Lies, More Lies, and Damn Lies




At the end of WWII and the fall of Germany, the allies, looking for beer, allowed only one brewery to reopen during that time.  The brewery was Becks. While the original intention was to have beer for the soldiers, it turned out to be a great marketing tool for the brand. When Becks was imported into the US several years after the war, it already had a “consumer base and awareness” due to the war. There weren’t many imports in those days, much less many German imports, so Becks quickly established itself and grew. They were by far the number #1 import from Germany, I know, as we compared all our Warsteiner programs against them.

In the past year, ABI took Becks and Bass (England) from their European breweries and began brewing both products in St. Louis, Missouri. Sales for both brands are now down double digits. As an industry analyst said, “this is not about brand building, it’s about costs!” As I mentioned in the blog “You are What Your Record Says you Are,” ABI continues with their cost cutting. Now they don’t have to deal with exchange rates, ocean freight, and other extraordinary costs. It’s now much cheaper to produce the beer in the States and AB doesn’t expect to see the consumer benefit at the shelf. Two losers with this scenario: the consumer who thinks they are buying a German produced beer which is truly imported from Germany, and the wholesaler who sees their volume and distribution drop as the consumer discovers other “real imports.” And there are plenty of real German imports: Warsteiner, Hofbrau, Paulaner, Veltins, and Bitburger to name a few. Beck’s packaging now states “Product of the USA, St. Louis” printed on the bottom of the label!

KPS just announced their sale to Cerveceria Costa Rica for $388 million. Now I know I have CRS (can’t remember stuff), but somehow, when NAB was created, I think I recall KPS saying they were going to build the company and not sell it. Now is there really anyone out there who believed them? Everything they did was to position NAB for a sale, updating the brewery, getting craft brands, staffing up, marketing spend, and slamming inventory into the system. Well, it obviously worked!

Over the years I’ve spoken to a number of college marketing/business classes about the beer industry, and I always told them that, in my opinion, beer is the most identifiable consumer product available. I explain that beer is personal, more so than any other product, because it is affordable. Not everyone can buy a Mercedes, Rolex, or Brooks Brother suit, but most people can afford a bottle of beer, which, through marketing, the consumer comes to identify with. Don’t believe for a minute that in todays social media, word about Beck’s/Bass won’t be flying around. Then let’s see how much ABI saves. It will be interesting to see what their strategy will be when they take over Spaten next year.

The question becomes: can any wholesaler support a brewery/brand that may or may not be around or will change materially? How does that work? Wouldn’t it be a welcoming change if companies like KPS were honest and told us just what their intentions were up front? Can ABI be honest to the consumer and retailers, or are they more like politicians; lies, more lies, and damn lies.







Leave a Reply

Your email address will not be published. Required fields are marked *