Bud Going To The Dark Side?

darth-vader
Maybe it’s Deschutes’ Black Butte Porter or Guinness that’s making Anheuser-Busch InBev (ABI) come over to the dark side? But whatever the reason, ABI is apparently poised to release at least five, possibly six, new beers which, if not actually black, have significantly more color than your average ABI beer. And apparently they’re also more extreme beers — which for ABI means 6% a.b.v. (it’s all relative). The first of these, Bud Black Crown, is described as a “golden amber lager” so it would appear “Black Crown” is more of a ceremonial title than a beer descriptor. According to one label I saw, there’s apparently a website set up — www.budweiser.com/blackcrown — though so far there’s nothing set up there yet. The Black Crown came from the Budweiser Project 12, specifically the Los Angeles entry. According to AdAge, there will most likely be a big marketing push behind this release, which may include a Super Bowl ad, and — ooh boy — a specially designed bow-tie can. The Black Crown is expected to be launched in early February.

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Next up is Michelob Black Lager, a “Special Dark Lager” and advertised as a “German-style Doppelbock.” There’s not much information I could find on this one, so it’s anybody’s guess what this will be like.

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Then, from the Busch family comes Busch Black Light. So either they’re going after the old hippies with their black light posters or having a bit of oxymoronic fun like “jumbo shrimp” or “black gold.” This one’s also something of a head-scratcher. It, too, is 6% a.b.v. — high for a light — and also mentions being “ice-brewed.” It couldn’t be a “black light,” like a black IPA, could it? That seems way too far-fetched, doesn’t it? So what is it? I’m stumped.

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And let’s not forget the Newark, New Jersey (née Latrobe, Pennsylvania) brand Rolling Rock. They’re coming out with Rolling Rock Black Rock, an “Extra Dark,” which presumably means it’s as “extra dark” as their regular beer is “extra pale ale.”

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Lastly, there’s ABI’s German brand, Beck’s, which is brewed here in the states. Beck’s will apparently be launching two brand extensions, presumably hoping to squeeze more shelf space out of Bud-friendly retailers. The first of these is Beck’s Black Jewel. It appears that it was also be 6% a.b.v. — which I’m starting to think is a magic number — and is brewed with Liberty hops, and could possibly be a single-hop beer. No world, however, on the beer’s color.

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Lastly, this one’s more of a stretch, darkside-wise. Beck’s Sapphire looks like it will either be a single hop beer or at least feature the German hop Sapphire (a.k.a. Saphir). But it does have a dark green and black label, so who knows? It, too, will be 6% a.b.v. (so that’s four out of six). Also, I always thought sapphires were blue and my understanding is that if impurities like chromium get into the gem, then it’s called “red corundum,” or more commonly a “ruby.” So who knows what the deal is with the red sapphire?

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So why is ABI suddenly going over to the dark side with beer color, labels and in their naming strategies? Your guess is as good as mine. It’s not as if dark beers have suddenly started taking off last week. Guinness has been around for a very long time, and most craft breweries have included a porter or stout in their portfolios for decades. Although we don’t even know if these will even be black in color. It seems doubtful, more likely they’ll just be darker in relation to Bud’s other offerings, in much the same way the original pale ales weren’t really pale, just paler than the popular dark beers at the time of their introduction. Again, it’s all relative. Plus, calling beers “black” this or that just sounds cooler, especially to the hipster millennials they’re obviously targeting with these beers. Some have speculated that it’s in response to the recent success that Yuengling has enjoyed with their (slightly) darker beers, but I don’t know. It certainly will be interesting to see how this all plays out in the coming months.

Bud Light Beer Camp?

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Did anybody else see this? I was watching the Colbert Report last night, as I often do, and happened to catch a commercial for “Bud Light Beer Camp.” If I’d had a beer at the time, I might have done a spit take. As litigious as Anheuser-Busch InBev has been, is it really possible that they could not have noticed that Sierra Nevada has been running a pretty high profile beer camp now for several years? Sierra Nevada Beer Camp has to date done at least 43 beer camps (I did #41), which is how many are listed at the Beer Camp website. But since 43 was held in 2011, it’s probably closer to 50 by now. Certainly, there’s been enough of them for ABI to have noticed. [UPDATE: Since I originally posted this, a colleague sent me a note that they knew someone who did Beer Camp #67 and believe that it's closer to 80.]

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I can just hear ABI’s lawyers, if the situation was reversed, arguing that this would create confusion in the mind of the consumer. I couldn’t find any of the commercials on YouTube, so I just photographed it on my television screen.

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Doing a Google search, all I could find was links to a few comedian’s websites talking about how they were involved in a series of “Bud Light beer camp” ads for Comedy Central. One conedian, Adam Newman, even had an embedded video, but it has been taken down. That site said it was a “six-part Bud Light ‘Beer Camp’ series” and included “other hilarious comedians Trevor Williams, Zack Poitras, Craig Rowin, and Jermaine Fowler.” He said it was “running this summer on Comedy Central.”

