Beer brands build on their heritage
"...by definition a craft beer is product by a craft brewer, not a big multinational."
Featured commentBig beer players Lion and DB are trying to cash in on their history in new marketing campaigns.
DB’s Monteith’s is returning to TV screens after a five-year absence to show off its entire history in 60 seconds.
In its latest TV ad, a narrator takes viewers through the brand's history starting from the 1860s, moving through to the 1940s and finishing in a modern-day bar.
Monteith’s marketing manager Jennie Macindoe says it communicates Monteith’s history all in one take.
A journalist was hired last year to research the brand's history and found Stuart Monteiths was jailed before he going to the West Coast to start his brewery. This became part of the ad’s story.
Ms Macindoe says embracing history is really important in a market that is so competitive and has many new craft beer players.
“It’s all about using heritage to your advantage to show you know how to brew great beers.”
At Lion, Speight’s is also recounting its history in short films available on its website.
Lion brand marketing director Danny Philips says Speight’s is emphasising 140 years of brewing history in New Zealand. The TV series positions the brewery as part of the rich heritage of the Otago region.
He says some brands need heritage more than others and this is a special story for those who love Speight’s, as people enjoy finding out more about brands that they love.
“We’re got a great community of Speight’s fans and this was a longer story to tell.”
Starting fresh
The Crafty Beggars brand is Lion’s latest label, touted as “a craft beer you can actually drink”.
Mr Philips says creating the brand from scratch has been a completely different challenge from working with well-established labels.
In a campaign targeted at men and women aged 20-25, the beer giant has assembled “a rogue council of Crafty Beggar beer brewers”.
Mr Phillips says this is based on nine real people within Lion who got together to create the beers in the range.
He will not reveal their identities, though the company has been open about the fact that Lion owns Crafty Beggars.
“We’re definitely not trying to be deceptive.”
The campaign has copped some flack from beer connoisseurs, who believe smaller companies can only produce craft beers. One Auckland outlet has refused to stock the brand because its advertising.
Mr Phillips says it is disappointing the outlet has discounted the beer without trying it, as many people want to get into craft beers that are not too flavoursome, as opposed to a “boutique craft beer”.
“What makes a craft beer is well debated; some are only from small breweries, but I dispute that. I see it’s being about more interesting and experiential.”
Lion also launched Speight’s craft range last year and bought out Dunedin boutique brewer Emerson’s late last year.
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Comments and questions32
Mr Phillips can dispute it as much as he likes, but by definition a craft beer is product by a craft brewer, not a big multinational.
Second, I find it funny that Mr Phillips talks down "flavoursome" beer, when the whole reason craft beer has become so popular is because people are sick of the tasteless swill produced by the two big boys.
So this by his own admission is flavourless. So what is it then? Oh, I see, a label to cash in on the trend, confuse consumers who don't know better and try to prevent the company from losing more market share.
Good on the outlet. What I'd love to see is the practice of tie-up/lockdowns that are standard in bars end so more craft beers can get access to them.
Haha, clearly written by a Lion/DB competitor. You all know that if Lion/DB are successful at creating 'craft' brands then your exit strategy disappears as they will never need to pay you for any goodwill value.
If this occurred then you would be consigned to an endless struggle to break even, no barriers to entry and no higher value owner to exit to. Yes Moa, I'm looking at you...
Moa is overpriced swill.
If "Lion has been open about the fact that Lion owns Crafty Beggars", why is there absolutely no reference to Lion in any of the marketing material, website guff, bottle label text, etc?
The flack is not because of scale or size, it's because of the bullsh*t and brandw*nk involved in (a lot of) these products. It's just nonsense to claim that they're not trying to be deceptive. Why else would they spin off a new brand that somehow fails to mention its parent company?
"Craft" beer is hard to define -- and it's not really worth trying -- but honesty and openness is arguably a key craft value. A brewery of any size is theoretically capable of being totally straight with their customers, but history shows that they (and a few newer operations, too, like Hancock's / Stoke -- who go unmentioned above but recently launched a profoundly deceptive range of beers under a long-defunct brand) just can't help themselves from stretching the truth -- or outright plain breaking it.
What total marketing trash. 'Craft' is a name dreamed up marketers trying to justify charging people more. While brand is important in the beer market, surely it comes down to taste in the end.
I think the craft phase will peter out in due course, once consumers wake up to the fact that they can get good tasting beers that they don't have to pay the 'craft' price premium for...
