Beerlines

Insights on beer marketing & PR by a beer-war vet

Archive for the 'Tooheys' Category

19 June
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Is lager the new frontier for craft?

Lager. Now there’s style name that seems to have almost disappeared from the local beer market.

Why? Is the industry just a little bit embarrassed about ‘lager’?

“Yes” there are many lager beers available: lots! Far and away the majority of beer consumed in Australia IS lager.

The L word
But funny, even many mainstream lagers are called everything but lager. We have ‘Bitter Ales’, ‘New’, lots of ‘Draughts’ – but not many unabashedly, in-ya-face “call me lager!” brands.  [Okay okay .. I know about Foster’s and Crown…]

I hear a few historical justifications. Smoothing transitions in the market from ales to lagers in the early 1900s; XXXX Sparkling Ale to XXXX Bitter Ale in 1924 for example. I hear of aversions to hearing such a Germanic word given two world wars.

But it seems as though this avoidance – this ‘lager cringe’ – is still in play.

A history of industrial suds
This cringe has hung around to influence the growing craft beer segment in Australia. There’s clearly been a blind spot when it comes to lagers.

It’s understandable. Craft beer has been, for many, a rejection of the samey mainstream lagers that came to dominate each state market. XXXX, Carlton Draught, West End, Swan .. you know the line up.

‘Craft beer’ is almost code for ‘I’m over mainstream lagers.’

This response was similar in the US market. Here the craft beer sector had a decade or two head-start on Australia. Here too the market had become dominated by lagers from big corporate brewers like Anheuser-Busch.

US lagers on the comeback trail – yeee haaar!
Given the historical lead by the US market, it’s interesting – perhaps portentous for Australia – that lagers are increasingly appearing under the US craft beer banner.

I give special mention and a big hat-tip to an article by Mike Reis in SeriousEats titled, ‘Lager is Craft Beer’s Most Exciting Frontier’ for prompting this post.

Mike’s article provides great background on lager as a style while highlighting a number of new craft lagers.anchor lager

Mike cites Jack Hendler of Massachusetts’ lager-only brewery, Jack’s Abby, as finding: ‘lager yeast’s neutral flavor helps the essence of his other ingredients really pop. This means simpler, cleaner expressions of all the flavor that can be coaxed from hops and malt. He’s used that to his advantage to create some brilliant style-bending lagers that even the most die-hard ale lovers can appreciate.

‘Hendler puts his love for lager simply: “We just think lagers make better beer”.’

Speaking of America, in a recent article in Australian Brews News about Brooklyn Lager, there was also a “renaissance predicted” for lager. In Australia, Eric Ottaway [from Brooklyn Brewery] noted: “.. rumblings that the broader lager category could be on the comeback trail.”

Brewer, and member of the Craft Beer Industry Association, Dave Bonighton at the Mountain Goat brewery. Source: ABC Rural website.Pic by Cath McAloon

Dave Bonighton: Brewer and co-founder of Mountain Goat craft brewery Melbourne

Will Aussie lagers come back?
Dave Bonighton, co-founder of Mountain Goat Brewery and vocal Australian craft beer champion, agrees with the ‘industrial suds’ rejection.

“Craft beer has grown for many positive reasons: most to do with great flavoured ales.

“True, some of this is a rejection of the yellow, bland, fizzy lagers that dominated the market. In most bars that’s the only style you could get for decades.

“Yes, I do see lagers as making a comeback in Australia. And craft brewers are well placed to do that.

“We, craft brewers, have learned a lot about bringing back taste to Aussie beer with great ales. Craft has been the Realm of Ales. I don’t see that changing much.

“All craft brewers welcome a diversity of styles. We look forward to lagers regaining the respect in Australia they’ve retained in Europe. We look forward to new tasty Aussie craft lagers adding buzz and excitement to the beer market. That’s a good thing.”

dermot 2

Dermot O’Donnell: Master Brewer

Lager’s lighter legacy
I asked renowned Australian brewer, Dermot O’Donnell, what he thought about the potential for a refreshed interest in lagers in the Australian craft beer segment.

He noted that it was easier said than done: ales, or rather ale yeast, was more flexible and forgiving than lager yeasts.