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A second Bud Light Beer Camp commercial ran at the end of the Colbert Report, and that one included a screen promoting the Port Paradise Music Festival, which appears to be a two-day music festival and cruise to the Bahamas that they’re sponsoring.

I assume that even with all of Sierra Nevada’s resources, they still won’t be taking ABI to court over this, though I imagine if the situation was reversed, that’s exactly what Bud would do.

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Welcome To The World ABInBevMo

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By now you’ve already seen the news that Anheuser-Busch InBev has taken another step closer to realizing their quest for world domination in the beer business. They’d already owned half of Mexican powerhouse brewer Grupo Modelo — makers of Corona, among other brands — but it was non-voting stock and they asserted very little control over them. In fact, Corona is often a competitor in the U.S., usually with non-Bud distributors. The irony, of course, is whether you bought Bud or Corona, eventually at least some of that money still made its way to ABI. The phrase “laughing all the way to the bank” springs to mind. Hard as it to believe, they already have a new website up even though the merger’s only been finalized in the last twenty-four hours. The name of the new site is Global Beer Leader. Does anybody else think that sounds ominously close to North Korea’s “dear leader?”

ABI is paying Grupo Model $20.1 billion to become ABIM, making it the second-biggest deal ever brokered in the beer world. The first was the $52 billion InBev paid to merge with Anheuser-Busch in 2008. The deal still needs government approval, and will likely be addressed and decided in the first quarter of next year.

According to the deal, Crown Imports — the current importer of Corona and other Grupo Modelo brands under the Constellation Brands umbrella — will continue to be the importer to the U.S. In fact, part of the deal includes the sale of the half of Crown Imports owned by Grupo Modelo to Constellation Brands, who had owned the other half, for $1.85 billion. That gives them 100% control over the distribution of the Modelo brands in America. ABIM head honcho Carlos Brito told Harry Schumacher this morning that they’re looking at this as a golden opportunity primarily to combine Bud and Corona outside the U.S. in the global beer market.

Adam Nason at Beer Pulse has a helpful chart showing that the merger gives ABIM control over 8 of the top 15 global beer brands, just over half.

Full details of the deal can be found at the new website Global Beer Leader.

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NOTE: This NOT their official new logo, I made this up as a parody.

A-B InBev Trademarks 40+ Airport Codes

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Here’s a strange development. Remember Anheuser-Busch InBev filed trademark applications for over a dozen telephone area codes a few months ago. Speculation ran high that they were planning on duplicating the success of their recent acquisition, Goose Island Brewing, and their 312 Urban Wheat Ale, named after the local Chicago area code, but nobody could say for sure. This past Monday, the U.S. Patent and Trademark Office granted ABI a 6-month extension to submit their mandatory “Statement of Use” forms, meaning we’ll have to wait a bit longer to discover exactly how they’re planning on using those area codes.

Pro Brewer is now reporting — though the original sources are Evan Benn on St. Louis Today and Jenn Litz at Craft Business Daily — that ABI has spent over $12,000 filing similar applications to lock-up over 40 airport codes, including “LAX (Los Angeles), SFO (San Francisco), MIA (Miami), BOS (Boston) and LGA (New York LaGuardia).” Again, no word on what the plan is for them, but it would have to be for a beer name, wouldn’t it? What else could it be? Surely not just making sure no one else uses them? ‘Cause that would be kinda evil. What’s next, famous zip codes? Two-digit state codes? There was a great joke Lily Tomlin used to tell in her stand-up act. “I love it how New York City named their streets after all the famous numbers.”

Big Changes At A-B InBev

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Wow, there’s a lot going over at Anheuser-Busch InBev, and besides the slip in sales of their core brands. Last week, rumors abounded that ABI was planning to roll out some version of 100% Share of Mind, which had been the “unofficial” policy until a few years ago, when it became unworkable. I wrote about it four years ago as it started to wane in Losing Their Share of Mind, and you can get the history and background of the policy there, assuming you’re unfamiliar with it. In a nutshell, A-B insisted that their distributors focus ONLY on A-B and A-B-related brands, and there were ways they had for dealing with those distributors that didn’t toe the line. And it worked well enough while A-B brands were selling well, but when they began to slip, it became harder to enforce and harder for distributors to remain profitable without taking on non-A-B brands, especially craft brands.

According to Beer Business Daily, ABI “is again turning up the leverage with Sales Opportunity Teams starting next week.” Apparently “Sales Opportunity Teams” (SOT) is the new buzzword for it this time around. They continued:

The SOTs, which A-B chief Dave Peacock has repeatedly said are not punitive in nature, will certainly be uncomfortable for distributors with growing competing brands in the house, as they try to explain this or that competing display or tap handle on the floor.

