Trends, and the Trendy People Who Are Trending Them

A rare cross-posting from my Session Beer Project blog, because there's more here than just session beer. 

"Not Even Justin Timberlake Can Save Bud Light Platinum"

You know how I know session beer is the smart new trend for craft brewers?

Because the big brewers are making higher ABV beers.

Check out this story in Ad Age. ABInBev and Miller Coors are betting big on boozier beers.

That appears to be part of the playbook for MillerCoors and Anheuser-Busch InBev, which have turned to pricier, higher-alcohol line extensions to recapture share from growing liquor brands. The latest entry: Miller Fortune, which will debut next year at 6.9% alcohol by volume with a marketing strategy aimed at luring millennial males during nighttime drinking occasions.

The brew, in the works for months, follows A-B InBev's recent launches of Bud Light Platinum and Budweiser Black Crown, which both check in at 6% ABV, compared with 4.2% for most light beers. The goal for brewers is to reach variety-seeking drinkers whose habits lead them to the liquor shelf and away from beers their fathers drank. 

(Can anyone tell me what the latest sales curves are like on Platinum? Thought I heard they sucked. Oh, here it is: "Not Even Justin Timberlake Can Save Bud Light Platinum")

Guys, guys, guys...People don't want beer with more alcohol. They want beer with more flavor. And Bud Light Platinum doesn't have beer flavor, it has added flavor, artificial flavor. Session beers have real flavor, and that's what people want. Good luck with the big beers; you're only about eight years behind the curve.

Small Batch Budweiser

That's right, I said "Small Batch Budweiser." I just got a press release from Anheuser-Busch about "Project 12," a "friendly competition" in which brewmasters at A-B's twelve American facilities (rumors continue to float that one will actually be closing sometime in the near future, possibly the Newark, NJ brewery) brewed beers "using the proprietary yeast directly descended from the original Budweiser yeast culture used by Adolphus Busch in 1876 and still used by Budweiser today."

“The key to this project was the common yeast – which is a very important and often under-appreciated contributor to the flavor and aroma of beer,” said Jane Killebrew-Galeski, director of brewing, quality and innovation for Anheuser-Busch. “We are proud of all these beers – the variety and the quality – but we want consumer feedback. So, we’re looking forward to what we hear when we sample this summer. Our objective is to allow our brewmasters to show some creativity, but the beers must fit the hallmarks the Budweiser brand is respected for, such as quality and consistency, and have a very crisp and clean taste.”

Okay, it's Bud that isn't Bud. But they stayed fairly close to the farm. Each beer is a lager "using all-natural ingredients." Six were selected to be part of a national sampling program to pare it down to three that will be released in a sampler pack this fall.

The beers are named for the ZIP code of the breweries. Here's what they made, briefly.

• Budweiser Small Batch 91406 (Los Angeles):  A deep-amber lager with 6 percent ABV that uses four different types of hops.
  
• 63118 (St. Louis):  A deep-gold 5 percent ABV American lager that uses the same types of hops (Hallertau and Tettnang) commonly used at the St. Louis brewery during  the 19th century. 
• 43229 (Ohio): A light-amber lager using eight different types of hops with 6 percent ABV. 
• 23185 (Virginia): A light-amber all-malt bourbon cask lager aged on bourbon staves and vanilla beans and with an ABV of 5.5 percent.
  
• 13027 (New York): A bright-golden lager brewed with six imported and domestic hops and with an ABV of 7 percent.
  
• 80524 (Colorado): A deep-gold, filtered wheat beer with 5.2 percent ABV using lemon peel, orange peel and coriander.

Why do we care? "The six sampler beers also will be sampled during “Budweiser Made in America” over Labor Day weekend in Philadelphia. The two-day music festival benefits United Way." I never knew we were a big Budweiser town. Wait, we're not. So is it about our music scene? Probably not. Is it about our being the birthplace of America? Maybe... Is it about getting a lot of attention for Budweiser in a town where Yuengling Lager is kicking their ass? Maybe... To be clear, I'm not really sure what that's about.

But I don't see this being anymore of a wavemaking, attention-getting breakthrough for Budweiser than any of the other projects A-B has tried. People just don't seem to want craft beer called Budweiser (which Shocktop is not), no matter what is wrapped around it, and I don't expect this to be any different. I'd be happy to try some of these, and I suspect they'll probably be good (except maybe that bourbon cask thing...I'm suspicious, but maybe they learned something from Goose Island). But I don't see this being anything significant.

Big Brewers Continue Same Old Dance; Can't Hear the New Music

Update: this just happened, it's all up to the anti-monopoly agencies now.

