One of the first signs of madness, I was always told, is talking to yourself. If that's the case, then Larry Nelson may have finally lost it. Before we cart him off, though, let's listen in on his and his musings on what 2011 offers the brewers of the world.

Happy New Year and welcome back to the future – did your Christmas stocking overflow with the joys of family, friends, cheer and good beer?

You’re on rhymin’ Simon form today, my friend. Yes, we toasted the New Year clustered around a bonfire, sinking numerous bottles of Champagne and setting off fireworks as the clock struck midnight, in the process violating many, many health and safety edicts.

In keeping with the ongoing global predilection to belt-tighten, the presents under the tree were more modest than in previous years, albeit leavened with wit. I asked for an assertive training course; instead I was gifted with Dell’s customer helpline number.

Clever – how’s that working out?

GREAT!! I’M NOW IN EVERYONE’S FACE, IN TAKE NO PRISONER’S MODE!! SURVEY TAKERS, GIRL GUIDE COOKIE SELLERS AND DOUBLE-GLAZING SALESMEN GIVE ME A WIDE BERTH!!

Hmm – read John Irving’s A Prayer for Owen Meany over the break, did we? And BTW, a recent office temp who used to sell double glazing said that the phone numbers for extremely irate, impolite cold call recipients were passed around so that they could be called repeatedly and further wound up.

That figures; for every action there is an equal and opposite reaction, in social transactions as in physics. Now, as to reading interests, at the moment I’m devouring a Christmas present, Dethroning the King, the insider’s look at InBev’s audacious all-cash takeover of Anheuser-Busch in 2008. Written by Julie MacIntosh, then the Financial Times’ US mergers and acquisitions correspondent, the book offers an insight into A-B’s culture under August Busch III and in due course his son the IV, fleshed out by numerous A-B executives seemingly willing, if not eager, to tell their story. It goes a long way to explain why A-B succumbed so quickly to InBev’s all-cash bid, and just how out of step A-B’s culture was in a modern corporate society.

Are you mulling over the virtues of InBev’s zero-based budgeting culture?

There’s a lot to be said for cost-cutting and fat trimming, isn’t there? MacIntosh makes the point that, if A-B’s management had got their act together on shedding costs not all that much sooner, InBev’s bid may well have failed.

And as the brewing industry emerges from paying down debt, and free cash flow becomes available once again, which are the best return-on-investment prospects for the industry?

There’s some pent-up demand for equipment, either for postponed greenfield projects in growth markets or for existing breweries in need of updating – capital expenditure forecasts should move upwards out of necessity. This should be made evident as of the 2010 year-end financial announcements come February. Thanks to media deflation during the recession, marketing spend went down while share of voice was held constant; here, too, there may be a need to earmark additional spend.

That’s more to do with operational cash-flow. C’mon: if you had hundreds of millions of dollars or euros and you were a multinational brewer, where would you spend it?

Leaving aside the potential for M&A activity, at this time multinational brewers are investing considerable resources in making their flagship premium beer brands truly global – AB-InBev is pushing Stella Artois in the US as an alternative to Heineken; in Brazil, it has introduced Stella and has plans to roll out Budweiser in 2011. In last year’s FEMSA Cerveza transaction, Heineken promised investors gold from its roll-out of premium brand delights in the form of its namesake premium lager in Mexico, and again perhaps Brazil.

SABMiller continues to dedicate resources to broadening Peroni Nastro Azzurro's coverage, which seems to be gaining some of the hoped-for traction amongst younger, style-conscious consumers. Carlsberg assured analysts last September that its flagship lager, currently "enjoyed in 140 markets", remains something of an unexploited treasure.

Yet, one wonders if the best returns are from investing in premium brands – you really need volumes to make beer, a bulky, expensive-to-package-and-ship product and initially boosted by an excess of marketing spend, worth the effort. AB-InBev has been pushing Stella for five years now in the US; according to estimates in a recent presentation to analysts, it will have claimed 3.3% of that market’s import sales value in 2010, up from 1.2% in 2005.

That’s a long, hard road and there’s an argument to be made that the best returns on investment are achieved from premium brands with a national or regional positioning – think Tuborg in Eastern Europe. Yet, to flip-flop for a moment, in markets where there isn’t strong segmentation - such as Colombia, where SABMiller bought Bavaria five years ago - there’s value in an international brand claiming the high ground of premiumisation. Its entry is not cannibalising existing brand sales/volumes and thus has merit.

For a newly-assertive guy, that seems a tad wishy-washy – in essence, your experience may vary according to brands and markets.

Okay, to tighten that up, the returns derived from taking premium brands global don’t, for the most part, justify the front-end spend. But, I think, in 2011, the story for brewers will be their development of segments beyond their core capabilities.

You mean as with Carlsberg, who are on record as looking for new growth opportunities for their core capabilities in fermentation, yeast and raw materials?

Yes – and more than that. Carlsberg, SABMiller and Heineken are all pushing into cider, an adjacent category. There could be other categories developed systematically, such as mineral waters that are already produced on a limited basis, often just to support the beer brand, as in markets where there are advertising bans on alcoholic products.

What about soft drinks?

Most brewers produce, bottle and distribute soft drinks as licensees; SABMiller, for example, is one of the world’s largest bottlers of Coca-Cola. On cost synergies, more work could be done on combining beer and soft drink logistics, as FEMSA Cerveza and Grupo Modelo have been experimenting with. But, here’s the blue sky thought for the day: One wonders if the industry’s best M&A possibilities lie outside the core brewing industry and with other long drinks, or even spirits. Diageo’s business, in this sense, could well be the template.

Thanks for all this: it’s certainly food for thought.

You’re too kind. May your efforts, insight and daring bring you prosperity and joy in the coming months. Now, could I interest you in some surplus Girl Guide cookies?

You really are an old softie.