“Let’s not forget the Australian market took to lager in a big way when the style was introduced. Up to then we had traditional ales.

“Lagers provided a lighter, easier drinking style that proved very popular as the Foster brothers found out. So, if you like, there was a market shift away from ales over a few decades.

“But it was only refrigeration that allowed this shift. Lager needs cold brewing temperatures.

“And that’s a challenge that sorted out the market. Lagers were popular but they required new refrigeration plants plus they were harder to brew and get right, and harder to keep right consistently over time. Lager yeasts are finicky buggers and require much tighter control over a longer brewing time than ales.

“This is one reason why bigger breweries won out. They had the scale to produce lagers – what the market wanted – with greater consistency of quality over time. The smaller guys could not do this: could not maintain quality, could not keep up.

“Today however, brewing technology is so much more sophisticated and scalable. With relatively little capital investment, brewing lagers is much easier, even in a small craft brewery.”

But does Dermot see lagers as having a comeback via Australia’s craft breweries?
“Yes: for good lagers. Great lagers deliver subtle flavours, typically from traditional, old world – German and Czech – noble hops. It’s great to have that traditional style perfectly interpreted.

“But lager doesn’t have to be strictly ‘noble’. Craft brewing is all about re-interpreting style and flavour – experimenting.

“New world hops from American, Canada and New Zealand provide opportunities for new interpretations of lager. That’s exciting. A number of Aussie craft breweries produce lagers: like Moon Dog and Stone & Wood for example – there are others. There will be more craft lagers I think.

“But, I don’t think craft breweries will shift away from ales in any great way however.

“There are hundreds of ale yeasts commercially available compared to lagers. Ales are less of a hassle to brew let’s face it. And ale provides a broader flavour palette to play with. They’re fun. They allow lots of robust interpretations with new world hops. With warmer fermentation we can create big flavours. With cooler temperatures we develop ales which most would think were lagers. There’s always been that overlap in style between ales and lagers.”

Big breweries will love this .. maybe not
We’d expect that big brewers LION/Kirin and CUB/SAB-Miller will benefit from any swing to lagers. However, I suspect that this shift may highlight the delights of lager newly interpreted by craft brewers rather than prompting a return to traditional mainstream brews.

I’m not foreseeing any lift in sales for VB, XXXX Bitter Ale or Tooheys New is what I’m saying. Hmm .. they aren’t called lager anyway.

Flavour redux
Lagers took off in Australia in the early to mid 1900s because, in part, they were a refreshing, undemanding, quaffable brew. It might be hackneyed, but they suited Australia’s conditions where, thanks to new refrigeration, we could enjoy a cold beer.

They may not have abided by German purity laws, but they were certainly sessionable. And perhaps, over time, the big brewers sacrificed flavour in favour of sessionability. It sold more.

I hope that if there is substance to this reported new lager frontier in craft – this renaissance of lagers – that the flavour Jack Handler waxed so lyrical about becomes a delicious reality in a range of new local craft lagers. I look forward to that.cheers

 

 

08 June
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The short-lived Bond Brewing World. An insider’s view

America’s Cup winning skipper John Bertand summarises the man well. Alan Bond was “polarising”.

And so it was with Bond Corporation’s involvement in brewing.

I had joined Castlemaine Perkins Limited in October 1986 as Public Affairs Manager. Early the next year, MD of the brewery, Frank Burnett, summoned me to his office in our Finchley Street HQ overlooking the XXXX brewery.

Without words, but with obvious disgust, Frank threw the now infamous Bond Brewing repositioning plan across his desk. I opened my mouth to object. Frank just shook his head and, as I recall, said: “Every objection you can think of has been raised. Just do it. Get the signage underway and, oh yes, you’re now editing the central magazine. Close down every brewery’s in-house newsletters.”

So, the big ugly stainless steel Bond Brewing sign on Milton Road replaced the long-standing Castlemaine Perkins sign.

