RBPMail 3.01, January 1997
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 Often, links you will see are out of date, and businesses referred to may also be long gone.
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THE HUMAN SIDE OF PABST DOWNSIZING
Tom O'Brien, a 29-year Pabst Brewery employee, and his wife, Cheryl, were both laid off when S&P Corp., the California-based company that owns Pabst, announced that it was closing the 152- year-old Milwaukee brewery at the end of 1996. For them, the closing of Pabst hurts emotionally as well as financially. They met at the brewery, handling cartons in the packaging department, and raised two children while employed there. The closing, which will cost more than 250 jobs and leave 774 people without company health insurance, has sparked a widespread boycott of Pabst products. "Pabst was probably one of my top beers until the day the retirees losing their insurance hit the papers," said Tracy Rice, manager of Rail's Inn. To get rid of its Pabst inventory, the bar sponsored a "Drink It or Dump It" day where patrons could buy $1 Pabsts and either guzzle the beer or dump it in a trough outside. Proceeds from the sales, about $700, were given to a fund for retired Pabst workers. Essie Anderson, 60, a Pabst employee for 20 years, has joined the boycott at Essie and Smitty's, her mom-and-pop grocery store. "When they canceled my insurance and left all the retirees without it, I said no more Pabst," she recalled from behind the register. "I have high blood pressure and when I went to fill my prescription the lady said 'Oh, Pabst. You can't fill this again.' " (Source: Jennifer Ordonez, Special to the Washington Post, December 26, Thursday, A Section; Pg. A03)
You can send your thoughts and support to Tom O'Brien by email at firstname.lastname@example.org, and check out his Web site of protest at:
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BREWERS EXPECT SEASONAL MARGIN GAINS ON SLOWER SALES
'Tis the season to trade up to premium brews. At least, that's what major brewers have noticed in the past five years. As the holidays roll around, beer drinkers typically trade up. Therefore, a Milwaukee's Best drinker may buy Genuine Draft or a Busch beer drinker may move up to Budweiser. Consumers also buy more imports and micro-brewed beers this time of year, said Jim Pyzyk, vice president and general manager of Beer Capitol Distributing Co. Russell Klisch, president of the Lakefront Brewery, said the brewery sells about 35% of its beer during the last three months of the year. Klisch said a majority of sales come from his seasonal beers and the rest comes from consumers' seasonal "changing habits." During the winter, Klisch said, more people flock to the bars than during the summer, typically the busiest time of the year for brewers. That's good news for Klisch, who sells about 75% of his beer through bars and taverns. "Miller is the direct opposite of us. They sell about 75% of their beer off premises," said Klisch. Scott Barnum, general manager of American Specialty & Craft Beer Co., Miller's craft brewing arm, said brands like Leinenkugel (http://www.leinie.com), Shipyard (http://www.shipyard.com) and Celis (http://www.celis.com), perform extremely well this time of the year. Barnum said that during Christmas and New Year parties this year, a wider variety of beers will be available. "It's different than the summer, when you may have two or three beers at a picnic. You will see maybe eight or nine different variety of beers," he said. (Source: James Causey, Milwaukee Journal Sentinel, December 26, Monday Business Pg. 4)
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MILLER CALCULATES CONTRIBUTIONS IN OHIO
Free beer and a big salary - what more could a person want from a job? That's the situation down in Trenton, about 25 miles south of Dayton, where the Miller Brewing Co. has its most prolific plant, brewing 8 million barrels a year. In a recently issued press release detailing its regional economic impact, the company said that the brewery contributed $64 million to the regional economy last year, including payroll, taxes and the purchase of goods and services within the region. The release said that the plant has 530 employees with an overall annual payroll of $33 million, an average of $62,264.15/year in salary. Plant manager, Dennis Puffer, confirmed these figures. "Our average salaries are in the $40,000 - $42,000 range. And with overtime, we have people making more than $60,000 a year." Puffer says the Trenton facility is the most productive in the entire company, and that visitors from around the world tour the plant and watch its team-based system in action. Miller employees are also allowed to bring two or three cases of beer home each month, but they can't drink on the job. "There's much more social awareness about that sort of thing these days," he says. "It would be unheard of to allow somebody to drink while they're working." (Source: D. Kaine Stankovich, Dayton Daily News, December 22, Sunday, Business Page, Pg. 7b)
