Ukraine’s brewers in times of war Russia’s invasion has wrought havoc on Ukraine, a country of 44 million people. By late April 2022, some estimated 5 million people had fled the country, while more than 7 million people had been displaced internally. Since Russia ended its siege on Kyiv at the end of March and… Continue reading May 2022
As the war in Ukraine drags on, western firms still doing business with Russia had better monitor Ukrainian foreign-office twitter accounts. A tweet by Ukraine’s ambassador to Germany, Andrij Melnyk, forced the German chocolate maker Ritter Sport to publicly justify why it refuses to pull out of Russia. This was not enough for activists, who… Continue reading April 2022
The Big Brewers issued their 2022 financial outlooks in February. They were remarkable insofar as Carlsberg, Heineken and AB-InBev refrained from commenting on geopolitical risks to their businesses – at a time when all our eyes were turned to Russia and its looming invasion of Ukraine. What can this possibly mean?
Despite the war in Ukraine, the band plays on elsewhere. In the US, over the past few months, the craft brewer CANarchy was sold to energy drinks firm Monster; San Diego’s Green Flash and Alpine were sold to craft brewer SweetWater (owned by a Canadian cannabis firm); South Carolina’s craft beer pioneer Weeping Radish was… Continue reading March 2022
“We Finns are not Vikings” Beer market Finland ǀ Although Finland is part of the Nordic countries, it is not only its language that makes it stick out. The Finns also go their own way when it comes to beer and alcohol. As beer consumption is in decline and the pandemic has hit craft brewers… Continue reading March 2022
Faced with “crazy increases” in the cost of ingredients, energy and transport, brewers will need to hike prices this year. To what extent – that’s the question. Brewers’ pricing may be a little more restrained than in other Consumer Packaged Goods categories because they all want to grow share, and they are all very mindful… Continue reading February 2022
AB-InBev is trying to talk up its share price. It is trading at a significantly lower valuation than every single one of its peers, despite controlling a third of the global beer profit pool. As the economist John Maynard Keynes said: Financial markets are moved by animal spirits, and not by reason. In this podcast… Continue reading No. 12: AB-InBev and the stock market game
It is spring cleaning at the Big Brewers. While Molson Coors sold San Diego’s craft brewer Saint Archer to upstart Kings & Convicts, which had previously taken Ballast Point off Constellation’s hands, AB-InBev quietly wound up its joint venture with cannabis firm Tilray. Looks like deals related to distressed assets and new opportunities are taking… Continue reading January 2022
In today’s climate, political issues have become hotly contested. Activists are dragging business leaders into debates that have little to do with their commerce. But before brewers go and find a soapbox to stand on, they should be aware that whatever they say, they could potentially alienate half of their workforce and consumers. So what… Continue reading No. 11: The political CEO
Slogans are important. They are memorable. They are a catchy statement regarding your business. AB-InBev’s marketers have coined a new one for the firm’s medium-term strategy: “a future with more cheers”. Sounds positive and encouraging after two years of covid, which have made people frazzled, anxious and snappy. But why the defiant tone? Why did… Continue reading December 2021
Data firm IWSR says that total beverage alcohol volume across the Asia Pacific region dropped 8 percent in 2020. It forecasts that only by 2025 will volumes return to pre-covid levels. Observers wonder for how long the Chinese government will pursue its zero-covid policy, which involves strict lockdowns, extensive testing, robust contact tracing, quarantine mandates… Continue reading November 2021
The new business of business is … politics Digital platforms ǀ In today’s climate, political issues – from public health to energy supplies and road planning – have become hotly contested. Stakeholder groups are dragging business leaders into debates that have little to do with their commerce. Breweries too have entered into the fray, willingly… Continue reading November 2021
When it comes to raising prices, brewers in many parts of the world have long played a game of “who blinks first, loses”. This is to say, you don’t put them up unless somebody else does, or you’ll be too expensive amid the competition and your sales will decline. Given rising inflation, price increases for… Continue reading October 2021
Beyond coronavirus: the future of supply chains From bottle and can shortages to shipping delays and soaring commodity costs, the pandemic has strained brewers’ global supply chains. Amid ongoing geopolitical tensions and a toughening of European legislation, brewers will need their ingenuity to adapt their supply chains in favour of greater localism. Even before the… Continue reading October 2021
It sent shockwaves around the industry when Australia’s number two brewer Lion announced it has acquired 100 percent of the Fermentum Group, which owns one of the country’s largest and most staunchly independent craft brewers, Stone & Wood, for an estimated USD 370 million. The group is estimated to control about 1 percent (200,000 hl)… Continue reading September 2021
Carlsberg in court again over collusion in German beer market. This is turning into a never-ending story. On 27 August 2021, Carlsberg will be dragged to court again over price fixing which occurred between 2006 and 2008. The Federal Cartel Office, in early 2014, imposed fines totalling EUR 338 million (USD 450 million) on several… Continue reading August 2021
