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RBPMail 2.10, October 1996
Real Beer Page Mail (RBPMail) began as a modest update to craft-brew events on the WWW. It evolved into a news digest and sometimes editorial forum. We present its contents here much as they were emailed to subscribers. Often, links you will see are out of date, and businesses referred to may also be long gone.
In this issue:
A-B SHIFTS STRATEGY IN BUDVAR BID
Anhueser-Busch, the world's biggest brewer, decided to break off talks with the Czech government over the use of the Budweiser name in Europe. Budvar, more widely known by its German name, Budweiser, is made by a small, state-owned brewery in South Bohemia called Budejovicky Budvar. For decades this firm has been locked in a David and Goliath legal battle with the mighty A-B for the right to use the Budweiser name. Deals struck in 1911 and 1939 gave the Czechs the right to sell their beer as Budweiser in Europe. The battle resumed in the 1970s and 1980s as Anheuser-Busch took legal action in individual European countries and launched its beer in Europe as Bud. In the wake of the 1989 collapse of communism, the warring parties agreed on a legal moratorium and resumed trademark talks. That moratorium collapsed this week, with A-B effectively throwing down the legal gauntlet to the Czechs. "It's as if the Americans have said: 'let's start selling in Europe and let them take us to court'," said an industry insider in Prague. It may be the private sector which has to respond to the legal challenge Agriculture minister Josef Lux this week pledged to prepare the small brewer for privatisation by the year's end. He made it clear that the brewer would be sold to locals: "We think that Budvar does not necessarily need a foreign partner" He said that lack of good will at the American side and the relatively successful efforts of Czech lawyers to register the trademark in several countries contributed to the decision. "Budvar beer has been made since long before Columbus discovered America," says Budvar's managing director, Jiri Bocek. "We will not succumb to the pressure of this giant." (Source: Joe Cook, The Guardian, Saturday, September 28, The Guardian City Page; Pg. 20)
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A-B & BUDVAR IN VIETNAM
Anheuser-Busch continues to make plans to enter the Vietnamese market even though it has pulled out of talks with an Australian company that wants to help build a $145 million brewery in southern Vietnam. The St. Louis brewery said in May that it was negotiating with Power Pacific Ltd., based in Australia. An A-B spokesperson said that talks broke off in July because the two sides couldn't agree on financing. A spokesman for the Vietnamese company said Anheuser-Busch was dropping out because of its trademark problems in Vietnam with Budejovicky Budvar, a Czech brewery. A-B denies that the two issues are linked. Budvar registered Budweiser as its trademark in Vietnam about 1960. The St. Louis brewery said Budvar doesn't deserve the trademark protection because it didn't use the name within five years. (Source: Al Stamborski, St. Louis Post-Dispatch, Wednesday, September 25, Business; Pg. 8c)
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BIG BREWERS BENEFITING FROM MICRO PRICING
Beer prices, flat for 3 years have risen nearly 3% since January producing the most expensive six-packs seen this decade. Major brewers are forecasting both dollar and unit-sales increases this year. And, heartened by consumer willingness to ante up amid the growth of more expensive beers such as Samuel Adams and Pete's Wicked Ale, brewers expect to raise prices further, perhaps by 2%. A second round of price increases could widen too greatly the spread between major brands and discount ones, says Bob Jennings, beverage-merchandising manager for an 84-store chain. They typically stock discount beers such as Keystone at about $2 less per 12-pack than the major brands. "The big brewers need to be careful not to go up too much or they'll have consumers trading down," he says. The rise of microbrewed beers "has changed the way Americans look at beer, and prices," says Tom Pirko, president of Bevmark LLC, a beverage-consulting company. More mundane issues also are driving prices higher. Coors, based in Golden, Colo., says rising costs for aluminum, grains and hops are forcing the industry's hand. And with brewers consolidating, competitive pressures are easing. The flat market for beer stocks, meanwhile, is prompting brewers to make bolder, riskier pricing moves. Shareholder returns for brewing-company stocks have been eroding during the past five years. Seeking to reverse that, top executives appear more willing to sacrifice market share for higher sales. (Source: Michael J. Mccarthy and Kelly Barron, Orange County Register, September 20, Friday, Business; Pg. C01)
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MILLER CUTTING WORK FORCE
Miller Brewing Co., the #2 U.S. brewer, announced it would eliminate 500 salaried jobs, or about 18.5% of its salaried work force by Nov. 16. About 350 of the job cuts would be at its corporate offices in Milwaukee, where it employs about 1,000 people. Another 150 jobs will be cut at other Miller locations, including Eden, NC, Irwindale, CA.; Fort Worth, TX; Trenton, OH; and Albany, GA. Industry analyst Ben Steinman of Beer Marketer's Insights, an industry newsletter, said Miller's parent company, Philip Morris Cos. Inc., is "notoriously impatient with under performance." He said Miller profits and sales were down in the second quarter even as they were introducing the new Miller beer. "They're not having a good year," The brewer also said it would reduce its infrastructure and other costs to become more competitive. (Source: Greensboro News & Record, September 14, Saturday, Business, Pg. B6)
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***** WEB WATCH *****
BEER SITES TO SURF:
******** Real Beer Picks ********
The folks at Hop Union who have brought you the hops guide in print and in various excerpted forms online now have an official web page. Look and learn at:
http://www.HopUnion.com
Do You Love Beer?
