Craft beer growth ‘scaring’ big brewers? I don’t think so …

In your dreams, guys …

James Watt, who has a PhD in self-promotion from the University of BrewDog, has just issued a press release revealing impressive growth figures for the Aberdeenshire brewery, and declaring at the same time that the “UK craft beer revolution” (whatever that is) is “scaring” the country’s beer giants into trying to buy themselves a slice of the artisanal brewing action.

Molson Coors buying Sharp’s brewery “is an act of panic, not commercial nous”, according to Watt. BrewDog’s 230 per cent sales rise in 2010 compared to 2009 reflects, Watt says, “a tectonic shift in the mindset of British beer drinkers”, and according to him the Canadian-American giant, brewer of Carling in the UK, “can see the change is coming and recognition that the market is shifting … they, along with every other mainstream brewery, are shaking in their boots. Companies that sell beer through sales offers, discounts and marketing gimmicks alone are just not sustainable any longer because the craft beer revolution is redefining the expectations of UK beer drinkers.”

Um – I don’t think so. Really. I wish it were all just as James says: I’m delighted to see BrewDog doing so well, and it would be fantastic to see an army of Carling drinkers pour their over-promoted lager down the sink, turning instead to BrewDog’s Punk IPA. (Incidentally, for the man who brought us a 55 per cent abv beer sold in bottles inserted into stuffed roadkill to talk about “marketing gimmicks” smacks of the pot calling the washing machine black …) But that ain’t going to happen.

Despite its dramatic sales increases, which is easily as much to do with its own promotional abilities as the excellence of its beers – it gives the impression of getting more publicity than almost every other small brewer in Britain added together – BrewDog is a pimple on the backside of British beer sales. It’s not the rise in output of a small brewer in the far north-east of Scotland that caused Molson Coors to buy Sharp’s earlier this month.

Rather, this is a perfectly sensible tactic in marketing warfare: as Pete Brown’s last report on the market showed, not only is cask ale climbing in the British pub market where other sectors are falling, but within the cask ale market, local cask ale brewers saw volume increases of five per cent, while the big multinational brewers, including Molson Coors, saw their cask volumes fall by 11 per cent. The job of Molson Coors is to be, as much as it can, a one-stop shop to pub company beer buyers. Cask beer, at 15+ per cent of the pub beer market and rising, is a small put important part of almost every pub company’s offer to its customers. But if, as a brewer, your own cask beer offer is proving less and less attractive, and you don’t want your pub company customers to buy their cask beer from elsewhere, then the sensible move is to acquire a local cask brewer yourself, and shore up that wing of your attack.

“Buying a small brewery does not buy you a craft beer soul,” Watt says, but personally, having seen how well Steve Wellington has done with the White Shield brewery at Coors in Burton, where he seems to me to be producing beers with soul and passion, I don’t believe giant brewer automatically equals soul-less beer.

All the same, I think that whatever label you give it – craft beer, artisanal beer, “beer with soul” – the sort of stuff you and I drink, dearest reader, will remain a minority passion for a very long time yet. Molson Coors certainly knows that, even if it would like some of the profits to be found in that minority: if James Watt really thinks he’s actually frightening the likes of Coors and Heineken, he’s very deluded, and I fear he looks an idiot by making such a claim.

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36 thoughts on “Craft beer growth ‘scaring’ big brewers? I don’t think so …

  1. Couldn’t agree more with you Martyn. I fear Brewdog believe their own publicity more and more….almost to the point of delusion. What annoys me is that their entire PR/marketing campaign focuses around knocking other peoples efforts whether that be small or large brewers. Why not concentrate on what they are good at……oh, hang on that’s PR/marketing.

  2. I think a lot of it is wishfull thinking. Shout loud enough and maybe the drinkers will change their habits. I dont think the mainstream drinkers habits are changing, but I still think James’s efforts are to be commended. If someone keeps telling the public that there is a world of better beer out there, then maybe some of that message will stick.

    For me, it’s about education, about saying to a friend who drinks a non-descript lager, ‘here try a pint of sierra nevada pale ale, it’s kinda light and lagerry’, oh right you like guiness? ‘try a cask Titanic stout it’s really smooth’. The amount of friends i’ve got on to decent beer by taking ‘baby steps’ is growing daily. Saying ‘stop drinking carling and drink a 7.5% hop monster extreme IPA’ is never going to work.

  3. These days I find it’s BrewDog’s pricing that irritates me more than their increasingly predictable marketing. In the pubs I usually go to, prices rarely go over £3 a pint. The other day I tried a half of 5 a.m. Saint on keg, & got charged £1.80 for it. Keg premium! It really is back to the seventies…

    • The cask stuff is generally the same price as the other cask beers. It’s more expensive to drink the fizzy keg version, for reasons that I am clearly too simple to understand.

