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January February 2007 > Cover Story
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Stalking Craft

By Andy Murray

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Since 1995, Blue Moon has steadily gained momentum and market share, but it’s really taken off lately, growing by 115 percent in the first 10 months of 2006 alone, according to the Rocky Mountain News. According to industry estimates, the company was on track to sell between 400,000 and 500,000 barrels of Blue Moon in 2006, which would have made it the equivalent of the third- or fourth-largest craft brewer in the U.S., behind Boston Beer; Sierra Nevada and New Belgium. But it's never been promoted as a Coors product.

“We’ve had a lot of success with word-of-mouth for Blue Moon without having to beat people over the head with it,” Hehir said. “I think it’s because people like to reward themselves by trading up a little bit. But while they do want to trade up, they don’t want to trade up too far in terms of flavor. They don’t want a beer they can’t cope with.”

The other major breweries are also trying to find the sweet spot held by unique but familiar-tasting beers like Blue Moon. Global brewing giant SABMiller, which bought the Miller Brewing Co. in 2002, recently scored a hit with its Fredrick Miller Chocolate Lager, which one reviewer called one of the “best new beers of 2006.” Miller also owns Henry Weinhard's, which recently launched an organic offshoot. A-B has put out regional brews, developed by its brew masters in St. Louis and New Hampshire, distributing them across the Northeast and the Midwest.

Not only are major brewers encouraging their own employees to get crafty, they are also lapping up smaller, independent brewers at a rapid pace. In May, Anheuser-Busch announced it was buying Latrobe, Penn.-based brewer Rolling Rock from the InBev, but it also owns large shares in regional craft brews such as Chicago’s Goose Island Beer Co., Seattle’s Redhook Ale Brewery Inc., and Portland, Ore.-based Widmer Brothers Brewing Co.

St. Louis Craft Fair

To hear that Anheuser-Busch is focusing on high-end products is to invite snickers, but Pat McGauley, vice president of innovation at Anheuser- Busch, doesn’t let it worry him. To craft loyalists who openly question whether a beer can be considered micro-anything if it is brewed by A-B, McGauley long ago came up with a counter-argument.

“We tell them to taste our beer and tell us it’s not meeting their standards. Anheuser-Busch has some of the best brewers in the world and we are winning the skeptics over,” said McGauley, 43.

But winning the skeptics over, no matter how well qualified its brewers are, means that the St. Louis behemoth has to take the micro- craft boom seriously.

In many respects, it has. In addition to backing Redhook and Widmer, last year, Anheuser-Busch launched two organic beers, Stone Mill Pale Ale and Wild Hop Lager. The giant brewer also came out with a line of four seasonal specialty brews in bars, including Spring Heat Spiced Wheat, Beach Bum Blonde Ale, Jack’s Pumpkin Spice Ale and Winter’s Bourbon Cask Ale.

“This is a building-block type approach,” McGauley said. “We don’t expect these beers to pay off right away, but the news we are generating in the market is very, very positive. These beers are all about creating excitement in the beer category,” he said.

Anheuser-Busch is also looking to reinvigorate its organizational structure by giving its network of breweries the authority to make and distribute regional beers to a limited area. Last year, those companies brewed beers like Mule Kick Oatmeal Stout in St. Louis and the Demon Hop Yard Ale in Merrimac, NH. These items, while only available in restaurants and bars, were a way of giving brewmasters throughout the organization the flexibility to work with more specific flavor profiles and recipes, while creating a sort of local pride of ownership. Next year, the program will expand to all 12 of the company’s regional breweries. “Beer is absolutely an emotional purchase so we are always trying to make sure there is an emotional tie between our products and customers,” McGauley said. “This is all about giving some control and brand ownership back to the consumer.’

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