Beer Education, Glossary of Terms, Beer Profiles, FAQs and more... what else would you expect from the folks who brought you the "Do you love beer?" campaign on television? Word from the ranks at Boston Beer Company says to expect more greatness in the works. So head to the Sam Adams site, bookmark it and prepare to return.
http://www.SamAdams.com
Taking Stock
The company that first introduced Internet stock offerings are at it again (see Stock Watch below) with a second offering and some new directions. You'll find their prospectus and information about online trading at:
http://www.WitBeer.com
AAA Metal Fabrication
Join us in welcoming AAA Metal Fabrication to the Real Beer Page. AAA has an established reputation for quality brew vessels, equipment and service with some of the country's major microbrewers. Among their customers are BridgePort Brewing, Full Sail, McMenamins, Portland Brewing, Pyramid Ales and Rogue Ales. For more details, check them out at:
http://www.gorge.net/business/aaametal
New Locale
A correction from last month's notice about the Northampton Brewery which points out the perils of virtual brew touring: we said that the brewery was in New Hampshire, as are sister breweries, Portsmouth Brewery and Smuttynose. Our readers and atlas CD-ROMs tell us that the brewery is indeed in Massachusetts. Please visit them at their new location :-) at:
http://www.RealBeer.com/nohobrewery/
THE AMERICAN DEAN OF BEER COMES ONLINE
In 1973, nearly a decade and a half before the craft-brew movement gained significant momentum, Will Anderson published his first book on beer, appropriately titled, "The Beer Book." In this work, he coined the phrase, "Brewiana," and inspired many a beer collector. Will has provided Real Beer, Inc. with rights to each of his out-of-print books, which we will be making available on the Real Beer Page to inspire a new generation of collectors and enthusiasts. In the meantime, we've excerpted Will's most recent work, "The Great State of Maine Beer Book" which is chock-full of beer history, brewiana and context for brewing in Maine, and the U.S. in general. If you like what you see online, the full, 180-page, beautifully printed, coffee-table version is available now for gift or personal use via snail mail only by sending a check for $22.95 and shipping to Anderson & Son's Publishing Co., 7 Bramhall Terrace, Portland, ME 04103. Support this self-published effort and let him know you heard about it on the Web.
