Previous key positions: President/CEO Krombacher USA 2010-2012, President/CEO Warsteiner Importers Agency 2006-2010, Corporate Director of Malt Beverages Glazer's 1999-2006, Regional Sales Manager Gambrinus 1996-1998, VP Marketing and Distribution Texas Brewing Co. 1996, President Distributor Investment Group 1991-1995, General Manager Coast Distributors (Columbia) 1988-1990, Distributor Development Manager Coors Brewing Co. 1987, President Texas Beers Inc., 1981-1987, Executive VP and GM Coors of Kansas 1978-1981, VP Sales Coors NE 1976-1978, others were sales manager Mid-State Beers, District Mgr. Lone Star Brewing Co and route sales Willowbrook. Active member of many industry associations such as NBWA, WBDT, Oregon Beer, Washington Beer, Utah Beer, Kansas Beer and Louisana Beer assoc. Nominated or won: Inner Circle, Founders, Proud Lion and other awards. Named industry expert in US Bankrupcy, Federal and many state courts.

May 262020

Tomorrow is Jim Koch’s 71st birthday, and as is tradition with these posts, we will visit Jim and Boston Brewing.

The transformation of the Boston Brewing Company in recent years has been truly remarkable. Not long ago, industry pundits questioned the success of the company, and rumors circulated within the industry regarding who would lead the establishment. That was then and this is now. In 2019, Jim acquired DogFish Head, the highly successful Delaware Brewery.  The acquisition enhanced Boston’s high-end beer portfolio, a transaction that, even within a short period of time, was positive for both corporations. Boston Beers’ continued success, however, is best explained in a recent video posted on the Wall Street Journal entitled From Beer to Hard Seltzer, A Culture Pivot Finds a New Market, by Dave Burwick, President, and CEO of Boston Beers. According to Dave, in 2016, the company jumped into the hard seltzer business and targeted predominantly females.  By 2017, however, the strategy had changed to gender-neutral marketing and encompassed the well-educated, upscale consumer. As of this year, the seltzer market has grown from a one percent market share in 2016 to a potential 10% share of the market.  

According to Dave, until recently, Sam Adams had been the favorite child of the Boston Beers; but with the growth of Angry Orchard, Twisted Tea, and Truly, the hard seltzer; Boston Beers needed a culture change.  The company’s stated goal was to be number one in the seltzer category, but to achieve the said objective; it had to be the number one priority of the company. The dollar amount to achieve this goal was not an issue with management, but given the increased competition from both Bud Light Seltzer and Corona Seltzer; it became necessary for Boston to reformulate their liquid and thereby improve the overall taste.

The seltzer category is dominated by two brands, White Claw made by Mike’s, and Truly, brewed by Boston. Both brands have continued their meteoric growth within the category despite the Coronavirus and the multitude of closed trade channels. As seltzers continue to expand, expect additional competitors to jump in the mix, including MillerCoors’ Coors Seltzer, which will arrive later this summer.

In his Wall Street Journal post, Dave goes on to highlight the importance of understanding a company’s culture and one’s commitment to that culture. Boston Beers has certainly been able to make the necessary transitions, while continuing to be a leader in the industry.

It is doubtful that Jim envisioned the success of Boston Beers when he first began the adventure in the early 1980s, but it is easy to see that Jim’s greatest strength is his vision and his ability to recognize change when needed. Let’s wait to see what Boston Beers looks like when Jim turns 80!

Happy 71st, Jim.

May 27th, 2020

 Posted by at 6:00 am
May 122020

Philip Morris’ purchase of the Miller Brewing Company in 1970 changed the fabric of beer operations.  The purchase also marked the beginning-of-the-end for WWII and Korean War veterans who were, at that time, running the industry. The purchase simultaneously launched the takeover of the Baby Boomers within the beer industry. AB was hit right between the eyes by Miller’s aggressive marketing and immediately ramped up their efforts by initially hiring young, college-educated individuals, many with MBAs. Beer professionals of the Greatest Generation were not prepared for such a change in the industry. Many retired, while others moved to distributors before wholesalers changed to the pre-sell concept. Numerous distributorships were available to buy, often marketed for sale in the Wall Street Journal.

