It’s deja bu time again in the world of Big Beer, with the return of excited prognostications for the no alcohol/low alcohol sector. All the marketing “experts” involved in the last round of predictions about how fast sales of no alcohol/low alcohol beers were going to expand have now retired or died, apparently – to be fair, it was 25 years ago – and a new generation is again falling for the fallacy of unwarranted extrapolation.
The Dutch giant Heineken is leading the charge, with the launch in the UK of Heineken 0.0. Currently no-alcohol beer has a tiny one per cent slice of the UK beer market, but David Lette, head of premium brands at Heineken, is popping up in the trade press declaring that he expects to see the alcohol-free beer category double in the next three to four years, and announcing that to make sure Heineken gets its share of this, it is putting £2.5m behind the launch of 0.0, with a £1.5m consumer advertising campaign breaking in July.
If they had given me a tiny one per cent slice of that marketing spend – just £25,000, chaps, very reasonable against what other consulting companies will charge you – I could have saved them all the rest of their money by assuring them that it ain’t going to happen: there will be no doubling of no-alcohol beer sales. And I hate to pour icy water all over young entrepreneurs, but the message is the same for the team behind Nirvana Brewery, East London’s latest, which started at the beginning of this year as the country’s first dedicated no/low alcohol brewery. The no alcohol/low alcohol beer market didn’t take off back in the early 1990s, for a variety of reasons, and for just those same reasons it’s not going to take off now.
In 1987 beer marketeers were even more optimistic about the future of alcohol-free beer, after it had apparently doubled sales in a year, to be worth £45 million, with predictions that it would grow tenfold by 1999. Barbican, the market leader, made by Bass, which had been launched in 1979, was spending £2.5m on an advertising campaign to fight off new entrants such as Kaliber, from Guinness, and Swan Light, from Allied, the first draught low-alcohol beer. Barbican’s first television ad campaign had featured Lawrie McMenemy, then the highly successful manager of Southampton, declaring: “It’s great, man.” McMenemy was later prosecuted for drink-driving, suggesting he perhaps didn’t think Barbican was quite as great as he had been paid to claim. Kaliber had signed up comedians Lenny Henry and Billy Connolly, and the actor Michael Elphick, to act as spokesdrinkers: another example of the dangers of celebrity endorsers, since Elphick was to die in 2002 of a heart attack not helped by his drinking up to two litres of spirits a day.
Thirty years on, that £45 million the alcohol-free beer market was valued at in 1987 pounds is equal to around £180 million in 2017 pounds – which is more or less what today’s alcohol-free beer market in the UK is worth. In other words, in three decades the sector hasn’t grown at all, in real terms. But 30 years ago, David Lette, today head of premium brands at Heineken UK, was studying for his International Baccalaureate at college in Singapore, according to his LinkedIn biography, and he didn’t join Heineken until 2002, thus missing out on the first great failure of non-alcoholic beer to live up to the extrapolations, and probably explaining why he is so optimistic today that the extrapolations for the no/low alcohol beer market are going to come true.
Are you a mature but still lively Victorian brewery? Do you worry that younger breweries, with their weird American hop varieties, shiny stainless steel lauter tuns and one-off wacky recipes, are luring your customers away? Is your 150-barrel minimum brewlength too inflexible to make experimental brews on? Worry no more: install your own microbrewery on the premises, and you too can be hitting the bartops with mango-flavoured double IPAs and smoked malt saisons. Comes with clip-on manbun and removable extra-bushy beard for all brewhouse operatives …
That’s unfairly sarcastic: I have no problems at all with big brewers who respond to the craft micro-brewery challenge by bringing in their own tiny set-up: I had great fun playing with the 10-barrel mini-brewery Brains installed at its site in Cardiff. The Brains plant, like those installed at Shepherd Neame in Kent, Hook Norton in Oxfordshire and Adnams in Suffolk, is designed to brew short-run one-off beers for selling in the company’s pubs. The Caledonian brewery in Edinburgh, however, has gone for something craftily different: an on-site microbrewery that is solely for experimenting with, making brews that, should they prove to be successful, will then be scaled up for commercial production in the main brewery.
I last visited the Caledonian brewery more than a quarter of a century ago, in 1989, which was just two years after it had been the subject of a management buy-out to acquire it from Vaux, the Sunderland brewer, which had bought it in 1919. The brewery was founded by George Lorimer and Robert Clark in 1869, and Vaux took it over to supply the North East of England with Scotch Ale, a style of dark, fruity beer then very popular in the region. Edinburgh was once the third biggest brewing city in Britain, after Burton and London, and even in 1958 it has 18 surviving breweries. One upon one they closed: Vaux announced it wanted to shut the Caledonian in 1985. Fortunately for posterity, its then managing director, Dan Kane, an active Camra member, and his head brewer, Russell Sharp, felt there was enough demand for the traditional beer it made for the business to be viable on its own. In a regular irony, the lack of investment by Vaux over the years meant the Caledonian brewery still retained old-style equipment long replaced elsewhere, most notably open direct-fired coppers, which gave the brewery an excellent marketing story.
