you know you’re only getting a positive review because that was the condition on which the beer was sent, how can you take any satisfaction from reading it? And how can anyone trust the person writing it?

Some of us draw the line in different places. I know some writers who refuse any free beer and will only review stuff they’ve paid for themselves. I respect that, even if I don’t go that far. I get a lot of free beer, and I only review a small fraction of it, so I know that the fact that I didn’t pay for it has not influenced my decision to review it. The few reviews I do write are always a mix of beer I’ve been sent and beer I’ve bought and paid for in a pub or bottle shop.

Next week, I’m off on a press trip to Catalonia. This is being fully paid for by the Catalan tourist board. I expect that at least some of us on the trip will receive some fairly sharp criticism on social media when we start tweeting about it, for accepting such hospitality. Again, I know writers who never accept such trips and respect them for it. I’m going because I’ve been keen to check out the explosion in Spanish craft beer for several years now and think there will be some genuinely interesting stories, but haven’t been able to afford to do it under my own steam. Will my reporting of the trip be influenced by the fact that I’m being given hospitality? I don’t believe so (beyond the fact that I’m actually there, of course.) But any story I write about it will carry a disclaimer explaining that it’s been paid for by someone else, so the reader can make up their own mind.

Communicators in any discipline who have a decent-sized following are in a privileged position. People put their trust in what we write. Especially when we write about our own personal experiences, there’s an unwritten contract with the reader that we will be open and honest. If I were to start recommending things purely because I was being paid or rewarded for making those recommendations, my integrity would be trashed. The trust of my readers would, quite rightly, evaporate.

We live at a time when big data is replacing creativity. The Upfluence guy only cared about the number of followers I have on Twitter, not the content or nature of my tweets, nor why those people have chosen to follow my account. The brewery’s PR firm isn’t really interested in what I think of the beer; they just want to submit a report boasting of how many pieces of coverage they achieved.

Call me old-fashioned, but I think true influence is harder earned, and much more precious than that.

| Anheuser-Busch, Beer, Craft Beer, Dark Star, Fuller's, The Business End

What Do You Do When Your Favourite Brewery Gets Sold To The Man?

Yesterday, it was announced that Dark Star Brewing had been bought by Fuller’s. In a much longer reader than I’d anticipated, here are some thoughts on how we might process such an event if it’s our favourite brewery being acquired…

                      You say ending, they say new beginning. Who’s right?

 

In every business, companies get bought and sold all the time. Brewing is, when all is said and done, a business first and foremost, in that if you don’t make more money by selling stuff than you spend on making it, you cannot survive.

But to many, craft brewing often feels like something more than just a business. It’s also a movement. Our favourite breweries often represent a set of principles and attitudes, a lifestyle, perhaps even a moral point of view, as well as making beers we enjoy drinking. This might entail a commitment to experimentation over convention, independence over conformity, living large rather than being cautious, or some other kind of anti-establishment or anti-corporate stance. Many craft beer fans are stuck in corporate jobs themselves, unable or unwilling to take their own risky leap into the unknown, and so they live vicariously through their favourite brewers, buying their beers to support principled decisions and actions they identify with and aspire to.

When a brewery gets bought, depending on the circumstances, it can feel as though people you believed in to live the dream on your behalf have turned out to be just like everyone else – they’ve disillusioned you and let you down. Alternatively, it may be that they stood heroically for as long and they could, but eventually had no choice to succumb, proving that a rebellious, anti-establishment stance is always ultimately doomed to failure.

These are not always rational or fair reactions, and they’re certainly not always justified, but given the high degree of emotional involvement around craft brewing, they’re entirely understandable.

Craft brewers have a long history of collaboration with each other, but rarely, if ever, do two craft breweries of comparable size decide to merge to further their mutual interest. Invariably, it’s a case of a larger, older, more conservative and established business buying a smaller, younger, more adventurous one. And that’s always going to set the alarm bells ringing. Instinctively, that alarm is rationalised through a fear that the beers will change: the accountants and marketing people will get involved. They’ll cut costs so the beer won’t be as good. They’ll dumb it down to appeal to a mass market. They’ll close the brewery down and brew it in a big factory instead, and it will never taste the same. Then you move on to the company itself: people will lose their jobs, and I care about these people (even if I’ve never met them.) But it’s the emotional bond, the identification with the brewery, that underlies such concerns.

