Is Heineken risking its brand image with new H41 beer? - Comment

It takes a lot for Heineken to meddle with its hard-won brand equity. So when it does, it's worth paying attention to the reasons why.

Today, the company unveiled a new beer deemed worthy enough to wear the Heineken label. H41 has been available at Heineken's visitors centre in Amsterdam since December but from this month will roll out in Italy before hitting selected retailers in the Netherlands.

The initial footprint is small, but, speaking exclusively to just-drinks ahead of the launch, Heineken master brewer, and H41creator, Willem van Waesberghe said he wants to see "how the beer flies" in test markets before growing production.

If that will happen depends on how it is received by consumers. From the perspective of large brewers, beer drinkers have proved to be a fickle lot of late. The growth of craft beer in mature markets has seen demand rise for full-bodied, flavourful brews, often doused with a liberal dashing of hops. Heineken lager, with its focus on refreshment, does not fit that description.

H41, then, attempts to turn the tables on the craft brewers by playing around with another of the four basic ingredients in beer - yeast. According to Heineken, H41 is made with a rare yeast discovered in Patagonia. Apparently the yeast has been confirmed as the 'mother' yeast of Heineken's A strain - the building block of Heineken lager since 1886. But if we step away from the marketing, Heineken's yeast focus is a clever play, allowing the company to bring more flavour to H41 to satisfy the craft beer crowd but retain the drinkability of its namesake brand. 

That is the magic combination for brewers - to have full flavour but also create a beer that consumers will buy again. Today's high-abv, fully-hopped craft beers are fine for one or two, but if you want consumers to return, then the beers have to be sessionable.

Heineken must feel that H41 hits the sweet spot if it is willing to risk its brand image with the beer. Other companies have tried extending their well-known brand names into the craft sector with varying success. In 2013, Anheuser-Busch InBev launched Budweiser Black Crown, even giving it a Super Bowl ad. Much less of it has been seen since.

Diageo, however, continues to pump out extensions under its Guinness brand. Last week, it went regional with a Guinness made with ginger, lemongrass, cola nut and chilli, targeted at the Nigerian market. 

As craft beer continues to grow we can expect more brewers to risk their big brand names with 'craft' extensions. This week Carlsberg said the craft and speciality category in mature markets is expected to grow 15% per annum globally in volume terms, and everyone is keen for a share. Buying part-shares in craft brewers, as Heineken did last year with Lagunitas, may serve as a useful stopgap, but the next stage is to take on the craft labels directly. 

Of course, as mainstream beer attempts to move into craft territory, the reverse is also true. The most successful brewers from the first craft beer wave in the US are now reaching a size that can compete with the big boys. Brooklyn Brewery, for example, is building a new headquarters and brewery on Staten Island in New York that will shake it loose from its geographic designation and allow it to grow even bigger.

Last year, Brooklyn CEO Eric Ottaway told me that he was seeing demand for his company's more craft-style beers decline while sessionable IPAs and the core Brooklyn Lager were in growth. Sessionabilty, he said, was a priority for future innovation.

All of which means the beer industry is set for a collision course - with mainstream veering towards craft and craft rushing into the mainstream. Let's hope they can all be friends when they meet in the middle.

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