http://www.RealBeer.com/rbp/authors/anderson
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SURVEY SNIPPETS
The data from our 1996 Real Beer Page Viewer survey is coming along great: we've sliced the list up by thirds, halves and quarters while yielding uniform results at each stage, which tells us that we've got a great sample and stats. 3,648 respondents told us their thoughts on beer and related topics, which we will share with you over the next couple of months. Here are a few snippets we learned:
Web Usage:
Daily - 74.5% Weekly - 23.5%
Real Beer Page Usage:
Monthly - 90% Weekly - 35.5%
Hot Sauce
Like It Hot - 81% Not - 19%
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******** Brewed Fresh For You! ********
The Real Beer Page announces a diverse group of brew websites to check out:
John I. Hass http://www.John-I-Haas.com
Hop Union http://www.HopUnion.com
Faultline Brewing Co. http://www.FLBC.com
Beer Is My Life http://www.beerismylife.com
Danse Skjold Brewing Co. http://danskol.com
European Brew Adventures http://realbeer.com/eba/
Five Star Products and Services http://www.fivestaraf.com/
Gritty McDuff's Brewpubs http://www.Grittys.com/
The Hart Breweries http://www.HartCanada.com/
Malt of the Earth http://www.MaltBev.com
Real Beer Feedback http://realbeer.com/rbp/feedback.php/
The Village Brewery http://www.realbeer.com/village/
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PABST GOES ON CORPORATE WELFARE
A federal judge cleared the way for Pabst Brewing Co. to cut off medical and death benefits to more than 800 retirees over the protests of the brewer's union workers. U.S. District Court Judge Myron Gordon refused to issue a permanent injunction and lifted a temporary restraining order he put in place last month against Pabst, which said it would save $ 3.5 million a year by terminating retiree benefits. The case has attracted the attention of Labor Secretary Robert Reich, who suggested earlier this year that Pabst was acting illegally in cutting off benefits. Pabst is the nation's sixth-largest brewer, but it has complained of losing money for more than a year, as microbreweries and the market leader, St. Louis-based Anheuser- Busch Cos. Inc., have dominated the market. (Source: James Causey, Milwaukee Journal Sentinel)
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COORS FAMILY TIES
The July/August issue of EXRA!, The magazine of FAIR (Fairness and Accuracy In Reporting - http://www.fair.org/fair/), a media watch group, reports the following of Joseph Coors: The beer tycoon is billed as a co-founder of Heritage [Foundation] for footing $250,000 of the foundation's first-year budget. Coors and his like-minded family members have aided such rightist causes as apartheid South Africa, the Mozambican terrorists RENAMO and the Nicaraguan contras (Coors Connection, Russ Bellant, 1991). (Source: Normon Solomon, EXTRA!, July/August, The Media's Favorite Think Tank, How the Heritage Foundation Turns Money into Media, pg. 11)
MOLSON STOCK FALLS FLAT
Molson Cos. Ltd. stock (MOLa/TSE) is flat, despite strategies to strengthen its core business. The Toronto-based holding company, which this year sold its international chemical business Diversey Corp. for more than $1 billion, intends to seek acquisitions in fast- growing markets such as China and South America and simultaneously expand market share in Canada. Molson shares have traded low since the company announced it will re-invest the money from the Diversey sale rather than pay it back to shareholders in the form of a share buyback or special dividend. Nesbitt Burns Inc. analyst Ian de Verteuil put a "sell" on the stock this summer when Molson confirmed its reinvestment strategy. In a report, he said investors would be better off getting out rather than wait in vain for management to realize their expansion strategy is unworkable. As a further weight on the stock, one of Molson's institutional investors has put three million shares on the block. Molson's checkered history when it comes to investments --which include Diversey and poorly performing retailing operations -- is a big factor. (Source: Paul Brent, The Financial Post, September 24, Tuesday, Section 2; Investing; Sector Watch; Pg. 36)
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***** STOCK WATCH *****
Our coverage of publicly traded stocks is available. Direct to Public offerings seem to be a growing occurrence on the Web. Here is an overview of Web-based prospecti:
SPRING STREET BREWING COMPANY
The company that caught international media attention by being the first company of any kind to offer shares directly on the Internet, announced a second offering on October 3, 1996. Spring Street markets and contract brews the Wit brand of Belgian-style beers, plans to open brewpubs in Atlanta and New England, and owns about 10% of the outstanding capital stock of Wit Capital Corporation, a newly formed investment bank and brokerage firm dedicated to arranging the public offering of securities through the Internet. The company will sell up to 1.2 million shares of common stock to raise upwards of $3.3 million to finance enhanced sales and marketing activities. Shares are being offered directly by the microbrewery at $2.75 per share with a minimum investment of $550.00 (200 shares). The offering has been qualified by the Securities and Exchange Commission under the Blue Sky laws in the following areas: California, Colorado, Connecticut, the District of Columbia, Georgia, Illinois, Kansas, Kentucky, Missouri, New York, Ohio, Oregon, Pennsylvania, Virginia, Washington, West Virginia and Wisconsin. The circular is available by calling (800) 948-3432 or directly on the Web at:
http://www.witbeer.com
LOVECRAFT DRAFT CIDER COMPANY, LTD.