  4. @phil thats very expensive. Perhaps a case of two halfs costing more than a pint? I hate it when pubs do this, doesnt encourgae diversity and responsible drinking one bit!

    That said, the place I reviewed the other day on my blog (the stew and Oyster) it cost me £3.10 for a pint of Deuchars IPA.That’s a 3.8% beer! To be fair it is a restaurant/bar and it costs between £3.50 and £4 for a bottle of becks in most restaurants… but still! bottle of Duvel (8.5%) was a very reasonable £3.70

  5. Perhaps I am in a minority here, and I appreciate the fact that living in the US means I have a wider field of “craft” brewers to choose from, but just for once I would love it if BrewDog’s beer actually lived up to the hype. They really are not as good as they would like the marketing loving types to believe, especially when compared to Sierra Nevada or North Coast.

  6. If Molson/Coors purchase of Aberdeenshire was a sole endevour then I think there might be some merit in Watt’s statement. In the US, the majors have been bying and selling local and regional breweries for years. The other wonderful trick they like to play, is developing “craft brews” under another name, this trend started in the early 1990s. George Killian’s Irish Red, Blue Moon, Green Valley Brewing, all are “craft brews” owned by AB or M/C. To answer Watt’s statement “Buying a small brewery does not buy you a craft beer soul,” I ask: at what point did you think that Molson Coors had a soul? M/C isn’t looking to break into the artisanal beer biz, they are trying to overtake market share.

  7. They really are not as good as they would like the marketing loving types to believe

    I’m going to post about this shortly, but I think BD are a terrific brewery who are shooting themselves in the foot by believing their own contrarian marketing. I’ve had four BD beers on cask: one was interesting but a bit weird, one was very good but not quite my thing, but the other two were absolute rock-solid classics. I’ve also tried three in bottle and one on keg: out of those four, two were in the ‘interesting but a bit weird’ bracket and the other two were just ordinary. Here’s the thing: that includes the keg version of one of the cask classics & the bottled version of the other. If all I’d had to go on was the bottle & keg versions of BrewDog beers, I’d probably never try their beer again.

    • Unfortunately I have only ever had the bottled versions, so that is all I have to go on. When I lived in Prague I enjoyed getting hold of BrewDog stuff because it was so different from what was available there, but since moving to the States it is difficult to justify the price difference between that and the locally produced stuff.

    • I am afraid awards fail to impress, especially the less than stellar (let alone mulit-national scaring) breweries that walked away with gongs from the World Beer Cup – Gambrinus the second best International Style Lager? More Gambrinus the second best Bohemian Pilsner? Kozel the third best Bohemian Pilsner?

      My arse.

      Having said that though, perhaps the time has come to do a blind tasting of BrewDog vs America?

      • Late last year I spent a fortnight in the Czech lands (after an absence of far too long!) and whilst Gambrinus is best described as average, Kozel was comfortably the worst beer I encountered.
        If they think that Kozel is a good beer these days they would faint from delerious pleasure if they tried, for example, Cerna Hora’s Sklepni (kellerbier) or Lezak (lagerbier)……..

        • @Rod: Seconded. Gambrinus and Kozel [both owned by SABMiller btw] are nothing compared to anything by Cerna Hora. Its a pity it’s not more widely available here where I am, in Bratislava.
          I know of one place here that imports Brewdog, although I’ve never bothered to order any. I’m of the opinion that aggresive, gimmicky marketing isn’t necessary to bring an Ale to central european markets. There’s a long beer-making tradition here, and plenty of people after something other than “eurobeer”. Belgian beers, for example, sell quite well here in darkest pilsner country, I see no reason by British Ale styles wouldn’t have their place too.
          Sadly, I’m yet to be proved right :P

  8. A great post! Not a lot I can add because you’ve said it all except that Steve, as great as he is, is not the sole beer soul at Molson Coors. Steve does what he does so well because we support and invest in allowing him to do it just as we will with Sharp’s.

    Cask & craft beer is in growth but stealing share from beer not from other alcohol – total beer is in decline whilst spirits and wine are on the up. It would be great if cask & craft on it’s own could change that but it won’t – for that the whole beer category needs to grow. We need more people interested in the category, choosing beer over wines, sprits and cider – I don’t see how fighting amongst ourselves will ever achieve that!

  9. Hi Martyn – on the button again, as usual. Do you think the guys at Brew Dog (and especially James Watt) believe all this drek they put out? He comes across as a bit of a buffoon but I can’t believe he’s like this in real life.

  10. Here’s to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes… the ones who see things differently — they’re not fond of rules… You can quote them, disagree with them, glorify or vilify them, but the only thing you can’t do is ignore them because they change things… they push the human race forward, and while some may see them as the crazy ones, we see genius, because the ones who are crazy enough to think that they can change the world, are the ones who do.