As beer drinkers in America continue to abandon light bland lagers for more interesting and varied beers (at a small but growing pace), the folks who run the world's largest breweries continue on as if nothing had changed. There is news today (in the Wall Street Journal) that ABInBev -- the Brazilian-Belgian behemoth that is inexorably swallowing everything beer-related -- is nearing a deal to purchase Grupo Modelo, the Mexican brewer of Corona and Modelo Especial. (if you didn't know, these are two very light, bland lagers that sell in huge amounts in America).

Anheuser-Busch InBev NV is close to taking control of Corona Extra beer maker Grupo Modelo, according to people familiar with the matter, in a deal that could be valued at more than $12 billion and would end a contentious history between the two companies. It would also consolidate the Belgian brewer's ownership of Corona Extra, one of the world's top beer brands.
AB InBev currently owns a 50% noncontrolling stake in Modelo, Mexico's largest brewer. The timing of any deal is uncertain, though two of the people said it could come as early as this week. It's also possible that the talks could break down before any deal is reached.

This, against a backdrop of shrinking sales of light, bland lager in the U.S.; although it must be said, that while ABIB's volume sales continue to drop, their profits continue to climb as they ratchet up prices and cut costs. Buying a huge Mexican brewery that makes a fairly high-priced brand -- Corona -- and one of the few strongly-growing light, bland lager brands -- Modelo Especial -- must make these guys salivate. A new company to cut fat out of, and two huge brands (three, really; Corona Light does okay too) ripe for the jacking up of the prices! It's like Christmas morning.

And it's happening around the world, as the WSJ article points out. 

London-based SABMiller agreed to acquire Australia's Foster's last year for some $10 billion, and Dutch brewer Heineken NV paid roughly $7 billion for Femsa Cerveza, Mexico's No. 2 beer maker after Modelo, in 2010.
More recently, Molson Coors Brewing Co. (like SABMiller and ABIB, the merged product of two colossal brewers) this year agreed to buy the Central and East European brewer StarBev LP for $3.5 billion, the biggest purchase ever for the company. The business had been owned by AB InBev, which sold it as part of its post-Anheuser deal retrenchment.

To what end? Well, come on: there's still stellar tons of money to be made in the light, bland lager business. You must know that, even if you spend all your waking hours in a brewpub. But what's the foreseeable end? I still think it looks something like this. I don't see any change in direction, though I have noticed that financial analysts have finally caught on: instead of urging the bigs to focus on their reliable core business -- the light, bland lagers that are losing steam -- they've reversed course and are telling them to get on this craft beer thing. 

If they do, in a big bold way...that could be a game-changer. Because as current sales figures prove, most Americans don't care that they're buying their beer from a big, soulless, foreign-owned corporation, and if that corporation makes a beer that tastes different, and celebrity chefs talk about it, and it has cool ads...they're probably going to buy it. That day's coming closer, and it's going to be a challenge for small brewers to survive against it.

I could be wrong. But I keep thinking of that Damon Runyan line from Guys and Dolls: “The race is not always to the swift, nor the battle to the strong...but that's the way to bet.”

Carlos Wept

Is the consolidation of big brewers going to reduce itself to absurdity? Speculation continues to strengthen that Anheuser-Busch InBev is going to make a bid for SABMiller. Leaving anti-monopoly issues out of it for the moment -- since, well, really: does anyone actually think the U.S. government is going to do anything about one company controlling 2/3+ of the beer market? Of course not; return to work, cogs -- let's think about this.

ABIB has the means to do the deal; they've been slashing costs and raising prices (even though their volume in their most lucrative market -- the U.S. -- is still dropping), they're making more money (not a great long-term state, how long can that go on, eh?)) and the debt from the purchase of A-B is either paid off or close to it; they've got a substantial warchest of almost $5 billion in cash/equivalents that will make a good start towards financing another acquisition.

ABIB probably wants to do the deal. SABMiller has been investing heavily in Africa and Asia, which are still growing beer markets (and ones where ABIB has not been particularly successful). And let's be honest: this is how Carlos Brito and InBev have worked for years. They are not brewers: they are bankers, and they grow their "breweries" by buying other "breweries," which are just counters, money, and markets to them. It's about money and balance sheets, slashing costs and raising prices. Anyone still shocked by that? God, I hope not.

Can SABMiller stop them? Dunno. Finance is not what I do. But judging from the speculation and the effect it's having on SABMiller's share price, it seems like a good guess that the answer is no. Especially since the market seems to "want" this to happen.

That's too bad. For one, the management at SABMiller is pretty sharp, especially in the U.S. part of the company. Sure, head honcho Graham Mackay said that craft beer would inevitably fade -- how's that working out for ya? -- but he's been brilliant on just about everything else. He's probably moving on soon anyway, but he's got some very smart lieutenants...and ABIB would probably dump them all and replace them with bean counters. It seems to be what they do.

This does mean something to you, of course. Consolidation will inevitably lead to more price increases, and when the mainstream beers that are still over 90% of the market take price increases, that's a green light to craft brewers to follow the leaders. Really, they do, because they can, and they want to pay their workers a better wage so that a craft brewmaster can finally make as much as a bottling line worker at a Miller plant.

