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Jay R. Brooks on Beer

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Stratemagizing A-B Advertising for ’08

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“Offensive in a good way” is how Tony Ponturo, vice-president of global media, sports and entertainment marketing for Anheuser-Busch, sees their strategy for advertising and marketing in 2008. By that he means they “can’t just be defensive in buying assets.” Although I’m pretty sure that’s exactly what every big beer company did once sponsorship of events, leagues, teams, etc. proved a lucrative way to get one’s brand name out there. So welcome to the new model? Doubtful, reading the Brandweek article on A-B’s marketing and advertising plans for 2008, I’m not exactly bowled over by novelty and a fresh approach.

At least we’ll see less new products this year. Of course, it would be hard to match the “80 new products and line extensions” of 2007. Executive V-P Bob Lachky, claiming A-B has “become smarter marketers,” listed only a few of the new product rollouts for this year.

  • Chelada (Bud-plus-Clamato)
  • LandShark Lager
  • Michelob fruit-flavored extensions
  • Shock Top (a Belgian white ale)
  • Wild Blue (a blueberry-flavored beer)

Hmm, none of those sound particularly promising, and I think I’ve already tried at least a couple of them (meaning only that they can’t be altogether new). And I love this bit of ad-speak.

But beer still has plenty of untapped white space, said Marlene Coulis, vp-consumer insights and innovations. Brews coming this year will likely be flavor extensions of existing brands.

“Untapped white space,” now there’s a phrase for you. I’ll be sure to work that into my lexicon this year somehow. It’s just too deliciously jargon-esque not to.

More from the Brandweek piece:

Call it a spin, but A-B is shedding its reliance on growth through distribution and pure image marketing that targets 21-27-year-old males. It has to. Bud and Bud Light have more than 90% distribution in big markets. To grow, A-B has to keep its core drinkers and attract “explorers”—people who seek variety in beverages. A-B also needs new products to win drinkers who reject the existing lineup.

To woo the uninitiated, A-B launched “the great American lager,” from DDB, New York [an ad agency —J], during January bowl games rather than wait for the Super Bowl. The Bud campaign cites product attributes like beechwood aging and seven-step brewing. [Those must be the embarrassing Rob Riggle (from the Daily Show) spots that I’ve been seeing. —J]

“The explorer group has never been talked to like this,” said Keith Levy, vp-brand management. “If we can reach them about what Bud stands for, we can grow.”

Still, the category’s penchant for advertising image in a bottle is not dead. “Image with a reason for being is powerful,” said Lachky. “We’re talking about the product more, and we understand better what the consumer needs are today. Image-only ads and attack ads are only sufficient within the category because our category is competing with wine and liquor.”

That’s why the advertising spend for Bud and Bud Light will increase by $70 million in 2008; cable and digital buys will at least double. Media spend for both brands was $219 million January-October 2007, per Nielsen Monitor-Plus. A-B will also seek more “cross platform” opportunities, as with the “Dude” campaign, which began online around Thanksgiving before jumping to TV a few weeks later.

Does any of that sound very different from what they’ve been doing for years and years? Not to me, and also not to Jim Morris who writes a consumer advertising blog, Advertising for Peanuts, who said in a recent post titled Beating Dead Clydesdales:

The recent history of Budweiser is strewn with carnage left in the wake of their fatal inability to leave a one-shot alone—frogs, whassupers, and now the eternal parade of the dude-utterers. Even when this brand does come across an idea with legs, they spot an ant and imagine a millipede, as has been the case with their long ago worn out “Real men of genius” radio campaign.

I realize that a good beer advertising idea is a rare and precious thing, seldom seen in these parts, but isn’t that all the more reason to nurture and protect it and respect its boundaries, rather than exploiting, devaluing and demeaning it until any memory of its original brilliance is eclipsed by the slagheap of its strained successors?

With the Super Bowl around the corner (Go Packers!), and the writer’s strike still going, advertisers are ponying up record amounts for 30-second spots during the big game. Prices this year are 15% more expensive than last year, as compared to being only 4% higher last year over the previous Super Bowl. A-B has reportedly bought 10 spots for its various brands. Let’s see how many of those are different from the usual fare.