Lovecraft, Creator of Rhode Island's Original Draft Cider with a logo that's bound to please followers of Lovecraft (the writer) has announced a public offering of 1,100,000 shares of common stock at $1.80 per share with a 200 shares ($360) minimum purchase. The offering is available in CO, CT, MA, NJ, NY and RI, with other states pending. Lovecraft is the first draft cider company in the U.S. to go public and intends to use proceeds to fund, operate and market a modern cider facility. For more information, contact the company at 1-888-LC-CIDER. Fax: (401) 621-8885. You may also contact Maury A. Ryan directly at (401) 272-0980. Or visit their Web site to download the prospectus directly at:
http://www.Lovecraft.com/
BRASS RING BREWING COMPANY Brass Ring announced 200,000 shares common stock offered at $5.00 per share ($1,000.00 Minimum Purchase). The company is raising money through this offering to fund the construction of it's initial Brew Pub location in downtown Redwood City California. The Company intends to raise a minimum of $650,000 up to a maximum of $1,000,000. Proceeds from this offering will be used to purchase all the necessary brewery and kitchen equipment, and to modify the existing site. Investors in Brass Ring Brewing Company have the rare opportunity to acquire significant interest in the venture due to fact that the Company is selling a 45% share of it's equity through this offering. Contact: 415.456.HOPS (4677) Fax: 415.459.0816. Email: [email protected]. The proposed location and floor plan as well as offering information is available on their Web site at:
http://www.realbeer.com/brassring/
BLACK BEAR BREWING COMPANY
Black Bear has filed a registration statement with the State of Georgia to publicly offer shares at $5.00 per share, with a 100 share minimum/$500.00 minimum investment. Upon completion of the offering, the Company will seek to have its Shares listed for trading on the Pacific Stock Exchange, which has already confirmed the eligibility of the Shares, pending their receipt of the required documents. The Company believes that its Shares will also be listed for trading on the OTC Bulletin Board Network. Black Bear will encourage its shareholders to actively participate in the brewery through a number of special privileges including: admission to special shareholder events and tastings at the brewery; priority in purchasing seasonal, limited production brews; opportunities to assist with community events and in its marketing; discounts on merchandise (Caps, t-shirts, golf shirts etc...); a shareholder t-shirt; and subscription to the Black Bear Brewery Newsletter. Contact: 800- 910-2787 for an investor subscription package. For more information, visit their Web site at:
http://www.realbeer.com/blackbear/
Additional Companies Communicating with Shareholders on the Web A growing number of companies are using their Web presence to communicate with their shareholders and investors. Some about the progress of their project and investment. Others about their share price and through quarterly reports.
Flying Fish Brewing Company http://www.FlyingFish.com
Great Providence Brewing http://www.americanbrewing.com
Mendocino Brewing Co. http://www.MendoBrew.com
Nor'Wester http://www.norwester.com
Oldenberg Brewing Co. http://realbeer.com/oldenberg
Portland Brewing Co. http://www.PortlandBrew.com
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PYRAMID BREWERY TARGETED WITH CLASS ACTION SUIT
A law firm in San Diego, CA has filed an investor class action suit against Seattle-based Pyramid Brewery charging fraudulent information on their filing documents prior to going public on December 13, 1995. "Pyramid's IPO was very bullish and one- sided...It was a very polished and optimistic picture of the company," said plaintiff lawyer, James Krause. The brewery has determined that the suit is groundless and plans a vigorous defense. " We think the risk disclosure section of the prospectus adequately and accurately describes the multitude of business factors that the craft beer industry has to contend with, including increased competition and seasonal sales variances, " said lead defense attorney, Peter Erlichman. The plaintiff purchased 100 shares of Pyramid. Donald Burdic, Pyramid financial chief said, "I purchased a significantly greater number of IPO shares than are represented in this purported class-action complaint, and it seems ridiculous to believe that I would have misled myself." (Sources: The Ericskson Report, July '96, pg. 1; Larry Bausch, The Celebrator Beer News, August/September, North by Northwest Column, pg. 10)
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MILLER TEAMS WITH STRONGEST BREWER IN PHILIPPINES
San Miguel has agreed to manufacture and distribute Miller beer products in the Philippines. Miller products have been marketed by a San Miguel distributorship called Beer World (Hong Kong) Ltd. in the Crown Colony since early this year. Richard Strup, senior vice president of Miller Brewing International, said the Milwaukee-based company's decision to enter the fifth-largest market in Asia was anchored on San Miguel's dominance of the local industry. San Miguel Corp. has cornered about 81% of the domestic beer market; exports its beer products to more than 20 countries; maintains 11 overseas breweries; generates about 4% of the Philippines' GNP and about 6% of the government's total tax revenues. Miller is the second largest brewer in the United States, with existing markets in more than 100 countries.