It’s got to be even harder this time, with craft beer riding a wave, with great growth, higher rings and consequently more profits. Sell less, make more. Hard to walk away from that, but of course having the best-selling brands is also pretty attractive, too. So what’s a distributor to do?

Today, the other shoe dropped, as Anheuser-Busch President Dave Peacock — and the last of the pre-InBev top executives — resigned effective today. According to ProBrewer

Peacock was one of the few remaining high-level holdovers who had stayed with the company after it was acquired in 2008 by InBev. He was only one of two non-Busch family members to hold the title of CEO.

Peacock is well liked by wholesalers and is known as reasonable, fair and an advocate for the second tier. The latest pressure on wholesalers by InBevAB may certainly have prompted Peacocks departure.

Peacock began his career at A-B in 1992 and was promoted to president in 2008 in the wake of the acquisition after serving as VP-marketing since late 2007. Many U.S. executives departed after the InBev takeover, but Peacock was handpicked by the new owners to lead the U.S. operation.

Harry Schuhmacher, in his Beer Business Daily, broke the news this morning, calling it “a watershed moment in the history of A-B since its acquisition by InBev.”

Coincidence? Hard to imagine the two developments are completely unrelated, especially since Beer Business Daily, presumably working from a press release, states he’s leaving “to spend more time with his family and pursue other business interests.” I’m always more than a little suspicious when that’s the official reason for leaving, as it so often is in circumstances like this one.

Peacock is succeeded by Luiz Fernando Edmond, who until today was the Zone President of North America. Oh, and Bud Light Platinum is coming soon, in the cobalt blue bottle, and should be on store shelves as early as this week. They’re calling it a “game changer,” but I tend to think these other two developments will change the beer landscape far more than a Bud Light line extension.

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High Alcohol, Low Calories: Bud Light Platinum

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This is a bit of a head scratcher. Though it’s been rumored for a while now, apparently it is coming, as AdAge is reporting that the TTB has given label approval for Bud Light Platinum. Though thought to be somewhere between 6% and 8% a.b.v., AdAge indicated the new low-calorie beer will weigh in at 6% and have 137 calories. Regular Bud Light is 4.2% a.b.v. and has 110 calories. And as regular Budweiser is 5% and 145 calories, it’s hard to see the point. Apparently, the idea is “to tap into the rising popularity of craft beers, which tend to be fuller bodied with more alcohol.” Sure, just throw in some alcohol, that should fool people. Apparently they’re missing the point that craft beer drinkers want flavor, not just higher octane. But given how successful the big brewers have been at convincing people to drink low-calorie light beers, I have little doubt this couldn’t work, too, however illogical I find the very notion of light beer.

ABI has also apparently registered the domain name budlightplatinum.com, but it’s not yet an active website. There’s not even a placeholder there so it may be some time before we see the actual beer. ABI has also not yet made an official announcement or sent out a press release.

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Area Code Beer

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After Anheuser-Busch InBev‘s recent acquisition of Goose Island for just under $40 million, it seems they may be taking a page from the Chicago microbrewery’s success. One of Goose Island’s most popular beers is 312 Urban Wheat Ale, named for the Chicago telephone area code.

Officially known as the Telephone Numbering Plan, it was first implemented only in large metropolitan areas in the late 1940s, and was nationwide by 1966. Until the number of area codes exploded due to fax machines, beepers (remember beepers?) and then mobile phones, many cities became closely associated with their area codes, being recognizable at once to anyone in the know. Thanks to such positive associations — not to mention being a tasty brew — Goose Island’s 312 became their best-selling beer, especially in their local market.

It appears that ABI is hoping such positive associations with local area codes will work as well in other cities as it has in Chicago. Earlier this year, in May, they applied for a federal trademark for the area codes in fourteen metropolitan areas. So far they’re seeking a trademark for 202 (Washington, D.C.), 214 (Dallas), 216 (Cleveland), 303 (Denver), 305 (Miami), 314 (St. Louis), 412 (Pittsburgh), 415 (San Francisco), 602 (Phoenix), 615 (Nashville), 619 (San Diego), 702 (Las Vegas), 704 (Charlotte), and 713 (Houston). I’m a bit surprised that both New York (212) and Philadelphia (215) are both missing from the list. Both seem more well-known to me than several on the original list. So far, there’s no information about ABI’s plans for the trademarks, whether it’s to market the Urban Wheat branded for specific markets or to do different beers in each city. But it’s certainly possible we could see some version of the beer below at some point in the future. Stay tuned.

