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David & Goliath – Is Big Beer Afraid of Small Beer? by IrishBeerSnob

We all know how the biblical tale goes, the struggle of the small warrior, David, versus the giant established warrior, Goliath. A struggle that on the looks of it is a slam dunk for Goliath. Only for that young upstart to defeat the Giant. Why am I talking about biblical tales? This is the most appropriate analogy for the battle that is raging between Macro & Micro Beer, & be under no illusion, it is a battle.

Currently, the market share of Craft Beer in Ireland is somewhere between one to two percent that means the remaining 98% is divided up between four multinational conglomerates; Heineken, Diageo, AB:InBev, and Molson Coors. With Heineken and Diageo being the two biggest out of the four. It’s worth noting that AB:InBev have 25% of the global market in beer.

So while sitting on 98%, why would they be afraid? In fact are they afraid at all? In my opinion, they are. Within the four pillars of Big Beer Inc, a dangerous mix of fear, and envy exists & festers. For years we’ve seen the American Craft beer scene grow at rates that would make any well-suited beancounter extremely happy. Likewise the trend over recent years in developed markets like in the EU such as Ireland, the UK,Germany, sales from Big Beer Inc’s industialised beers have generally fallen. This is why we’ve seen huge pushes into developing markets like Africa, South America and East Asia.

They’re frantically trying to halt the decline of sales in a bid to keep shareholder value increasing the right way on the RoI (Return on Investment) axis, and yet sales are not turning around. In fact the sales of Craft Beer in the US now outsells the once popular Budweiser beer (worth noting, Bud Lite outsells this beer now), which has been in decline for years. Why are their sales falling though?

Personally I think the primary reason is people are looking for more taste, and flavour. They also want to know where their beer or cider is produced and what the story is behind it. We are seeing great innovation in the Craft Beer sector in Ireland and abroad. So when the execs in the big brewing companies see yearly double digit growth in the Craft Beer sector the green eyed monster comes out.

This is why bartaps in front of us are seeing a proliferation of Crafty (the generally accepted term for not craft-but-trying-to-be) product lines such as Hophouse 13, Crafty Hoor, Brewer’s project etc. For too long they’ve traded on past glories, failed to innovate with products that captured consumer trends to come up with something new. But they’re being sneaky how they go about it. It’s not immediately obvious for example that Crafty Hoor is in fact a Heineken product when you look at the pump clip. Imitation is the new innovation for Big Beer Inc.

taps

Sadly, there are also anecdotal stories of publicans being offered inducements to keep craft out, or even remove craft altogether. To me, these are signs of fear and envy which are now fuelling their policies at any cost to maintain the status quo, and frankly abuse their market position.In this relentless pursuit, who suffers most from a lack of competition? The consumer.

Ultimately, I am a realist. Craft Beer sales will take years to get to 10% on their current trajectory. Macro beer by its very nature will always be the biggest seller, due to its homogeneous, bland, well marketed & financially backed approach to making & selling beer. It is the definition of commodity; one size fits all. Stack em high, sell them cheap. And sell lots.

It is however disappointing that a blatant abuse of market position that a fair and level playing field cannot exist. We should, and could see more local support for local producers – as in the UK & U.S.. As a consumer, ask your local pub the next time you’re in. “What local beer do you sell?” If they say ‘none’, don’t be surprised.The vintner association has pointed out countless times that their members like to push for the support of local business & the local economy.

And it’s true. your local pub does rely on your support and custom. But if we don’t ask, we won’t get. It’s a supply & demand business. The Irish love the underdog story. Craft Beer is that story. it’s happening in our communities by people from them. Only then will we be “Supporting our Local“.

REVIEW BY WAYNE DUNNE

wayne

From IPAs, to Stouts, to everything in between. Wayne is a passionate advocate for Craft Beer and Cider in Ireland. He regularly features in online publications and podcasts, as well as writing with his wife on www.irishbeersnob.com. Wayne’s aim is to kick down the doors of convention surrounding Craft Beer and Cider by writing in a no nonsense style. Drawing on his experiences of many different beers he is going to bring you on a journey that you’ll be asking yourself, why didn’t I join this revolution sooner?

 

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