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POLISH MARKET HEATS UP IN RAINY SUMMER
Most seasonal consumer products have suffered through Poland's chilly and rain-soaked summer. Non-alcoholic beverage sales in Warsaw are down as much as 90% from last year's steamy July. But the truth in the Polish saying that such weather is "pogoda barowa" (pub weather), combined with aggressive marketing efforts and increased production capacity, have helped breweries rack up record sales. Total beer sales in the second quarter of 1996 jumped by 21.7% year on year. Poland's number three brewery, Zywiec--25%- owned by Heineken (Netherlands)--reported a sales increase of 17.7% over last year. Okocim-- 31.8%-owned by Carlsberg (Denmark)--increased sales by 37% this summer. A battle of Western heavyweights is emerging--the brewing sector is top heavy, with 56.7% of market share in the hands of five breweries. For those top breweries, the future looks bright. Polish beer consumption is still far below that of comparable West European countries, but growing rapidly. Average consumption in Poland is an annual 30 litres per head-- about one-fifth that of Germany and the Czech Republic (the world's top beer lovers), and roughly equal to that of Greece and France. In most of Western Europe, these levels are stagnant, or in slight decline. Polish annual consumption, however, is expected to increase by over 10% per year, and may reach more than 50 litres per head by the end of the decade. (Source: The Economist Intelligence Unit Ltd, September 3)
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JVNW AWARDED $10,000,000 ORDER
American Craft Brewing International Limited has placed an initial $10,000,000 order for new micro-brewing equipment with JV Northwest, Inc. of Wilsonville, Oregon. The order will supply equipment to enable AMBREW International to open up to 20 micro- breweries internationally over the next 25 months. The new micro- breweries will be located in targeted cities abroad such as Zurich, Dublin, Budapest, Warsaw, Singapore, Shanghai, and Tecate (Mexico); and will operate as Company-owned subsidiaries or as majority- owned or otherwise controlled joint ventures with strategic local partners. As mentioned in last month's RBPMail, AmBrew International owns and operates the South China Brewery, the first in a series of international breweries based on the concept of American-style micro-breweries. The Company believes that American-style micro-brewing has growth potential in other key world markets and that the South China Brewery is a model that can be adapted to other markets.
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SHIPYARD BUILDING WORLD'S FIRST BREWERY IN AIRPORT
Shipyard Brewing Company, Greater Orlando Aviation Authority and Host Marriott announced approval for the world's first microbrewery to be built in an airport. The Shipyard Brewing Company will construct the 20-barrel microbrewery in the central corridor between the A and B sides of the Terminal. In addition to hand brewing beer at the site, Shipyard will sell brewery-related wearables and merchandise and offer tours of the facility. The Shipyard beer produced at the Orlando microbrewery will be available to the two Host Marriott Services-operated Shipyard BrewPubs, and to off-site Florida distributors for sales throughout the state. Last year, Orlando International Airport served more than 22.5 million passengers. To follow the progress of the project and learn more, go to:
http://www.Shipyard.com/
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BIG NAMES IN BELGIAN BEER BACK NEW BREWERY
Wendy Littlefield and Don Fineberg, co-owners of Vanberg & Dewulf, U.S. Belgian Beer Importers, have entered into a joint venture with the principals of Duvel and Affligem, two of Belgium's leading independent brewers to create a new brewery in the U.S. The Cooperstown, NY farmstead microbrewery, nestled within a hillside renowned for hop production in the last century, will produce all bottle-conditioned beers in the traditional Belgian manner. The brewer, a Belgian native and graduate of Louvain's Institute of Brewing Studies, will arrive at the brewery in the winter with the first beers expected to be ready by late spring, 1997. The company said in a press release: "The first brewer in America (aboard the Mayflower) was a Belgian - recruited by the British to ensure a vital supply of good beer. Now, 387 years later, Belgian brewing prowess is coming back."
