May 212019
 

As the title of this blog states, the subject matter for my writings is truly limitless!  The inspirations come from my real life experiences of more than 50 years in the beer industry, providing fodder for the inspiring topics covered over the past seven years.  Frequently when asked about my knowledge of the industry, I share stories concerning the companies I have managed, the brands I have represented, and recently, about my teaching assignments, and consulting jobs. 

Though questions often center on what involvement I have had in the industry, some inquiries are less focused on the mundane and more so on the exciting and less talked about aspects of this business.  Like the dead bodies I have seen in bars, the outlines of human remains on bar floors, the beer stolen from my truck, the retailer who pulled a gun on me, and even the retailed who pulled a pistol from his pocket and began shooting at a rat running across the floor of his establishment.  I have also seen brewery executives fired for stealing, taking bribes and kickbacks, wholesalers trans-shipping beer, selling beer outside of their territory, altering the liquid in the kegs, falsifying bill-backs, and even hiding out-of-date products.

Of course, I have witnessed many employees partaking in the same tricks and once even knew of an individual who worked in the field for two different breweries at the same time! And, he was a full-time employee for both companies. The special considerations asked for by retailers have ranged the gamut from legal to illegal and everything in between.  Unfortunately, I have seen many breweries accommodate those requests.

On the flip side, I have witnessed a tremendous amount of good in the beer industry. For example, many wholesalers and breweries have provided help to victims of natural disasters; countless in the industry have hosted charity events for veterans’ organizations; and many have provided opportunities for fund-raising events to support local needs. I am happy to report that the good that is being done in the industry far out weights anything shady.

Perhaps, when asked: “What have you done in the beer industry,” rather than answer with the historical overview of my previous positions, I should respond:  “I have done and seen just about everything one can imagine in an industry that has a far-reaching impact on many.”

The subject material for these blogs is unending.

Editors note: There have been some technical difficulties with this site, we are trying to resolve these soon. Thanks.

 Posted by at 6:00 am
May 142019
 

 

Cinco de Mayo was celebrated last week and though the numbers for the weekend have yet to be released, the industry expects to see the continued success of Corona, Modelo, Dos Equis, and other Mexican beers.  This growth did not happen overnight. It took these brands many years and hundreds of thousands of dollars to become major selling volume beers in the U.S.

Other imported beers have tried to penetrate the U.S. market, and while some have created a nice business, most have been unsuccessful.  Those that were not as profitable have either left the country or have maintained a small, yet viable business concentrating on the CDI/BDI indexes where they have a fair chance to create volume.

On the other hand, American crafts that have attempted to launch markets overseas have also struggled to establish themselves as viable companies.  Some brands have been successful, and some, like Stone, have not flourished and consequently have left Germany.

With the exception of the Modelo brands, no other imported brand has become a disrupter in the U.S. market.  To date, other imports lacked the knowledge, resources, and/or the desire to build their brands.  That, however, may soon change.

In a major announcement last week, Lion published that Simon Thorpe, the former CEO of Pabst, has been named CEO of Lion for their U.S. market.  Kirin, which owns Lion, is also the owner of a number of Australian and New Zeeland breweries and beverages, some of which have been imported into the U.S. The company brings with it years of leadership experience in operating U.S. companies.  Other major American investments made by Kirin include Coke a Cola bottling of Northern New England and the partial ownership of Brooklyn Brewery and Four Roses Distillery.

With more than 7,000 employees, Lion could easily be considered a disrupter.  The question going forward is will Lion be the disrupter or will Lion become more like Sapporo.  This brewery moved into North America with their purchase of Sleeman in Canada and have since purchased Anchor in San Francisco.  Sapporo has a major presence in both the U.S. and Canadian markets, but has yet to move the needle in either.  The reason could be that Sapporo is taking the long road and not pushing for immediate results.

Lion could well employ the same strategy, but with Simon as CEO, coupled and the current beer environment in the U.S., Lion’s timing puts them in the perfect position to play the disrupter.

No doubt that Lion has the key parts to become a disrupter: resources; leadership; partnerships; investments in the U.S.; and worldwide success.  The industry will know Lion’s ultimate goals by the end of 2020 and they could be interesting.

This is the age of disruption.

 

 

 

 

 Posted by at 6:00 am
May 072019
 

MillerCoors released their first quarter numbers last week, and once again, the results were worrisome.    Depletions were down -3.8% and shipments were off -2.7%.  In the fourth quarter, depletions were off -5.1% and shipments were off -8.9%.  Perhaps a more telling stat is that MC’s first quarter negative numbers were up against 2018 negative numbers, depletions down -3.8% while shipments were down -6.7%.  This trend in negative numbers continues not only MC but also for AB.

While recently visiting with employees of a large AB distributor, a former, long-time employee put the negative trends into perspective.  In the almost 30 years this individual had worked at AB, Budweiser had lost volume every year, yet even today, Budweiser remains the fourth largest volume brand in the U.S.! This is remarkable.

At the same get-together, it was announced that senior management had decided to add a spirit line to the company’s portfolio with the hopes of bringing in local spirit and wine brands.  Obviously, this large AB wholesaler was looking to the future, as are AB and MC by rapidly adding to their product line.  The conversation moved to the effectiveness of this AB wholesaler given the fact that they will now compete against W&S houses, including Southern Glazers, Republic, Diageo, Brown-Foreman and other powerhouse companies and brands.  Keep in mind that Tito’s is a regional product from Texas and will also be considered a competitor.

Southern Glazers and Republic have both attempted to enter the beer side of the industry with little to no success despite the fact that both distributors have states with competitive beer portfolios.  Neither company, regardless of the brand quality, however, can compete against the beer guys in servicing the market.  This is because the marketing of beer is so distinctly different from that of wine and spirits.

Unless a beer distributor is fortunate enough to acquire a successful brand like Tito’s, competing against powerhouses Southern Glazers, Republic and other large W&S companies will be difficult. Such an acquisition will take resources from what could otherwise have been spent on their malt business.  A more successful model can be seen in the Northwest beer house, Columbia, where both Constellation beer and the W&S segment consolidated under one roof.

Many industry pundits have provided their opinions as to why the industry and brands continue to decline. Some say it is pricing while others tout the decline is due to marketing (above the line). Either way, the negative trends persist.

As the fall-out of craft breweries continues, it will not be long before wholesalers identify which crafts to invest in.  Spreading a limited dollar amount among 20 to 30 crafts has little effect, but when that amount of vendors is reduced to 10 to12, a wholesaler might experience the unexpected… greater success.

The key is not to prioritize what’s on your schedule but to schedule your priorities.

 

 

 

 Posted by at 6:00 am