Article By: Lew Bryson
Well, I've got some choices for you. There's a rich smooth porter, a crisp and spicy witbier, an all-organic pale ale, a brisk and bitter IPA, a pumpkin-and-spice ale that's perfect for fall drinking, and a big 8% bruiser that was aged on a bed of roasted cocoa beans. What microbrewery are they from? Oh, two little places you may have heard of: Molson Coors and Anheuser-Busch.
Have these behemoths suddenly discovered that small is beautiful? Are they trying to blow the craft brewers out of the market? Most importantly, are the beers any good? Let's take a look and see.
ONCE IN A BLUE MOON There's nothing really sudden about this. Coors introduced their line of Blue Moon beers in 1995, and the Blue Moon Belgian White's been around ever since. It's a brand with some years under its belt, not a new idea.
How did Coors get into the craft business back in the category's first boom period? "The craft business was just starting to take off in the mid-'9Os," said Kabira Hatland, with Molson Coors corporate communications. "It was a segment of the beer category we wanted to pursue. Our brew master, Keith Villa, began experimenting with recipes for a drinkable Belgian style beer - it was very different from what was out there at the time."
Villa was the brewmaster at the Sandlot Brewery, a small brewpub-like brewery at Coors Field, in Denver. Coors used Villa and Sandlot as a pilot brewery. "We tested a lot of recipes at the Sandlot Brewery," Hatland said, "and landed on the Blue Moon Belgian White, a unique recipe for a unique ale. It includes three grains - barley, wheat and oats - for body and creamy mouthfeel, and hops, coriander and orange peel to provide just the right amount of spice to make it drinkable and refreshing."
The beer won a gold medal in the 1995 World Beer Championships, "so we knew we were onto something," said Hatland. Unfortunately, what they were on mostly was the wrong side of the curve. Blue Moon came out just before the craft brewing boom went flat. As the Brewers Association, the craft brewing industry's organization in Boulder, Colorado, is quick to point out, craft beer sales never declined - but they sure did grow slowly.
People who were still interested in craft beers were the kinds of folks who knew where what they were drinking came from, and they weren't interested in "microbrew" from the likes of Coors. Sales of Blue Moon sputtered, and some of the line extensions - an Abbey Ale, Nut Brown, Honey Cream, Raspberry Cream - were dropped. The Belgian White Ale hung on, along with one seasonal, a Pumpkin Ale, that was produced most years.
Why did Coors continue to produce the beers? Hatland declined to comment on that question. But it's not really surprising when you consider that Coors has pulled this kind of "keep it in the closet 'til it's in style again" trick before with Zima. Zima, perhaps the first of the 'malternatives', sagged badly, and then revived quite nicely when the hard lemonade brigade appeared on the scene. There may be a company strategy at work here; after all, they still brew Coors Original and Coors Extra Gold despite a lack of sales encouragement.
The brand pretty much went dormant, with very little in the way of promotion. When it did start to revive, it was almost reminiscent of the Pabst "push-pull" phenomenon in which a couple savvy retailers and wholesalers noticed an upswing and followed up on it.
I knew something was going on when I was giving blood one day two years ago and overheard the head nurse talking to one of the blood runners. "I had this great new beer called Blue Moon last night," she said. "It was really different, kind of spicy and tart, didn't taste like beer. I liked it so much I had four pints!" Ah-ha, I thought to myself, Coors is getting some play.
Sure enough, it's made a big resurgence lately. Blue Moon posted double-digit growth in 2OO5, with impressive sales (for craft-type beers) of around 2OO,OOO barrels. Coors is slowly putting some support behind the brand. "Blue Moon has a number of grassroots promotions and some local print advertising in various markets," said Libby Oberpriller, the Blue Moon brand manager. "We also support the brand with point-of-sale and neon displays, but are not planning other promotions at this time."
Take this as evidence that Coors is continuing its balancing act with Blue Moon. Even though the brand is over ten-years-old, most people still don't seem to know that it is a Coors brand. The brewery doesn't want to put too much money behind it, fearing a loss of the small-brand cachet; but they don't want to let a possible success die on the vine because of lack of promotion, either.