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******* GABF ROUND-UP*******
A REAL BEER STORY
Two years ago this brewer rode out to the GABF 400 miles on his motorcycle. He's paid out of his own pocket to enter his beers into competitions, because the owners of the brewpub don't value or understand the brewing aspect of the business. When Rob Moline of Manhattan, Kansas' Little Apple Brewing Company called back to the restaurant to inform them that he won a Gold Medal for best barleywine in the U.S., he was told, "That's Groovey." Well, we love this guy, his beer and his triumph against-all-odds attitude, so we've created a little page for you to get to know him a little better. Help us congratulate Rob Moline by surfing to:
http://realbeer.com/travels/lilapple
ANOTHER REAL BEER STORY
A-B set up a beautifully painted display across the street from GABF venue, Currigan Hall, using two Semi's that housed "Beer School." The road show apparently had been in San Francisco the week before. The school was intended to educate consumers about the brew process and open the conversation to A-B's new line of specialty products. The metaphors of preaching to the choir and grinding hamburgers before vegetarians may both explain some of the cold response A-B got from the crowds attending the GABF. As thousands of attendees waited for the doors to open for the first night of tastings, an A-B pitchperson tried to recruit people to come over to their school. The crowd booed loudly. Pointing a guy out in the crowd, the pitchperson persisted, inviting him over. "I wouldn't drink your beer if you paid me," he said, which met cheers from the crowd. A-B may have to attend some schooling about the craft-beer audience.
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FIND WINNERS ON THE REAL BEER PAGE
You may not have been able to attend this year's GABF, but you can meet some of the brewers and breweries that won. Congratulations to the1996 medal winners who are online with The Real Beer Page:
Twenty Tank Brewery
.............Dry Stouts; Heart of Darkness XXX Stout; Bronze Medal
Twenty Tank Brewery
.............Specialty Stouts; Kinnikinick Old Scout Stout; Gold Medal
Blackstone Restaurant And Brewery
.............Brown Porter; St. Charles Porter; Bronze Medal
Celis Brewery Inc.
.............Belgian-Style Ales; Celis Grand Cru; Bronze Medal
Brew Moon Restaurant and Microbrewery
.............Munchener Helles and Export; Munich Gold; Gold Medal
Redwood Coast Brewing Company
.............American Wheat Ale or Lager; New World Wheat; Silver Medal
Rogue Ales
.............Smoke-Flavored Beers; Smoke; Gold Medal
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LITERARY LUMINARIES "Oh PEN A BEER"
On September 6 in Denver, CO, Kurt Vonnegut performed what is believed to be the first-ever literary beer bottle reading. The bottle was one of a case of 12, 22-ounce bottles of Denver Public Libation commissioned by Wynkoop's John Hickenlooper and Barbara Macfalane. The beer celebrates the city's year-old Main Library and features short stories which begin on the front of the label and end on the back. Writers included Vonnegut, Dave Barry, Ridley Pearson, Bruce Drucker, T.A. Barron, Baxter Black, Harry N. MacLean, Patricia Calhoun, Gregg Moody, Jack Kisling and H.R. Moehringer. Vonnegut's story, "Merlin," ponders what might have happened if Galahad had access to a submachine gun. Dave Barry's contribution revised the Goldilock's bowls of porridge to beers. In his short, Barry describes "Mama Bear's beer, which was manufactured by a giant company and heavily merchandised via an expensive television advertising campaign featuring dogs and health young men and women with the intelligence of garden implements." (Source: Rocky Mountain BREWS, AJ Feldmann, pg. 18)
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IF THEY GIVE YOU LEMONS, MAKE..?
"Alcopops" are new, lemonade-flavored drinks containing about 4-1/2% alcohol. Big in Australia, Britain, and Hong Kong, "alcopops" have begun pouring into the U.S. The top two sellers, Bass PLC's Hooper's Hooch and Two Dogs Lemon Brew, an Australian brand, are rolling out nationally. The first alcopop was concocted three years ago by an Australian brewer named Duncan MacGillivray trying to find a use for a truckload of lemons. Vaguely similar to the beer- and-lemonade mixture sold in British pubs as shandy, MacGillivray's brew, Two Dogs, is now Britain's second-biggest seller. First is Hooper's Hooch, which Bass claims will ring up sales of $300 million this year. If alcopop sells at the same rate in the U.S. as in Britain, it could soon capture 4% of the $50 billion beer market. They'll compete against a handful of homegrown versions from smaller brewers. Both Miller Brewing Co., which tested a version this spring, and Anheuser-Busch Cos. have names picked out for their own brands. One-Eyed Jack, the first brand to go national in the U.S,, was developed by Better Beverage Importers and is sold in supermarkets and TGI Friday's restaurants. Yellow Belly Lemon Ale, another early entrant, is made by Minnesota Brewing Co. (Source: David Leonhardt with Heidi Dawley, Business Week, September 23, Pg. 158)
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HISTORICAL NUGGET:
REAL BEER HAS FOUND FAVOR IN SWEDEN.