But such takeovers are going to become increasingly common over the next few years. Craft beer as an overall segment looks set to grow indefinitely, even if the rate of that growth will slow down as the scene matures. But the number of outlets available in which to sell craft beer are arguably fixed – the number of pubs is declining. Supermarkets are steady. Specialist bottle shops are growing, as are alternative outlets such and festivals and special events. But these account for a tiny proportion of the total route to market. We’ve had such an incredible growth in the number of breweries in the UK – more than trebling since the millennium – that we have a massively increasing number of breweries chasing a limited number of fonts on the bar and spaces on the shelf. The most exciting – and, it has to be said, the most fashionable – breweries have no trouble securing their route to market. But many struggle to get space. Even when they get a place on the bar, the fickle consumer says, ‘Yes, I’ve had that one, what else have you got?’ and there’s always another one waiting to take their place.

Some brewers just can’t make a living. Others are getting by, but want to grow so they can make themselves and their families more financially comfortable, or hire more people so they can work fewer than eighty hours a week. Growth takes investment, and investment requires more growth to pay it off – if you can secure it in the first place in an uncertain financial climate when you’re one of several hundred breweries seeking it. For some, the answer is crowdfunding, but how many breweries are you going to invest in? Sometimes, selling simply makes most sense. And like I said, it happens in every single industry.

So when your favourite brewery goes, is it a catastrophe or is it salvation? Ultimately, only time will tell. I hate making predictions because they’re often wrong. But there are some questions you can ask that might provide clues – if you can discern the true answers beneath the spin, that is…

 

Did the brewery want to sell or not?

If it’s a hostile takeover, you can be sure there will be blood. But such takeovers usually only take place if both companies are already listed on the stock exchange. If a brewery is privately owned, no one can force them to sell. Someone can make them an offer they can’t refuse (commonly known as ‘a Camden’) but there are two actors in any sale, and too often we just look at is as the big guy snapping up the small guy.

 

What’s in it for the seller?

Obviously, for the individuals running the brewery, there’s personal wealth. If you’re doing a well-paid job to support yourself and a family, I’d think very carefully about accusing someone of ‘selling out’ on this score. Those people likely put their houses and all their savings on the line to build this thing, and worked longer hours, for less money, than you ever have.

But that’s rarely the only reason for selling – there can be benefits for the brewery too. That beer you love is getting access to a bigger sales force with a wider distribution. The biggest limit on a brewery’s growth is its fermentation capacity. New fermentation vessels are expensive. When Molson Coors bought Sharp’s, many predicted the Cornish brewery would be closed by its new owners. Instead, those new owners delivered lots of shiny new fermenters. OK, so bottled Doom Bar is now brewed in Burton, where there’s greater bottling capacity, but six years after the acquisition, Sharp’s cask ale is still brewing in Cornwall (like it or not.)

On the other hand, is there any dissent in the ranks? When Elysian was bought by A-B Inbev, while the official line was delight around ‘joining forces’, the head brewer quickly walked. Watching how long the key people stick around beyond any mandatory period is usually a good indicator of whether or not the sale was just for the money.

 

What’s in its for the buyer?

It does seem as though the strategies of the big guys are changing. Historically in the UK, most pubs were owned by breweries. When a brewery was taken over, invariably it was so the acquirer could get their hands on the pubs, and the brewery itself would invariably be closed down (take a bow, Greene King.) It’s also common practice traditionally in any market to buy an annoying competitor just to get rid of them, running down a business you couldn’t beat in the marketplace.

If a non-craft brewery buys a craft brewery that doesn’t own a big pub estate, they want it for the beers themselves and/or for the brand. They want it because they can’t brew and sell those beers within their existing brand portfolio. Now, they don’t lack the brewing expertise to do that – they probably have far better equipment and access to higher quality raw ingredients, and it’s easy (and much cheaper) for them to poach a brewer from a small craft brewery rather than buy the whole thing. What they’re paying for is credibility, an established audience, goodwill, and to a lesser extent, recipes (which they could replicate pretty closely if they had to.)

But the main reason bigger breweries buy smaller ones is that their systems and scale prevent them from acting in the same way as smaller, nimbler, craft brands. Processes designed to sell big commodity brands can’t keep pace with the craft market. So when they do buy these breweries, they tend to run them as separate entities that don’t conform to the same practices as the big brands. A-B Inbev’s many craft acquisitions sit in a separate craft division with its own CEO. Carlsberg is running London Fields as a separate company. Heineken knows it hasn’t a clue about cask ale, so when it acquired Scottish brewery Caledonian, they went big on improving health and safety but apart from that they left the brewhouse alone. These companies aren’t being altruistic about this – they know that if they tried to run it directly, they’d fuck up the thing they just paid a lot of money for.

