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Posted July 2015

Belgium – Beer consumption drops 5 percent in first five months of 2015

Like in neighbouring Germany, beer consumption in Belgium continues to decline. In the first five months of this year, the drop was 5 percent over the same period last year, the Belgian Brewers’ association reported on 19 June 2015. “This is the strongest decline in the past 15 years”, the association told local media. Fortunately, exports are compensating for some of the decline at home.

Between 1995 and 2014, domestic sales decreased steadily by 23 percent. Last year was an atypical year because of the Football World Cup, which resulted in a less pronounced decrease. Per capita consumption of beer now stands at 72 litres (in Germany it is still slightly over 100 litres). Read on

 

USA - Beck’s beer drinkers feel misled and win refund

It would have been purely for economic reasons that AB-InBev transferred the production of Beck’s for the U.S. market from Bremen to St. Louis at the end of 2011. Allegedly, AB-InBev thus saved USD 9 million per annum in transportation costs alone.

But did they stop a second to reflect what this shift in production would mean to the image of Beck’s as an “import beer”?

If they did, they should not have been too surprised when one year later some loyal Beck’s drinkers filed a lawsuit, arguing that they were misled by AB-InBev over the origin of Beck’s.

On 25 June 2015 media reported that AB-InBev has agreed to settle the class action case and is offering refunds. Read on

 

USA – Blame it on the consumer for being an enigma

So PepsiCo’s CEO Indra Nooyi is “puzzled” by her younger consumers because they seem “confused”? Consumers “confused”? That’s a bit much. But Ms Nooyi would say that, wouldn’t she, as Millennials obstinately refuse to fall for her marketing spin.

We’ve never seen the consumer as confused [sic] as they are today,” she said in April 2015, in response to a question from an analyst about PepsiCo’s approach of sorting its products into three buckets: “fun for you,” “better for you” and “good for you.” The categories roughly capture a spectrum ranging from junk food to relatively healthy. “If you’d asked me a few years ago, it was about things like [diet drinks],” Ms Nooyi said. “Now they view real sugar as good for you. They’re willing to go to organics even if they have high sugar, high salt and high fat. It’s a challenge.”

Sorry for criticising Mr Nooyi, but in a market economy, finding your consumer should be a challenge. Hasn’t there long been talk about the consumer being “king”? Kings, as we know from history, have always been capricious and hard to impress. The only alternative to giving consumer choice is producers operating a cushy monopoly, which free marketers consider a boo-boo because it limits, yes exactly, consumer choice.

Perhaps Mr Nooyi’s recent moan comes from the realisation that in the past Fast Moving Consumer Goods (FMCG) companies had it so good. Whatever they flogged to the consumers, they just bought it. Even when they merely added a bit of gold to the label and sold the same stuff for a higher price, consumers still bought it.

In the old days, consumers fell into two categories: gullible yea-sayers and hard-core refusniks. For FMCG companies the choice was easy: why bother throwing good marketing money at the latter if peddling your wares to the former was like selling hot buns?

These days are gone. Today, consumers fall into three broad categories: old-timers (who are the ageing yea-sayers), middle-of-the-road types (who are open to most product suggestions) and Stalinists (who are ideologically opposed to almost everything that smacks of Big Business). Read on

 

United Kingdom – Diageo to sell Scottish golf resort

Gleneagles - what a place for a corporate jolly. But soon no more. Diageo, the world’s number one drinks group, that is under pressure to lift sales and profits, is close to agreeing the sale of its luxury Gleneagles hotel and golf resort in Scotland, media reported on 26 June 2015.

The site, which was allegedly put up for auction earlier this year, could fetch anywhere between GBP 150 million and GBP 200 million (EUR 282 million), UK media reported. Its sale would relieve the burden on Diageo’s CEO Ivan Menezes, after a period of underperformance that has triggered rumours of a takeover.

Needless to say, Diageo declined to comment. Read on

 

USA – Lagunitas builds new brewery near Los Angeles

And we thought that California was water-stressed? One of northern California's largest craft breweries is setting down roots in Los Angeles. Lagunitas Brewing Company, based in Petaluma, north of San Francisco, and known for its hoppy pilsner, amber ale and IPAs, announced via its owner's Twitter account at the end of June 2015 that it is currently building a new brewery in Azusa, a suburb of Los Angeles.

Lagunitas is the sixth largest craft brewer in the U.S. and its Los Angeles plant, its third, is scheduled to open in 2017 with an initial capacity of around 420,000 barrels (500,000 hl) per year.

The reason why Lagunitas is not moving to Los Angeles proper but to Azusa may have something to do with the incoming USD 15 minimum wage for the city of Los Angeles, commentators mused. Read on

 

USA – Brewers Association’s turnover to reach USD 21 million in 2014

Congratulations. In 2011, the Brewers Association’s revenues were USD 10.5 million, but last year they stood at USD 21.1 million, says Beer Marketers Insights, a trade publication.

According to Beer Marketers Insights, this makes the BA, the representational body of U.S. craft brewers, a much wealthier organization than the Beer Institute, whose members include AB-InBev and MillerCoors.

Events still are a major source of income for the BA, reaching USD 10.8 million in 2014, or slightly over 50 percent of the BA’s total income.

The BA now has 2,447 brewery members and a staff of over 50 people.

To further American craft beer promotion and education in Europe, the BA, on 17 June 2015 announced that it has hired the German journalist and beer sommelier Sylvia Kopp as its American Craft Beer Ambassador in Europe.

“Ms Kopp will support export growth to the region by facilitating and fostering relationships between U.S. exporters and European importers and distributors, as well as educating trade and media about the quality and diversity of products offered by the U.S. craft beer industry, about U.S. craft beer culture, and about proper care and handling for craft beer,” the BA said in a statement.

 

Belgium – Lindemans brewery doubles capacity

The Lindemans brewery, famous for its fruit beers and geuzes, has seen demand for its beers rise sharply in recent years and has doubled its capacity to 170,000 hl and staff to 32. At the end of Aril 2015 the new packaging hall was officially opened.

When I visited the brewery at the end of June, it was full to the rafters with barrels and they were busy filling bottles. Demand from abroad for Belgian lambic beers continues to grow. It is not just the fruit lambic beer that is enjoying great success. Lindemans has also seen a growing interest – again mainly from abroad - in sour ales, a category in which lambic and gueuze beers feature prominently.

For six generations the Lindemans family has mastered the process of brewing lambic beers, namely spontaneous fermentation. “Brewing lambic has specific problems,” says Geert Lindemans, who owns the brewery together with his cousin Dirk. “Other beers leave the brewery within a few weeks, whereas lambic beers stay at the brewery for one year at least... often many years. A substantial expansion of our storage, filling and packaging capacity was therefore needed. It took an investment of EUR 15 million and two years of planning and building, but today we are proud of what we have achieved.” Read on

 

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