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Big beer, small change

Can large brewers adapt to a world where small is beautiful, where consumers value flavour, personality, and localism?

Mary Lewis Lewis Moberly

Craft beer is no longer a sideshow – it dominates the sector. How do the large brewers respond? After all, these established beer brands have long prided themselves on dominance, and scale. Can they adapt?

Buy the competition

So far, we’ve seen different tactics. There is the financier route of simply buy the competition. See InBev’s takeover of Goose Island. A simple, straightforward way of ensuring profits stay where you want them, but does little to prop up ailing sales of core brands.

This is a problem for big beer: four of the five largest US beer brands, including AB InBev’s Budweiser and Bud Light, posted volume declines last year. There are more than 3,000 small 'craft' brewers in the US, twice as many as half a decade ago, and their combined shipments have grown by a double-digit percentage every year since 2009, according to the Brewers Association, which represents small brewers.

Make your case

It is figures such as these which are driving some large brewers to rail against the injustice, to point out that in fact their beer tastes as good as the new, 'authentic' beers. Indeed, many of today’s behemoths were the original craft beers a century or two ago.

Two salespeople from Victoria Bitter, Australia’s only billion-dollar beer brand, took this a little too far. They entered VB for the Surry Hills Craft Beer Festival. Renaming it Vaucluse Bitter, they presented it as a craft beer from a small microbrewery. Apparently they even grew their beards out for the event. The beer took top prize. The salesmen made their point, but won few friends….

Playing small …

So is there more large brewers can do to defend the quality of their products and buy up troublesome competitors when the balance sheet allows it? A tough task, but can be done.

To rebuild reputations the large brewers need a multi-pronged strategy. They need to become credible, through range extensions, limited editions or a restage.

But this will not be enough. As the VB duo discovered, product alone will not suffice. You can’t just be craft; you also need to look craft. They need to make their packaging design work for them. Small is beautiful – but there is more than one kind of small.

Through a host of subtle visual cues a brand can convey that it is local, authentic, connected to place and history, and has an individual taste.

Big beer speak

We’re already seeing this happen. Pilsner Urquell is doing. Made in Plzen, Czech Republic, using the same process for 172 years, Pilsner Urquell was one of the first craft beers, but has long since become associated with the homogeneity that for so long dominated beer taps.

With specialist beers such as the unfiltered, unpasteurized Pilsner Urquell Nefiltrovaný it is seeking reappraisal by the craft beer movement and then taking this new reputation to a mass audience with an April 2015 release of a ‘brown’ bottle packaging format. The new packaging will feature a retro styled label on 330ml, and nod to the brand’s Czech lineage.

Or, closer to home, there is Greene King, transforming its reputation with the 2014 release of a range of craft beer and the introduction earlier this year of a pump clip which boldly references the brewery’s proud history.

Where next?

These are smart responses to a changing market. The large brewers that do manage to ally the passion of the beer enthusiast for craft values to their traditional advantages of price and international reach, will find themselves in a good place.

And what, finally, of the craft brewers themselves? Well, they’ll probably keep doing what they do so well: innovating with new ingredients and techniques, keeping the market fresh and interesting, and ensuring the big boys to stay on their toes.

1 July 2015