Who do you think said these things?
– “What’s probably changed the most in a generation is the variety-seeking nature of today’s beer drinker.”
– “I think the craft brews bring a really important interest among beer drinkers in how beer’s made, why beer’s special. I am astounded with how curious consumers are about beer, the process of beer.”
– “Beer’s a local business.”
Based upon the way the sentences are phrased and that it wouldn’t exactly be news for Deb Carey of New Glarus Brewing to say stuff like this you probably already knew it wasn’t somebody from the the world of small-batch brewing.
In fact, the Wall Street Journal has an interview with Leo Kiely, CEO at Molson Coors, today in a feature labeled “Boss Talk.” (Available by subscription or by buying the dead tree version.)
You may not consider what he has to say about management style, boosting share prices and consolidation in the beer industry relevant. If that’s the case, here’s one of my favorite links of the past week, with geeky details about Ballantine IPA in 1939, that I haven’t got around to writing about.
Still with me? I’m certainly not saying the guys in the boardrooms think like we do. Consider the first question and answer.
WSJ: How have American beer tastes been changing?
Mr. Kiely: What’s probably changed the most in a generation is the variety-seeking nature of today’s beer drinker. I sort of grew up as a beer drinker in the late 1960s, early ’70s, and my brand set was an import, Heineken, and a domestic brand, Schlitz. Today I watch a beer drinker in his late 20s, and he’ll have an import brand, maybe two, he enjoys. He’ll have a craft-brew brand. And the bulk of his beer drinking will still be a light lager.
Why, oh why do the big beer guys keep saying this? I guess they wouldn’t were it not true at some level but plenty of people have made it clear they aren’t ever going back to international light lagers.
To Kiely’s credit, the newly established AC Golden Brewing isn’t designed to throw bunches of advertising dollars at the “flavor of the year” before moving on to the next fad.
This gives us added flexibility and agility, and another way to get innovative ideas to market without redirecting critical resources from our core brands. We feel this gives us a real competitive advantage as a brand builder in the beer business. AC Golden will focus on patiently introducing a new brand and allowing it to grow over time. Look, we introduced Blue Moon 13 years ago and today it is one of the fastest growing craft-style beers. We like to call it our 13-year overnight success story.
Then there is White Shield in England. The Guardian recently offered a great story, beginning:
“It is miraculous. There is the gleaming, sprawling mass of Coors’ state-of-the-art brewery which looks more like an oil refinery than anything else. And there, to one side, in the Museum of Brewing, is the Worthington White Shield Brewery, a classic arrangement of copper mashing tuns and fermenting vessels, wooden floors and wooden joists, and even an old-fashioned hoist used to lift the sacks of malts. It’s like coming across the Koh-i-noor diamond in a box of theatrical paste jewellery.”
That’s not what’s going to be going on in Golden, Colo. But I know that next week at the Great American Beer Festival in Denver that I plan to try the Blue Moon Chardonnay beer that I missed last year (it won a medal). It was developed in Golden. So was a peanut butter beer.
Not sure I need to sample that one.
“Why, oh why do the big beer guys keep saying this?”
Because, Stan, it’s utterly and undeniably true. Craft beer and imports are growing, no question, but the vast majority of the US market is still divvied up between A-B, Molson Coors and SABMiller, and the vast majority of the sales of those three companies is light lager.
In fact, that paragraph is one of the most lucid statements about the current state of the beer biz that I’ve read from a big beer guy in quite some time. It’s certainly more realistic than what comes out of the mouth of Mr. Graham “craft beer is going to fade” Mackay of SABMiller.
Mr B,
There is little more dangerous than disagreeing with you, but I’m going to take my chances.
Certainly the bulk of beer consumed is from macros – the beer we love is a niche within a niche. But look at his statement closely. His description is of a single beer drinker, implying the “average” person. Average being consuming something along the lines of 10% imports, 4% micros and 86% bland lagers.
Granted, he does focus on the late 20s demographic, and there is a matter of what people can afford. But once people get a taste for what Jim Koch calls “better beer” and they can afford that (like when they get a little older) then they aren’t going back.
That’s what the large beer companies are fighting – trying to get the coveted “Gen Y” drinkers to commit to them instead of wine, spirits of beer with flavor.
To Coors credit – as much as I hate given the corporate entity credit – they are creating options for venturesome drinkers.
Mr. H,
I must protest, good sir. What we’ve seen, I believe, is the death of brand loyalty, which means that the “average beer drinker” IS going to be mixing up his or her beer choices among light lagers, craft beers and imports. And sure, people who get a taste for craft beer still drink light lagers — I see it all the time, among friends, patrons in bars, even beer writers. (How many times have you heard someone who should know better say “Ya, I had a Bud, but it was the only beer going”?) With all due respect to yourself and Mr. Koch, “better beer” drinkers do go back, and it happens all the time.
It’s what I call “drinking to the occasion.” A light lager or two after the softball game, a draught pale ale after work with colleagues, a selection of imports when entertaining, back to the light lager when doing yard work around the house. It’s not what you or I do, but I do believe it’s a pattern millions of beer drinkers still follow.
And careful of putting percentages in Mr. Kiely’s mouth. He simply states that the “bulk” of that average person’s beer is light lager, not that the percentage of light lager consumed correlates exactly to the market share those beers possess. “Bulk” could be simply 50% plus one beer.
Since even I would have to concede that you are closer to right than I am it so would be silly to go on. As much as some might enjoy a cage-match tussle between us in front of he Blue Moon display at GABF.
(But you need to hang out with a better crowd. My friends would rather drink mediocre wine than mediocre beer.)
“Craft-style beers.” Hmmm.
Yessir, this is no Cadillac, but it’s as close as you can get for the money.”
Shepherd Neame, the large-ish Kent brewer, has also ventured into small batch brewing recently. I might do a blog post on that actually. Thanks
Ed: Here’s a link to Stonch’s post.
Is Keith Villa in charge of this new operation or what? If so…I would predict some beery passion to churn behind the perceived “smoke & mirrors” most will only see, and believe.
Send a growler of that Chardonnay Wit eastward, will ‘ya?
Is Keith Villa in charge of this new operation or what?
There is somebody else corporately in charge. Keith continues in his development role. I’m happy to see him stay in the brewery.
I want to go back to whether drinkers go back to cheap beer once they’ve crossed over.
Posers will and people who were never really drinking micros, but stuff like Corona and Shiner Bock. I side with Jim Koch that once people really appreciate good beer they aren’t going to settle for less if they can afford to.
Matt – As a point of order, Jim Koch uses the phrase “better beer” but I don’t think he’s said drinkers don’t go back. In talking about “trading up” he’s made the point of consumers buying cases of Sam Adams at Costco as a treat they might not always afford.
That “can’t go back” idea comes from a lot of other craft brewers.
I mostly agree with that idea, but Stephen’s point about “drinking to the occasion” can’t be overlooked.