Beer – What We Will Be Arguing About in 2013

2012 – what a year it was for beer. Microbreweries skyrocketed in numbers, hipsters drank beer instead of red bull (or whatever the fuck hipsters drank before beer) and lifestyle magazines wrote about this new thing called craft.

What did we – the beer community – do? We argued about it, obviously. Incessantly, like little children who’ve just learnt the word no.

Q. What is CRAFT BEER?

A. Who knows?

Q. If keg is better than cask, but cask is real ale and is better than macro, allowing for the fact that some European beers are keg, but not really keg and cask is real, like bottles, but cans aren’t real, except in a literal sense, what’s the square root of the hypotenuse?

A. I JUST DON’T CARE ANYMORE!

In 2013, we don’t argue about keg or cask or craft or trigonometry anymore OK?! This is what will happen in 2013:

1/ We will drink beer from cans, in copious quantities

2/ We will argue about whether the macros are going to start buying up the micros and whether this is a bad thing or not, then we’ll argue about exactly what point a micro becomes a macro, then we’ll all get exasperated and only drink our own homebrew, however bad it is.

This is a good article read it (thanks to @topfermented via @brewdogbarjonny)

OK, I am being a bit silly obviously. But I think it’s clear that this will be a topic for discussion in 2013.

Regardless of exactly what we concluded in 2012 as to what constitutes craft beer, I think we generally all have a sense of the type of breweries we like and the type of beer they produce. It’s these breweries and these beer types that have achieved success and growth in 2012.

But according to the British Beer and Pub Association, 2012 was the eighth consecutive year of negative growth in beer sales. Given the number of UK breweries has doubled in the last ten years there is a clear anomaly here. Essentially, the market is going down the pan, apart from a small portion of it that will rightly or wrongly be labelled craft or artisanal or micro or small or whateverthehellyouwanttocallit.

It stands to reason that the macros will want a piece of that pie. Hell, if I was a marketing man at a large brewery tasked with growing the business, I’d just tell the brewers to knock out an IPA and plaster craft all over the label (ahem). In the US, SABMiller and AB Inbev are cornering the “Faux craft” market (what exactly is faux…….oh shut up) and it’s only a matter of time before the UK market follows suit (if it isn’t already).

Better still, why not just go and buy one of those successful small breweries for way more than it’s worth and take over from the inside out.

When we have this argument, when we decide how we want our beer market to be shaped in the future, we need to remember what it is about beer that we like and why this can never be provided by a multinational company run for the benefit of its shareholders.

Individuality and Independence

Everyone likes to think they liked something before anyone else and it’s never quite the same when everyone else likes it too. Big business can’t possibly support individuality and independence because a business model that maximises sales and profit simply doesn’t allow for small consumer groups. Why would it?

Not for profit

Profit doesn’t really fit into our beer world, well not profit in the multinational sense. If a brewery makes enough to pay its employees handsomely and save some in the bank to make better beer more widely available (subject to the Individuality and Independence point above) that’s great. But when a company makes decisions purely to maximise return to shareholders the outcome will never be optimal for anyone but the shareholders.

Choice

We love choice. Think Calvin Harris but substitute girls for beers. Profit and choice are not terribly compatible things either. Maximum profit comes from market domination which comes from killing the competition which means less choice. We all lose. Well, those of us who like choice anyway.

Quality

The more it costs to make something the more you have to charge for it and the more limited the market for your product becomes. Another unacceptable situation for a large profit orientated business. We like good beer, made with lots and lots of expensive ingredients. Macros like beer made with cheap ingredients in as small quantities as possible so that everyone can afford it.

There’s a continuous theme in all the points above and that’s the incompatibility of beer that we like to drink with making monstrous amounts of profit that can be immediately extracted out of the business by the shareholders. Top Fermented makes a very good point that breweries should be defined as craft only if they are not traded on a stock market and that makes perfect sense to me. No shareholders, no expectation of dividend payments, no concentrating on profit above everything else.