Then all these small craft manufacturers will all go out of business in a hurry because they won't have the necessary economies of scale (much like all the small vineyards).
That's a shame from consumers' perspective, but probably a function of these manufacturers making business decisions on the back of a 'trend'.
Dreamed up by marketers? Bollocks.
'Craft' price premium? Where do you come up with this stuff?
There are breweries and alcohol distributors who dream stuff up to fill a market segment that they're not currently making any revenue from. But brewing for the love of it is different: make the beers, work out what you need to sell it for, and put it out there, where marketers will reverse engineer something, starting with what they want to sell it for, and then figuring out how to make it happen. I've happily paid $29 for a 500ml bottle of beer, and it was spectacularly good. That isn't gonna change any time soon, and every time I work at hopscotch.co.nz, there are young dudes who come in the door gagging for decent, lovingly made beer, and are prepared to pay whatever it takes to support the brewers in realising their passion.
If your paid $29 for a 500ml you are in my opinion either a) a fool or b) have no taste buds.
More expense does not equal better.
"Craft" beer is purely marketing of predominately over-hopped beer.
Would you say the same thing about a $50 bottle of wine?
Look at it this way, those who love beer see paying $5 for something that tastes like water to be a bigger waste of money.
Spoken by someone who truly has missed what craft beer is about. Maybe your view is the result all this idiotic media coverage?
Craft is purely marketing? Of predominantly over-hopped beer? Dunno how many brewers you've talked to, or how you've come to these believe these comments to be true, but seeing as I *have* talked to a number of brewers, and drunk many, many justifiably expensive beers (in many styles, not just insanely hoppy ones, but a fair few of those, too) I find your whole reply to be entirely laughable.
More expense does not equal better, but Pliny the Elder is a beer I'd always wanted to try (rooly rooly hoppy it was, too!) and it's so rarely available on our shores that price wasn't really irrelevant; I'd probably have paid more.
Largely, to people who really indulge, price is increasingly irrelevant. As well as working at hopscotch, I'm part time at a wee wine store, where guys in suits spend under 5 minutes in the store, pick three bottles out the fridge and don't bat an eyelid when I ring up $30+ on eftpos. There are only going to be more of these customers, as people become more educated about the choices available, and realise there's tasty beer they'd not known about previously.
Of course more expensive does not equal better. But if a product is better, then you are willing to pay the price they would like to charge for the product. For the price of one 330ml beer I brought the other day, I could have had a six-pack of Crafty Beggar.
But I know where I would prefer to spend my money.
“We’re definitely not trying to be deceptive.”
BUT, we cannot reveal who the nine brewers are.
Just more marketing ploy to hide a board of business people focusing on profit instead of quality - and that to me is the seperation of craft and non-craft.
Craft is made by a brewer with no compromise on quality and ingredients with a focus on making the best tastiest beer they can.
Non-craft is a product which is carefully planned and balanced based on margins and profit: less "flavoursome" = less ingredients and therefore a greater profit margin.
The question I have is: If Lion spent the Crafty Beggars' marketing budget on ingredients and hired one craft brewer from a small craft background, instead of nine board members, would a product be released that would be superior? No doubt.
It's important for manufacturers to focus on both taste and profitability. Ultimately, that is the only way that their business becomes sustainable and their product will last on the shelves.
If you are trying to claim that craft brewers don't want to make a profit, then that is simply disingenuous.
"People want to get into craft beers that are not too flavoursome." From the horse's mouth, the exact reason people are turning their backs on the multinational's pish.
"Craft beer" is impossible to define — it means too many different things to too many different people. Beer connoisseurs prefer to measure what makes good or bad beer by its flavour and aroma. That way, hollow concepts like "brand" can be completely ignored.
By their own admission, the Crafty Beggars range is less flavoursome, by design. They have to come up with ambiguous marketing to get around the fact that it's just more commodity factory-produced lager. Just another sheep in wolf's clothing attempting to fool unknowing consumers into thinking it's something it is not.
What's more curious is that Lion, with Crafty Beggars, openly slate the adventurous nature of "craft" brewers, at the same time buying Emersons. Presumably one hand is not talking to the other? Or one isolated group of marketers completely is unaware of the wider beer landscape? Either way, it's a sloppy mixed message.
The only thing stopping a brewery of any size making great flavoursome beer is willingness and the intent, honesty and integrity of the people behind it.