  11. But the fact that some geniuses were laughed at does not imply that all who are laughed at are geniuses. They laughed at Columbus, they laughed at Fulton, they laughed at the Wright Brothers. But they also laughed at Bozo the Clown. – Carl Sagan

    • I was talking to someone in Burton last Saturday who told me why he believed Molson Coors bought Sharpes. According to him Carling sales are weak in the South West and Doombar, which is very popular in the free trade down there, will give their reps an extra bargaining chip when negotiating to sell Carling. It sounded like a credible reason to me.

  12. So are you telling me that “Sharp’s” of Cornwall is now owned by Molson Coors? Does that explain the sudden appearance of Doombar at a local supermarket? God, I just thought they cared (. . . ).

    Do we have to question everything? Will it change the quality? Should I just make my own beer and never taste anyone else’s just in case?

    Francis Fukyama was right – the 21st Century will be split asunder by tribalism.

  13. Pingback: Craft beer growth ‘scaring’ big brewers? I don’t think so … | BloggerLager.com

  14. Here in America, Brewdog is just another craft beer. Sure, they do some experimental things, with barrels, tons of hops and higher abv beers and such- but who over here doesn’t (among the better craft brewers)?

    Jolly Pumpkin, to me, is the most innovative brewery I know about. They make wonderful beers that hover around 4%. They don’t try to kill you with hops, and when they add them, they don’t forget about that whole pesky malt ingredient that somehow shows up in beer.

    Also, to my knowledge, they are the only American brewery that uses naturally occurring yeast, reminiscent of the best Lambic brewers. And, I have yet to crack open one of their beers that didn’t blow me away.

  15. Some interestng points on here, and some daft ones.

    Does James Watt believe his own hype? I suspect he does because to be that passionate and that determind you have to believe it. You can’t live and breathe a company if you don’t believe in what you are doing, and not just believe it, have unfailing belief. It wont be a company to James , its a baby.
    If he doesn’t beleve it he’s just another cynical marketing man, trying to pull the wool over the consumers eyes. However, marketing is just that. Its not about ‘shouting loud enough someone might hear you’ its about sowing the seed in the mind of the consumer. Its propaganda. More importantly, whatever your opinion of BrewDog, their beers and their marketing, they are helping grow the profile of the craft beer market.

    James didn’t say Molson Coors are scared of BrewDog, he said it was scared of the growth of the craft beer market. Two very different things. Look at how many new breweries have opened up and how many are expanding to cope with demand. In the same way that Greg Koch from Stone analyses the whole US beer market I imagine James Watt does the same. He will know the consumer trends, the market share and he will see how much the ‘lager’ industry has lost out to the microbrewer (and it has btw, there are solid stats on this). James wasn’t arrogantly saying ‘BrewDog are huge and the big boys are scared’ he was saying ‘the craft beer revolution’ (that means the proliferation of more and more craft beers in to the UK beer market, signalling the potential for change in the drinking habits of UK consumers. Its also a very good strap line the US microbreweries have been using for years. More propoganda, and its working)
    Most brewers of ‘craft beers’ will, even if its begrudgingly, admit that BrewDog have been a catalyst for change over the past couple of years by creating a space for other breweries to fill. A space that wouldn’t have opened up as quickly if BrewDog hadn’t started all their ‘shouting’ and ‘marketing gimmicks’. Worth being thankful for.

    James Watt is an idiot? He has grown a company from nothing in 4 years, created an export market of 25+ countries, convinced some of the best brewers in the world to visit the UK and share their knowledge and passion, not to mention their beer and created a brand which is now known all the way around the world. I wish I was an idiot.

    Yes its brash, yes its terribly un-British (we don’t like people who say what they do is good, we like people to be understated and keep their success to themselves) and yes its all very arrogant. And all you guys are talking about them. I’d say he’s done a rather good job wouldn’t you?

    Why does keg beer cost more? Please tell me you can work this out on your own? Do you all understand how you produce cask beer and how you produce keg beer? Or is this ‘its too expensive’ stuff soming from a point of total ignorance?

    What do you require to serve a cask beer? A cask of live beer, unfiltered, easily filled and non carbonated. What do you require to serve a keg beer? Well, a kegging machine for start (google the cost of those) plus a method of filtering, plus the carbonation. Then you have the install costs, so the technician costs, the font, the maintainance.

    As for BrewDog prices in general….. what ingredients do they use? Pricing is based on competitive margins so they will be priced to compete without running the company in to the ground. What about duty? I can’t imagine with a 3.5 million a year turnover BrewDog recieve much in the way of tax relief from the SBR scheme, if any. So their prices will reflect the higher rate of duty they pay compared to say Thornbridge or DarkStar.

    Essentially what BrewDog have done is promote a market and brought craft beer from the periphery to the fringes of the mainstream. Yet, and this is the bit I can’t understand, so many of you complain about that.

