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WRITER, CONSULTANT AND BROADCASTER SPECIALISING IN BEER, PUBS AND CIDER. BEER WRITER OF THE YEAR 2009 AND 2012

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Wednesday, 27 October 2010

How risk aversion is choking big brewers

I'm in Rochester, New York.  Yesterday, we went to this shop:

This is a very big beer shop.
I'll save the beer porn pictures for later, because there's something else that cut through my gibbering excitement and imminent worry about weight limits on the flight home.



Blue Moon.  It's not my favourite beer.  I find it too sweet, and the serve with a slice of orange a bit forced.  But I'm glad it has been launched in the UK.  I'm glad Molson Coors are at least showing recognition of the need to develop a craft beer portfolio if they want to prosper long term.  And I know various people who really do like the beer.

With my marketing hat on - and because there are people working on Blue Moon whom I count as good friends - I also know that the launch of Blue Moon has taken an awfully long time and cost a serious amount of money.  Not because they fucked up (they didn't) but because that's how big companies work.

In Beers of the World, they also stocked these:



Instantly, to my mind, Blue Moon becomes a much more interesting beer.  I'm curious about trying the range.  I don't expect these beers to blow my socks off, but now we have a global brewer launching a series of seasonal beers and I think 'Yay, they're finally getting it!'

So given that these beers have already been manufactured, tested and distributed, why don't we see them in the UK?

I may be completely wrong (and if I am, I'm certain to be told so in no uncertain terms very soon) but I think this is a perfect example of how the systems and processes of big brewers are stifling their creativity.  I've worked on 'New Product Development' (NPD) projects a hundred times.  These companies are risk averse - they actively reward caution.  A typical 'critical path' to even get to a regional test launch for a new brand is at least a year long and costs hundreds of thousands of pounds.  There will be at least two sets of focus groups.  Both the 'liquid' and the brand positioning will be tested against various target groups, both at concept stage and much closer to pre-launch.  Consumers will be asked their opinion on everything, down to the shade of orange on the box.  At each significant juncture there will be a 'gate' where the team responsible has to present to the board or whoever, to convince them not to even launch the thing, but just that it's worthwhile proceeding to the next stage of research and development.

I've maybe worked on eight or nine different new beer launches for big brewers in the last few years.  I think one of them saw the light of day - and despite all that investment and caution, it failed.

Look - here are the beers, sitting unsold in a big beer shop in North America.  What's stopping some bright, beer loving person at Molson Coors (there are plenty of them) simply saying, why don't we ship a palette of each one over to the UK, stick 'em in places like the Rake, the White Horse, North Bar, go down there and chat to punters and see how they go down?

That's what a micro brewer would do.  That's what the likes of James Clay are doing with brands like Saranac, Flying Dog, Stone and Goose Island.  You might take a bath on one shipment.  But you'll probably make it up on the others.

Multinational brewers in theory have an infrastructure that would make this very easy.  But it's too much of a risk.  It has to go through the system.  I've no idea if Molson Coors are looking at bringing these seasonals to the UK, but if they are, it's going to take a lot of research, a lot of time.

I've only singled Molson Coors out because it's their beers I saw in the shop yesterday.  But all the big boys operate like this - it's a general criticism.  And it's not a criticism of the people who are genuinely passionate about beer in these organisations, it's a criticism of the systems and processes that stifle them.  I've worked with many of their competitors and found them all the same.  Great for me, because it can mean up to several months of lucrative and much-needed freelance work.  Bad for them, because at the very least, the market will have moved on and developed between saying 'let's look at launching brand x' and actually getting the product into pubs and bars.

Come on, Big Guys.  Take a chance.  Live a little.  Every single marketing text book I've read by gurus like Tom Peters urges businesses to embrace risk.  Brew Dog are at the other extreme - some of what they do is unspeakably bad, but I always support their stance because if they didn't have the attitude to risk that produces the stinkers, we'd never see the likes of Paradox or 5am Saint either.  It nets out pretty positive in the end.  You don't have to go as far as they do.  But really, what's the worst that could happen?

19 comments:

Cooking Lager said...

Don't know what books you've been reading, but the ones I read mentioned calculating and quantifying risk so that embracing risk becomes an investment rather than a gamble. You did read more than the cover jacket?