The upshot? Kinda weird. Like I said here, 2 1/2 years ago, one of these days, Carlos Brito is going to run out of big breweries to buy...and then what happens? Will he start buying spirits companies? Will he start buying into wine? One thing I feel pretty sure about is that he won't suddenly decide to buckle down and make brewing the real focus of his energies. It's just not his style. Or his interest.

"Wife Beater" On Wikipedia?

You may or may not know that the ABIB/InBud-brewed Stella Artois is colloquially known as "Wife Beater" in the UK. Or at least, it was for a while...and now will be again, thanks to the publicity for that embarrassing monicker generated by a hired PR company's clumsy attempts to expunge it. Sure, it's true: read about the original story here in The Independent, and then read the just-drinks.com story here on how InBud defends their actions in hiring Portland Communications to scrub the term "Wife Beater" from the Stella Artois entry on Wikipedia.




(Why "Wife Beater?" Depends on who you ask. There's the "Stella!" line from A Streetcar Named Desire, bellowed by the abusive Stanley Kowalski, but others will tell you that it's because the beer appeals to the kind of yob that would beat his wife, or that the beer's drinkers would be the kind to walk about in the strapped undershirts colloquially called "wife beaters." (Note that Brando's wearing a regular t-shirt in the clip.) I favor the first; fits too well, and the others just sound like snobbery to me.)

I don't care that some intellectually-aware beer drinkers tagged Stella with the name "Wife Beater." Well, I do, a bit; it does wink and giggle at domestic abuse to some extent, and that's bullshit. But as a writer, and a reader, and an independent thinker, I care a lot about this kind of paid clean-up activity on the Internet. It's the greatest strength and weakness of Wikipedia; anyone can edit it, and that leaves it open to abuse...except it's not happening here. The editors caught the changes, and reinstated the references.

Why did Portland think they could do this, and why did InBud believe them? Well, sit down, because someone's got to tell you: it's because they still think you're a bunch of chumps. It's because some marketers still look at us as cattle, as blind sheep, and they don't try to influence you, they set out to manipulate you. There is a difference, and there are ethical, good-minded marketers who look to influence your decisions without insulting you. Portland Communications are not such marketers, and apparently, InBud doesn't hire that kind, either.

Friends from Europe have been telling me for years -- years! -- that InterBrew, then InBev, and now ABIB is a company that's bad for the industry, that they indulged in bad business practices, that they killed breweries, that everything they touched turned to crap. I resisted. Stella, for what it's worth, still tastes decent when it's a fresh draft, and that's my touchstone: what's in the glass? I just repeated that to folks at Bocktown Monaca who had come out to see me last Tuesday: I don't care who's making it -- as long as they're not using child or convict labor -- I care about how it tastes.

But this...leaves a bad taste in my mouth.

Bud Light Platinum -- and I thought Miller Clear was dopey

It's like Bud Light doing a pole dance...

Go read this, and come back. We need to talk.

All up to speed? Okay. The quote that stands out there (other than "higher-alcoholic beer," what the hell, fella, was there something too tame (and accurate) about "higher-alcohol"?) for me is this one: "Bud Light Platinum is a trendy blue-bottle line extension that appeals to a key group of beer drinkers and expands consumer occasions.”

WTF?

• Blue bottles are trendy?
• Blue bottles are a type of beer?
• Blue bottles appeal to a key group of beer drinkers? WHO?

You guys should know by now that I don't slap AB around just for fun, but this idea's got "cognitive disaster" stamped all over it. A 137 calorie "light beer" with 6% ABV? Right, pound these like 4.2% 105 calorie Bud Light (because it does say BUD LIGHT right on it), and you'll be knee-walking -- knee-walking and fat -- in no time.

I'm seeing a lot of people -- beer geeks -- saying this is a shot at the craft market. I'm sorry: you're stoned. You guys think everything is about craft beer: it's not. Craft beer is still under 6% of the market. It's growing, it's profitable, and you've got Dark Lord in your cellar, but 7 out of 8 beer drinkers are still pounding mainstream suds, okay?

What we have here is yet another attempt to get people to pay more for light beer. I'm not sure how making "Bud Light" stronger than Bud (at 5.0%) and only 8 calories "lighter" per 12 oz. can is gonna do that, but that's what they're doing. It's crazy, and it's going to fail. Everyone in the media knows it's going to fail, you know it's going to fail. This is going to be another Bud Select, a big fat expensive FAIL. Why are they doing this? Did all the smart people quit or get laid off?

Ah, well. Sit back and watch the follies.