What the heck has honesty and integrity got to do with the taste of beer? That's just try-hard marketing rubbish. I couldn't give a toss if my beer was made by prison inmates, so long as it tastes good and represents good value for money.
You craft brewers need to get real - you're never going to make money in what is essentially a volume-driven market (beer volumes and marketing spend).
Ironically, the very companies you are currently slating (Lion/DB) are the ones you will need to catch you when you inevitably fall.
I'm not a craft brewer, I'm an enthusiast. One who doesn't have to hide behind an anonymous pseudonym. Gutless much?
Honesty and integrity are what drives a brewer's intent and the flavour of their beers. The beers I consider to be good and flavourful are made by people who don't have to bullsh*t about their ingredients or origins. The ones that resort to lying taste the weakest. You can call that a coincidence, but I would suggest that it is you who has to "get real".
And I never slated any brewery as such, I slated their ambiguous marketing. Cut close to the bone?
Right, so in a blind taste test you could tell between a beer made by an honest person and a beer made by a crook? Or by a small brewer and a large brewer.
Mate, you're the one who's swallowed the marketer's bait - hops, line, and sinker.
How do you think a beer made by inmates would taste, mumbo? Like they've put about the same efforts into it as they have every other aspect of their lives.
This is why the taste of (decent) beer has to do with honesty and integrity; likewise with passion, trust in oneself and hard work.
To me, value for money is a Liberty Yakima Monster, damn tasty and entirely worth supporting the brewer by parting with $10 per bottle. Yep, as in $120 for a dozen. That not your idea of where value and taste intersect? Didn't think so. These comments you're making are seemingly based on limited knowledge of the industry, and it shows in that you seem to assume that people posting here are craft brewers. Now I know Barry personally and he's a bloody good home brewer, but isn't producing anything for sale. Likewise, the assumption of the identity of the first anonymous poster. I bet you a pint it's not anyone with any links to any brewery, other than drinking the stuff they produce and being hugely passionate about it. Hell, it could have been me, reading through it, as I identify with much of what it puts across, and I've not got a brewing bone in my body. Phil does, in fact, work for a craft brewer, but his views have quite a history that precedes this employment, and they haven't changed much in the last wee while.
It is quite correct that brewing is volume-driven, though it is worth differentiating the economies of scale that selling more very well made beer might yield, and where things go awry- spreadsheets, shareholder returns, reducing production costs, massive marketing budgets that involve advertising that tells a rather coloured version of the truth.
I suggest we revisit this discussion in a few years, Hugh, when most of the craft brewers have gone to the wall. Ultimately, the wider market (not the odd individual here and there prepared to pay $120 a dozen) will decide which of them survives. My pick is that it will be the ones who can sell sufficient volumes to keep the price point reasonable.
However, I fear for those manufacturers making capex decisions based on this trendy niche. Moa got enough silly retail investors to cross-subsidise their brewery for them - but most small manufacturers will be bearing their own costs. My feeling is that it would be prudent to maintain a variable cost base for as long as possible to see whether this segment is truly sustainable...
Mumbo, I suggest you look at the US market, where craft (definition used here is independent breweries, not owned by a large listed conglomerate) now equates to almost 15% of the market. In fact, a couple of the "craft" brewers there now produce more beer pa than Lion do here. The US, while home to some of the most tasteless, insipid beers in the world, has become the hotbed of high-quality craft brewing on a economically viable scale.
Yes, the NZ market is smaller, so there is probably less room for profitable craft brewers, but at less than 3% market share (though growing) there is lots of room still.
Lion are not doing anything here that the large US brewers haven't done by releasing a "faux craft" brand. I suspect it will fail like most have done over there, too.
Obviously not a student of history, are you Mumbo?
There's bound to be a tapering off at some point in the future, if not a 'shakedown' along the lines of what occurred within the US craft industry in the mid-90s (you'd also do well to note what has happened since). But I'd bet my house on it not happening within the next few years.
Awww, is the poor DB marketer feeling the pressure of a market more competitive than the cosy duopoly? What, is the shrinking volumes and the more discerning consumer impacting your bonus? awww, better go out and attack those 'orrible craft brewers who are supplying the market what they want.
Stop fighting on brands and give us price competition please.
"The campaign has copped some flack from beer connoisseurs, who believe smaller companies can only produce craft beers."
This is a ludicrious claim. Many small companies only produce cr*p beer.