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"ODD-SIZED" BEER BAN IN FL CONTINUES
In order to provide real beer for his customers, Alan Johnson, owner of Barefoot Wine & Spirits in Palm Beach Gardens has to appeal to the Florida Legislature. By Florida law, malt liquor can only be sold in containers of 8, 12, 16, or 32 ounces. Importers and micro-breweries that use metric or odd-sized containers don't meet those standards and can't sell in the state. Johnson and others want that changed. The consumer should have the choice of beers that most other states have - and retailers should have the option to sell them, they say. But the opposition is intense, with wholesalers and many big distributors battling to keep the status quo. Johnson says they are battling a rich and powerful lobby of the big breweries such as Anheuser-Busch and distributors. "The most compelling reason I've heard is the choice," said Florida Sen. Ron Klein, D-Boca Raton. Sen. Klein said he'll take the information given him and have it evaluated by the regulated industries committee. He'll decide by February or so whether he'll sponsor legislation. "I need to understand all the ramifications, where we don't get into a situation we didn't think of," Klein said. The factors to consider include how the repeal would affect tax revenues, retailers and consumers. (Source: Marguerite M. Plunkett, The Palm Beach Post, December 19, Thursday, Business, Pg. 1D)
You can let Senator Klein know you think he should sponsor legislation by contacting his office at 407.482.8560.
Florida Consumers Beer Association can be reached at: P.O. Box 24691, Tampa, FL 33623. 813.977.0141. email@example.com
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TSINGTAO CHALLENGED BY INVADERS
DATELINE: QINGDAO, China, Dec 18: Tsingtao Brewery built its reputation as China's king of beers earlier this century by catering to thirsty foreign invaders. The company was founded in 1903 and initially targeted thirsty Germans living in the port city of Qingdao -- formerly Romanised as Tsingtao -- that Germany had wrested from a weak China. Company officials say the beer also thrived during the Japanese occupation before and during World War Two. But analysts warn that after years at the top, a complacent Tsingtao today is seeing a new breed of invader eat into its once-impregnable market share. The brewery in eastern China's Shandong province, which in 1993 became the first Chinese company to list on the Hong Kong stock exchange has "rested on their laurels for too long", said one Beijing-based beer industry analyst. Tsingtao relies on its traditional brand-name prestige and is being out-advertised by thirstier rivals. The decades of state control that followed the communist revolution of 1949 were a factor behind Tsingtao's later neglect of its home market. Analysts have long complained about a lack of transparency at the brewery, which is still 44% state-owned. The 4,000-strong workforce of the group, which has assets of 3.0 billion yuan ($360 million), is another potential concern. "They are vastly overstaffed," said the Beijing-based analyst, a view seemingly borne out by the relaxed approach of many workers observed during a recent visit to the brewery. Tsingtao plans to boost production to 500,000 tonnes this year, from 350,000 tonnes in 1995, and hike annual output to 1.4 million tonnes by 2000. Tsingtao is also one of 10 domestic brewing groups that have been promised preferential loans and conditions from the government to help them compete with joint venture breweries. "(Tsingtao is) troubled, but they will survive," said the Beijing-based analyst. "They have very powerful backing... a lot of people do not want to see it go down the tubes." (Source: Mure Dickie, The Reuter Asia-Pacific Business Report, December 17, Tuesday, BC cycle)
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NEW MICRO-BREWERY TO OPEN IN IRELAND
American Craft Brewing International to open micro-brewery in Ireland; Located near Dublin, the new micro-brewery will produce premium beers and ales for the Irish market, as well as for export. The new micro-brewery, for which the operating equipment already has been fabricated, will be housed in its own building. Production of beers and ales is expected to begin in the first quarter of 1997. In the U.S., beers and ales imported from the Irish micro-brewery will be nationally distributed by AmBrew International's subsidiary Atlantis Import Company, Inc. AmBrew International's focus on overseas markets derives from the significant growth of micro- brewing in the U.S. having yet to spread to most other parts of the world. With the opening of its South China Brewing Company in Hong Kong in June 1995, the Company literally established the first American-equipped micro-brewery outside the United States.