An addition that was too good to pass up. Convenience Store News notes in their story on Bud Light Platinum that it "...has the chance to be a trailblazer in the light beer market. Most beers in that category deliver fewer calories and carbohydrates than standard beers, while providing a lower alcohol content." Oh, CSN, if I didn't know better, I'd think you having some fun with these guys! 

Goose Island to be Acquired by AB InBev

Just got this. Goose Island has agreed to be acquired by AB InBev. Important points: John Hall stays on as CEO (no word of Greg Hall's status - update: it's been announced that Greg will be stepping down as brewmaster); this is a 100% acquisition; the two Goose Island brewpubs are NOT part of the deal; ABIB will invest in a brewery expansion immediately; and wholesalers will not be affected. Read on:

GOOSE ISLAND SELECTS CURRENT PARTNER ANHEUSER-BUSCH FOR GROWTH STRATEGY

Chicago Small Brewer, Craft Brewers Alliance to Sell Stakes in Goose Island;

Expansion of Chicago Brewery Planned

CHICAGO (March 28, 2011) – 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. 

Wholesalers currently servicing retailers with Goose Island beers will continue to do so with no disruption in service.

“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.” 

Anheuser-Busch’s purchase of FSB is subject to customary closing conditions, including obtaining required regulatory approvals.  The transaction is expected to close in the second quarter of 2011.

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.

So...if you're a diehard craft beer type, and you love Goose Island...do you keep drinking it? Or do you immediately stop, and start bitching about how it doesn't taste the same anymore? Or do you just...wait and see and try to stay impartial?

MGD 64 Lemonade: I'm not kidding

"MillerCoors Plans Lemonade Beer"

That's an actual headline from the Wall Street Journal. I'm not making this up. Let's get a couple relevant quotes, and then shred this. Here's a  beauty from the Chicago Tribune:

The company expects the brew to attract new consumers to the beer category and to capitalize “on the growing consumer interest in flavored beers,” Andy England, chief marketing officer for Chicago-based MillerCoors, said in a memo to employees Friday.

They better hope something works, because:

Miller Genuine Draft 64, named for the number of calories it contains, got off to an auspicious start after its national rollout in 2008. But sales have cooled. The brand’s unit sales to retailers fell by a double-digit rate in the third quarter, the company said in November, while MillerCoors’s overall sales to retailers declined 4 percent. 

Does that sound familiar? Chillingly familiar? That's right!

MillerCoors, a joint venture of U.K. beer giant SABMiller PLC and U.S.-Canadian brewer Molson Coors Brewing Co., has struggled with another fruit-flavored brand: Miller Chill. The lime-infused light lager enjoyed a strong debut in 2007, but its sales slid after larger rival Anheuser-Busch Inc. unveiled Bud Light Lime the next year.

Hey, if ABIB 'steals' lime (i.e., does it better, which Bud Light Lime did: Chill was poorly executed), just go to lemon! They'll never think of copying that! 

The two/three (your call: is "MillerCoors" one big brewer, or two?) big brewers are having a bad time of it. The economy is clobbering their main consumers, and craft beer has apparently reached a tipping point that has consumers across the spectrum interested, despite higher prices. Mainstream beer is taking an ass-whipping, even light beer sales are down (they're actually up over the last two quarters, I believe...but only because the previous year's numbers were so bad), and the mainstream imports are having their damned lunch eaten (and getting kicked around the schoolyard to boot). 

No, wait...Yuengling is pretty much mainstream -- a bit out of it, but it's essentially a light lager made with a substantial amount of corn, and they do have a light beer -- and they're kicking ass and looking for a new production plant. Could it be that it's actually...the big brewers' marketing that sucks? Oh, man, if the marketing fails...

Here's what happens when the marketing fails. ABIB's sales dropped 3.1% last year (MillerCoors fell 3.4% over that period). But things are not unhappy at the big brewers. Why?

The two brewers, which together account for nearly four out of every five beers sold in the U.S., still have managed to record steady profit growth, offsetting their weaker sales volumes by raising prices and cutting costs. 

Sound business practice, leading to expansion...well, no. What this really leads to is retiring debt, and then going to look for other breweries to buy and ravage -- sorry, lead to new heights of world domination. Rumors are rife that Diageo may finally be ready to unload Guinness (there are even some rumors that ABIB might be ready to just eat Diageo whole), and Grupo Modelo is a likely target. Carlsberg and Heineken are probably safe from takeover because of their ownership structure, but analysts are predicting that the final round of consolidation may at last be upon us, as the signs from the Book of Revelations appear. (It's getting tighter in spirits, too: Diageo, Pernod Ricard, Bacardi, LVMH (who seems more interested in buying up more luxury goods than booze lately), United, and Gruppo Campari are circling like wrasslers in a huge cage match, while Brown-Forman and Fortune hang out in the corners. That one's gonna get bloody.)

Who will win? I guarantee it won't be the consumer, and government anti-monopoly agencies seem to be nowhere in sight.