Tulips and beer Dutch craft beer ǀ What on earth have tulips got to do with beer? Very little it seems. Except perhaps for tulip shaped beer glasses. But there is one country in this world where tulips can serve as a metaphor for the phenomenal rise of craft breweries. Cross your heart: what do… Continue reading August 2021
There seems to be no end to the hard seltzer saga. In the UK, BrewDog et al were slammed by the watchdog over misleading hard seltzer claims The Advertising Standards Authority (ASA), on 7 July, took objections to hard seltzer ads which appeared between December 2020 and January 2021, including BrewDog’s Clean & Press range,… Continue reading July 2021
USA – Jim Koch of Boston Beer has high hopes for hard seltzers It was kind of unsettling to hear Jim Koch, the founder of Boston Beer, only talk about hard seltzers at the US industry gathering, the Beverage Forum, which was held in May. Is beer on the way out, and its continued decline… Continue reading June 2021
The power of the narrative Narratives help us make sense of the world and ourselves. Take globalisation. It was presented to us as an inevitable process, forging global champions in its wake. In the brewing industry, the narrative of “biggest is best” was countered by the craft brewers’ own narrative, which was modelled on the… Continue reading April 2021
USA – Constellation takes impairment charge on Mexicali brewery Constellation Brands is finding itself in an awkward situation with no easy way out. In March 2020, Mexicali residents, in a referendum, rejected the completion of the 10 million hl brewery at a cost of more than USD 1 billion, which Constellation had already partly built.… Continue reading April 2021
At home in one’s past Beer and nostalgia ǀ As the deadly pandemic wears on, many of us can be forgiven for feeling nostalgic, pining for the times when life felt normal: when we got together as a family, when we had an after-work beer with colleagues, when we hugged our friends and kissed our… Continue reading February 2021
USA – Uber buys alcohol delivery app Drizly for up to USD 1.1 billion A cool price for a piece of technology. Uber said on 2 February 2021 that it has acquired the alcohol delivery service Drizly, the latest purchase for the ride-hailing company, as it seeks to diversify its business after a pandemic-related decline… Continue reading February 2021
USA – Constellation Brands saw sales of Corona rise in 2020 Americans drank plenty of Corona and Modelo beers while being stuck at home during the pandemic, boosting Constellation Brands’ third quarter results (until end of November 2020) beyond investors’ estimates. Constellation posted a turnover of USD 2.44 billion for the quarter, up 22 percent… Continue reading January 2021
From bottle and can shortages to shipping delays and soaring commodity costs, the pandemic has strained brewers’ global supply chains. Amid ongoing geopolitical tensions and a toughening of European legislation, brewers will have encountered vulnerabilities in procurement and risks in their production strategies just about everywhere. How can brewers improve their supply chain resilience?
It was a remarkable admission by James Watt, one of the founders of Scottish craft brewer BrewDog: He said that in March 2020 he broke down in tears when the severity of covid-19 became clear: BrewDog had lost almost 70 percent of its revenue overnight, almost all of its 100 bars were closed, most of… Continue reading No. 9: Direct to consumer
The latest deceptive buzzword in the brewing industry is digitalisation. Like all terms it can mean a whole lot of different things. Take the Drizly app. It is a piece of technology which was bought by Uber in February 2021, whereas Flaschenpost (message in a bottle), which was acquired by Germany’s major brewer Radeberger in… Continue reading No. 8: Digitalisation
Both Coke and Heineken announced they will be launching their hard seltzer brands in Europe this year. Tere are several barriers that any hard seltzer brand will need to overcome in Europe, starting with the fact that “seltzer” is not a word used here. Will consumers over here really fall for the hype of low… Continue reading No. 7: Hard seltzers
For all the hype and hope over sustainability, the market share of organic beers remains small. Is it because consumers do not want to pay more for them? Or is it because other purchasing criteria like flavour, style and support for the community are still more important?
Narratives help us make sense of the world and ourselves. Take globalisation. It was presented to us as an inevitable process, forging global champions in its wake. In the brewing industry, the narrative of “biggest is best” was countered by the craft brewers’ own narrative, which was modelled on the biblical story of David and… Continue reading No. 5: Narratives for the brewing industry
Dubbed MegaBrew, the merger between AB-InBev and SABMiller in 2016 combined the world’s two largest brewers. In the following years, AB-InBev unwound SABMiller little by little. But its megadebt has proven a headache. Was the whole thing really worth it?
Through dealmaking the Big Brewers could bulk up more quickly than through organic growth. That is how they become global. But not all deals lived up to expectations. Constellation Brands’ purchase – and subsequent sale – of US craft brewer Ballast Point can serve as a warning.
Only in times of crisis, do we suddenly become aware of how fragile our supply chains are. Considering how little food people usually keep at home in their fridges and cupboards, urbanites are just three meals away from starvation. But despite all the stock-piling around the world, beer supply chains weren’t disrupted during the pandemic.… Continue reading No. 2: Is Brewing beer an essential industry?
From globalisation itself to craft beer, the brewing industry has witnessed all kinds of disruptions. Even CEOs sought to become disruptors. And now we have the covid-19 pandemic, which has hit the industry unprepared.