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Franconia Offering Shares on Web & Tasting in Real World The Franconia Brewing Company, currently offering stock at their web site, has purchased a facility in the heart of the Pocono Mountain resort region of Northeast PA. Development of an authentic German-style craft brewery will feature a 60-barrel, Huppmann- built copper system brewhouse, and Franconia will use imported German malt in a triple-decoction mashing process to brew German- style lagers and wheat beers. Franconia has an exclusive license with the Keesmann Brewery of Bamberg, Germany to brew and sell Keesmann's traditional brand, Bamberger Herren Pils, in a 14-state region of the United States. Franconia is importing several kegs of this fine pilsner for a series of free tasting events; e-mail your name and address to firstname.lastname@example.org for an invitation to one of these events, or call Franconia directly at 800 367-2348.
Draft the Draught Horse in a Drought - Another Stock Offering For some reason, the double entendre on tap for Draught (pronounced "Draft") Horse has created more tongue-tangles than you can wag a tail at. The name and story is explained in detail on the new Web site. While you're there, meet the Durnings, the Brewer and the Horses and learn about their pending stock offering. The shares will be registered for sale in Massachusetts, New York, New Jersey, Pennsylvania, Delaware, Maryland and Virginia. Price $3.75 Per Share. Minimum investment 200 shares; Maximum investment 40,000 Shares. Contact by phone at: (215) 321-0194. Or on the Web:
BEER SITES TO SURF:
Real Beer Picks
Yes, you can visit the Heartland... in New York City. No, this isn't a salsa commercial; there really is a brewery with heartland values, faire and good, honest, fresh beer. Check out their award-winning beers and Web site at:
Danse Skjold has some new information available at:
Online message boards, extensive BrewTiques and more from Maine's leading Brewpub await at:
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QUICKIE EMAIL SURVEY
Thanks to all who responded to last month's Quickie Survey. Cheers to Daniel Aron for winning a Real Beer Page Tee in our random drawing. Here's what we learned last month:
DOMESTIC TRAVEL - How Many Trips Do You Make Each Year of 200+ Miles (you traveling fools...)
Less than 5 23%
10+ trips 77%
20+ trips 31%
From 1996 Survey of 3648 Real Beer Page viewers compiled by PSTAT (http://www.pstat.com)
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Brewed Fresh For You! The Real Beer Page announces a diverse group of brew websites to check out:
AAA Metal Fabrication
Ale By Comparison
Anderson, Will http://www.RealBeer.com/rbp/authors/anderson
DeGroen's Beers/Baltimore Brewing Co http://www.degroens.com
Hop Union U.S.A. http://hopunion.com
Northampton Brewery http://northamptonbrewery.com
Packaging Plus http://packagingplus.com
Red Brick Press
Samuel Adams Beers http://www.samadams.com
Vanberg & DeWulf http://belgianexperts.com
Wit Beer (new url)
World of Beer http://www.WorldOfBeer.com
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UK HOME BREW FIRM ATTACKED FOR ALCOPOP KIT
A Norwich home-brew manufacturer yesterday drew widespread condemnation for launching a do-it-yourself alcopop kit which can legally be sold to under-age drinkers. A loophole in the law applying to all home-brew kits means Splooch, marketed by Continental Wine Experts as an "alcoholic booster" to be added to soft drinks, can be bought by under-18s because it is not alcoholic at the time it is sold. The pounds 4.99 kit, which carries a cartoon logo on the front showing two drunken eyes, takes 10 days to turn 18 standard 330ml bottles of soft-drink into 27 bottles with a strength of 5% alcohol by volume. It also includes instructions on boosting wines and beers so they become as strong as 15%, Nigel Griffiths, Labour's consumer affairs spokesman, said. Richard Danby, the manufacturer's technical director, denied it was aimed at teenagers. "It is meant to be the home-brew equivalent of alcopops but we are not targeting under- age drinkers." (Source: Stuart Millar, The Guardian, December 9, Home Page; Pg. 7)