By the mid-1980s, the Greatest Generation had disappeared from an industry that was now run by Boomers. History, however, does repeat itself as we witness the last of the Boomers nearing retirement. Boomers born in the late 1950s and early 1960s are currently in their early 60s and late 50s; while older Boomers, those born immediately following WWII, have already left the industry, many due to InBev initiated cutbacks following the purchase of AB.

Crafts, often interested in designing their own unique business models, ignored experienced professionals and instead choose to employ young, inexperienced workers. The advent of the Coronavirus and its negative effect on the industry has impacted the craft brewers’ industry. Many crafts have gone out of business with more expected to follow suit. Even larger, more successful brewers have been negatively impacted by the virus in largely unanticipated ways. Brewers with employees in their late 50s and 60s are facing questions regarding the future of operations as the on-premise opens up and chains beginning to reset appointments.

Many older employees, who are considered more susceptible to the Corona virus, are not willing to leave their homes, yet brewers who are under pressure to ramp-up production, need these employees in the market. HR departments at the breweries will support older employees, while younger bosses and younger employees are out and making calls. What brewers could be facing is the fact that older employees might not feel safe until a vaccine becomes available; something which might not occur until next year. If such is the case, will HR departments support the older employees?

Employees in their late 60s could be offered attractive severance and retirement packages, similar to actions taken by InBev did in 2008. Such packages could be considered a win/win for both parties. Those in their late 50s, however, could be in a more precarious position. They may not yet be ready to retire; while at the same time may not be comfortable returning to the marketplace. How will brewers and some wholesalers handle such employees? As more accounts open, it might soon be all hands-on deck.

Even with the closing of the on-premise, many brewers and wholesalers have logged record sales days, weeks, and months. Now, however, brewers are experiencing a serious and unforeseen scenario. How companies deal with their employees will speak volumes.   

I don’t worry about a number; I am fine with aging.

 Posted by at 6:00 am
May 052020

During college, while working for Willowbrook, the Dallas Coors distributor, some of my time was devoted to keg routes. This somehow “qualified” me to be my fraternity’s official keg buyer for our renowned Ice Cream Socials which entailed 15 kegs of Coors and 10 kegs of Budweiser or Schlitz. Thankfully for me, the pledges were in charge of returning the empty kegs and equipment.

Over the years, kegs have played a large role in the success of the companies I worked with, whether it was running beer distributorships or as an importer. At some companies, the kegs were as much as 40% of a company’s total volume, something that was especially true at Warsteiner. Kegs have always been a profitable item for the three tiers, particularly during the years that wholesalers and brewers did not split handles. Throughout my time at Schlitz in Louisiana, the company enjoyed a 70% draft market share, while in some parts of Kansas, Coors also benefited from a 70% draft market share. Today, one can find accounts with more than 100 different flavors on tap from a variety of wholesalers. Some large on-premise accounts, like the Flying Saucer, honor those customers who work their way through the brands on tap by placing an honoree plaque on the wall of the establishment.  

As important as the keg segment has been in past decades, the current Coronavirus pandemic might change that model. Closing the on-premise killed both that segment and kegs. The cost of closing kegs is now surfacing.  MolsonCoors’ Q1 results show kegs’ aggregate costs in the $50 million range, with an additional $18 million lost in finished keg inventories which are not expected to sell. As bad as MC’s results are, wait until AB reports on their keg losses and write-downs.  The question is: how does the industry evolve the keg segment now assuming the on-premise business will not return to its previous state?  One can assume that in the immediate future, the on-premise keg segment will be much smaller due simply to mandated capacity restrictions.  Expect that both wholesalers and brewers are creating plans to mitigate any future catastrophes. The financial losses are staggering.

Is it reasonable to believe that the PTR for kegs might double? If the current margins increase from 35% – 40% to 70% – 80%, or more for both tiers, any future disasters might not be as expensive. If the overall percentages of keg business drops to five percent or less, will that be considered good or bad? Even with keg cost increases; retail could add an increase of a dollar per glass and still provide a good margin.

