Article By: ANDY CROUCH
CROUCH How is the
Beer Institute's relationship with smaller brewers?
JEFF BECKER I'd like to say that one of the things we've been able to do, at least over the last seven to eight years, is the policy stuff where there is interest among the smaller guys at getting involved. I think we've gotten them more involved and will continue to do so. The issues are usually not big versus small until somebody decides they want to change the definition of what a craft beer is. We have very few disagreements, certainly on the bigger issues. The three tier stuff is going to be something we continue to work with the Brewers Association on. We have the tax and labeling issues with them as well. But on the big stuff, we do tend to be 9O- percent in alignment. Across the smaller issues, I think there is a challenge and an opportunity to get together, say in keg loss or working to develop better draft standards. There is a variety of those things that, in the development of the relationship over the last seven or eight years, has made conversation a whole lot easier. I think it's been real helpful to get their perspective as well.
Tell me about the Beer Institute and how you joined the
JB The Beer Institute was the outgrowth of the United States Brewers Association. It went out of business in 1985 and the brewers felt they needed a forum to deal with public policy issues. So the Beer Institute was formed in 1986 and at that time the major members, some of which are no longer in business, included Anheuser-Busch, Miller, Coors, Heileman, and Stroh. In 1986, the craft brewers were very small. I came in 1988 to run the Alcohol Issues Department, which dealt with advertising and tax policy issues. I was elevated the next year to vice-president and several years later to president.
The Beer Institute has a lot of different responsibilities
and plays many roles. Tell me about some of the group's main
areas of focus.
JB Right now we are very focused on the Tax and Trade Bureau's labeling issue because it is not only an important issue for our industry but for others as well. For example, the liquor industry is trying to use equalization in the labeling debate. Whether it is TTB labeling or the equalization stuff, it will always be something that we pay attention to. Advertising is always something that provides fodder for the critics or litigation. It is consistently going to be an issue we focus on for two reasons. One, you have critic groups that try to use misinformation to create public policy. Our role is in the public policy vein is to be the spokesperson for the industry. For example, [the Center for Science in the Public Interest] came out the other day and said that we shouldn't be advertising in the NFL. So we put together a statement and sent that out to the persons who are interested. Advertising is always going to be an interest of ours. Tax policy is another. We have a federal government right now with quite a deficit and I think you're going to see some leadership changes in the next few years and people are going to have to come to grips with the deficit. The last time they did this, we got thrown into the mix and it's something we are working on right now.
The TTB's proposed rulemaking on labeling is an important
issue for the beer industry and one that began with a push
from several consumer groups, including some that are
considered to be neo-prohibitionist. Talk about how the Beer
Institute is handling the proposed labeling issue.
JB n the case of labeling, we actually have the liquor industry encouraging these consumer groups based upon their agenda, which was not about consumer information but equalization and the normalization of liquor products versus beer and wine products. My initial reaction to the National Consumer League and the CSPI was that they were shilling for certain members of the liquor industry instead of standing up for giving consumers more information. We've been putting a statement of average analysis on all light beers since light beer was born thirty years ago. That information has long been available for light beer, which is now about fifty-percent of the market. If it was all about providing information to consumers then there would have been a logical place for the industry to start. The illogical place to start is with the graphics that we believe are misinformed and could mislead the public. Our concern is that when there are issues like this or with advertising and tax policy, we first have to determine the motivation behind the move. Clearly with the labeling issue the motivation was on behalf of the liquor industry trying to get the consumer groups to promote their equalization agenda. That is why you saw us come out pretty strong right away in making sure that people understood the difference between providing consumers with information that is good for them to have and simply furthering the equalization campaign. I think you have to balance these things. When you look at what the CSPI did in saying that we shouldn't be advertising in the NFL - it's ridiculous. Something like 88-percent of that audience is twenty-one years of age or older so what better audience is there for beer? We have to continue to be vigilant and I think smaller brewers are starting to play a role at their community level and are starting to be more concerned about what the advocacy groups are doing. I'm very happy they are as interested in the labeling issue. We cannot let groups like CSPI and others feel like they have an open field to play in where no one will rebut what they are saying. If you just leave it out there, people will believe it is true and we can't do that.