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**** Regional Spotlight: Czechoslovakia ****
BASS CZECH UNIT BEER EXPORTS SURGING
Exports from British brewer Bass Plc's Czech unit, Prazske Pivovary a.s. surged in 1996 and are likely to reach 295,000 hectolitres by the end of the year, a senior Bass official said on Friday. Mervyn Childs, Bass country manager for the Czech Republic, said exports of Prazske Pivovary's lager-type Staropramen brand had risen by over 60% compared with 1995 and had almost trebled since 1994 when the company exported just 109,000 hectolitres. "We're well on the way to the half million, five year target that I set ourselves three years ago...And we're now looking at a target of 750,000 hectolitres...(by) the year 2,001," said Childs. In 1993, Bass took a 34% stake in Prazske Pivovary for nine million pounds and has progressively increased its stake to the current 51%. "When we came here our exports were about 7% of our production but this year they are going to be up to 15% of our production and I won't be happy until they're 25%," said Childs. The Czech beer industry as a whole currently exports around 1.5 million hectolitres of beer annually compared with seven million from neighbouring Germany whose export volumes, Childs said, the Czech Republic should be aiming to emulate. (Source: Robin Shepherd, The Reuter European Business Report, December 6, Friday, BC cycle)
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PLZENSKY PRAZDROJ CONSIDERS MERGER
Plzensky Prazdroj a.s., the largest Czech brewery, is interested in the possibility of concluding a strategic partnership with Jihoceske pivovary (JCP), the fifth largest Czech beer group, the Czech business paper Hospodarske Noviny writes. JCP makes the beers Samson, Regent and Platan, which cover 8% of the market. Prazdroj plans to increase its market share from the current 22% to 40% in the year 2000. The chairman of JCP's board, Petr Fencl, said Prazdroj and JCP could close an agreement only after a decision is made on the privatisation of another south Bohemian brewery, Budvar. Fencl noted JCP's current shareholders want to take part in the denationalisation of Budvar. But thanks to the possibilities connected with Budvar, Prazdroj is joined by Anheuser Busch, Bass and Carlsberg in looking at JCP. The firm's shares have only limited transferability and any sale must first have the approval of the board of directors. Last year, JCP raised its share capital by 100 percent to Kc474 million. With 700 employees, the firm has annual receipts of about Kc900 million and a gross profit of Kc30 million. (Source: CTK National News Wire, December 23, Business News)
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BUDVAR SQUARES UP TO U.S. RIVAL
Budejovicky Budvar, the state-owned Czech brewery, yesterday used the opening gambit in what could be an expensive battle with Anheuser-Busch of the U.S. for the hearts and pockets of beer lovers worldwide, and claimed the moral high ground in their battle over the Budweiser trademark. Both companies will face each other in court in those European markets where one or the other does not have full access. Budvar's top executives invoked history and commercial logic to justify their rejection of overtures by their powerful U.S .opponents to settle the trademark issue after the breakdown of negotiations three months ago. Mr JiriBocek, Budvar general manager, said the final offer tabled by Anheuser-Busch, which he detailed for the first time, would have left his company playing second fiddle to U.S. Budweiser in European markets where the companies are disputing rights to the trademark. (Source: Vincent Boland, The Financial Times, December 20, Friday Companies And Finance: International; Pg. 26)
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If you were subscribed to BEERWeek, you would have already read the following headlines and sample articles:
Week of December 2 - 9, 1996
-Layoffs in Pacific Northwest
-Rock Bottom Divides
-Celebration Still Scarce in Big Apple and Environs
-International Packaging Award for Mendo
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MINOR FLURRY OF LAYOFFS