For now, the grassroots approach seems to be working. "The craft segment is growing faster than any segment in the beer category," said Hatland, "so there is natural consumer interest in craft products. We focus on brewing the best beer we can, and let discovery happen."
MICHELOB VARIETY This isn't a sudden swerve of course for Anheuser-Busch, either; actually, their path on this is fairly close to that of Coors. A-B had taken their first shot at the craft-type market in the early 199Os with Crossroads, a true to style Bavarian-type hefeweizen. Crossroads was drinkable and delicious, and one A-B brewmaster told me that they'd brewed a hefeweizen for the company summer picnics.
Good beer, but the marketing and positioning was confused; they didn't seem to know how to place the beer for the consumer. To be fair, no one did at that time, and it wasn't until recently that this kind of beer started to catch on with Americans. (It's quite popular in Germany, with about 25% of the market.) Crossroads went under pretty quickly.
About six years later, A-B introduced a number of craft-type beers, all at about the same time. There were the Elk Mountain beers, the American Originals line, about six Michelob specialties, Red Wolf, and two regional beers: Pacific Ridge pale ale in California and Ziegenbock in Texas. They were, by and large, pretty good; some of them, like the Michelob Porter and American Hop Ale, were really good.
The only ones still around last year were the Ziegenbock, Michelob Amber Bock, and a couple seasonally appearing Michelob specials. The American Originals and Elk Mountain disappeared pretty quickly, the Michelob specialties took a little longer, and Pacific Ridge was only phased out recently. As happened with Blue Moon, these beers came in just as the microbrewing bandwagon's wheels fell off.
Pat McGauley, A-B's vice-president of innovation, thinks it was an internal issue as well as something caused by external forces. "I think it was timing," he said, "but motivations were different. I wasn't there, but it was a wave that was being ridden and I'm not sure what was pushing it. We're being driven by the consumer these days. When you match up being able to make great beers - package them, providing variety, providing surprise - consumers are looking for that. Why not from the Anheuser-Busch company? I know the people I work with every day in brewing can deliver these beers into the marketplace."
McGauley and Doug Muhleman, A-B's group vice-president for brewing operations and technology, have a lot to deliver. Beginning late last year with some seasonal releases, they have opened up a whole stable of craft-like beers. I was recently A-B's guest at the hop harvest on their northern Idaho farm, and part of the very hard work the trip entailed was tasting as many of the new craft-type beers as they could put in front of me. McGauley and I went through them.
"Michelob Porter and Michelob Bavarian Style Wheat are in the Michelob Specialty Pack, a 2O-pack," he said. "We call it our sampler pack; it also has Mich Marzen, Mich Pale Ale and Amber Bock. We've had that program going since 1997. We change out the beers, but not every year. We get nice responses back. People like the in-and-out nature of the products, retailers like it because it's an extra SKU on the floor. There's a great variety in the Specialty Pack this year."
There are two truly big beers in the mix as well, the Michelob Celebrate Vanilla Oak and Chocolate brews, both weighing in at over 8% ABV. The Vanilla Oak is aged with bourbon wood; the Chocolate was actually "dry-hopped" on a bed of roasted cocoa beans. The Vanilla Oak was good, the Chocolate was excellent.
"We're making beer part of the holidays, part of the celebration," explained McGauley. "They're only going to be in gift packs, packaged with snifter-style glasses, two 24 ounce bottles in the package: Vanilla Oak on the left, Chocolate on the right, for about $2O. You're sipping these things, savoring them, sharing them, and the gift pack encourages that."
The real headbanger of the bunch is the Brewmaster's Private Reserve, a beer that hit me like a 1O% blonde doublebock - a very well-crafted, tasty, balanced blonde sledgehammer. "That's in national distribution for the holidays," McGauley said. "It comes in a big, heavy, black onyx bottle, a 46.5 ounce flip-top magnum-size bottle. There's no draft on this product, just the bottle."