Meanwhile, that "growing consumer interest in flavored beers"? Like the smartass fish used to tell Charlie the Tuna, consumers aren't interested in flavored beer, they're interested in beer with flavor.
 

FEMSA Follow-up

Hey, remember we were talking about how well Dos Equis is doing for Heineken USA? Keep in mind that Heineken USA is just the importer; the beer is brewed and owned by Mexican brewer/drinks conglomerate FEMSA (Fomento Económico Mexicano, S.A. de C.V.). But I see in the Financial Times today that they are "in talks" to sell off their beer business, to either SABMiller or Heineken, in order to focus on their profitable Coca-Cola business. Here's why I posted, in light of the previous post:

Heineken USA has distributed Femsa's beer in the US since 2005, after Femsa's decision to extract itself from a distribution deal in 2004 with former partner Interbrew. Femsa and Heineken USA, a unit of the Dutch beermaker, signed a deal in April 2007 to extend their relationship for another 10 years.
But the US partnership with Heineken has underperformed, industry insiders say, as Femsa's beers have struggled to compete against fellow Mexican brewer Modelo and its ubiquitous top beer, Corona.
[...]
But the need for consolidation in the Latin American brewing arena has taken on a new level of urgency in the wake of InBev's $52bn deal to buy Anheuser-Busch. As part of that transaction, InBev, the world's largest brewer, gained a 50 per cent stake in family-run Modelo.

In other words...the strong growth FEMSA's Dos Equis and Tecate have shown in the U.S. isn't enough, because they aren't Corona. They have "underperformed." Sounds to me more like FEMSA doesn't have the stomach for the fight.

What it really sounds to me is that the "need for consolidation" is lemming-like, brewers rushing to buy other brewers so they get big enough to fight for market share, when all they're actually doing is fattening themselves for the kill.

And who gets rich? Bankers. Who gets screwed? Brewers, and you, my friends, because huge brewers can and will throw their weight around and have an effect on the entire beer market, including crafts, just like Wal-Mart does in retail.

And what will happen when there are but three or four mega-monster brewers left? I hope someone's standing by Carlos Brito, ready with a videocamera:

When Alexander saw the breadth of his domain, he wept, for there were no more worlds to conquer.

Bud Light Golden Wheat

That, believe it or not, is a Bud Light. The head didn't last too long (though I won't swear it was the beer's fault; I may have gotten a little grease on the inside of the glass), but it's cloudy, and it definitely smells of orange and a hint of fresh grassiness.

Okay, it's a Bud Light Golden Wheat. I got some samples, and I will give it the same shot I did the Miller Lite Craft beers. Gotta admit, I'm impressed with this more than with those already, just on the look and the aroma.

Well...there's not a lot here. Light body -- though not as thin as a Bud Light -- and they certainly didn't overdo the orange like Miller did; it's there, but it's unobtrusive to the point of understatement. It's not sweet, and that's good. It's not thin, it's not cloying, it's not really flawed.

And if that sounds like I'm damning with faint praise, well, I guess I am. BLGW fails in the classic manner of light beers: there's nothing wrong with it, but there's not a lot right, either. A beer's got to be something good, it's not enough to not be something bad. BLGW succeeds in one thing: it is easy to drink. Plain boiled white rice is easy to eat, but I don't often make a meal of it. I suspect I'll be having Bud Light Golden Wheat even less often.

What about the commerical prospects? I mean, I'm hardly the target market, and most of you aren't either, most likely. I think it's going to fall between the rails. It's too cloudy and heavy (too mouthy?) for light beer drinkers. Bud Light Lime has been a big success, but it's light and clear, where this isn't. What's more, this is another summertime kind of beer. Can't see this one working in the wintertime, which means even if it is successful, it's going to cannibalize BLL. And Blue Moon drinkers will kick it aside quickly as watery next to their tipple...though there may be some siphoning off of drinkers who are looking for a Blue Moon light. If that happens, well, how long do you think it's going to take Coors to do a Blue Moon Light, maybe a Half Moon? (I actually believe Coors is smart enough to let that go, and they should; it would deflate the brand's image.) I don't see this one working.

One other thing...it bothers me that the success of Blue Moon has led wannabe competitors to just class these beers as "wheat" beers. Guys, you're working for a brewery, one with world-wide connections and a huge staff of highly-trained brewers, and I've met and talked with some of them: you know damned well that there is more than one type of wheat beer. So why do you let the marketeers be stupid about this? It's not just a wheat beer, it's a --

Oh. My. God. It just hit me. Of course. It's a witbier-inspired beer...a Belgian-inspired beer. Is it that InBud doesn't want people making the Leuven connection, doesn't want to in-their-face American customers with the Belgian-based dark overlords of Budweiser? I don't know, but it is a consideration.

Still irks me.

Got a package...