Portland, OR - Portland Brewing has laid off 13 people, approximately 10% of its work force, while in Seattle, Pyramid Breweries, Inc. has laid off a few hourly workers and made the decision not to replace several employees who will be transferred to Pyramid's new brewpub in Berkeley, CA. According to Portland's president, Tony Adams, the decision to downsize was made to meet current market conditions. The company had taken a "hard look" at its projected revenues for the next quarter and concluded they were too optimistic. While the company is growing, it cannot currently afford the entire infrastructure it has built. Redhook's president Paul Shipman is quoted as saying, "I'm not ready to say there is a shift, but there are a lot of signals that suggest there is a shift." Pyramid's CFO, Don Burdick, reported that seasonal market needs were behind the layoff of hourly workers. While Pyramid's sales have slipped somewhat, it has stronger operating margins than some of its prominent competitors, according to quarterly financial statistics. Also in Oregon, Nor'Wester Brewing recently laid off employees in Portland and stated it would reduce expenses at its affiliated brewery in Denver (BEERWeek readers will remember, Nor'Wester's Mile High, brewers of Timberline Ales, has in fact recently been closed down.) The Oregon Liquor Control Commission has reported slowing growth rates and even sales declines among some craft brewers in Oregon. (Source: Mike Francis, Portland Oregonian, November 27, 1996)
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Week of December 9 - 16, 1996
- A-B vs Miller in Texas
- Guinness' Win-a-Pub Contest IV
- First U.S.-manufactured Fully Automated Brewing System
- Death und Taxis!! Another Bavarian Brauerei Goes Kaput.
- Can You Say "Canandaigua?"
- Micros for China
THURN UND TAXIS TO CLOSE
Regensburg, East Bavaria - One of Germany's best known breweries is to close on 31 March 1997. The Royal Thurn und Taxis brewery in Regensburg, East Bavaria is to cease brewing and its products will be brewed over 100 Kilometre away at the Paulaner brewery in Munich. Both breweries belong to the brewing giant Josef Schorghuber, as does Hacker-Pschorr in Munich. For some time now Paulaner has been trying to close both Munich breweries and move to a massive brand new brewery near the former airport at Riem, where both Hacker, Paulaner and others will be produced. At the end of the seventies, T&T produced almost one million hectolitres of beer. That had fallen to around 320,000 hectolitres by the time of the sell out to Schorghuber. It is rumoured that the brewery was 800 million marks in the red. Only seventy years ago Regensburg boasted over 120 breweries and now it has nothing but a couple of Hausbrauereien. The advertising slogan was Furst Class reflecting the beer's Royal heritage. The small brewery at Schlierling where the six employees brew the Weizen and Roggen beers is to remain open for the time being. 120 staff at Regensburg will lose their jobs. - By Paul Roberts
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Week of December 17 - 23, 1996
- A-B Wants to do Brew House Concept?
- Mark Dorber Out at White Horse Pub
- Marin Brewing Co's Craig Tasley Dies
- California's ABC Take New Turn on Returns
- Pete's New CFO
- NY State Craft Brewers Get Political
QUINTESSENTIAL CELLARMASTER OUT AT WHITE HORSE Respected Cellermaster Mark Dorber has been relieved of his duties at London's legendary White Horse Pub considered by many to be the Mecca of "Real Ale." London's Evening Standard wrote, "Dorber's superb cellarage standards, his evangelism on behalf of worthy ales and beers not only from Britain but from right around the world and the way in which he proved that a busy local can also become a distinguished centre of beer culture made him a manager like few others. That there should be no space for the people like Dorber in BASS's dull world of formula pubs is profoundly distressing." Dorber was the featured speaker at the recent Real Ale Festival in Chicago, reported in the Celebrator Beer News, December, 1996. He also made a presentation along with Roger Protz at a Real Ale Seminar given by All About Beer Magazine during this year's Great American Beer Festival.