Ordering a pint in the future might be getting a pint glass and a 16 ounce can of beer, while some enterprising retailers might create this program with a 19.2 can.  Even pint glasses may disappear and be replaced by 16-ounce plastic cups.  No kegs, no pint glasses, just a 16 ounce can and a plastic cup.  All of which could decrease the retailers’ overall volume, but increase profit and minimize future losses due to closing and the resulting loss of business.

It is fair to say that, at least in the short term, the on-premise business will change, and it may never return to its previous state. For hundreds of years this country has socialized in taverns, now we are socializing over Zoom.

The way prices are increasing, the good old days have passed us by.

Editor’s Note: During the past week, the industry lost two former Coors wholesalers: Willie Davis, the Green Bay Packers Hall of Fame football player and former President of West Coast Beverages, and R.D.Hubbard, the previous owner of Coors of Kansas, owner of Safelite Auto Glass and horse racing tracks across the nation.

I worked for, or with both gentlemen. They were special people and will be missed.

 Posted by at 6:00 am
Apr 282020

Last week the White House outlined a three-phase process in which the country could reopen after closing due to the worst pandemic of our lives. It is during the second step that bars and restaurants could begin to reopen. There is no set timeline for this reopening, and the White House left the final decisions to the individual state governors.

Some of the states are in a better position to implement the reopening process sooner than others. But given the current status of the virus, it is safe to assume that most of the country is still looking at June before returning to a new normal, a date which is still about six weeks away. Even the PGA tour announced they expect to start their season the week of June 8th in Ft. Worth, although without fans at the games. At least it is a start.

In the recent IRI reports, the off-premise dollars and volume numbers still reflect growth, but not as dramatically as the recent four weeks had shown. Most wholesalers are seeing a slowing of the off-premise volume, but even those increases are not enough to offset the on-premise volume losses. Brewers and wholesalers are now looking into the future and making decisions for the next several months. A number of brewers have either reduced their staff by furloughing or laying off employees. Now, more wholesalers have done, or are considering doing, the same to their teams. Still others have decreased their staff salaries by 25% and implemented a reduced work week. Expect more of these reductions in the coming weeks as the shutdown continues.

The question is: will the real cost of the virus shut-down be the loss of sales or the toll that layoffs, furloughs, and salary reductions have had on those affected employees?  Brewers and wholesalers have worked hard to establish a corporate culture and environment to be able to attract and hold high performing employees. Will those employees who have been impacted by the cost-cutting reductions be as committed as they were prior to the virus? Many employees may be disillusioned and will have lost confidence in their company’s leadership. Expect some employees to transfer to beer companies who supported their employees during this crisis.

In the early 1980s, I was the owner and president of the seventh largest Schlitz Distributorship, geographically located in the southern-most point of Texas (The Valley), bordering Mexico.  During this period, the market was hit with a magnitude of issues: the devaluation of the Mexican peso, an oil embargo, the coldest winter in 100 years which resulted in devastation to the Valley’s citrus industry, and all while facing a 50% unemployment rate in The Valley.  I implemented a 10% across-the-board reduction in pay, and personally took a 20% salary reduction. That one decision, to reduce the pay of our staff, might have been the worst business decision of my career as employees lived from paycheck to paycheck.  There were not necessarily interested in the overall picture of the situation as much as they were in ensuring their ability to put food on their families’ table.  

While President of Warsteiner, the European economy was experiencing a 1.5 to 1 exchange rate with the euro, but Warsteiner itself was riding the largest third quarter in the company’s history from both a profit and volume view.  It was at this time that the owners decided to raise their price by four price points, slashed marketing in half, and laid off one-third of Warsteiner’s employees. This resulted in the Warsteiner U.S.A. losing 39% of its volume. Six months after these changes were instituted, the brewery admitted that it had made a mistake and requested that the prices be revised.  Twelve years later, their business still has not returned to those levels.

