Posted November 2011
Belgium - Fundraising the Trappist way
The Abbey of Saint Sixtus in Westvleteren,
one of the smaller brewing establishments of the Trappist monks
in Belgium, is famous for its beers. It is generally not
possible to buy the Westvleteren beers in shops. If they are
available in specialty beer bars, it's because someone has gone
to the trouble of personally picking them up at the monastery by
the crate at a pre-given time.
As with other Trappist breweries,
demand exceeds supply. The Westvleteren monks only brew 4,750 hl
beer a year as producing higher volumes would counteract their
contemplative life which follows the rules of "ora et labora"
("pray and work") set up by St Benedict some 1,500 years ago.
This posed a dilemma when the monks
discovered that one wing of their abbey, which housed their
cells, was subsiding. They needed to raise quite a bit of money
to build new quarters.
Initially, the logical solution to their
problem - sell more beer and make more money - was off. But
following the recent financial crisis, donations only trickled
in slowly. That's when Theo Verfloet, President of the Belgian
Brewers' Association, managed to convince them that selling
extra beer was the way forward.
The obstacles to his plan were massive: not
only would the higher production volume affect the monks' lives,
it could also potentially harm the image of their beer if it
were pushed into the market without much ado.
So the brewery's pro bono project team,
consisting of marketers Jan Callebaut, Piet Jaspaert, Luc Struyf
and Krishan Maudgal, came up with the idea of a one-time offer.
Mr Verfloet then worked out that, in order to
raise a few million euros, the monks would have to brew an extra
1,300 hl beer, or an extra batch per month for ten months. Why
just ten months? Simple. If the stock-building had taken any
longer, it would have seriously reduced the shelf-life of this
beer, which is three years.
While the monks were busy brewing extra
stock, the marketing team determined that each of the 93,000
Bouwsteenboxes ("brick boxes" to underline that the proceeds
would exclusively contribute to the new building) were to
contain six 330 ml bottles of the Westvleteren XII beer (10.2%
ABV) and two degustation glasses by Ritzenhoff. The asking price
was set at EUR 25 (USD 34) per box.
The next challenge was to find a single
national distribution partner. Giving the beer to all of
Belgium's 1,500 or so beer wholesalers was not deemed feasible
as it would have bogged down the monks for weeks with invoicing
alone.
Fortunately, the Belgian discount retailer
Colruyt offered itself. Its logistics partners picked up the
beer when it was ready at no charge and took it to all of
Colruyt's 213 outlets where the boxes were made available to
punters on 3 November 2011.
To prevent the boxes from being snatched up
by resourceful internet auctioneers, the marketing team had also
launched a newspaper campaign which included coupons. Only
Colruyt shoppers with coupons would be able to purchase one box
per person.
The marketers had thought that it would
probably take a week to sell all the beer. But, to their great
surprise, on 3 November 2011 early in the morning long queues
were forming outside Colruyt stores. Within 48 hours 98 percent
of the Bouwsteenboxes were gone.
What's more, Colruyt delivered on its promise
to return EUR 25 per box sold to the monastery.
The Bouwsteenbox campaign will be continued
in 2012 in order not to exclude Westvleteren's international
wholesalers from this once-in-a-lifetime offer. Wanting to give
all their partners a fair chance, the marketing team devised an
auction, whereby wholesalers obtained a contingent of certain
batches. If all goes to plan, the last batch will be shipped in
August 2012.
As could be expected, some of the
Bouwsteenboxes have already appeared on ebay. When I checked on
13 November 2011, the starting offer for one was USD 150 plus
USD 47 for shipping.
Denmark - Overwhelmed by meteorological
challenges
Russia: down. Western Europe: down. How much
worse can it get? On 9 November 2011 Danish brewer Carlsberg
reported an almost flat net profit for the third quarter 2011
amid declining sales in most of Europe and Russia. "2011 has
been a challenging year and we have faced headwinds from rising
input costs, adverse weather conditions and soft trading
conditions in our largest market," chief executive Joergen Buhl
Rasmussen said.
Read on
Belgium - On being number one
Seems like the winner gets it all. Being the
market leader in the U.S. and Brazil, AB-InBev got away with
raising beer prices by 9.4 percent in Brazil and 3.7 percent in
the U.S. in the first half of 2011. As a result, third-quarter
profits rose by over 16 percent
to $2.03bn compared with last year's
equivalent of USD 1.86 billion, the company reported on 9
November 2011.