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Week of December 23 - 30, 1996
- Boston Beer Co. Buys Ohio Brewery
- A-B Invests in Mexico
- New California Label Law
- It's an Ad, Ad, Ad, Ad, Ad World for Miller
- New Micro for Dublin
BOSTON BEER CO. BUYS HISTORIC OHIO BREWERY Cincinnati, OH-AP reports that the Boston Beer Company is buying the Hudepohl-Schoenling Brewing Company, a 63-year old Cincinnati brewery. Both companies declined to disclose the terms of the transaction and final sale is subject to talks on tax and economic issues. According to BBC owner Jim Koch, his company is currently exercising an option it took to buy the brewery. Boston Beer has invested several million dollars to improve H-S, Cincinnati's last major independent brewery. Koch plans no substantial changes at the brewery, which has a yearly capacity of 390,000 barrels. Hudepohl- Schoenling produced several beers for regional distribution for Boston Beer Co. this past year. Recipes and packaging were determined by BBC. Hudepohl-Schoenling will keep its offices at the brewery and will continue to produce beer as an independent company. Among its beers are Little Kings Cream Ale, Christian Moerlein's Cincinnati Select and the Hudy labels. Jim Koch is a native of Cincinnati. His father, also a brewer, apprenticed at the Cincinnati plant in 1946. At that time it was called the Hudepohl Brewery.
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Week of December 30 - January 6, 1997
- Micro Sales Down
- Anderson Valley Brews More Beer
- Copperhead Still on Labatt's Case
- Imports Keep on Comin'
- Vermont's Catamount Expands
- AmBrew: 20 Craft Breweries in 25 Months?
SIEBEL OFFERS BRITISH ALE COURSE
According to the most recent Siebel Institute Alumni News, a decision was made to offer a two week British Ale Technology course in northeast England next June in association with the Brewlab at the University of Sunderland. The course will cover not only the technical aspects of British brewing but will focus on hands-on experience in local breweries as well. Noting that no gold medals were awarded at the GABF in the English-style Pale Ale category, Siebel learned from judges that it was felt that American brewers did not have first hand experience of British brewing techniques or with freshly brewed British beers. The Institute is also offering a German brewing course in Munich in September. Contact Siebel Institute, 773-279-0966.
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This concludes our BEERWeek excerpts. Each edition of BEERWeek features headline news articles like those sampled above, along with press releases, promotions, opening & closings and events. Want it weekly? Go to http://www.beerweek.com to subscribe today.
Religious Body Seeks Beer Ban But Nobody Hears Calling Molson's Satisfaction Guarantee
Religious body seeks beer ban but nobody hears calling RAMALLAH, West Bank - In the upscale restaurants of Ramallah and beach-front eateries of Gaza, Palestinians are popping the lids of Taybeh Beer, their first-ever home grown brew. It's a tasty part of the night life that has sprung up in the West Bank and Gaza since the arrival of the Palestinian Authority two years ago. But if the religious establishment gets its way, the beer pronounced "tie-bay" and all other alcohol will soon be off the shelf. On Wednesday, the Palestinians' highest religious body "re-emphasized" its month-old call to ban liquor licenses. The retrenchment by the Fatwa Council was in response to people ignoring its directive, called a "fatwa" - an Islamic ruling like the one Iranian clerics used to call for the death of ''Satanic Verses'' author Salman Rushdie. Though the "fatwa" rings serious, Palestinians are pretending the Oct. 31 ruling was never made by the 21-member council. Popular among the affluent, especially those who returned to the West Bank and Gaza in the wake of the 1993 peace agreement with Israel, Taybeh, which means "delicious" in Arabic, sales have ballooned since Palestinian Christian Nadim Khoury started the business last year. About 36,000 bottles are produced every week, said Khoury, who grew up in Boston. And since the "fatwa," which urges the Palestinian government not to issue new liquor licenses or to renew existing ones, sales have not dwindled, he said. (Source: Deborah Horan; The Houston Chronicle, December 5, Thursday, A section, Pg. 30)
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MOLSON'S SATISFACTION GUARANTEE
Molson Breweries broke out a Total Satisfaction Guaranteed program on all brands covering product replacement or a money-back guarantee. Get your refund by calling 800-MOLSON-1.