If the purchased brewery’s brands start getting brewed in the big brewery, using big brewery logistics, there may be some cause for concern (or they may actually be improved on more modern kit.) But if the beer is still being made in the original brewery, by the same people under different management, there’s a chance that even your understandable suspicion that the recipe may be dumbed down is unfounded. I hate the rebranding of Goose Island IPA as ‘Goose’, but Bourbon County Stout, and the range of wood-aged beers produced by Goose Island, remain at least as outstanding as they ever were.

The real threat of these acquisitions is to the broader world of craft, and is a little more insidious and harder to detect. The brewer wants your favourite craft brand because they don’t have anything similar themselves. They don’t want to fuck it up. The brewhouse is probably safe. But then it gets into the hands of an aggressive sales force. The brand might be discounted to push it into wider distribution, which is great for a skint drinker but can take the sheen off the brand’s standing. Or, if it’s a very popular brand, it might be used as a bargaining chip: “Yeah, we’ll sell you the super-cool, sexy craft beer brand we just acquired, but only if you permanently take these other craft beer brands off the bar, and stock our shitty lager as well.” Your favourite beer is still safe, but the brand is tarnished by the new company it keeps, and by the fact that it’s no longer allowed to mix with its old mates. This may sound like paranoia, but it’s common practice. When I worked on Stella Artois, I saw first-hand how both aggressive discounting and aggressive package deals were used to massively inflate the growth of what had been a niche, cult brand with a good deal of credibility. A few years later, it became what we know it to be today.

 

 

What past form does the buyer have?

So is your favourite craft beer brand going to go down this route or not? Well,  there’s big and big. I’m always confused by the outcry when Duvel Moortgat buys a craft brewery, because Duvel Moortgat makes some of the best beers in the world. One Dark Star fan lamented yesterday on social media that his favourite brewery is now part of just another corporate behemoth. Fuller’s may be many things, but it’s a minnow in the world of corporate beer. Fuller’s has also demonstrated a commitment to the world and ethos of craft beer matched by few of its peers. Yes, Fuller’s also closed the Gales brewery and quietly retired some of its brands after buying that, but the circumstances were different than they are with Dark Star.

Ultimately, each case has to be judged individually.

 

As craft brewery acquisitions gather pace, there’s an increasing body of evidence to suggest that the demise in the quality and integrity of a once-loved brand is by no means guaranteed. But if your true objection to acquisitions is that they run against the ethos of whatever you define  ‘craft beer’ to be, that big corporates should have no place on the indie scene, then prepare for further disappointment: ultimately, everyone is for sale.

| Advertising, BrewDog, Craft Beer, Marketing, The Business End

Why I can’t get too excited about BrewDog’s big ‘sell out’

The bad boys of brewing recently sold a 22% stake of their company to an investment firm. So?

First, I have a terrible confession to make. Remember when John Lydon made those butter ads? I’m afraid I was partly responsible for that.

It wasn’t my idea or anything like that, but in my role as a planner I was responsible for putting together the research among butter buyers to find out who the best celebrity would be to front the campaign. It was one of the last freelance planning jobs I did before being able to switch to writing and beer consultancy full time.

We tested Lydon against a bunch of other people, and he came out top among Britain’s housewives because they felt he was so uncompromising, he’d never just do an ad for the money – he’d only do it if he genuinely believed what he was saying.

In other words, he was the best person to do what we were paying him to do, because he would never do what we were paying him to do, so if he did that, it’s OK.

Predictably Lydon got some stick for ‘selling out’. Because this is Johnny Rotten we’re talking about, he didn’t give a shit. Where he deigned to give a response, he said that punk was always about grabbing the filthy lucre from the big guys, and that’s exactly what he was doing here.

(If you ever tire of arguing about the definition of craft beer, head over to music and have a go at defining punk. As I witnessed last year at an event to mark punk’s 40th anniversary, it makes craft beer look simple.)

So I’ve witnessed a similar situation before to the one this week where BrewDog announced they were selling a chunk of the company to TSG Investment Partners in San Francisco – the same people who also help finance Vitaminwater, popchips and US beer brand Pabst – and were greeted with cries of ‘sell out!’

I can’t get too excited one way or the other about this.

Firstly, it’s hardly surprising, is it? BrewDog has been on an astonishing growth spurt for ten years. It already has 44 bars around the world and exports to 55 countries, and has double or even triple digit growth every year. The company has always been about rapid expansion, and this is a logical next step, which, if it has any lesson at all, is that, as Martyn Cornell has written, crowdfunding can only get you so far.