It says its revenue grew
by 3.6 percent to in the third quarter even though volumes
decreased by 0.2 percent.
Read on
Germany - AB-InBev to relocate 600,000 hl of
Beck's to the U.S.
AB-InBev's German employees are worried. In
early November 2011 workers at the Beck's brewery in Bremen were
told that in 2012, about 600,000 hl of Beck's beer will be
brewed at the St. Louis brewery. In 2013, another 80,000 hl,
currently exported to Canada from Bremen, will be brewed at
Labatt's in Canada.
The total volume of Beck's to be relocated to
North America represents over 10 percent of Bremen's beer
output, estimated at 6 million hl.
Read on
Namibia - SAB's new brewery: postponed but
not abandoned
Two years ago SAB,
the South African unit of SABMiller, announced it would build a
brewery in northern Namibia after it had finally obtained a
licence to brew beer in Namibia following a decades long
struggle. But to date, not even the ground has been broken. What
has held up the project? According to rumour, Norman Adami, the
powerful Managing Director of SAB, did not want to see 220,000
hl in production volume go to neighbouring Namibia, as he was
still desperately trying to cope with over-capacity at his seven
breweries after the loss of the Amstel licence which had
accounted for more than 9 percent of SAB’s volumes before April
2007 (when Heineken terminated the licensing contract).
Then were delays in rezoning the land on
which the brewery is to be built. Mean-minded critics might
argue that SAB purposefully chose a plot of land that was not
designed for industrial use in order to delay the project even
further.
However, these disputes have been solved so
construction of the brewery could start next year.
Read on
USA - Molson Coors third quarter profit
underwhelm
How can they drink beer if they are without
jobs? The jobless rate in Britain in October 2011 jumped to 8.1
percent, its highest level in 17 years, and young people, the
core customer group for beermakers, are being hit hardest.
Experts are talking openly of a “lost generation” without hope
of finding a job.
This, combined with the UK economy on the
brink of another recession, also affected the UK's number two
brewer Molson Coors, contributing to a 23 percent drop in
third-quarter profit from a year ago.
Read on
Mozambique - SABMiller launches a cassava
beer
If they can brew a clear beer with sorghum,
why can't they do it with cassava? Actually, SABMiller seem to
have come up with a way of doing it. In an effort to provide
consumers with an affordable beer, SABMiller at the end of
October 2011 put the first cassava-based beer, called Impala
Cerjeva, into the Mozambique market.
By using cassava - a drought resistant root
vegetable rich in starch - to brew beer, SABMiller will be
commercialising a technique used by Africans for generations to
brew beer at home.
The cassava root plays an important role in
agriculture in sub-Saharan Africa because it does well in poor
soils and with low rainfall, and because it is a perennial that
can be harvested all year round. However, once dug out of the
ground cassava perishes within 24 hours unless it is processed.
In Africa farmers usually chip and dry it. But that is not a
feasible commercial option.
Read on
Germany - Beer, bratwurst and football
So do football and beer go together or do
they not? To all appearances, football bodies are in two minds
about it. FIFA, the international football federation, thinks
it's ok, while the German Football Federation, DFB, begs to
differ.
Within the
DFB
a fierce debate has erupted over whether the federation should
extend the sponsorship contract with the German brewer
Bitburger,
which expires after the European Football Championship in 2012.
According to reports by German sports media
in October 2011, some DFB top honchos are in favour of allowing
Bitburger to sponsor the German national team. Only they
reckoned without the DFB's President Theo Zwanziger. He has
called off talks with Bitburger, saying that there is a clash of
interests. The DFB has backed the “enjoy alcohol-free sport”
initiative drawn up by the German Olympic Sports Federation.
This has placed the football organisation in a quandary as to
whether it can enter into a commercial agreement with a brewer.
“If
the DFB were to negotiate a contract extension with Bitburger,
we will have to explore very carefully whether, and how, this
can include beer advertising,” Mr Zwanziger was quoted as
saying.
Bitburger's sponsorship deal with the DFB is
estimated to amount to two million euros per year.
A Bitburger spokesperson declined to
comment.
It needs to be said that many German football
clubs have lucrative contracts with brewers and are therefore
affected by the dispute. A general ban on alcohol advertising in
the national league, the Bundesliga, will reportedly deprive
clubs of EUR 300 million per year in revenues.