InBud sent me two packages recently. I got the same one Uncle Jack did (and I ask the same question), and I also got some bottles of the new Bud Light Golden Wheat. I shall approach it with an open mind, as I always try to do. But as I tore my way through armor-plate level bubblewrap and tape, cursing and yanking, I couldn't help thinking...guys, come on. It's Bud Light. If it breaks, you'll just make more, right? When I get a sample of really great whiskey (and I've got a 25 year old Rittenhouse Rye I'm getting to real soon here), okay, seal it in steel lined with gel-packs. There is no more of it. But this is overkill.

God, I'm bitchy today. I need a Guinness.

Bud Light Morphs Again: takes on Blue Moon

Fresh off last year's apparently successful challenge to Corona with Bud Light Lime, another Bud Light line extension is in the works: Bud Light Golden Wheat. I missed the announcement on this back in mid-June, but the launch is coming up on October 5, so I'm still ahead a little...

Anyway, as you can clearly see by the graphic, this is a definite line extension keying off the BLL success...and it appears to have the same kind of targeting. Though the name might lead you to believe this is primarily a wheat beer, and the cloudiness might lead you to believe it's an "American hefeweizen," it's not. Check this out, from the St. Louis Business Journal:

The beer will use unfiltered wheat so it will look cloudier than its Bud Light counterpart and will have orange and coriander, also known as cilantro [no, actually, it's not], as ingredients to give it a bigger, sweeter taste, according to [vp of marketing Keith] Levy.

Uh-huh. I'm hoping Levy didn't say "The beer will use unfiltered wheat," because I hate when all that field dirt and bugs and such get into the mash... Kidding aside, clearly what we have here is yet another shot at Blue Moon that isn't Shocktop Light. Good idea to set it in the Bud Light family: what's Shocktop to most people?

Still, I'm guessing that this is going to cannibalize more Bud Light Lime than it eats Blue Moon. What these guys need to find is a winter Bud Light to balance the summer strength of Bud Light Lime, not another summer seller. Bud Light Posh Spice? Hey, I dunno, I'm just thinking out loud here...

Hey, Mister Kiely: which of your kids do you like best? Huh? Which one?

Interesting piece in Crain's Chicago Business this week on the struggle MillerCoors boss Leo Kiely is facing. There are a number of components, but the key factor, the big Wahooni, is this: how do you grow both Miller Lite and Coors Light, two beers that are obviously in direct competition with each other...and with the best-selling beer in America, Bud Light. How do you put together a business plan that keeps Coors Light chugging along (the brand grew 6% in the last 12 months, very impressive indeed) and also lights a fire of focus under the flailing Miller Lite (down 4% over the same period)?

This is exactly what I was talking about almost two years ago when I called an impending MillerCoors merger a shotgun wedding. This was a merger that simply had to take place; when you're at this level in a highly consolidated business -- as mainstream brewing certainly is -- the only way to survive is to be the biggest sumbitch in the jungle. SABMiller and Molson Coors weren't big enough alone -- amazing, but true -- to take on A-B, let alone the ABIB juggernaut that was starting to look ever more real at that point. They had to merge to have a hope of winning.

And that's the sad thing about what this business has become. It's not enough to do well any more. It's about the guys at the top winning. It's about the shareholders getting a big pay-out (and taking the money and buying more stocks in hope of hitting the jackpot again when some company gets gutted). The best thing I see about the current deep recession is that these damnable masters of the universe are no longer celebrities. I hope it lasts, and we make much of people who create something other than marketing campaigns and buy-out deals.

ABIB small brands not doing so well; actually, they suck

The St. Louis Post-Dispatch is reporting on "a fascinating item" in trade pub Beer Marketer's Insights about A-B's smaller brands. Budweiser, of course, continues on a 20 year slide, and Bud Light is just about flat, but Bud Light Lime is still sizzling: the brand posted 30 million cases in sales in only 8 months last year, the best launch since Michelob Ultra, and is blazing strong this year, with 36% growth. The company's budget beers, Busch and Natty Light, are doing very well in the shitty economic times.

It's the much smaller brands that are hurting (and ABIB has a LOT of them: "A-B sells about 70 brands that collectively make up less than 1 percent of its total volume, Insights reported."). Some have been cut already, and others are headed to the block (could this finally be the end of Bud Dry, which clings to life in some isolated regional markets?). Here are the numbers from Information Resources Inc.:

Landshark Lager volumes are down 23 percent for the 13 weeks through July 12; Bud Chelada is down 27 percent, and Bud Light Chelada is down 12 percent. And Tilt brands, [now] without caffeine, are suffering serious declines of between 30 percent and 50 percent. Bacardi Silver Mojito is down 30 percent. Michelob Ultra still about even, but Michelob Ultra Amber is down 25 percent. Bass is down 24 percent, Beck's is down 7 percent and Rolling Rock is down 8.5 percent for 13 weeks. Michelob is down 36 percent, Michelob Light is down 28.5 percent and Michelob Amber Bock is down 25 percent for 13 weeks. Bud Select is down 14 percent for 13 weeks.