Denzil Vallance said...

We sell Blue Moon in our pub on draft and it's quite popular among our customers but we're the only coors account in Wakefield who have ever heard of it. The reason these brands ultimately fail in this country is that the breweries and distribution and sales networks are completely disjointed. Hardly anyone in Coors UK is aware of Blue moon. What about Zatec? (FFS)

the tale of our installation is a case in point. We got the font, the branding, the coasters, the special glasses etc. happy days. 1st time we re-order it's out of stock! did we get a phone call about it? nah! it just didn't show up. Now when the customers see the font they can't be sure whether there's anything in the cellar to come out of it. hardly brand building.

And that's not even touching on the complete lack of response we've had from Coors' "Marketing to women" department.

you can spend any amount of money on centralized marketing. If your telesales and delivery subcontractors don't know or give a rat's ass about your product you're buggered. The bean counters strike again.

impymalting said...

Oh man...look at that parking lot! It might as well be a planet. I really have been away from the US a long time.

The Beer Nut said...

Nice post. I've been making the same argument about White Shield: MolsonCoors opened an Irish office last year and are shipping Blue Moon, Grolsch and ┼Żatec over from the UK. How risky would it be to throw a couple of cases of White Shield on the back of the truck?

Arctic Alchemy said...

I can only speak from my perspective on the US market, and I say, I love Blue Moon (not the taste) , but what it does as a gateway beer for the masses. It's a balance between better marketing, and a different but reasonable taste that appeals to the folks who say, yes, I like craft beer. It's a Trojan Horse among the big ones.
From the larger conglomerates
this should be a small risk to market, they are the only ones who see it as a risk to their archaic methodologies.

Nicholas King said...

What I really don't understand about this caution is that diversification of this sort does work in other areas of the drinks industry.

There are plenty or enormous multinational wine companies who manage large portfolios of both high volume and boutique wines without any bother. It makes perfect sense to segment the consumer base and target different products at different groups and every brand benefits from a unified distribtuion network. Why large brewers don't follow suite seems entirely baffling. I can't understnad why they don't want the sales from a boyant sector.

Sid Boggle said...

What you said about taking the beer out to beer bars and gauging the reaction of punters is what MolsonCoors did a few years ago at The Rake with Blue Moon. And all the effort (film crew, buying punters who would go on camera drinks etc) was just to present to the board.

The whole process seems totally strangulated...

Kristy said...

It's not about being risk averse, quite the opposite.

I spent a day with Pete Coors and he was asked the exact same question about seasonal Blue Moon (which I would love to see over here too). His answer was this - the Coors brewery in Golden was built to brew one brand in 8 different pack formats - we're just not set up to brew on a small scale and the Burton brewery is no different.

But we're trying, if we weren't Blue Moon wouldn't exist at all, never mind be over here. And we have the White Shield brewery so we are setting ourselves up to move faster and try more things.

Gary Gillman said...

Coors was one of the early big breweries which seemed to recognize the potential of good European beer, e.g., its licensed George Killian, and Blue Moon. Still, Killian's doesn't seem as good to me as when first released. (I like Blue Moon though). My sense is, like all big commercial breweries, it knows it has to do something, but seems uncertain which way to go. Live a little. That puts it well. I agree that the investment has to have a reasonable chance, but I think an intensive marketing and product effort could come up with the right numbers.

If you are still in Rochester, it would be a pity to miss a well-poured Genessee Cream Ale. Genny was the pre-craft beer favourite son of the area and still is very popular. It's old school, but good and suits some of the regional food specialties there (wings, beef on weck, red hots, etc). And it backs a bourbon well too.

Gary

Gary Gillman said...

Postscript: Molson in Canada bought Creemore Springs Brewery 5 years ago, a craft brewery which makes a number of good lagers. Creemore is being promoted with some energy and the beers have not changed, but I think much more could be done in a craft direction if the will was there.

I think with Coors, another direction they should consider is to re-launch regular Coors (not the Light version which seems to get all the attention). Bring back the circa-1933 spec for Coors Banquet Beer. I think that would be an excellent product!

Gary

James said...

It's fascinating to see how the US beer market has developed: providing choice under one brand umbrella. Obviously it's not always easy to deliver a large range logistically which might be what's preventing Coors expanding their range in the UK. (The book keeps might also be having their say).