Anyway, most (not all) "craft" brewers in this country do not use "craft" ingredients and therefore can't be considered "craft" by their own defintion. Rather, they purchase their ingredients fom large multinationals or the local monopoly, NZ Hops, the exact type of companies the rally against in the beer market. About time craft got more crafty in this country - we're still a decade or two behind the US.
It's a great debate which I read with awe. It does seem to me that the taste/flavoursomeness (if here is such a word) is not only a matter of fact and personal taste, but it is also influenced by the environment in which I drink my beer, the company I am keeping at the time, the look of the bottle or the glass I'm drinking it from, etc. These are all 'brand' values which are earned by the brewer concerned whether international, national or very local.
Lion/DB
Ah yes, sugary brown water which they charge you the price of beer for.
Good luck with your "craft beers". No longer do Kiwis have only the choice of bland beer cr*p created by marketers.
It's actually pretty encouraging to see the level of comments / vitriol / downright abuse that the topic of 'craft' beer generates each time an article is published. For me, that shows that it's unlikely to be a 'fad', as some call it. And, no, all the small wineries actually haven't gone bust either - yes some have, and some breweries will do so too - but it'll be because of poor business strategy rather than lack of market demand.
Big breweries will always try to take advantage of opportunities created by small brewers (either through takeover or through so-called brand ripoffs). They do that because big businesses always do that, because it makes financial sense for them to do it. Nobody can expect them to do any different. It may not be nice, but business isn't nice.
'Craft' is an over-used, misleading term, in my opinion. I'm more interested in 'good', whoever produces it. But the fact remains that the majority of large volume beers aren't good. They're (mostly) not 'bad', but just really, really dull. And that's because they're more likely to have nine accountants running the show than nine brewers.
If you're happy with the taste of your mass-market beer, then just keep buying it. But there will always be a premium, quality-focused end of the market for people who want more (and this is the only part of the market that's actually growing at the moment).
In the end of the day, it's what it tastes like that counts. And if you can't tell the difference between Lion and Liberty, you may as well stick with your supermarket cheapies - because, pretty much by definition, you lack taste.
Correct Rory. I presume none of the blustering reactionaries in this thread have visited Wellington lately, where craft now accounts for 40% of the tap beer market.
They've never been to the Malthouse or Hashigo Zake, or seen the crowds of lowly paid young people gathered round the taps at Regional Wines & Spirits on a Saturday afternoon pondering which ludicrously expensive, hand-crafted ale they should fill their flagons (flagons!) with.
The journey to craft beer is a one way ticket. Once you've been hit with flavour and aroma, you're never going back. $4 for a coffee would have been ridiculed in 1985. Not any more. Craft beer is the same. Get used to it.
Hahahahaha. I've never seen so many people put their names to a thread. In my experience this usually happen where (1) people have a massive ego and think their name makes any difference to how their comment is perceived, (2) where they are sycophants of the industry and are basically greasing up their customers, or (3) they are try-hards who are so desperate to be associated with something they perceive as 'cool'.
Get real, craft brewers - you have a 3% market share among all 50 of you - in a volume industry that is declining overall. None of you will make any money until the rest go bust. So maybe the segment grows but your individual roads are not paved with gold. This is because there are no barriers to entry, but massive barriers to success (marketing scale).
Can anyone name me another NZ company which is third in its industry but is making good money in a sustainable way? There may be the odd one but it will be the exception not the rule - and I suspect the same logic will apply to the brewing industry in NZ.
Then all of you egos will need to go and buy a small loss-making vineyard instead to see your name on a bottle...
A bit of a harsh way of putting it, but probably true. There will be lots of blood spilled in this industry over the next few years as they battle for relevance in a crowded market
One thing that people have failed to consider when grumbling about pricing - NZ boutique (for argument's sake let's not use the word 'craft') beers are generally more expensive due to the cost of ingredients. Not because the brewers want to line their pockets. The profit margins for small breweries are extremely low. And if you want to really go nuts at someone about pricing - talk to the NZ government and get them to reduce excise tax, not to mention the GST that gets added to the overall purchase price of the beer, which effectively is GST on excise - so tax on top of tax.
High indgredient costs are mostly due to the need to buy off local monopolies, like NZ Hops, or instead of import ingredients that could easily be grown here if the market was competitive rather than sown up in a deal between NZ Hops and taxpayer-funded Plant and Food.