Despite a couple of fires at the brewery in the 1990s, those coppers are still there (though one is a replica, replacing a vessel lost in the fire of 1998, and they now appear to have suspended lids I don’t remember from before). Brewery manager Craig Steven says the now unique coppers give all the brewery’s beers a distinctive rotundity he always recognises in blind tastings. In 1991 the brewery launched a golden IPA using the name of another old Edinburgh operation, Deuchar’s, which had closed in 1961. That beer’s popularity was cemented with the award of the Champion Beer of Britain title by Camra in 2002, and it remains one of the UK’s best-selling cask ales. Then in 2004 the Caledonian Brewery lost its independence again, being bought by Scottish & Newcastle after S&N closed the old McEwan’s Fountainbridge brewery in Edinburgh. Just four years later the Dutch giant Heineken swooped on S&N, and Caledonian is now the second-smallest brewery (out of 165-plus) in what is currently the world’s third-largest brewing group.
Which is why, presumably, they can afford to fly me up to Edinburgh, stick me in a four-star hotel, take me out for a very fine dinner in one of the Scottish capital’s best eateries, and all so I can see the new “Wee George” microbrewery (named for George Lorimer) and try the first beer to be scaled up and rolled out after trials on Wee George, an American-style IPA called Coast to Coast. There are those beer writers who would turn down being filled full of roast venison at a brewer’s expense in the belief that it would compromise their independence: I like to claim I’m not that cheaply influenced. (That is to say, you CAN influence me, but it will cost you lots …)
Talking of independence, Caledonian’s MD, Andy Maddock, who joined the Scottish brewer in March last year after six years as a senior sales and marketing man at Heineken, says his operation has an “arm’s length” relationship with its Dutch parent, allowing it to be entrepreneurial and to follow its own path as a “modern craft brewer”. There seems to be considerable fondness for the Caledonian brewery at the top in Heineken: they like its hands-on old fashionedness, and Michel de Carvalho, husband of Charlene Heineken, who inherited the business from her father Freddie in 2002, has apparently said Deuchars is his favourite beer.
The advantages Caledonian has over most of its rivals, of course, are that as part of a huge conglomerate its financing is cheaper to arrange than a totally independent operator could manage, though it still has to have “all the rigour” in its budgets that any commercial operation has to have; and it can use its Heineken connections to get into other markets. Currently 95 per cent of sales are “domestic”, but in the next four to five years, Maddock says, he wants to see exports increasing, with Deuchars in particular and also Coast to Coast and the brewery’s new “craft lager”, Three Hop, being aimed at Western Europe. He also wants to see Caledonian’s beers making a bigger impact in the off-trade (“We haven’t punched our weight there yet,” Maddock says), and a greater awareness among drinkers that Deuchers is a Caledonian beer: it appears many Deuchars drinkers don’t actually know who makes it.
On the other hand, they know why they drink it, or at least Caledonian does: “drinkability”, that mysterious characteristic no brewer knows for certain how to achieve, but which is vital for a beer to win a substantial slice of the market. Strangely, Caledonian is one of the few breweries I’ve visited where “drinkability” has been emphatically placed in the heart of the business strategy. Maddock says that the future of Caledonian will be based on a “modern” range, with beers such as Coast to Coast, that emphasises “distinctiveness and accessibility”, and a “traditional” range, led by Deuchars, where “drinkability is really important”. The idea, clearly, is that if you fancy trying one of those new craft beers, you can be reassured by the Caledonian name that it won’t be a frightening experience you’ll never want to repeat; and if you’re looking for something comfortable and more familiar, Caledonian has that for you as well. “Comfortable and familiar” are, frankly, far too under-rated among beer raters: most people most of the time don’t want to be challenged by their beer. Indeed, probably, most people don’t want to be challenged by their beer any of the time. “Predictable but not boring” is a great position for your brand to take, if you can capture it. “Predictable” also has to mean “predictably good”, of course, and part of that means making sure your raw materials are top quality: Caledonian has insisted for a long time on using what it says is the best malting barley in the world, from the east coast of Britain, both Southern Scotland and East Anglia, it also only uses whole-leaf hops, and it has now altered the way it buys hops, eschewing the traditional hessian hopsack for vacuum-packing in foil, believing this to keep the hops fresh for longer.