Second, BrewDog is maturing. Being ‘punk’ makes perfect sense when you arrive and overturn all the tables in the temple of beer, but they’re ten years old now, and that’s ancient in craft beer years. Martin Dickie and James Watt are in their mid-thirties with young families, and they employ, at the last count, about 450 people. A couple of years ago they did a re-brand that ever so subtly made them look and feel more grown up, less brash.

Before
After

BrewDog stopped being ‘punk’ when they grew into a stable, successful business that supports hundreds of people’s livelihoods instead of putting their foot through the mash tun and throwing the fermenters into a swimming pool before overdosing on End of History in a seedy hotel room. Behind the image and the increasingly infrequent brash stunts, they employ marketers, PR people, accountants, HR managers as well as brewers who all know what they’re doing, because you can’t function as a large business if you don’t. That doesn’t sound very punk, does it?

Thirdly, James Watt individually still owns more of the company than the investment firm he’s sold a chunk of his business to. If you insist on going by the US definition of craft beer, the sold stake is less than the threshold that disqualifies BrewDog from being craft.

I doubt anyone can be truly surprised by this move. I’d be amazed if anyone was genuinely upset by it. I think any outcry is merely the satisfaction of being able to say, ‘I told you so.’

As this spoof makes clear, the one significant part of this is that BrewDog will find it increasingly difficult to get away with grandstanding ‘4 real’ behaviour. I’ve sensed a move away from this over the last few years anyway.

The punk attitude has helped BrewDog build an amazing brand that pays a lot of people’s wages and genuinely does encourage more people to enjoy great beer than would otherwise have been the case.

Punk is dead. But the punks won.

Okay, now you can tell me how the Sex Pistols were never really punk anyway.

| Anheuser-Busch, Beer, Budweiser Budvar, Lager, Marketing

Budweiser: You Can’t Rush Plagiarism

Seems like America’s beer just can’t stop stealing things from southern Bohemia…

I was shocked late Friday night to see a really good beer ad from Budweiser. No, stop laughing. I’ve seen plenty of good ads from Bud before – stuff about frogs and lizards and whazaaap, but this was a good beer ad: it’s true, it’s centred on the product, and it says something good about the broader beer category – good lager takes time to mature.

Last I heard, Budweiser is matured for twenty days. That’s not as long as the classic lagers of the Czech Republic and Germany are matured, but it’s a hell of a lot longer than the 72 hours some leading brands allegedly spend in the brewery between mashing in and packaging. You may not like the (lack of) taste in Budweiser, but even now they do some things right, and deserve some credit for that. So I was pleased to see an ad that had made lager maturation look cool.

I said as much on Twitter and Facebook, and very quickly Simon George of Budweiser Budvar UK shot back that his new strategy is to focus on the Czech beer’s astonishingly long lagering time – five times longer than the American beer. Budweiser Budvar has been running this copy for about nine months, albeit without the huge TV ad budgets US Bud can afford:

The dispute between American Budweiser and Czech Budweiser Budvar is decades old. Bud founder Adolphus Busch told a court of law, on record, in 1894: “The idea was simple,” he testified, “to produce a beer of the same quality, colour and taste as the beer produced in Budejovice [the Czech name for the town known as Budweis in German] or Bohemia.” Even though that record exists, the company has since flatly denied that this it stole the name Budweiser from the town of Budweis, or even took any inspiration from there. (There’s a lot more on this dispute in my book Three Sheets to the Wind.)

Budvar spent a long time capitalising on its David V Goliath relationship with Budweiser and has recently decided to move on and focus on its ageing process instead, as part of a new strategy to remain relevant in a market where craft beer means drinkers are more interested in product specifics. But it seems Budweiser are still hung up on their namesake. Nine months after Czech Budvar focused their marketing campaign on how long it takes to make their beer, American Budweiser focused their marketing campaign on how long it takes to make their beer:

 

Having stolen the idea, they’ve now gone the whole hog and even stolen the same copy. The Budvar headline above? ‘You can’t rush perfection.’ Spot the difference in the Facebook link to the ad below.

Come on, Budweiser. You’ve already stolen your name from the town in which Budweiser Budvar is brewed. You’ve copied their advertising idea (albiet in a fine execution) and now even their copy, word for word. You employ some of the best and most expensive advertising agencies in the world (even if you do try to shaft them on costs.) Is this the best those agencies can do?