Bud Select's down? How can they tell? Stella was up 14%, BTW, and the much-despised (by the entire geekerie) Shocktop more than doubled over last year (seriously, Shocktop is the whipping boy for "faux craft" hate).

Wow. There's a lot of room for cutting losses and changing focus. Time to fish or cut bait on this stuff, and stop clogging the distribution channels and fogging the message. You can bet that the Brazilians are going to take a machete to this brand jungle.

Didn't hear anything about Budweiser American Ale, though the numbers I saw for last year were not bad. Let's end on the strangest note of all, though: Bud Ice is up 34 percent. What?

Hop Hound Amber Wheat

Turbid amber color, nice head of creamy foam, bread-fresh aroma with a lightly citrus character to it. Tangy, refreshing, medium body, a real cut to it, spicy/lemony flavor and, long after the beer last moves down the throat, a bitter pull in the back of the throat.

If this were any other kind of beer than an American wheat, I'd cry foul on naming it Hop Hound. Because folks: it ain't that hoppy. But for what is widely, sadly, called "hefeweizen" in the U.S. (particularly in the West, something they just gotta answer for), this is, indeed, on the hoppy end of the scale. Kinda brings back memories of Wild Goose Spring Wheat, although that had a whole different mouthfeel to it, thanks to the English ale brewing.

So... yeah, it's the new Michelob spring seasonal. At 5.3% ABV. And it's really got yeast in there (although the neck label only refers to it as "what's left," and while it's technically not all yeast...it's pretty much yeast), quite a bit of it. The dog thing seems goofy. But it's not a bad beer at all for the category.

Get your flaying knives out: I liked another ABIB product. Damn me, I hate me when I do that. FWIW, I did see a sixpack of Wild Blue last week (in Philly, during Philly Beer Week!) and I still hate that syrupy shit, so there you go.

The World's Largest Brewers: ups and downs

Just saw some interesting numbers: change in stock prices over the last year on the world's largest brewers from a regular e-letter from www.e-malt.com. Rolling down from the year's best performer to the year's biggest loser:

MolsonCoors -- +4.4%
SABMiller -- -15.7%
Heineken -- -48.2%
Carlsberg -- -60.9%
Anheuser-Busch InBev -- -70.7%

MolsonCoors has been tearing up the pea patch lately, running on big margins from Blue Moon and increased volume on Coors Light, enough to offset losses from the Canadian brands side of the business. Coors has put in place a number of things that are appealing directly to their customers: the 'blue mountain' temperature sensing label, the 'air vent' pouring aid on their cans, and they've done away with the goofy "Twins" advertising and have focused on the beer and the fun.

That all seems silly to most craft drinkers, but you know what? We don't drink Coors Light anyway, so they're not aiming at us. They are aiming at us -- or people who are thinking like us -- with the very understated and smart support they're giving Blue Moon. You gotta be some kind of smart to beat the crap out of the average performance of American/European stocks last year: -42%. Hats off to MolsonCoors.

"Anheuser-Busch has become a wholly owned subsidiary of Anheuser-Busch InBev..."

The deal's done. InBev now owns Anheuser-Busch, and the new company is called Anheuser-Busch InBev. Not a lot to say that hasn't already been said... So long Sesame Place, no more laughs about Big Bird and Bud Light. Wonder if Busch Gardens in Williamsburg will go as well? (Sorry, got some questions about this: Sesame Place won't be closing, but ABIB will almost certainly be selling it off for cash; they'll probably sell off every non-brewing asset they can.)
More to the point...whither Michelob, Budweiser American Ale, and all the craft brewer investments -- Craft Brewers Alliance, Coastal, etc.? This company bit off a lot for this merger: they're gonna have to come up with cash -- from selling assets -- and savings -- from cutting costs. This meeting of corporate cultures is going to be the Clash of the Titans. Buckle up, kids.

Another Bump on the Road to InBud

From a Financial Times story on Carlsberg's problems with the weakening Russian rouble (Carlsberg gets about 40% of their profits from their biz in Russia, so it's a big deal for them), comes this further dose of bad news for prospects of the InBud deal:

Currency declines have...hurt the stock of...InBev. The Belgo-Brazilian brewer's stock fell 34 per cent over the past month, closing at €28.68 on Thursday amid fears over its exposure to the sliding Brazilian real (Brazil accounts for about half of InBev's profits.)
The lower InBev's stock falls, the more risky its planned takeover of US brewer Anheuser-Busch becomes. The brewer has already postponed a $9.8bn rights issue to help pay for the takeover, blaming volatile equity markets.
When the deal was announced in July, InBev's shares were trading at €45 and the company would have needed to issue around 196 million new shares to raise the $9.8bn, investment bank Dresdner Kleinwort said. It would now need to issue more than 320 million shares - and find people to buy them.
Anheuser's stock was trading at about $58 on Thursday, some 17 per cent below InBev's offer price of $70 per share.