BRITISH BREWERS GROW WITH SPECIALTY MARKET
Recovery in Britain's small brewing industry is being spearheaded by the trend for drinking "less but better". Sales of stronger, more expensive premium brands such as Whitbread's Boddingtons and Bass brew Caffrey's are growing while those of many standard brands are falling. In the year to September total sales of premium packaged lager jumped by 6% and premium ale by 2%. Standard lager and bitter, however, fell respectively by 2% and 4% in the same period. Britain's third-biggest brewer, Whitbread, has forged a premium brand strategy with a portfolio that includes Stella Artois, Murphy's and Boddies. Boston Beer is a nitrokeg, hybrid brew, not unlike Caffrey's, but has American overtones rather than Irish. It is a product of a marriage between Whitbread and phenomenally successful U.S. brewer Samuel Adams. The two companies worked together for a year or so developing a recipe - a 4.6% alcohol-by- volume creamy ale with a lager taste. The product, which will appear in draught and canned widget form, is due to be launched nationally this Christmas and New Year, backed by a $3 million advertising and promotions campaign using American imagery including the cult Harley Davidson motorbike. The product will be made on license in Whitbread's craft brewery in Castle Eden rather than in Boston. As with Stella, Whitbread will pay Samuel Adams royalties for the brewing rights. (Source: Helen Slingsby, Evening Standard, December 04, Pg. 36)
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COORS PRESIDENT SIZES UP '96 & BEYOND
Coors president Leo Kiely III said in an interview with the Rocky Mountain News, that he expects year-end results for 1996 to be "OK," adding that "basic trends are pretty good." Marty Romm, an analyst at First Boston in New York said, "They have to grow faster than the industry and improve their profitability. If they can do that, then maybe they can get their returns up, but it's not going to be easy." Coors operates at a disadvantage because it's unable to control pricing and lacks the efficiencies of industry giant Anheuser-Busch. With 44.8% of the U.S. beer market, Busch enjoys a national network of breweries. Coors, on the other hand, bears the expense of shipping most of its beer from the world's largest brewery in Golden. "The fact of the matter is Coors is defined by its structural position in the industry," Romm said. "They're No. 3 with 10% share, and they're trying to play the same game as their much larger competitors Anheuser-Busch and Miller." To reduce those handicaps, Kiely said Coors has reduced costs through outsourcing and other means. Kiely's plans for 1997 include more elbow room in key markets such as New Jersey and North Texas. And one market irony he hopes to eliminate is Coors' No. 2 position behind Anheuser-Busch in Colorado. "The first piece of business is to drive our core brands in our core markets," he said. "If we're doing that, we pay the rent, we grow our profitability and generate the funding for goal No. 2, which is to invest in incremental growth in selected markets. One of our specific goals is to develop a stronger franchise in the Hispanic markets," Kiely said. "We'll start investing in some of those key markets next year, quite aggressively. Basically between now and 2000, the Hispanic population is growing at three times the general market," he said. The other long-term prospect for brewers is the maturing "Echo Boom," offspring of baby boomers who will soon hit the legal drinking age of 21. (Soure: Richard Williamson, Rocky Mountain News, December 26, Thursday, Business, Pg. 1B)
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END OF NON-ALCOHOLIC BEER TREND
The non-alcoholic beer trend may be over, beer industry insiders say. In recent years, the segment has garnered a 1% market share, but sales have been stagnant since 1990. "It would be fair to say that, in 1990, non-alcoholic beers were at their peak and then remained constant since then," said John T. Sheehan, president of Beechwood Distributors Inc., who distributes the No. 1 selling NA beer in the U.S. Anheuser-Busch's O'Doul's. Paul Roller, president of a Miller distributor, said that overall non-alcoholic brews represent less than 1% of his business and are in decline. "I believe that NAs have run their course," Roller said. "They are such a small percentage of the overall business that they are not even worth talking about." Last year, Anheuser-Busch spent $3.1 million on advertising for the brand, more than any other U.S. brewer spent on its non-alcoholic brand. However, Anheuser-Busch spending on the brand was down 69% from 1994, when the St. Louis-based brewer spent $10.3 million on the brand. (Source: James E. Causey, Milwaukee Journal Sentinel, December 23, Monday, Business Pg. 3)