Bond Brewing replaces the Castlemaine Perkins sign: a great PR lesson

Bond Brewing replaces the Castlemaine Perkins sign: a great PR lesson

For Queenslanders it was bad enough – just tolerable – that XXXX was owned by a West Australian, but to do this …

This was a serious wounding to the Castlemaine Perkins’ image and its brands. Indeed, this helped open the door to a new competitor, Power Brewing (link to an overview of that era by Matt Kirkegaard).

Sorry Bondy!
Powers launched with a stinging put-down of XXXX via a television commercial featuring Queensland rugby league legend Wally Lewis, saying “Sorry Bondy!”powers

While the other breweries went through the same repositioning it’s fair to say it was Castlemaine and XXXX that were most adversely impacted by consumer backlash and competitor response.

In early 1990 Bond Brewing went into receivership and Lion Nathan took over the breweries later that year.

Those who ignore history..
Bondy, or rather Bond Corporation, took over the Swan Brewery in his home state of Western Australia in 1981. Thereafter he took over east coast brewing conglomerate Castelmaine-Tooheys in 1983. His company now oversaw about half of the national beer market.

While the media loved the glitz of Bondy’s brewing business with his Swan airships, Schooner XXXX, sponsorships and beer jingles by Mo and Jo, the stock market was less impressed. Again: polarising.

Make ‘Bond’ ubiquitous!
To remedy this, the Corporation’s board believed they would attract major institutional investors by renaming all his breweries as Bond Brewing.

This step remains a case study in ‘how to lose generations of consumer loyalty overnight’ as well as one of corporate hubris. Indeed, it’s a lesson a number of big corporate brewers seem to have ignored .. still. And they wonder why ‘small and local’ is doing so well .. Bond Brewing XXXX

Polarising is an under statement.

Because, under the direction of Bond Brewing’s Executive Director, Bill Widerberg, Castlemaine Perkins, Tooheys and Swan were very publicly rebadged as Bond Brewing Queensland, New South Wales and Western Australia respectively. As if this wasn’t enough for parochial beer drinkers of the time, Bond Corporation also changed the addresses on all labels to the corporate address in Perth. Read more…

24 November
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200 Australian breweries mark an historic high

Australian brewery numbers have reached a high not seen for over a century.

This was the good news from Australian brewing historian Dr Brett Stubbs.  See his research work here.

Over the years I’ve had many conversations with Brett about Australia’s brewing heritage. Often these chats were about the massive decline in small breweries across Australia in the late 1800s and early 1900s. This rapid decline was in response to advances in brewing and transport technologies, stiff competition from large city-based breweries, and new Federal supervision but also rationalisation due to economic downturn (thanks Brett!).

My interest was in the role this phase had in setting up the state-based dominance of mega-breweries like Castlemaine Perkins Limited, Tooheys, Cascade, CUB and Swan.

Brewer, and member of the Craft Beer Industry Association, Dave Bonighton at the Mountain Goat brewery. Source: ABC Rural website. Pic: Cath McAloon

One of an increasing number of successful Australian craft brewers, Dave Bonighton, at the Mountain Goat brewery. He’s a member of the Craft Beer Industry Association. Source: ABC Rural website. Pic: Cath McAloon

“The trend is your friend” so they say
A recent article by Brett highlights an important brewing milestone. It tells some good news about the current number of breweries across Australia. With Brett’s permission I’m pleased to share this good news story in full. Enjoy .. Read more…

30 March
Comments Off on Craft beer winning the ‘eye level’ war in retail

Craft beer winning the ‘eye level’ war in retail

For decades major brewers have competed and paid heftily to secure choice, high-profile positions in major retailers’ bottle shops and liquor barns.

The visual customer-facing beer war at POS
Every customer-facing cubic centimetre was precious turf. It was (and remains) a very competitive visual war for beer brand presence in major retailers.

And the big brewers were all over it! They owned it – they thought. Indeed, they devised their own science to prove it: ‘space planning’ and ‘planograms’ and whatever.

The most highly sought after POS placements in retailers’ fridges are, of course, at eye level. The grab-and-go slot.

So for years, what have we seen at eye-level? Usually six packs of VB or Tooheys Extra Dry or XXXX Gold; the result of big brewers with big brands paying the big retailers big bucks.

Craft now dominates at eye level
But a trip to Woolworths’ owned BWS shows how times have changed. Craft beers are front and centre.