    If BrewDog had acted in the same way as every other UK brewer they wouldn’t be as big as they are, they wouldn’t have the following they do but more importantly for the category itself, they wouldn’t have had the impact they have had which has encouraged more and more drinkers to try new things. Other breweries will undoubtedly produce better beers in the future but in the same way Stone have paved the way for US breweries by being the big shouty one who people either love or hate, BrewDog will do the same in the UK.

    A quick point about BrewDog being very average in the US. US beers taste a lot better in the US than they do by the time they get here I assure you.

    I am fully behind the craft beer revolution and I happen to think that BrewDog are doing a fantastic job of promoting it. Whether they are doing a fantastic job of promoting themselves is of no concern to me whatsoever.

  16. Oops, mistake….

    He was saying that the ‘Craft beer revolution’ is scaring the big boys, the market growth as a whole, not one company

  17. Dammit, Keen as I was to go and make bacon sandwichs, I forgot the vital point…… that James is probably right

    Consumers trends and drinking stats over the past two years show a decline in the lager market and the resurgent growth of the cask/real/craft beer/ale market in the UK. However, overall beer drinking has declined due to economic pressures etc etc.
    This means that the microbreweries are no longer eating themselves, instead their share of the market is increasing. If their share is increasing but the overall trend is in decline where is that increased share coming from? Its coming from corporations like Molson Coors and Molson Coors being a massive multi-national are a money making machine and little else.

    So Coors look at the market and they say ‘we’re losing money here and all these breweries are springing up and all these other breweries are getting bigger. Provence of product is important to the consumer too. How to get that piece of the pie back?’ Then they look at the market and assess which of the small regional breweries would benefit them the most.

    Molson Coors will spin some nonsense line about being commited to quality beer, but its rubbish, they are commited to the bottom line. Sharp’s have one product which sells nationwide and a brewer with a reputation for creativity, so they get the best of both worlds. More importantly they get a chance to get their piece of the pie back.

    Was James right to say the big boys are scared? In a way, yes. Scared is possibly the wrong word, but wary wouldn’t be too far off. Molson Coors didn’t spend £30 million because they love great beer, they spent it because they were aware that they had few products which could compete in the growing craft beer market. It wasn’t a purchase out of fear so much as a purchase of necessity based on the success of the craft beer industry.

    Does James Watt look foolish for making the claim that the industrial brewers are worried about the growth of the craft beer industry? No, because he is actually right. Had he made the claim that it was BrewDog’s sole influence that brought about this purchase then he would uncredible and very stupid, but I suspect he is rather less stupid than your blog makes out.

    Now, Imagine if every small brewer adopted the same attitude towards its branding and its marketing as BrewDog (minus the slagging off of other brewers) just imagine how powerful that could be? May be the other brewers should shut up complaining about BrewDog and learn from what they have done well. Then the big boys would really have something to be scared about

    • If the big brewers weren’t afraid of craft brewing worldwide, why would they all be buying up craft breweries or producing “craft” brews of their own under names that are hard to trace back to the parent company.
      A-B Inbev also run a beer enthusiasts website where it is virtualy impossible to see who runs/pays for it.
      They are taking notice for the simple reason that their sales are stagnating and craft beer continues to grow.
      Good on brewdog for drawing attention to the great alternatives out there, not just themselves but to craft brewed beer in general. If they weren’t a bunch of loud-mouths the media wouldn’t give a damn and never give them coverage.

      • “If the big brewers weren’t afraid of craft brewing worldwide, why would they all be buying up craft breweries or producing “craft” brews of their own under names that are hard to trace back to the parent company.”

        Because they prefer to be able to offer bars/bar owners/pubs/pub chain owners as complete a portfolio as they can, to ensure none of their big rivals can ever say “ah, but we can offer you big names AND small niche names, so take our big names and our small names and get the complete line-up of beer types cheaper than from anywhere else”. But if you look at the comparative sales figures of “craft” and mass-brewed beers, it’s glaringly obvious that, even if one is rising and the other falling, the disparity is so enormous, big beer really has nothing to fear from a sudden collapse in its market.

  18. Thanks Martyn
    I agree the disparity is enormous , and its interesting that the reason you give is for them to offer a complete portfolio. (I completely agree!)
    I maybe hopelessly optimistic but I hope that while they may not fear the craft beer industry they are certainly sitting up and taking notice, and the fact that the big US/multi-nationals even want to offer a complete portfolio shows that they want a piece of the craft beer pie and don’t like to see anyone getting the punters’ cash! this is true in North America- I live in Canada and CoorsMolson have bought up one of the largest craft brewers in Canada (Granville Island Brewing) no doubt in the hope to ensure that those “craft” taps in pubs, bars + restaurants stay in the ‘family’.

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