KIRIN U.S. FACILITIES MOVE
The American subsidiary of Kirin Brewery Co., Japan's largest brewer, has moved its U.S. headquarters from New York to Santa Monica to be closer to a new brewing operation and its West Coast customers. Kirin, which recently signed a joint venture with the Anheuser-Busch plant in Van Nuys, considers the West Los Angeles area a strategic regional location, said Jim Tate, company controller. The company is seeking greater name recognition in an increasingly crowded market, he said. Kirin owns 90% of the joint venture. A-B holds the remaining 10%. A-B also has an agreement with Kirin to produce and market its Budweiser beer in Japan. Kirin is building a new brewing facility at the Van Nuys plant, which A-B considered closing in the early '90s. Production is scheduled to begin next month. Tate said Kirin will use A-B's existing bottling line at the Van Nuys plant, but the Japanese beer company will use its own brew master to brew the company's three premier specialty beers: Kirin Lager, Kirin Ichiban and Kirin Light. (Source: Emily Otani, Los Angeles Times, December 20, Friday, Business; Part D; Page 2)
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WNBA AND ANHEUSER-BUSH TEAM UP
Advertising column reports on an agreement by Anheuser-Bush, Lee Apparel, Champion and Spalding Sports Worldwide to become the first four corporate sponsors of the Women's National Basketball Association, with a commitment to spend a total of $40 million over 3 years to promote the new league; critics believe sponsorship by the beer company will tarnish the image of women's sports, a charge Anheuser-Busch refutes by noting that women account for 25% of its beer consumption (Source: Stefan Fatsis, Wall Street Journal, December 20, Friday, Section B; Page 3, Column 1)
ANHEUSER-BUSCH TO INCREASE STAKE IN MEXICAN BREWER
The Anheuser-Busch Companies said yesterday that it would pay about $550 million to increase its stake to 37% of Mexico's No. 1 brewer, Grupo Modelo S.A., known for its Corona beer. In 1993, Anheuser-Busch, based in St. Louis, acquired a 17.7% interest in Grupo Modelo for $477 million, with options to increase its holdings any time between mid-1995 and the end of 1997. After the investment, Anheuser-Busch will hold 10 of 21 seats on Modelo's board, up from 3 of 14 seats. (Source: The New York Times, December 19, Thursday, Section D; Page 4; Column 1)
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MICRO STANDS UP TO A-B FOR FAIR PLAY - Editorial
We usually reserve this space for our own editorial rantings. After Real Beer received an anonymous fax of the following letter, we decided to publish it in full here. Our guest editor is Wynkoop founder John Hickenlooper addressing his A-B distributor:
"I am writing to formally let you know that the Wynkoop Brewing Co. will no longer carry any A-B products as a consequence of A-B's continuing slander of Jim Koch and Sam Adams beer in their ongoing radio ads. I regret this decision, as you have always provided us excellent service. We have continually offered Bud products since we opened in 1988, and have prided ourselves in offering product diversity to our patrons.
"The A-B campaign against Boston Beer is mean-spirited and, I believe, misleading and unethical.
"As you know, the craft beer industry is a large but diverse community. Our common goals include the celebration of fine beer and to expand the diversity of brands and styles available to the consumer. When someone maliciously smears one of our fellow craft brewers, they effectively smear all craft brewers. It is an affront to anyone who values the diversity and quality in beer that the craft movement has created. The extended craft-brewing family includes thousands of opinion leaders around the country. I would hope that A-B would seek to cultivate them rather than alienate them.
"I am no champion of Jim Koch's marketing tactics, and I find it more than a little ironic to be defending him. But no community, especially an exceptionally diverse one such as the craft beer community, should tolerate a bully.
"Again I apologize to you, the distributor, for removing the A-B products, and I look forward to renewing our business relationship once the A-B marketing forces come to their senses."