 

The Yeast of Immortality

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Though it appears the focus of this new discovery, at least as reported in Live Science, is mostly about the vain hope of immortality, it does involve beer yeast. Research scientists from USC “have extended the lifespan of yeast, microbes responsible for creating bread and beer, by 10-fold. That’s twice the previous record for life extension in an organism.” Or as USC News put it, “[b]iologists have created [brewer’s] yeast capable of living to 800 in yeast years without apparent side effects.” Normal yeast lives not more than a week, usually. The USC study managed to keep the yeast alive for ten weeks.

The full results of the study will be published today in the Journal of Cell Biology. I can’t say this will have any impact on the brewing industry, but it seems like it can’t hurt to have yeast that is effectively ten-times tougher and longer-lasting.

 

St. James Gate For Sale?

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Back in October of last year, I got slapped around quite a bit when I suggested that Guinness had closed St. James Gate already, as I heard the rumor quite some time before that it was in the works and had sort of figured that the deed had been done. Turns out I was wrong, but not as wrong as some of my critics supposed. I was just ahead of my time. A friend returned recently from Dublin (thanks Chris) and sent me this article from the Irish Independent entitled Last Orders for Brewery as Sale Looms.

The article begins:

The closure of the iconic Guinness brewery at St James’s Gate in Dublin could be one step closer after drinks giant Diageo appointed three sets of consultants to oversee the sale of the prestigious Dublin site. The move away from the city centre could net Diageo a windfall of up to €3bn for the 56-acre plot.

In an effort to keep this from happening, city councilors passed a motion trying to make sure that by law there must be a brewery at the current location. It is believed that “this could restrict future development at the site, thereby reducing its market value.” So it appears that even the City of Dublin is trying to keep Diageo from closing down the nearly 250-year old Guinness brewery at St. James Gate. But if I had to guess, as an international conglomerate, I imagine Diageo will figure out a way around such a small obstacle as that if they really want to unload it.

 

 

Full Sail Re-Boots LTD Series

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Full Sail Brewing in Hood River, Oregon will be re-launching their seasonal LTD series that they debuted in 2007. Though curiously, they’re starting over again with Recipe 01, so perhaps re-booting might be more accurate.

From the press release:

Full Sail proudly announces the return of its lager seasonal program — the LTD series. Our first offering is a wonderfully balanced medium, copper colored lager with subtle hop accents, and a caramel aroma, that goes down smooth – perfect for the winter season. Since its release last year LTD has been embraced by both the critics and consumers alike winning a gold medal in the World Beer Championship and becoming one of the fastest growing new beers in the U.S. (I.R.I 12/02/07) “We are excited to be able to branch out and brew some interesting lager beers as they are such a huge part of brewing tradition. It is one of the best parts about being an independent, employee owned company – we get to celebrate our creativity as well as the rich heritage of beer styles,” said Brewmaster Jamie Emmerson. “It is such a pleasure to brew these beers and have them develop such a fervent following — it is why I love my job!”

LTD Recipe 01 will be available in six-packs and in draught and will begin shipping from the brewery again in January 2008. The bottle labels describe LTD Recipe 01, as an easy drinking, nonetheless way tasty limited edition lager. Featured on the six-pack is a “Malt-O-Meter” that will tell you at a glance that LTD is a medium body, perfectly balanced malty beer with a lovely hop aroma and caramel notes. For the beer aficionados, or the aspiring ones, the bottom of the six-pack features an easy to read chart of “Today’s Recipe”, including hop (Czech Saaz, Hallertauer) and malt varieties (caramel, chocolate and wheat), Plato (16 degrees), I.B.U. (26), alcohol by volume (6.4) and even secret sauce! Full Sail will follow up with a limited edition bottling of LTD Recipe 02, this spring.

Alphabet Soup: A-B Enters the Fray Between S&N and CG for BBH

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This is a story that’s really been going on for some time now, at least a year, probably more. In a nutshell, the BBH (or Baltic Beverages Holding) was created in 1991 by a 50/50 joint venture between Oy Hartwall (a Finnish brewing group) and Procordia Beverages, best known for Pripps (then a Swedish company). The plan was to acquire breweries in the lucrative areas of Russia and the Baltic. And little by little, they did just that. But in 1995, another Swedish company, Orkla, bought Pripps an created a new company, Pripp-Ringnes, only to then merge with Carlsberg in 2000. As a result, the Carlsberg Group became a 50% owner of BBH. Two years later, Scottish & Newcastle bought Hartwell and that’s how we got to today, with BBH being a 50/50 joint venture between Carlsberg and S&N. In the meantime, BBH became the owner of 19 breweries in Russia, Kazakhstan, the Ukraine, Uzbekistan and the Baltics (Estonia, Latvia and Lithuania) which gives them a commanding share of the market, nearly 40% of the fifth largest — and possibly fastest growing — beer economy in the world. Not surprisingly, the predatory nature of corporations generally means that other companies have developed in interest in BBH.