Those breweries and wholesalers that are able to keep their staff employed could see that commitment payoff for many years into the future. The companies that have no options, but apply their payroll reduction across the board, might also benefit if the companies apply for and receive support through the PPP government program and make those affected employees whole again.

As with the actions of the federal and state governments, when the virus is eliminated the second guessing game will begin and both breweries and wholesalers will be questioning their decisions. Thousands of people have been affected, but sadly, the worst may be yet to come.

Without loyalty, you won’t accomplish anything.

 Posted by at 6:00 am
Apr 072020

Many of us are now into the fourth week of the shelter-in-place virus edict and trying to adjust to our new way of life. Some experts are forecasting that the next couple of weeks will be the most difficult yet as the rate of infections rise and grave economic news continues to increase. 

Bump William’s recent update of the IRI data for the week ending March 22nd, clearly illustrates this point. The majority of the major breweries are experiencing extraordinary off-premise numbers while, at the same time, experiencing sharp declines in on-premise sales. Currently, off-premise volume gains are off setting on-premise volume losses. Even with strong successes in the off-premise, some major breweries, including Pabst and Deschutes, have laid off their on-premise teams, and many breweries may announce additional layoffs by the time this post become public. The longer the pandemic continues, the greater the chance that beer industry people will lose their jobs.

Last week, Nielsen CGA projected a loss of 18 million cases of craft beer during the shutdown, an estimate which could be conservative. Already there have been a number of craft breweries close and the industry expects more to follow suit. The general consensus is that the crafts were over indexed, and this situation is weeding out the weak sisters. Those breweries with owners whose intent was never to invest for the long haul will be among the first to close their doors. While, unfortunately, those crafts that were in the business for the love of beer and had goals of being in for the long-haul, could be negatively affected through no fault of their own. Numerous retailers and wholesalers are instituting policies that have directly impacted the financial viability of crafts, many of whom have over-indexed their on-premise marketing, while simultaneously limiting their investment in the off-premise accounts. The on-premise business is gone, and it will be awhile before it returns.

Many crafts have invested in the chains with new packaging, cans, and chain specialists.  These investments were to have been paid off this spring with new chain resets.  Despite the continuation of sales and services for the retailer, when the retailers postponed their resets, or wholesalers discontinued undertaking resets, the decisions were financially devastating to the crafts. Craft brewers cannot get their beers to the consumer.  When a vendor has their approved products scanning with a retailer, that product should have an opportunity to succeed or fail.

No one truly has a clear picture of what the industry’s future will look like in six months or a year, but one thing is certain, the beer industry will never be the same. Undoubtedly, when the industry looks back, the reflections will be: “we could have done this,” instead of a “what was done.” Hindsight is always 20/20.

Yesterday, the CEO of Raytheon stated that the airline industry would not return to normal for two years assuming a vaccine has been found.  Raytheon, with access to 12 billion dollars, is concerned about small businesses and their supply chain.  To support that chain, Raytheon is making cash available to those vendors.  The CEO stated, “Without our supply chain, we are out of business.”  Retailers and wholesaler should take his words to heart.

Groundhog Day. 

 Posted by at 6:00 am
Mar 312020

We can all agree that the Corona virus has turned the world upside down. But perhaps a more accurate explanation is that the medical and political response to the virus has turned the world upside down. While the effects of the virus are uncertain, one thing is certain: it will be awhile before we know the full impact of the Corona virus… what it has done to our world, our nation, and what will be the repercussions of the decisions made in response to the virus.

We know that many business models developed by other CPG companies failed to perform in the early days of the virus. The highly acclaimed just-in-time business model supported by the made-to-order inventories collapsed under the public’s panic buying. What did work, and what was the most effective delivery model, was beer distribution. With the on-premise accounts closed, most distributors adjusted their off-premise teams by adding merchandising and delivery workers. The results were evident in the number of record sales produced. Many wholesalers had all-time record weeks, not seasonal records, company records.

Going forward, many wholesalers believe their all-time sales highs will slow as consumers begin to realize that grocery, liquor, and c-stores will remain open and well stocked. Once again, wholesalers proved their value to retailers and consumers. If sales begin to slow, however, expect wholesalers to being lay-offs.