This pic from BWS South Melbourne was central to the fridge fronts. There was no VB or Carlton Draught in this frontage at all. Those brands were back in the cold room.

bws2

Clearly BWS is on top of consumer interest at retail. And the consumer increasingly wants something new to try: an interesting brand or style to drink and brag about.

Okay, quite a few of the craft brands in this BWS are Woolies’ own private labels (often called faux craft) and clearly the retailers are making better margins, but the takeout is clear: craft has won this particular POS battle.

Big brewer versus big retailer – control of the POS
For years the big brewers believed this key point of sale in retail was theirs.

That sense of entitlement, I suspect, has rankled the big retailers for some time.

These facings must seriously be pissing big brewers off no end. Especially, as you can bet many of these small craft brewers are paying nowhere near as much for the privilege.

Interesting times at POS. And for that .. Cheers!

02 February
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Australian owned: does it make a difference?

Back after a sabbatical, I note Coopers Brewery signage re-emphasising its Australian ownership.

Not surprising in light of CUB and LION – the majority of the national beer market – now being foreign owned.

I question how much of an influence this appeal to national loyalty is with beer drinkers.coopers sign

Years ago national, or rather state, loyalty would have been far more important to the parochial beer consumer.

Not any more.

For a number of reasons, not least is so many brewery ownership changes and global brand swaps in recent years, consumers can barely keep up!

Ownership is no longer as influential
Who owns Corona or Cascade? Who owns Little Creatures or Löwenbräu? Who owns Stella Artois or Stone & Wood?

Who cares?

I doubt we’ll see again the outcry and consumer backlash created when the traditional big state brewers like Swan, Castlemaine Perkins, Cascade and others were bought by interlopers from interstate or overseas.
xxxx

I’m not dismissing loyalty – in this case nationalistic – as a marketing influence: albeit I think it a waning one.

But as modern beer consumers increasingly choose from an expanding personal portfolio of preferred domestic and global brands and styles to suit various drinking occasions, I question the value of putting too many marketing dollars behind appeals to Australian ownership.

Parochialism is not dead. It’s just not guaranteed state-wide anymore 
While Coopers is talking more about ‘national share’ and pitching itself against the foreign-owned big guys, many new and emerging craft breweries are securing solid local loyalty and support.

I mean really local: local local: micro local.

In many ways the beer market is coming full circle.

As the big breweries aspire to globalised ownership clouds, savvy craft breweries are reclaiming local grassroots.

And to that: Cheers!

20 October
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Will big retail replace big brewing?

Swan Brewery’s closure was announced by LION this week. 

I could go on about how sad that is in many ways.

Instead, taking a bigger view of the beer market, I suggest that in that swan-song we can hear chords of big retail replacing big brewing in Australia.

In many respects Swan Brewery was a dinosaur. It reflects the entitled view of ‘owning’ state markets that the big capital city breweries had for decades. Indeed, almost all these big breweries – like Swan, Tooheys, CUB and Castlemaine Perkins – were constructed to produce enough beer for 100% of ‘their’ state’s market.

And why not? In the good ol’ hey days (not so long ago in the 1970/80s) Swan had over 95% of the Western Australian market and Castlemaine had almost 90 of Queensland for example.

But times changed and those breweries haven’t.

It’s been a challenge for them. On the one hand, the tradition of owning mega-brands, market dominance and the advantages of economies of scale. While on the other, pressured for flexility to create small batches of new styles and innovative beer brands.

Hard to do in one brewery where you’ve already invested heavily in the biggest brewing equipment available on the planet. Hard to have both mindsets in the one company.

I’m not saying that Swan’s closure means we’ll see more big breweries in Australia ‘rationalised’. However, no matter how you spin it – they got their marketing wrong.

In that market you can almost hear brakes screeching as big brewers rapidly seek more flexible operations.

LION has invested in smaller craft breweries, notably Little Creatures and James Squire. CUB took over Matilda Bay. Both of them are rapidly topping up their traditional big-brand portfolios with small craft and niche boutique brands from both domestic brewers and international.

This sense of urgency to ‘get niche’ is almost palpable.