So when I asked my old college buddy in a local investment firm back in May, what's all the financial activity around BUD mean, he told me that investors were betting that A-B was going to get bought. If BUD is trading 17% below the price shareholders are supposed to reap when InBev buys them out... One of you financial whizzes wanna explain all this?

Budweiser American Ale (and Michelob Pale Ale): first notes

The long-awaited Budweiser American Ale is finally in my glass, after some of the same delivery problems Uncle Jack had (with the weird result that I didn't get the first shipment, but then got two more instead of one; it's okay, I'm sharing).

How about it? It’s bright and clear, it’s a deep ruddy amber, the foam is creamy and light parchment-colored. I smell sweet fresh malt, some caramel, and piney hop. The flavor has all that, in fact, it delivers on the aroma in an almost one-to-one ratio, although the caramel masks the hops to a degree. The ale is not overly full in the mouth, somewhat on the light side, but that’s not really a surprise; A-B was surely intending this as a drinking beer, not a sipper. The biggest surprise for me here is the finish: it’s relatively long, and bitter.

Passing it around here at Tucquan (I wrote this while rusticating on the Susquehanna again, no trip to Conestoga this time) gets some interesting reactions. "Oh, that’s good. I could drink that!" (from Cathy, who’s pretty demanding on beer, but does like a nice pale ale) "That doesn’t taste like beer, that tastes like rye bread!" (my mother, who’s currently drinking a Reading (which, bless her, she insists on calling "Old Reading"), so I’ll take that as a positive), and "It’s not that hoppy" (Uncle Don, who’s drinking Coors Light, but has had many a craft and import with me).

Don’s right, it’s not that hoppy…but for something with "Budweiser" on the label, it’s plenty hoppy. More importantly, for a pale ale, it’s fine, easily as hoppy as SNPA. Actually, turns out it's not...quite. It's about 28 IBU, SNPA is about 32-34. I'd call that ballpark, though.

Interesting to note two things. One, the cap is a pry-off, not a twist-off. A-B has noted that the craft market doesn’t trust twist-off caps. Two, the label is damned near unreadable on that dark red-ochre background. Intentional? Or a rare screw-up?

I had a bottle of Michelob Pale Ale sent to me last week as well, so I decided to do a side-by side. It was revealing.

Not sure, but I think this is another tweak on this beer, which has been around in one form or another, in varying markets, since the mid-1990s. It’s quite a bit lighter that the Bud Ale, more a reddish gold. The nose is restrained (i.e., there ain’t much), mostly a light piney Cascades aroma. It’s fairly creamy with malt, the hop comes through with a brittle edge, and it finishes up quite clean, with a lingering bitterness.

Side-by side? Clearly two different beers. The Bud’s caramel malt gives it a much heavier mouthfeel than the Michelob’s pale malt, while the hoppy edge of the Mich makes it cleaner, crisper. And no, I cannot believe I’m writing those words: "Bud’s caramel malt…much heavier mouthfeel…hoppy edge of the Mich…"

The question for both these beers remains the same as it has for over ten years. Can a beer that is brewed in a "craft" profile, but labeled with a mainstream brand…ever sell? Who’s going to buy it? Bud drinkers? To be blunt: not effin’ likely. Craft drinkers? Maybe, but most of them will not want to buy a beer from A-B (or InBev, for that matter). Sorry, guys, but for the majority of serious craft drinkers, who makes the beer is as important (or more so) as what the beer tastes like. Crossover drinkers? Maybe. If we could ever get a solid number on just how many people who regularly drink Blue Moon know it’s a MolsonCoors product…I could give you a better answer.

Pabst and The King

The InBud deal is bringing some strange stuff to the surface. Pabst felt the need to release a statement yesterday that initially read like this:

In response to the many inquires we have received regarding the acquisition of Anheuser Busch by InBev: No doubt, the AB-InBev combination will create a formidable competitor. And it is true, Pabst Brewing Company will be the last of the famous iconic U.S. brewers to be fully independent and American-owned.

As a Pennsylvanian, Yuengling is pretty iconic to me, but I'll admit that's a parochial attitude. Still..."In response to the many inquiries"? Hoo boy.

Then, of all people, Michael "Eulogy" Naessens released a statement on the deal...since he's Belgian and a CPA. Who knew? I had to chuckle over this bit, though:

“Budweiser was the king of beers when the U.S. beer market was an absolute monarchy and people had little choice. Now it’s more like a constitutional monarchy, with craft beers leading the revolution.” says Naessens.

Hail to The King, baby!