Lately things have heated up with potential take-over bids. The main players have been primarily the Carlsberg Group and Heineken, both of whom have attempted hostile takeover bids to wrest control of BBH from S&N. The negotiations have been very public and quite contentious with accusations of bad faith and underhanded dealings flying around so fast and furious it’s like a blizzard. I’ve been following it somewhat casually but haven’t written about it before now. What’s changed? Today the London Telegraph is reporting that Anheuser-Busch is considering “a potential £4.6bn bid for full control of BBH.”

From the Telegraph article:

S&N already owns 50 per cent of BBH alongside Carlsberg. But the Edinburgh-based brewer is preparing a bid for full control of BBH as part of its defence against Carlsberg, which is plotting its own £10bn takeover bid for S&N as part of a consortium with Heineken.

S&N’s plan would be to finance a bid for BBH by offering a 25 per cent stake to a minority partner.

Anheuser-Busch has long coveted a place in the rapidly expanding Russian beer market and replacing Carlsberg in a new joint venture with S&N would offer it part ownership of the country’s leading brewer.

I was pretty sure A-B had a long-standing relationship with Carlsberg. They definitely used to distribute Carlsberg and their Elephant Malt here in the U.S. It’s interesting to see how quickly any loyalty they might otherwise have felt to Carlsberg over their years of business together goes out the window when the dollar signs twinkle in their eyes. This whole scenario reminds me of your average Godzilla movie where the giant lumbering monsters of business do battle with each other while at the same time stomping on and smashing to bits the very world in which they, too, live. Whatever happens to those flattened buildings (and people) destroyed in their wake are somebody else’s problem, they’re simply externalities. We’re merely the frightened tiny ants of people who can do nothing except watch as they destroy our city.

Rhetoric aside, it will certainly be interesting now to see how this plays out. I know Heineken desperately wants a bigger piece of the Russia beer pie. That’s specifically the reason they bought Krusovice from the Radeburger Group last year. As for A-B’s interest, with slowing sales of domestic beer, I can only imagine they’d love a quick fix like this.

 

A Night In Heaven

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On January 11th, 21st Amendment Brewery broke out the good stuff for a very special beer dinner. It was a five-course dinner, plus amuse bouche (which are essentially smaller sized hors d’œuvre, the name comes from nouvelle cuisine). For beer, owners Shaun O’Sullivan and Nico Freccia dipped deep into their beer cellar, pulling out their own beers from years past, beers picked up during their travels as well as beer given to them by visiting brewers. Only twenty guests were permitted to purchase tickets to the dinner, primarily because many of the beers were in small supply. The brewer’s loft, situated on the mezzanine level in the back overlooking the general seating area below, was the setting for the event. One large rectangular table with a white tablecloth with 24 place settings was the only table in the room. As a result, the dinner had the feel of a large cocktail party in a friend’s home. Throughout the evening, bottles of beer from the library were selected on the spot to pair which each course with no fewer than a half-dozen different beers that could be sampled with each new dish. The price per person was $120, which given the quality of the food and the sheer variety, diversity and uniqueness of the beers was a bargain. When you consider that one of the beers of the evening was Wesvleteren 8, it was a steal. The food was terrific, the company engaging and lively, and the beer heavenly.

 

Shaun O’Sullivan holds a bottle of 2000 Cantillon Gueuze that he hand-carried home from Brussels, after a trip he and I took to Cantillon last year.
 

For more photos from the 21st Amendment Brewer’s Library Dinner, visit the photo gallery.
 

Anderson Valley Gets Real

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I’m not entirely convinced of their claim of combating global warming, but Anderson Valley Brewing announced that they have begun brewing real ales and have added a beer engine to their tasting room, and that’s certainly good enough news for me.