So to Wee George: Caledonian’s answer to the fact that there are now 100 breweries in Scotland, very few of which can match it with the popularity of its “traditional” line-up, but at least some of which offer are going to have widespread appeal – “widespread appeal” being the market sector Andy Maddock and his crew would like to own most of, thank you. It’s a £100,000 collection of hand-assembled stainless-steel kit capable of producing just 400 litres at a time, around a thirtieth of the main brewery’s capacity, but it has its own filler that can be used to put the beer into bottle, cask or keg, and it even has a hopback, just like the “big” brewery. Hopbacks are an old-fashioned item of kit today, replaced almost everywhere by whirlpools, but brewers who have kept them have realised that a hopback can be a terrific tool for adding all sorts of flavour to your hot wort. The new kit went in on June 1, and since then it has been producing one beer a week – the first being a version of Deuchar’s IPA, presumably to see how different the recipe would turn out on the Wee George kit compared to the Big George kit. Scaleablity was a problem at first, but the Caley brewers are getting better, they told me, at working out what tweaks were likely to be needed to translate a brew from Wee George to the main brewery.
The first Wee George beer to make it from experiment to scaled-up bar-top brand, Coast to Coast, was pushed through in eight weeks, which shows that for a 146-year-old, the Caley can be nimble enough when it wants to be: most big breweries barely have a meetings cycle that short, never mind the NPD pipeline. The name comes from the combination of West Coast of American hops – Simcoe, apparently – with East Coast of Britain barley. It’s a perfectly fine craft-beer-with-training-wheels, I suspect there’s an as yet untapped market for such brews among people looking for a beer to have when you’re only popping in for one and you want something with more flavour that usual but not TOO much, and I’d give it a fair chance of doing very well. Though if I were any good at predictions, I’d be much richer than I am.
Many thanks to the Caley crew for taking me north to meet Wee George, and I look forward to tasting future roll-outs.
You can hardly get fresher beer than from a bottle snatched off the production line by the managing director of the brewery, only seconds after it had been filled and capped – and, indeed, it’s excellent, cold, refreshingly flavourful and welcome, even at 10.30 in the morning. Mind, there are few or no Anglo-Saxon breweries where this would be possible, since health’n’safety barriers would be in place to prevent anyone from being able to reach across into the filling machinery and grab a passing bottle from the conveyor. However, this is Italy: while in a British brewery everybody would be forced into hi-vis jackets, ear protectors and goggles, here, where life is visibly more relaxed, visitors can wander about unworried by the HSE.
I am at Menabrea (pronounced roughly “MENahBRAYah”), one of the few surviving family-run Italian breweries, with roots that go back to before Italy was a single country. Menabrea is based in the town of Biella in Piedmont, 1,400 feet up in the foothills of the Alps, 40 miles from Turin to the south-west and 50 miles from Milan to the east. It is a town of 46,000 people, with soft water coming down from the Alps that, with plenty of nearby pastureland for sheep, has encouraged a local woollen industry: the town is home to Cerruti and Fila, among others. That same soft water is also very good for brewing lagers.
The brewery was started in 1846 by a couple of cafe owners, Antonio and Gian Battista Caraccio, and Antoine Welf, from Gressoney in the Aosta valley, to the north-west of Biella. Welf was a Walser, that is, a speaker of the Walliser dialect of German found in the Swiss canton of Valais and surrounding territories such as Aosta. Welf disappears, and in 1854 the Caraccio brothers started leasing the brewery in Biella to another Walser, Anton Zimmermann, also from Gressoney, and his compatriot Jean Joseph Menabreaz (sic), who were already running a brewery in the town of Aosta itself. Piedmont – and Aosta – were at that time part of the Kingdom of Sardinia, ruled by the House of Savoy, but in 1861, with some help from the French and Giuseppe Garibaldi, Victor Emmanuel, King of Sardinia, was able to declare himself King of a more-or-less united Italy. Three years later, in 1864, Zimmermann and Menabreaz – now, post-unification, with Italianised first names, Antonio and Giuseppe, and, in the latter’s case, a more Italian-looking surname as well, with the final “z” disappearing – bought the brewery in Biella from the Caraccios.
The announcement last week that W&Y was bringing back Courage Imperial Russian Stout genuinely excited me, and not just because it’s a fantastic beer. It showed that the Bedford company has a shrewd understanding of the sort of niche a medium-sized brewer can exploit with the right brands, and it has cottoned on to the growing desire of drinkers in the UK, the US and elsewhere to drink authentic, heritage beers again. McEwan’s and Younger’s have plenty of heritage – Younger’s No 3, for example.