While the world and the beer industry are working to get through this crisis, the next question is: what will the world look like when the virus ceases?  What will be the new reality? First, it is almost certain that we will experience a recession during the last half of the year. Unemployment numbers are already massive, with more to come.  The newly passed Congressional bill may convince many workers to stay home, as they may make more money not working than being employed.  This will leave restaurants, bars, and even craft breweries who survived the downturn, scrambling for workers.

Expect to see states with self-imposed shutdowns to become cash-strapped and begin to look for revenue streams. New or increased state taxes may come in the form of income taxes, sales taxes, property taxes, etc. States that have resisted legalized gambling may decide that such a revenue-producing stream might not look so bad after all. Consider how many direct and indirect jobs could be created from casinos. Sports booking could raise its head in every state. And the big one, marijuana sales, could be legalized nationwide. Even raising taxes on beer could become a reality. States will be strapped, and everything is on the table. Expect brewers and distributors to take a long hard look at their go-to market model. A 1990s video made about the Spanish Flu pandemic of 1918, which killed over 30 million people, suggested that those who survived did not even feel comfortable going back to church until 1922.

Consumers, too, will view the on-premise differently, but to what degree? Wholesalers may make the on-premise sales virtual, thereby reducing their sales teams, and putting more pressure on the brewers’ sales teams to become the in-market sales function. Expect brewers of all sizes to ramp up their chain departments. In the future, expect that off-premise will be the major battleground. Of course, online marketing and home delivery will become the big opportunity.

Consumers and retailers now know that the antiqued liquor and beer restrictions are irrelevant. This pandemic has made that fact crystal clear. And consumers will not put up with old laws. Most states have suspended restrictions for on-premise accounts to help them survive the current crisis. Look for the possibility of states permanently changing the laws once the reality of an increased revenue stream from beer sales tax sinks in.

There is a very realistic chance that the worst is yet to come. Regardless of that, the beer industry will adapt, improvise, and overcome. It will never be the same…that is the reality.

Now I am trying to decide:  ponytail or man bun? Barbers are going to be in high demand.

This is the age of disruption.

 Posted by at 6:00 am
Mar 102020

Decades ago, beer wholesaler warehouses came in all sizes and shapes. The Coors warehouse in Dallas, where I worked in the summers during college, was a building not specifically designed to be a beer warehouse, but it was new and had recently been modified for Coors. The volume at that time was under a million cases, yet the building was complete with a hospitality room, locker rooms, an open area for supervisors, and some executive offices. Trucks were loaded in-doors and, of course, there was a refrigerated warehouse for the beer.  

The Falstaff warehouse in Austin was in a very old building with a small office area and the trucks were loaded by hand just outside the building. In Oklahoma, a Schlitz operation was located in an old railroad station and some small Lone Star operations were located in barns. The most modern beer operations in those days were the Schlitz warehouses because of Schlitz’s dominance.  The warehouses were designed for beer and many had been built within that decade. Most of the warehouses had the same design, small offices, a meeting room, a check-in area, inside loading, and warehousing. Many new warehouses had added storage for p-o-s and draft equipment.

Once Miller Lite became dominate, the Miller wholesalers followed suit with new and updated warehousing. Previously drivers had safes in their trucks and would unlock their safe and deposit their money in can trays and proceed into the check-in area to reconcile their daily sales. The newer warehouses designed by AB, Miller and Coors now provide their drivers with securely locked check-in offices.

Old, established breweries such as Schlitz, Bud, Pabst and Miller all had a similar look and feel. They all had a castle-like appearance, built with bricks, as this was popular during the 1800s. The executive offices of Schlitz’s corporate headquarters in Milwaukee were dark, walnut paneled, with heavy thick carpet. Executives were dressed in suits and all had administrative staff. The personification of the corporate world at that time. Visiting both Schlitz and Pabst corporate offices, one found that security was focused only on deliveries to the brewery. Basically, what was coming into the brewery and what was leaving, and that was it. 