Semi-Prohibition was given up on October 1 [1955] as a failure in that country after 36 years of strict rationing of braennvin (liquor). The Swedes have only been allowed an insipid beer containing 2.8 percent alcohol. The new 4.5 beer found immediate favor, outselling liquor 3-1 on the first day of unrationed alcoholic sales, and Sweden spent one of its soberest weekends. The 4.5 beer had previously only been brewed for export. German and Danish beers were also put on sale. Many Swedes drank beer for the first time, a goodly number turning from hard liquor.
PUBLISHED OCTOBER, 1955 AMERICAN BREWER
(no relation to the publication currently available from Owens Publishing).
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GROWIN' UP - EDITORIAL
Stroh-Heileman merger. Pabst and Lone Star layoffs and plant closings. Miller job cuts. As the craft-beer business in the U.S. adds six new breweries/brewpubs weekly, the distant thunder clouds from the top and second-tier brewers may be imperceptible to the micro segment. But the warnings are helpful, especially if we take them into a broader context than this quarter.
The medium-large brewers feel more demands from investors, creditors, stockholders, boards. The Molson article in this month's RBPMail points out that even doing traditionally accepted as sound strategic moves can be frowned upon by the market. Management at these companies are being forced to make something happen. In a mature market, that means acquisition or reduction or both.
While I was in Chicago, I spent a little time at the Seibel Institute, where Bill Seibel and his staff were generous in letting me spend time with their extensive beer library. One of the gems discovered there was a trade journal called American Brewer. Reading through decades of briefs on company opening and closings lead me to a theory that we are soon to repeat our beer industry history.
After Prohibition was repealed in 1933 we saw 15-20 years of growth through consumer education and recruitment. Then consolidation took place. In the 1980s, another kind of prohibition was repealed, allowing homebrewing and small-scale brewing in nearly every state. It's been pointed out to me that consolidation was more simple in the 50s when nearly every brewer was brewing similar beer styles and using similar yeast and processes. I remain convinced that these issues will be circumvented as the craft- segment matures. One strategy we will see more frequently in 1997 will be buy-ins if not outs, as we've seen through Miller with Shipyard, Celis and Leinenkugels, as well as A-B with Redhook and now rumors of Widmer. Smaller players will initiate buy-ins and buy-outs, with leveraged positions in several brewing companies.
One strategy I've advocated is for craft brewers to align themselves with similar system, style and artisan-level brewers around the country to create a network of brewers marketing diverse portfolios in their local markets. This would bring the strength of relationships and provincialism to bear in each partner's geographical expansion. And the consumer wins by having interesting product brought into the market as qualified by their favorite brewer, rather than the distribution channel and financing dictating product availability.
What is clear by watching the industry from the press box is that the Craft-Beer movement has a long way to go before it reaches full maturity, but it is entering adolescence and will find growing pains awkward. The big brewers are hovering outside the halls with bullhorns trying to recruit new audiences. For the time being, the craft-segment can enjoy the beer enthusiast mindshare and sense of community. At present, there is security in the niche.
For the consumer, these are exciting times. The small niche brewers providing uncompromised product and consistent creativity -- and you know who these are -- will be difficult to emulate, replicate or standardize, creating a built-in poison pill against easy acquisition. Brewers that play it safe and emulate the big brewers in product or marketing may not be around long.
Editor's note: Regarding editorial from last month, we received hundreds of messages for and against alleged liberal leanings. We do not have the resources to respond to each individually, but would like to note that articles selected for RBPMail are pulled from hundreds published around the world each month. We would also like you to know that we are working on creating a public forum for your response to add to the debate within our community. Editor's Note2: We would like to express our sincere condolences to the families in Milwaukee experiencing hardship due to loss of benefits and/or jobs. You are in our thoughts tonight.
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