Big retail: big threat
One very big reason for this urgency by LION and CUB is because of Woolies and Coles.

Big retail and the colossal impact they can have on brands has been a big threat to the big brewers for years.

Now that competitive tension is really out there for all to see.

Retailers have tried in various ways, year on year, to squeeze more and more profit from the brands of the big brewers. They’ve tried just about everything including bringing in their own imported premium beers.

Now retailers are becoming brewers. Well .. almost.

Four new Sail & Anchor craft beer brands in pride of place at Dan Murphy’s

Here’s a recent case study: Woolworth’s through its Dan Murphy’s owns the Sail & Anchor brand. They also have an interest in another WA brewer, Gage Roads. Dan Murphy’s has just released a clutch of new ‘craft’ Sail & Anchor beer styles/brands which have been brewed under contract at Gage Roads.

Own the brands: not the brewery
It’s a great position to be in: own the brands but not the brewing equipment as well as owning almost all the retail. And given that LION’s website focuses exclusively on ‘brands’ as opposed to breweries (and all the heritage that used to go with them) perhaps that’s their plan too?

So who will own the title for ‘BIG’ in future? BIG brewer or BIG retailer?

Clearly the tectonic plates of beer market ownership are shifting. Maybe that’s a good thing. One benefit is that as the big guys battle for niches, their marketing has a halo effect for small craft brewers like Cavalier or Mountain Goat.

Woolies Lager?
One outcome of bigger retail power in the beer market that I am not looking forward to is homebrand beer. The huge UK retailer Sainsbury’s provides their version of Crown Lager for example. Shudder…

Cheers!

 

19 September
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VB and Alan Bond: big lessons in taking beer consumers for granted

‘We put the consumer first.’

Any trust which mainstream beer consumers held for this claim, and the big brewers that made it has, too often, been shaken.

This post highlights two big lessons from both of Australia’s major brewers.

One is recent concerning VB. The other is from the 1980s but still provides relevant learnings in how not to treat loyal beer consumers. It concerns Alan Bond and his Bond Brewing empire.

Alan who? 
Fair question. The lesson however comes from what his Bond Corporation did to the three major state breweries it took over. They made up over half the national beer market and are now owned by LION, Australia’s largest brewer.

Bond Brewing corporate stainless steel replaces the Castlemaine Perkins sign

There are two great articles in Australia’s Beer and Brewer magazine which cover this fascinating and calamitous period in Australian brewing : one by ex-Four Corners journalist Paul Barry and the other by leading beer writer Matt Kirkegaard, editor of Australian Brews News.

A band-aid approach to trust
High-profile and public ‘whoops: we got it wrong’ flip-flops might help restore some trust. In the end though, loyal consumers still think they were taken for granted and ask ‘when will it happen again?’

The silver lining to these marketing and PR blunders is some big lessons for small brewers in what not to do in building and maintaining consumer trust.

Trust is hard to develop; easily lost; and unforgivingly hard to patch up. Band-aids only go so far.

If consumers really are your number one priority then you must live and breathe that focus 100%:  honestly, openly and transparently. Otherwise – especially in our increasingly networked market – your ‘trust’ credentials will be probed and found wanting.

Here are the two classic case studies in taking Australian beer consumer trust for granted:

VB’s apology letter in the press

VB: stuffing the golden goose Read more…

08 July
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Global beer brands via global kegs?

Stainless steel is pretty boring. But beer lovers should celebrate it because it redefined beer markets around the world. It created kegs that allowed beer brands to spread.

Okay – less boring: these kegs mean we now have a greater – indeed global – choice of tap beers. Beers that stay fresher, longer.

Beerlines celebrated this recently, as the two photos below reveal.

Pic one: Famous German brews, Fischer’s Stiftungsbräu and Bitburger, outside Claypots Evening Star restaurant in the South Melbourne market. Pic two: Sierra Nevada Torpedo Extra IPA from California waiting to be rolled into the cellar at the  Royston Hotel: renowned craft-beer pub in Richmond Melbourne.

Two German brews in South Melbourne

Torpedo waits at the Royston in Richmond

Kegs defined beer markets Read more…