At Coors Brewery in the 80s, we were issued ID cards which opened the front doors and operated the elevators. Perhaps the most secure operation was West Coast Beverage, Coors and Pabst operation located in the Watts area of Los Angeles. The operation was inside a compound, surrounded by a 15-foot-tall brick wall with barbwire and managed by guards located in a drive-in guard house. Only employees of that warehouse were allowed in the offices.

New warehouses and breweries years have extremely tight security with electronic passes at every door and access to all areas is limited to a few employees. With the addition of security cameras and security guards patrolling the grounds, one feels quite secure.  

The recent horrific shooting at MolsonCoors in Milwaukee illustrates that not even top level security can guarantee one’s safety.  Rest assured that MolsonCoors, along with many other beer companies, will review their security and procedures…perhaps the one good thing to come from this tragedy.

The industry is rallying behind MolsonCoors with financial support through GoFundMe me and other means. Over 1.1 Million has been raised so far. That is what makes this industry great, the beer people are there for each other when needed.

There is no safety in numbers, or in anything else.

 Posted by at 6:00 am
Mar 032020

The long-anticipated expansion of Coors into central and South Texas in 1976 had retailers chopping at the bit. The Coors Brewing Co. appointment process was highly published and hundreds of individuals applied for franchises. As the distributorships were awarded, the media jumped all over those announcements and people were excitedly anticipating the rollout. Coors rolled out in San Antonio in March 1976. The largest chain at the time was Handy Andy, and when the Coors arrived at their stores, space had already been allocated in the box next to Schlitz, the market leader and giant. There was no paperwork, no scanning, no presentations, no spreadsheets, no resets and no round tables. All the retailer expected the driver to do was to price the six packs and stock the beer.  It should be noted that the few chains that existed during the 70s did not participated in the annual reviews and resets which are common today.  Annually, there were few, if any, new products or packages and since all sales were Diver Sales, it was incumbent upon the driver to sell the products. Fortunately, such sales were relatively easy. 

In 2020, the industry is looking at the spring resets for all chains including seltzers, which, of course, are on fire. To put things into historical perspective, one must consider that just HEB alone, one of the larger chains, has approved 509 new SKUs this spring! 509! How does one handle 509 new SKU’s? Did 509 old SKU’s get replaced?

While most vendors and distributors anticipate the upcoming resets, AB and their wholesalers’ rollout of Bud Light Seltzer was nothing short of remarkable. AB, aired a TV spot for the Seltzer during this year’s Super Bowl, used that spot and their wholesaler network to take Bud Light Seltzer to market. This led to obtaining a place in the market where within three weeks and Bud Light Seltzer recorded just over 10% share of the seltzer segment.  This is remarkable and shows the industry how effective the AB system is when all the components come together. It also illustrates the frustration the remainder of the industry, especially the crafts; have in getting their beer to retail. Crafts, historically have not, or will not, invest in experienced chain personnel or financially support chains, thus creating a level of frustration with the execution of the AB and MC networks.

The industry awaits the beginning of the spring resets while AB and their wholesalers benefit from their ability to move and execute. It will be interesting to follow the success/failure this spring and summer of the 509 new SKUs. And it is a safe bet that AB will have something to say about those 509 SKUs and that success.

Execution beats strategy for lunch.

 Posted by at 7:00 am
Feb 182020

The fact that celebrities endorse or represent a particular brand is nothing new in the beer industry.  Immediately following World War II, many regional beers, using the new medium of television, utilized cartoon characters to represent their beers; while in the 50s and 60s, print ads hosted sport stars and Hollywood actors/actresses to endorse a particular brand.  During this era, the use of celebrities was most closely associated with the current national brands including Pabst, Schlitz, Falstaff, and Budweiser. 