Hans-Dieter Drewitz, the DFB’s vice-president
for youth football, maintained that the organisation is not
seeking a blanket ban on alcohol sponsorships but may need to
establish new ways in which to promote the concept of
responsible drinking.
FC Bayern Munich Chairman
Karl-Heinz Rummenigge
does not seem to understand the controversy within the DFB. The
sports newspaper
Bild
quoted the Bayern boss as saying: "Three things go together:
football, bratwurst and beer."
The world football organisation FIFA appears
to have no such qualms. On 25 October 2011 AB-InBev announced
the extension of its official beer sponsorship for the 2018 FIFA
World Cup in Russia and the 2022 FIFA World
Cup in Qatar. The cumulative TV reach
audience of the FIFA World Cup is more than 25 billion while the
finals attract 700 million people. Apparently, global viewers
seem to be more savvy when it comes to responsible beer
consumption than fans of the German team.
Brazil - Kirin buys the rest of Schincariol
Kirin Holdings on 4 November 2011 agreed to
buy out shareholders in Brazilian beermaker Schincariol
Participacoes e Representacoes, completing its biggest
acquisition to date.
The Japanese brewer will pay 2.35 billion
reais (USD 1.35 billion) for the 49.54 percent stake, giving it
control of all outstanding shares, the company said in a
statement. The deal settles a dispute with shareholders who had
challenged the Tokyo-based beermaker’s acquisition of half of
Schincariol earlier this year in the courts.
The minority shareholders did not get a deal
as sweet as their cousins did when they sold their majority
stake to Kirin in August 2011.
Read on
Scotland - Minimum pricing: take two
They don't give up easily. On 31 October 2011
the Scottish Government published its bill on a minimum unit
price for alcohol. The bill looks to set a minimum price for a
unit of alcohol as a condition of the licence. It also sets the
formula for calculating the minimum price (based on the strength
of the alcohol, the volume of the alcohol and a price per unit
of alcohol).
The Scottish National Party (SNP) failed to
push through a similar proposal in May this year after it was
rejected by Members of Parliament, but the party's victory in
the Scottish election has allowed them to put it back on their
agenda.
At this stage, the Scottish Government has
not proposed a unit price.
When it first launched its minimum pricing
initiative, designed to target own brand vodka, strong cider and
basic lagers, the SNP proposed setting the minimum price at GBP
0.45 per unit.
Read on
USA - MillerCoors profits drop 14 percent
Brewers usually blame it on the economy or
the weather if figures don't live up to expectations. Same with
MillerCoors. The number two brewer in the U.S. reported on 2
November 2011 that low consumer spending and rising commodity
prices contributed to weaker earnings in the third quarter.
MillerCoors said third quarter net income,
excluding one-time items, dropped 14 percent to USD 286.9
million from USD 333.9 million in the same quarter a year ago.
Total net sales decreased 2.5 percent to USD 1.97 billion, while
volumes declined 4.2 percent to 17.17 million barrels from 17.91
million barrels.
Read on
Australia - Lion reports revenue decline
Like most companies across Australia's
retail, grocery and other consumer goods sectors, Lion continued
to experience tough market conditions during its third quarter.
The brewer-to-drinks-to-dairy company, which is wholly owned by
Japan's Kirin, reported on 4 November 2011 its third quarter
results for the three months to 30 June 2011.
Lion said that year-to-date revenue declines
were caused by weak consumer sentiment along with the ongoing
consequences of poor weather, natural disasters in Lion’s key
markets, the loss of private label contracts and deep retailer
discounting on white milk.
Read on
UK - SABMiller and Efes join forces
A shrewd move which should have led to some
serious chin scratching in Brussels and Amsterdam. The line-up
between SABMiller and Turkish Efes not only allows the two
also-rans in Russia to better compete against market leader
Baltika, it also adds another protective layer to SABMiller and
makes the world's number two brewer less easy to take over.
On 19 October 2011 SABMiller said it would
transfer its Russian and Ukrainian beer businesses, worth USD
1.9 billion (EUR 1.4 billion), to Anadolu Efes Biracilik & Malt
Sanayii and take a stake in the enlarged company to create
Russia's second-biggest beer maker.
The agreement implies an exit multiple of
about 12.7 times estimated EBITDA according to analysts, which
is broadly in line with recent deals in the brewing industry.
Read on
Australia - Foster's AGM brawl
Foster's shareholders were not amused.