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Anheuser-Busch InBev Buys Goose Island

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I received a press release this morning that Anheuser-Busch InBev is buying a controlling interest in Goose Island Brewing. ABI will pay $22.5 million for a 58% share of the Chicago brewery and the remaining 42% currently owned by the Craft Brewers Alliance will be sold to ABI for an additional $16.3 million in cash, bringing the total price of the sale to $38.8 million. The Chicago Tribune is reporting that “[a]n additional $1.3 million will be invested to increase production at Goose Island’s Fulton Street brewery” and that the “transaction is expected to close by the end of June.”

From the press release:

Chicago-based Goose Island, one of the nation’s most‑respected and fastest-growing small brewers with sales concentrated throughout the Midwest, today announced it had agreed to be acquired by Anheuser‑Busch, its current distribution partner, in a move that will bring additional capital into Goose Island’s operations to meet growing consumer demand for its brands and deepen its Chicago and Midwest distribution.

Goose Island’s legal name is Fulton Street Brewery LLC (FSB). Anheuser-Busch reached an agreement to purchase the majority (58 percent) equity stake in FSB from its founders and investors, held in Goose Holdings Inc. (GHI), for $22.5 million. Craft Brewers Alliance Inc. (CBA), an independent, publicly traded brewer based in Portland, Ore., that operates Widmer Brothers, Redhook and Kona breweries, owns the remaining 42 percent of FSB and reached an agreement in principle to sell its stake in FSB to Anheuser-Busch for $16.3 million in cash. Anheuser‑Busch holds a minority stake (32.25 percent) in CBA.

Goose Island sold approximately 127,000 barrels of Honkers Ale, 312 Urban Wheat Ale, Matilda and other brands in 2010. To help meet immediate demand, an additional $1.3 million will be invested to increase Goose Island’s Chicago Fulton Street brewery’s production as early as this summer.

“Demand for our beers has grown beyond our capacity to serve our wholesale partners, retailers, and beer lovers,” said Goose Island founder and president John Hall, who will continue as Goose Island chief executive officer. “This partnership between our extraordinary artisanal brewing team and one of the best brewers in the world in Anheuser-Busch will bring resources to brew more beer here in Chicago to reach more beer drinkers, while continuing our development of new beer styles. This agreement helps us achieve our goals with an ideal partner who helped fuel our growth, appreciates our products and supports their success.”

Hall will continue to be responsible for Goose Island beer production and the expansion of Goose Island’s Chicago brewery, where production will continue and its business will still be based.

“The new structure will preserve the qualities that make Goose Island’s beers unique, strictly maintain our recipes and brewing processes,” Hall said. “We had several options, but we decided to go with Anheuser‑Busch because it was the best. The transaction is good for our stakeholders, employees and customers.”

Anheuser-Busch has distributed Goose Island brands since 2006 as part of an agreement with Widmer Brothers Brewing Co. of Portland, Ore., a co-founder of CBA, that provides Goose Island access to the network of independent wholesalers that distribute Anheuser-Busch beers. Anheuser‑Busch also provides logistical support to all Anheuser‑Busch wholesalers distributing Goose Island and CBA beers as part of that agreement.

“These critically acclaimed beers are the hometown pride of Chicagoans,” said Dave Peacock, president of Anheuser-Busch, Inc. “We are very committed to expanding in the high‑end beer segment, and this deal expands our portfolio of brands with high-quality, regional beers. As we share ideas and bring our different strengths and experiences together, we can accelerate the growth of these brands.”

The two Goose Island brew pubs are not part of the deal, but will continue in operation, offering consumers an opportunity to sample Goose Island’s award-winning specialty beers and food selections.
As part of CBA’s agreement to sell its 42 percent block in FSB to Anheuser-Busch, in addition to cash, Anheuser-Busch will provide enhanced retail selling support for CBA brands, will reduce distribution fees payable by CBA to Anheuser‑Busch and will provide CBA additional flexibility with respect to future acquisitions and divestitures.

In a separate press release today, Goose Island announced that Brett Porter will become Brewmaster of the production facility, replacing longtime brewmaster Greg Hall. Porter’s most recent brewing job was with Deschutes and he’s also brewed at Portland Brewing and a couple of UK breweries.

UPDATE: Goose Island founder John Hall has released a short statement about their acquisition by ABI, which they call a Special Announcement.

More On The Possibility Of An ABI / SABMiller Merger

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You’ll no doubt recall the Interwebs were lit up last week with the idea of an Anheuser-Busch InBev merger with SABMiller, which was started by Credit Suisse analysts engaging in speculation. While there were some reports to the contrary, the two mega-beer companies were not in talks.

Yesterday, apparently Credit Suisse followed-up their report by saying, after fueling such a flurry of speculation, that “nobody in our diverse pool of responders indicated that we are off the mark.” They further suggest that ABI “could come knocking” on SABMiller’s door before the end of this year.

As usual, there’s more to it, such as stakes in Grupo Modelo are part of the equation. You can read more about those at Beer Business Daily, which again I heartily recommend that everyone get a subscription to Harry’s newsletter.