Comment - Beer - Is 2012 a FMCG/Craft Beer Tipping Point?

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Pete Brown is back, refreshed, raring to go, and pondering the future. "Which way will beer go in 2012?", he asks the tea leaves.

We may have stopped greeting people with Happy New Year now, but with this being my first column of the year, I’m obliged to look back and ask, “2011 – what was all that about?” and make the obligatory “Ooh, didn’t it go quickly?” comment. Then, I'm to look forward and ask what 2012 holds.

I started writing this column almost a year ago now, and of course, it doesn’t seem like two minutes have passed since I submitted the first one. 

To take stock of the past year, I looked back over the columns I submitted in 2011 and was struck by one overriding theme: the relationship between mainstream beer and what is now commonly referred to as ‘craft beer’. 

Being a beer writer I’m a bit of a snob about what I drink myself. Not a complete snob – I judge any beer on what it actually tastes likes rather than who made it, and there are various big multinational brands I’m perfectly happy to order in a pub or bar. But, I am always conscious that, when it comes to craft beer, I could easily be accused of over-emphasising the importance of a tiny niche in the beer market, and failing to understand the broader dynamics of the real world.

I do have previous in the world of large scale beer marketing, however, and this means that I can see both sides of what, for me, emerge as the main talking point for beer in 2012: should beer be considered as something special, something to be romanced and cherished, or can - and should - it be treated simply as another FMCG product?

Your answer probably depends on whether you come to beer primarily as a marketer or a drinker of it.

I can see the marketers' point. I’ve spoken to beer brand managers who are told by headhunters that they are not ‘proper’ marketers because the brands they work on don’t have the scale, dynamics, or systems of bigger grocery brands. That must be galling.

But, I spend most of my time with drinkers who think there is something very special about beer, something that transcends what other products can offer. They feel a greater degree of ownership and belonging about their beer than they do about other brands, and they do this whether that brand is Corona or Russian River’s Pliny the Elder Imperial IPA. 

Your choice of dog food or toilet roll has very little emotional investment, because it doesn’t represent your aspirations, and doesn’t say much about you to others. Beer is a reward. Beer is status. Beer is self-definition. To simply treat beer like another FMCG brand actively is to neglect or even actively damage the stuff that makes it special. 

I’m not saying there isn’t a role for marketing, business processes and systems and grown up professional financial management. For every flavourless, bland, unloved but consistent megabrand there must be a hundred tasty beers let down by awful packaging, trapped by an inability to grow production capacity, or stymied by dramatic variations in quality. Even at consumer level, for the most product-focused drinker, branding and image play their roles, whether they admit it or not. 

It feels like 2011 saw craft beer nudge closer to centre stage. Anheuser Busch completed its takeover of Goose Island, SABMiller began a soft launch of what they hope will be a partnership with a small brewer in Belgium in the hope of taking their beer international, and MolsonCoors continued to develop its thriving Blue Moon brand.

Craft beer became, in some quarters, a term that was the subject of fierce debate. What does it actually mean? In the US, which kind of owns the term, it’s defined strictly by the size of a brewery’s output. This definition is of limited use because, if you want to get picky about it, you could argue that Goose Island ceased being a craft beer when its ownership changed, even if nothing else did. Conversely and, more importantly for craft beer lovers, perhaps it also implies that every small-scale brewer is producing lovingly-crafted, high-quality, flavourful beers.

That simply isn’t true.

This is nothing compared to the furore that happened in the UK last year, where we have our own traditional craft beer in the form of real (cask) ale. The extension of the notion of craft to cover some keg and bottled beers upset the purists, but not as much as the definition problem did. The fact that there is no precise technical definition of craft beer led many to argue that it, therefore, doesn’t exist. To which my answer was, I might have negligible knowledge of biological classifications such as species and phylum, but that doesn’t stop me being able to describe the difference between a donkey and a giraffe perfectly well.

Beyond all this, out in the real world, the simple truth was that, in 2011, more people were drinking more craft beer, and seemed happy to part with more money for it, even in lean economic conditions. 

We hear a lot about how tough times are forcing people to cut back, which is, in turn, forcing beer to commoditise, with the supermarkets' buying power driving out margin and making price the only meaningful variable. 

The flipside of this is that, when people do want something special rather than everyday, they have saved enough money to be able to splash out. Craft beer pubs are opening everywhere, and are charging eye-watering prices for obscure and eccentric beers that customers seem perfectly happy to pay.

Craft beer is on-trend. People are increasingly curious about it. In countries where beer has been seen traditionally as a downmarket or old man’s drink, this stigma is rapidly falling away. 

Only a fool would suggest that mainstream lager beers are going to make way for a plethora of IPAs, wood aged Imperial Porters and Belgian-style sour beers. But, you’d have to be equally foolish to simply dismiss craft beer as an unimportant niche patronised only by a gaggle of blogging beer geeks. 

I’ve no idea what will happen to beer in 2012, apart from one thing: interest in it will continue to grow, and that growth of interest will be driven by craft beer. We live in interesting times.

Sectors: Beer & cider

Companies: SABMiller

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