But I’d like to make it clear, now, that if I notice ANY references by the brand’s new owners to Younger’s being “established in 1749”, I shall be driving up to Bedford and administering a few slaps. Because it wasn’t. This claim of a 1749 foundation date has been around since at least 1861, making it 150 years old, or more, and it still regularly pops up. Only yesterday the Scotsman newspaper printed this rubbish
“William Younger founded Edinburgh’s historic brewing industry when he set up his firm in Leith in 1749.”
There are two big errors in that one sentence: Edinburgh’s brewing industry is, of course, far older than 1749: the city was stuffed with breweries long before, so much that its nickname, “Auld Reekie” (“Old Smoky”), is sometimes said to have come from all the smoke that came out of the brewery chimneys. In addition, William Younger never started a brewery in Leith, in 1749 or any other year. In fact he was almost certainly never a brewer at all.
Ha! As I wrote yesterday, researchers in yeast genetics are changing the story on the history of yeast all the time, and the day I put that post up, new findings on the genetics of lager yeast came out which, as New Scientistreported, take the hybridisation narrative further down the road to a fascinating destination.
To quote New Scientist, Gavin Sherlock and Barbara Dunn of Stanford University, California, compared the genes of 17 lager and ale yeast strains across the world, with origins dating from between 1883 and 1976, and derived from breweries as diverse as Carlsberg and Labatt, Rainier and Heineken:
It has long been thought that Saccharomyces pastorianus, the yeast used in lager production, formed only once from the hybridisation of S. cerevisiae and S. bayanus. Instead, the team discovered that it happened at least twice in two separate locations in Europe, giving rise to the two different lager families … The hybrid, which makes lager instead of ale, probably evolved in Bavarian beer-brewing cellars during the 16th century.
The team also found that Saaz yeasts have a single copy of each parent yeast’s genome, whereas the Frohberg yeasts have an extra copy from S. cerevisiae. They believe this difference affects the flavour of the lager, as well as how quickly the yeasts can ferment the hops
[my emphasis, and sic, fer gawd’s sake. Bloody journalists … do they know nothing?]
So Scottish & Newcastle falls to the Carlsberg/Heineken combo, thanks to what now turns out to be its foolish involvement in the Russian beer market, leaving not a single one of the former “Big Six” British brewers in existence, and plenty of questions to be answered – what will happen to S&N’s stake in Caledonian, for example? What about WaverleyTBS, the distribution company S&N owns that delivers many independent small brewers’ beers to British pubs?
Just as important, does Heineken have the ability and experience to make any decent sort of run in the British beer scene, now it has become UK brewing’s biggest player, covering everything from keg and cask ale through standard lager to cider? It’s a much more complicated market than any other the jolly green Dutch giant deals in (even if the head of the Heineken family does live in Britain).
Two other news items you may have missed if you don’t read the trade press suggest that big continental companies can’t hack the intricacies of the UK beer market. First, Inbev is withdrawing the strong Artois Bock after less than three years.
So the sharks have started moving closer to Scottish & Newcastle. This is the latest in a series of foregone conclusions in the British brewing scene since a Conservative government decided it would be a jolly idea to partially sever the tie between brewers and pub ownership with the Beer Orders of 1989.
The result, which had been predicted as far back as 1950, by a right-wing economist called Arthur Seldon, writing in The Economist. was that the big brewers – Bass (including Tennents of Scotland), Whitbread, Allied (Ind Coope, Ansells and Tetley’s), Courage, Grand Met (Watneys), Whitbread and S&N, quickly abandoned pub ownership almost entirely.
Then, because brewing in the UK isn’t that profitable, the big brewers abandoned brewing, so that by 2001 only Scottish & Newcastle was left of the Big Seven brewers of 1989 – the rest merged with others or transformed into something else, such as distillers or hotel companies.
S&N, which swallowed the brewing interests of Courage and Watney, rose from being the smallest of the Big Seven to being the largest UK brewer, while the rest of the industry was brought by Interbrew of Belgium (Whitbread and part of Bass), Coors of the United States (the rest of Bass) and Carlsberg of Denmark (Allied).
Unfortunately for S&N, it never dominated its home market the way Heineken, Anheuser-Busch, Carlsberg or SAB of South Africa did theirs, and it has never been able to find the transformational deal that would turn it into a true and invulnerable giant. It bought Kronenbourg off Danone in 2000, and became the biggest brewer in France; it bought Hartwall of Finland in 2002 and gained a half-share, with Carlsberg, in BBH, owner of the biggest brewing concern in Russia (to Carlsberg’s great annoyance). But what it really needed to do was acquire a truly global coverage, the way Interbrew did by merging with Ambev of Brazil, or SAB did by merging with Miller of the United States.