There are four seasonal drafts - Spring Heat Spice Wheat, Beach Bum Blonde Ale, Jack's Pumpkin Spice, and Winter's Bourbon Cask - and two regional drafts; New England gets its own Demon's Hopyard, Ohio gets Burnin' Helles. If the two regionals are successful, each of the 12 A-B breweries across the country will eventually produce one for its own area, all different.
Finally, there are two organic beers in national distribution, Stone Mill Pale Ale and Wild Hop Lager. Why organic beers? Again, McGauley's listening to the consumer. "People wanted craft-style authentic beers, and they, today, like that they're organic as well," he said. "Female consumers particularly like organic products. They're succeeding as beers; success is not just in the organic stores, but in the package liquor stores."
THE LONG RUN We've all been here before, about ten years ago. The big brewers see the success of the craft brewers - and the attractive higher prices their beers command - and figure they need a piece of that action. They jump in with a big splash - and not much happens. Miller took a shot at it themselves with the inside strategy, buying the Celis Brewery and a half-interest in Shipyard Brewing; the plan crashed when Celis went under and Shipyard eventually bought their half back.
How do we know that these moves by Molson Coors and A-B are going to be any different? Should you invest any money, time or energy in them?
Well, maybe. "It's an entirely different era," McGauley said when I asked why he thought this time around would be different. "Consumers are looking for more, they're more discerning in nature. That's why these beers will be successful. They like things that come in and out of season, they're waiting for the Pump Spice. They like these fuller-tasting beers. Can we satisfy those needs? There's a lot about authenticity in these styles, and we're not over-marketing the beers. The beer talks for itself.
"I know we're in it for the long run," he said. "I don't think the consumers will change their minds tomorrow and not want these kinds of beers. Satisfying the needs of the retailer is important, but it goes back to what the consumer wants. We're in business to sell beer. When you go from the core of our portfolio - Budweiser, Bud Light, Bud Select - to the new specialties, you can start picking what you'd drink in different situations."
Blue Moon is one of the brightest spots in the Molson Coors portfolio these days, small as it is. Probrewer.com noted back in May that the growth in Coors beer volume in 2OO5 was "driven by double-digit growth of its Blue Moon label".
They can hardly ignore it, especially when people continue to discover it on their own. "Growth of Blue Moon Belgian White is strong across the country, and we're very pleased with it," said Hatland. "It has truly grown by consumer word of mouth and through bartender and wait staff recommendations."
What about the outlook for craft brewers, that is; what are the chances that these craft offerings, with the marketing might and distribution muscle of mega-brewers behind them, will simply bulldoze craft brewers into oblivion. I've been reading hand-wringing posts and e-mails about this from a variety of 'beer geeks' since I wrote about trying the A-B beers elsewhere.
I don't think this is a serious issue. Nationally available craft-type beers are going to be popular and natural choices for chain restaurants and chain grocery stores who want to deal with as few suppliers as possible. Craft brewers aren't really a big factor in those markets now. But the real bastions of craft beer consumption are going to turn their noses up at a major brewer's offerings. Doug Muhleman admitted as much: "We know that plastering Anheuser-Busch on the label will be a turn-off for a lot of people."
Besides, buoyant as craft beer sales are, that's not what's really concerning the big boys. I asked Muhleman about that; are these beers a reaction to craft beer sales, are you concerned about their share of the market? "We see young legal age drinkers going more to hard liquor," he said. "That's the major issue for Anheuser-Busch, for the beer industry."
That's what these beers are really about, Blue Moon and the Anheuser-Busch stable. They're about shaking things up, about offering choices to the consumer. You only have to look at the vodka section of your shelves to know that the spirits company got that message loud and clear. The craft brewers based their business on it. Now the big guys are learning that the future is not about focus; it's about diversity.
The gratifying thing is seeing how much fun they're having with it. There were five A-B brewmasters along on the Idaho hop harvest trip, and they were having a blast showing off their new beers. The real reason that the other A-B breweries are going to introduce their own regional drafts? Because the other brewers all want to get in on the fun. If they can hold their own, and convince the rest of the company that diversity is useful and profitable, things should get interesting.