Macros have the power to run elements of their business at a loss, they have purchasing power, marketing power and routes to market 100s of times as effective as most small breweries. If they are allowed to infiltrate the craft beer market they will spread like a parasite, feeding off all the good will and quality that has been generated over the past 5 or 10 years, whiping it out like a plague of locusts. It’s a serious threat and we all need to make sure it doesn’t happen.

6 thoughts on “Beer – What We Will Be Arguing About in 2013

  1. I don’t think that the macros will infiltrate the ‘craft’ beer market to a large degree, try as they might. The breweries producing the best beer do it because they are passionate about what they do. It’s the beer that drives them, the striving to produce the best, and not the focus on profit margins or shareholders as you state. Knowing what good beer, really good beer, tastes like means that you won’t accept poor immitations. Although the larger brewers may buy up or buy out some of these micros, new ones will spring up, and are springing up everywhere at the moment. Maybe it’s a bubble that will burst but maybe, just maybe, it’s a sustainable revolution.
    I agree about canned beers too, but maybe not drinking directly from the cans.

    • My worry is that they will buy up the best ones with more money than small businesses can refuse to turn down, then kill off the competition, then make them all shit!

      I do hope you’re right and it’s not a bubble. Although, to me, the levels of growth feel unsustainable.

      Definitely drinking out of cans!! 😉

  2. ‘Big business can’t possibly support individuality and independence because a business model that maximises sales and profit simply doesn’t allow for small consumer groups. Why would it?’

    ‘Can’t possibly’ seems a bit strong. Think of the world’s biggest drinks company, Diageo. I could see a company like that picking up breweries in the same way as they themselves pick up distilleries. I’m not talking about the 70s-80s style ‘take over and close down’ trend; there’s nothing to say that these breweries couldn’t be given almost complete autonomy, benefiting from the parent company’s contacts and distribution network. I know it might not seem likely but surely anyone with half a brain looking at any ‘craft’ brewery would realise that the main asset is the people involved. Some big companies are also pretty good at preserving the integrity, or even ‘independence’, of their brands, when it suits them. Think of how many people would turn down a Guinness as being mass produced macro-swill, order themselves a lovely pint of something from their local independent craft brewery and have a Talisker to accompany it.

    I’m not saying it’s a good thing, it’s just something I can envisage happening. Big businesses can, and do, deal in niche products.

    Good article, great food for thought.

    • Thanks Gareth.

      You are completely right, of course. I intended for the statements to be quite sweeping in the hope that it would raise some challenges.

      I like the model of the distilleries and I think that would be a more comfortable middle ground. To my mind, whisky still feels like a more niche drink than a pint of beer and perhaps maintaining that independence and integrity is paramount to the continued success of those products.

      I think the success of foreign macro beers in this country proves that people can be sold on a product that they consider to be a bit out of the ordinary without it actually being out of the ordinary at all. If macros can do the same with “faux” craft then we could be in trouble.

  3. I’m not sure we have too much to worry about. Sure, the multinationals may try to buy out or create their own ‘Craft’ labels but surely the ‘Craft’ (sorry about all the inverted commas!) market appeals mainly to consumers looking for new and interesting products and trying to support smaller, local producers. The multis would be seen through quite quickly by the typical ‘Craft’ consumer and so what if they mass market a ‘Craft’ style beer, this could potentially lead more people into the wonderful world of micro (or nano!) brewed beers….support your local brewers!!…
    For 2013 i predict more great beer brewed by tiny breweries!

    • I think that holds if they create their own beers which clearly don’t conform to what we see as “Craft” (I do the quotes too, don’t worry). They may appeal to macro drinkers and turn them on to the ‘real’ stuff which could be a positive.

      The danger is the “wolf in sheep’s clothing” approach. Say a macro buys up Kernel for instance, produces it in a 1m HL plant and uses its routes to market to monopolise supply and sells it at a loss to take other smaller producers out of the game. With ridiculous duty, smaller breweries are already operating in the margins, so it wouldn’t take much to tip them over the edge.

      With so many new breweries, there’s only so much pie to be eaten and if you get some big fucker coming in and scoffing the lot, the runts (sorry, a poor term, but works for my analogy) don’t get anything to eat.

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