Actually, they were quite irate at Foster's - probably - last
Annual General Meeting held in Sydney on 25 October 2011, as 42
percent of shareholders rejected an AUD 5.2 million (USD 5.5
million) pay and perks package for Chief Executive John Pollaers.
Just over 56 per cent of shareholders voted
to award a short and long-term incentive of about AUD 5.2
million (EUR 3.9 million) worth in shares to Mr Pollaers. He has
headed Foster's for less than seven months and is widely tipped
to leave when SABMiller takes control of Foster's later this
year.
What infuriated shareholders was the fact
that the long-term bonuses, payable in 2014 and 2015, were given
to Mr Pollaers after SABMiller went hostile in its battle for
the Australian brewer. At that time, everybody on Foster's board
must have been fully aware that Mr Pollaers would never have to
work for his long-term bonus.
Read on
Russia - Carlsberg sacks Baltika CEO
On 26 Ocotber 2011 Carlsberg announced it has
appointed Dr Isaac Sheps, currently CEO of Carlsberg UK, to take
over the leadership of Baltika Breweries (Baltika), Carlsberg's
Russian unit. Dr Sheps will also be responsible for Carlsberg's
operations across Eastern Europe. He will take over on 1
December 2011 and replace Anton Artemiev, the current CEO of
Baltika, who will nevertheless continue to serve as a member of
the Baltika Supervisory Board.
The change in the executive suite may take
some by surprise but it's the usual last ditch resort once the
going gets tough. Baltika’s Russian sales have weakened in
recent years following the government's clampdown policies on
beer consumption in order to tackle alcoholism. Moreover,
competition is likely to intensify as SABMiller plans to join
forces with Turkey's Anadolu Efes to become the number two in
the market.
Read on
Netherlands - Saved by thirsty Africans
Dutch brewer Heineken on 26 October 2011
reported a 1 percent rise in net profit for the third quarter
(July to September 2011), claiming that strong sales in Africa
and elsewhere offset the impact of poor summer weather in
Europe.
Net profit reached EUR 525 million (USD 736
million) in the three months, while sales grew slightly by 0.6
percent from last year to EUR 4.65 billion, despite the
disadvantage of a strong euro, the company said.
Heineken sold 56.9 million hl of beer in the
third quarter, an increase of 2.7 percent, with western Europe
the only region to record a 1.7 percent drop in volume.
Read on
Ireland - C&C boss to step down
Pollaers (Foster's), Artemiev (Baltika) and
Dunsmore (C&C Group): it must be the season for golden
handshakes. The Chief Executive of Irish drinks and cider group
C&C (Magners, Bulmers, Tennent's) John Dunsmore will be in line
for a multi-million euro payout after he unexpectedly announced
his resignation on 19 October 2011.
Mr Dunsmore, who took over three years ago,
could cash in to the tune of some EUR 8 million (USD 11.2
million) by the end of C&C's fiscal year when he formally steps
down from the board in February 2012.
It has since transpired
that Mr Dunsmore has a non-compete clause preventing him from
joining a rival for just six months.
So come September next year and Mr Dunsmore
could return to the drinks industry, perhaps even with former
rival Diageo which is said to be desperate to build up a cider
business.
Read on
USA - Heineken counts on the female touch
Is Heineken breaking the glass ceiling for
women or has the brewer run out of male candidates wanting to
turn around a struggling brand? In October 2011, Heineken USA
announced the appointment of Olga Osminkina, most recently
Executive Director of Global Marketing for cosmetics company
Estée Lauder, as its Senior Brand Director for Heineken Lager.
From face paint to brews.
Interesting. What could the two have in common?
Ms Osminkina is the second high-profile woman
to have been hired by Heineken USA. At the end of February 2011,
the brewer appointed Lesya Lysyj as the company’s U.S. Chief
Marketing Officer. Ms Lysyj had previously worked for Kraft
Food’s confectionery
division. "Both of the categories are lifestyle categories, and
they represent a treat in somebody's day," Ms Lysyj then
explained her career move to Adweek, a trade publication.
Read on
France - Danone hopes to sell water assets
According to Japanese media, French group Danone
has approached Japan’s Suntory Holdings about a potential
purchase of the French food giant’s mineral water business,
which includes the Evian and Volvic brands, it was reported on
22 October 2011.
Suntory is believed to be keen on the idea
and is likely to start negotiating with Danone this month after
examining the details of the proposal.
Read on
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