From the press release:

Anderson Valley Brewing Company (AVBC) proudly added to their award-winning line of handcrafted beers, “Real ale”—a natural ale created in a traditional and environmentally-friendly style. Real ale is a beer that highlights Anderson Valley Brewing Company’s continuing efforts to make high quality beers in an environmentally responsible manner. Real ale is:

  • * A truly “organic” ale with only four natural ingredients: malted barely, hops, water and yeast and absolutely no additives.
  • * Served at 10-13 C degrees via a human-powered “hand pull” it’s naturally cool, resulting in far less energy being used for cooling.
  • * Naturally carbonated through the yeast’s effervescence — no additional carbon dioxide is added.
  • * Reducing packaging by using casks which can be reused for up to 20 years.
  • * Created using solar power which provides 40% of Anderson Valley Brewing Company’s annual energy needs.

Though Real ale is environmentally responsible, the traditional method of brewcrafting also results in a more robust, stimulating, and fresh taste that can’t be found in traditional brands. Real ale’s unique flavors and aromas are partly due to the process of fermentation.

While a great many breweries remove yeast before the beer reaches the glass, Real ale differentiates itself by retaining the yeast in the container from which the beer is served. Though the yeast settles at the bottom of the cask and isn’t poured into the glass, the yeast is still active in the cask where the process of fermentation continues until ready to serve. Real ale is currently available in Anderson Valley Brewing Company’s visitor’s center.

 
In other Anderson Valley news, they will be having a special event on February 2 to celebrate their 20th Anniversary. And the 12th annual Boonville Beer Festival will take place in 2008 on May 10.

 

 

The Times Goes For Extremes

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There was another terrific article by Eric Asimov in the New York Times yesterday about extreme beers called A Taste for Brews That Go to Extremes. Although admitting not everybody likes the new extremism, Asimov certainly does and the article also includes several Bay Area beers, including ones from Lagunitas, Mad River and Moylan’s breweries. And there’s a great quote from Brendan Moylan, owner of both Marin Brewing and Moylan’s.

“We’re the same country that put men on the moon, and we’re taking the same approach to beer,” said Brendan Moylan, the founder of Moylan Brewing Company in Novato, Calif. “We passed the rest of the world by ages ago, and they’re just waking up to it.”

The Times also did a tasting of several extreme beers, and happily included two well-known brewers in the process: Garrett Oliver, from Brooklyn Brewing, and Phil Markowski, from Southampton Publick House. Despite their initial derisiveness over the very pursuit of extremeness, even they found beers they enjoyed. 90-Minute IPA from Dogfish Head was the group’s favorite, followed by the Double Simcoe I.P.A. from Weyerbacher and Maximus from Lagunitas. There’s also a Beers of the Times feature where you can listen to the tasters talking about their favorite beers.

 

Coast Range Closed?

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coastrange
I heard a rumor today from a fairly reliable source that Coast Range Brewing in Gilroy, California has closed their doors for good. My understanding is that they’re a Chapter 11 Reorganization Bankruptcy and are actively looking for a buyer.

I’m sorry to say that’s it’s not a huge surprise as they’ve been having financial difficulties … well, for a very long time now. For several years at least they’ve managed to stay afloat due mainly to doing contract beers for a variety of clients, having picked up quite a lot of new business when Golden Pacific Brewing was sold to Gambrinus a few years back. Before that they picked up a tidy sum from a French brewery by selling them the U.S. rights to the name Desperado, which had been the name of their Pale Ale, so that the tequila flavored French Desperado beer could try to take over the American beer market during those thirty seconds when tequila flavored beers were the “in” thing — A-B’s Tequiza, which they still make, managed to own the category.

Coast Range’s passing, though, is quite a shame as I thought brewer Peter Licht was quite talented. Back when fruit beers were more popular, he made a Blackberry Wheat that I thoroughly enjoyed. And he did several fine contract brews for me when I was the beer buyer at BevMo, too. The only reason they never seemed to reach very far beyond their own backyard had more to do with distributor networks, retailers and some poor management decisions than bad product. I will mourn their passing tonight with one of their Farmhouse beers, a new label they debuted two years ago.

Lumpy Gravy: Now That’s A Beer Name

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By know you probably already know that Tony Magee, the iconoclastic owner/brewer of Lagunitas Brewing, is a big fan of Frank Zappa. So far, with the permission of Zappa’s widow, Gail Zappa (who runs the Zappa Family Trust), he’s released a Lagunitas beer on the 40th anniversary of each of Frank Zappa’s first two albums. First there was Freak Out and then Kill Ugly Radio, the original title of his second album, Absolutely Free. Now comes Lumpy Gravy, again using artwork from the original album. I haven’t tried it yet, but I can only hope it’s a brown ale. That would be most fitting.