We see it as a marketing ace. If our aim is to raise the standard of beer drinking in the UK to the highest level we face a paradox. Choice is great and keeps our beer world exciting; but too much choice can cause confusion and risk alienating less dedicated drinkers. Having a large range of beers under one umbrella offers a solution: choice without the confusion. An exciting but approachable beer market.

So, in light of the above, look out for US seasonal beers from the like of Goose Island, Brooklyn and Anchor. I'm also thrilled to say that Brooklyn Local 1 and Brooklyn Local 2 will be regularly available in the UK within the next few months....and, do you know what, if they don't sell then so be... it we'll throw a party to get rid of them!

Cheers,

James Clay

The Professor said...

Very much in agreement with Gary about the initial release of Killian's...it was marketed as, and tasted like, an ale. And a pretty good one, to boot. Why they saw fit to dumb it down to basically become 'red Coors' is beyond me. So sad. It had character and, I believe, potential.

Right on too about Genessee Cream Ale...very nice brew, although I do wish they'd consider re-introducing their even better ale offering of years gone by, Twelve Horse Ale. Sure do miss that one!

Dawsons Creek dvd said...

the beer looks like great!i want to have a taste!

Rob Nicholson said...

"we're just not set up to brew on a small scale and the Burton brewery is no different"

This whole subject isn't restricted to the beer industry; it’s endemic to most large companies where the process becomes sludge. I worked for a while for a large pharmaceutical company (in IT) and left because it was stifling compared to the smaller companies I’d worked for before & after. I assume there are many, many books written on the subject but because it still often happens (i.e. smaller concerns steal market share – micro breweries take sales from larger breweries), then I equally assume it’s not an easy problem to solve.
PS. Personally, I’m in no rush for imported product to compete with our own...

knutalbert said...

Carlsbergs strategies in Denmark and Norway is another case. They dominate in both markets, but in Denmark they supply shops and bars with a range of craft beers to supplement the pale lagers. In Norway you can have Stella in addition to the pale lagers. Wile the Norwegian independent breweries are selling more every day.

Thomas Barnes said...

@Ron,

Good to meet you in person and a delight talking with you. I hope you enjoyed your time in Rochester.

Consider though that Coors might just be extending their Blue Moon line to put pressure on the "real" craft beer producers. In the U.S. a fair bit of beer is sold in grocery stores and producers must pay grocers for shelf space. It might not matter how well Blue Moon sells, as long as Coors can take up shelf space which other craft brewers might use to sell their products. Basically, a war of attrition where Coors is using dollars from their mainline products to limit the growth of potential rivals (e.g., Sam Adams, Sierra Nevada).

For that reason, they might not have any interest in expanding beyond the North American market. No need to go international with a product which is only intended to keep down the upstarts at home.

@Gary,

Killian's only exists in North America because one of the Coors scions fell in love with the original Irish version of it on a trip to Ireland back in the 1980s and got the rights to brew it in the U.S.

Sadly, "market forces" and "consumer preference" quickly provoked Coors to turn "U.S. Killians" into a faint shadow of what it was when originally released. Time from delicious to boring was something like 3-4 years.

I believe that there's still a French version that's more like the original. Tellingly, a smaller company has the French brewing rights. IIRC, the original Irish version has gone the way of plain porter.

Melissa Cole said...

@Kristy, correct me if I'm wrong but the Blue Moon we get in the UK (and outside Coors field I think everywhere) isn't brewed in Golden, Colorado anyway, it's brewed in Canada by Molson, so how does this have an effect on the supply to the UK?

The Beer Nut said...

That story can't be right, Thomas. Lett's of Enniscorthy closed in 1956 and never made a beer called "Killian's". The Coors reps are more likely to have seen it in France, Pelforth having acquired the "George Killian" brand name after Lett's folded.

BLTP said...

Well I saw this on draught at the Albany in London's fashionable London. It came in one of them tall glasses complete with 2 slices of orange. Sadly after all that palaver it was just a bit bland and the orange made it's taste like well orangeade. I can see it being good as a thirst quencher on a hot day and it wasn't actively unpleasant just a bit neither nowt nor nothing really. 4 quid too!! Had a pint of Pure UBU (?) after which was much better and 45p cheaper if memory serves.