Sports marketing came to the forefront after Philip Morris bought the Miller Brewing Company and Miller began a race with AB to see which establishment could purchase the rights to various sports and stadiums. Miller introduced Miller Lite and supported the brand by using retired, famous ex-jocks with their “taste great, less filling” highly successful campaign.  In subsequent years, Ed McMann of the Tonight Show with Johnny Carson became a longtime spokesperson for Budweiser. Other famous celebrities included Paul Newman who switched his endorsement from Coors to Budweiser and shortly thereafter put a Bud logo on his racing car. Coors selected Mark Harman to endorse their beer, followed by Pete Coors, and the brand has successfully used Sam Elliott’s voice-overs for years.

Domestic brewers have had varying degrees of success using celebrities; however, imports as a whole have not used screen idols to endorse their products with the exception of Heineken who has used cameo appearances with some celebs. In recent years Heineken tied into the James Bond franchise going so far as to use Daniel Craig in some of their ads. The brand also retained Neil Patrick Harris as a spokesperson for Heineken Light. One can argue as to the effectiveness of these ads, however, that particular campaign was short-lived.

Heineken recently announced the hiring of professional golfer Phil Mickelson as spokesperson for Amstel Light. This is somewhat baffling in that Amstel Light is almost a memory in beer. Heineken recently tried to pursue Michelob Ultra using Amstel Xlight, a low carb light beer that went absolutely nowhere. Perhaps by using Mickelson for a beer that has little to no distribution, Heineken is trying to reach Generation Xers, or the last of the retiring baby boomers. In some way this campaign resembles what Pabst did 10 years ago with Schlitz. Pabst targeted Florida, which witnessed the first wave of boomers retiring and reintroduced Schlitz, a beer that generation grew up on.  Pabst employed billboards and new distribution in the hopes of motivating the boomers to return to the beer. Unfortunately, the ploy did not work.

Heineken will be using Mickelson to advertise a beer that has no distribution, especially in the on premise accounts. This campaign appears to be a reach for Heineken and a waste of Mickelson’s appeal. Had Heineken used Phil to promote their Heineken Light, at least they would not be speaking to empty shelves. The question is: why is Heineken using a highly regarded golfer to prop up a basically non-existing brand? Mickelson has become somewhat of a social media sensation with his posts, but this relationship seems to miss the target. Remember, Ultra is the main beer sponsor of men’s professional golf.

A goal without a plan is just a dream.

 Posted by at 7:00 am
Feb 112020

When traveling either within the U.S. or outside the country, I typically look for which brands of beer are sold in the area, as I’m sure others in the beer industry do likewise. Call it a habit, but brands particular to an area characteristically tell a story of that region’s beer industry.

Several weeks ago, I visited the Dead Sea in Israel. While there I encountered the “Lowest Bar in the World,” (honestly, the name of the bar) which was located 420 meters below sea level. The Dead Sea is visited annually by tens of thousands of people from all over the world. This bar, the only one located at the Dead Sea, offered two styles of Israel’s Gold Star beer, in addition to Stella, Heineken, and Weihenstephaner. The bar also offered Corona, Tistango, Carlsberg, and Paulaner in bottles. Obviously, visitors to the Dead Sea were coming from all parts of the world, so this selection of global beers made sense…beers from all over the world for the people from all over the world. 

Such was typical of our trip to Israel: massive crowds of tourists lined up at every historical and religious site. At times, it felt like the Super Bowl on steroids. At each site we visited, and at the hotels where we stayed, the restaurants served multiple brands of beer, with the lead offerings provided by Gold Star’s two brands, followed by Heineken and Stella, all of which were on draft. 

A majority of the tourists were Americans; however, one could not find a single American beer! No Budweiser, no Coors, and no Miller, much less any other brand. The question is: why would such global companies, including ABInBev and MolsonCoors, not have beer in Israel considering the international tourism? The simple answer might be that these global breweries look at countries such as Israel as a second-tier market. When one reviews the global markets in the media, most articles deal directly with China. It seems many breweries have their eye on China and that country’s massive population. And if the focus is not on China, then it is on India, Africa, or South America. If a global brewery was intent on expanding or building their flagship brand, it would seem the international visitors to Israel would be a natural go-to place. At least the Europeans seem to see it that way.

Traveling around the world is one thing, but to be home is something special.

 Posted by at 7:00 am