Heineken's new range foreshadows craft beer's straitened future - Comment

Most popular

The just-drinks Analyst returns

Why spirits must rethink its future positioning

The just-drinks Analyst returns

Why spirits should look back to move forwards

just-drinks speaks to Distill Ventures' CEO


With just over 20% of the country's total beer market value, the craft segment in the US is ahead of the global curve. Walk into any mom-and-pop convenience store or supermarket, and you will see a good selection of craft beers. Look closer, however, and the brands on show are mostly owned by larger players such as Anheuser-Busch InBev or MillerCoors.

Heinekens Maltsmiths range was unveiled last week in the UK

Heineken's Maltsmiths range was unveiled last week in the UK

This is not yet the case in the UK, where supermarket chains tend to stock a comparatively-varied selection of independent craft labels. The country's smaller retail outlets, meanwhile, mainly stick to the big lager brands such as Carling, Beck's and Stella Artois.

As they have done in the US, mainstream brewers are keen to gain more of a foothold in the UK's craft convenience aisle. Having bought London's Camden Town Brewery in late-2015, Anheuser-Busch InBev has also embarked on marketing activations in the country for its Goose Island brand, part of lofty global ambitions for the Chicago craft brand that ABI purchased in 2011.

Heineken is attempting a similar UK tactic, albeit on a smaller scale, with the Lagunitas portfolio it partnered with in 2015.

Last week, however, Heineken unveiled a new weapon in its invasion of the UK's craft segment - the launch of Maltsmiths, a range targeted at the so-called "beer-curious".

Maltsmiths only has two variants - IPA and Pilsner - but is ready-made to host more expressions as part of its simple, mainstream approach to craft-style beer. With its bold, primary-coloured packaging and front-and-centre labelling that highlights the product's beer style ahead of all else, the new brand is targeted at UK beer drinkers that have not yet tried craft. There are 13m of them out there, Heineken believes, with many supposedly being kept out of the category by the bewildering array of products currently on offer.

"There are so many different beer styles around," Heineken's director of new beer, Sam Fielding, tells just-drinks. "But, a never-ending choice can be quite intimidating. We're helping people and easing them into this area with beer styles that people are relatively comfortable with."

The new range is an entry-level craft product positioned a few rungs below Lagunitas or Monteith's on the craft ladder, yet offering consumers a different proposition to 'world' beers such as Red Stripe or core brands Amstel and Heineken. The launch brings to the UK beer category a product that attempts to break through some of the bluster that permeates premium beer.

Indeed, the bold packaging cues resemble some of the recent innovations witnessed in the UK wine trade, which have been designed to connect better with occasional wine drinkers, such as the ditching of geographical indicators in favour of highlighting grape styles. For Chardonnay, read IPA. For Sauvingon Blanc, read Pilsner.

This pared-down approach may soon become more necessary for craft beer producers in the UK, if trends in the US are anything to go by. Last week, The Boston Beer Co delivered a disappointing set of full-year results after a 2016 in which its flagship Samuel Adams brand lost significant volumes. Blame was pinned on the increase in craft competition. However, Boston Beer's management remain confident for the future because of what they see as an forthcoming simplification in craft beer retail.

According to Boston Beer CEO Martin Roper, retailers in the US are beginning to "simplify their shelves a little bit, particularly some of the larger ones". 

This simplification, said Roper, was "good" for Boston in the long term because the "fragmentation on the shelf has affected our brands". 

The trend could also be good for Heineken in the UK. The new Maltsmiths offering aids the simplification process by offering retailers an easy entry point for craft, especially smaller retailers with limited space.

"For a small convenience outlet, if you're thinking about ranging a few beers, having a couple of the Maltsmiths there would really help bring people in," argues Fielding, who agrees that convenience outlets "in particular have finite space and ranging is difficult".

The question of availability, however, and any perceived attempts by brewers to limit it in craft beer is a sensitive issue. Last year, AB InBev CEO Carlos Brito caused a mini-outrage among craft beer drinkers when he said he believed consumers were tired of choice. His critics countered that the idea of choice was exactly what AB InBev is trying to take away from the market, by leveraging its brand and distribution power to put forward its own craft brands. The bleak vision of the future painted by some is one in which only AB InBev's - increasingly-extensive - portfolio of brands exist on the shelves.

Fielding, in contrast, says he believes that "choice is to be celebrated". However, in a nod to the realities of the market, he adds: "Whether or not over time the category becomes too fragmented, we will see."

If craft beer's long tail does start to diminish, then it is the big brewers, with their brand and distribution power, that are best positioned to survive. Maltsmiths, therefore, is a brand that feeds off the wide-ranging appeal of craft's current variety to target those not yet part of the club.

It is also built to survive in a future where such choice could be much more limited.

Related Content

Scale or Stale - M&A options for craft brewers looking to grow their business - Industry Comment

Scale or Stale - M&A options for craft brewers looking to grow their business - Industry Comment...

UK mirrors US as canned craft beer sales soars - Nielsen figures

UK mirrors US as canned craft beer sales soars - Nielsen figures...

Do consumers know about beer terminology as well as you do? - Comment

Do consumers know about beer terminology as well as you do? - Comment...

Big beer versus craft beer - Is the fight finally over? - Comment

Big beer versus craft beer - Is the fight finally over? - Comment...

Oops! This article is copy protected.

Why can’t I copy the text on this page?

The ability to copy articles is specially reserved for people who are part of a group membership.

How do I become a group member?

To find out how you and your team can copy and share articles and save money as part of a group membership call Sean Clinton on
+44 (0)1527 573 736 or complete this form..

Forgot your password?