In the last year or two the Brewers Association has stepped
up its legislative advocacy efforts. How do you think the
Brewers Association has been doing?
JB I think the small brewer caucus is a very good idea. It gives both them and us a different way to talk about the industry. In some instances, the beer industry is defined as the large brewers and we know there are many others. It's been very good for all of us to have different beer styles when we are up on the Hill. It expands for people in Congress what they think about the beer industry. Not just to think about the large brewers but about the small brewers who are adding a lot of different flavor profiles, entrepreneurship and domestic jobs that in this economy are very important. We want to continue to work with [BA President Charlie Papazian] and the folks at the Brewers Association. A lot of their board members are on our ex officio board as well. We think we've got a great story to tell about the strength and diversity of our industry today. It's a very different story than it was even four or five years ago. They bring a lot to the table and certainly add some new sex appeal to the industry and that is always a good thing.
What efforts have the Beer Institute undertaken to solicit
new craft beer members?
JB We've had quite a few of the smaller brewers on our ex officio board since I've been president. We now have people like Jim Koch, Steve Hindy, Gary Fish, Kim Jordan, Ken Grossman, and Larry Bell. These people are leaders and will continue to be leaders in that industry. Our board recently voted at our annual meeting for the management committee to put together a proposal to add to our voting board a small brewer member who will have full voting rights. Our challenge is to continue to work on the level that we do, work with Charlie and the Brewers Association, and then to keep the conversation going and the relationship development between the larger and smaller companies through our organization. In terms of soliciting membership, we did sent out a mailing this year for the first time trying to get small brewer members. We haven't sent one out to every small brewer but we will be doing that. We see the value in being able to identify to a particular member of Congress a person in their district who they can feel like they have a personal relationship with. Down the road we'll be looking at how we can help with the Small Brewers Caucus and also how we can get some more small members into the Beer Institute so that they can appreciate what we are doing on a policy and political level because it's important for their business as well.
Has the internationalization of the beer industry in the
last few years, including the mergers between SAB and Miller
and Molson and Coors, changed the way the Beer Institute
operates or its focus?
JB It is clear that as soon as our members became more international and global, not only in selling their products but also in their relationships, that it was incumbent upon us to do more in the global policy arena. The World Health Organization has been contemplating for about two years whether to develop a global strategy on alcohol as it has with tobacco. Our concern is that alcohol and tobacco are not the same product - they are clearly different. We've been trying to get the beer side of things to be more cohesive around the globe so that we are looking at these things from a beer perspective. Generally how we've dealt with these issues is to deal with them on a beer, wine and spirits perspective and not just from a beer perspective. As we look at developing countries and the development of policy of beer, wine and spirits, we think it is important that people remain aware that beer is the most moderate of alcohol beverages. There are preferential opportunities for selling and marketing here and these should be considered in other countries where they are developing policies. We firmly believe that we need to be diligent on the international and global levels. Clearly, our activities will continue to expand in that regard, particularly because the United States plays such an active role at the WHO.
In looking long term, do you think that craft beer as part
of the market is stable and something that is here to
JB I certainly do. In the last twenty-five years, you've seen a sustained growth in the craft brewing segment. You have a lot of individuals who got into it because they thought it was fun and interesting but have turned it in to quite a business. It's definitely here to stay. People are thinking about succession planning and getting their kids involved and that's a wonderful thing. It is phenomenal to see the wealth of talent we have available to us . . . and now to see them as thriving businesses I think is terrific. The import segment is going to continue to grow and we hope the domestic segment will continue to grow. I think what we are starting to see now is slowly everybody is starting to come back and that is a very encouraging sign for everyone. I think imports and craft beers definitely have a place to stay and I think you see some of the larger brewers doing those same sorts of things. I'm very encouraged about the future and I think that anybody in the industry right now should be.