Thursday, December 13, 2012

Missing the Mark

Yesterday, CNNMoney posted a Beth Kowitt interview with SABMiller executive chairman Graham Mackay, about his company's response and plans to adjust to the rise of craft-beer sales in the U.S.

Well, they've got a plan—but as usual it's off the mark.

Mackay has a handle on what the problem is. The big breweries focus, and have focused for years of what he deems as "repeatability" and "...the elimination of harsh flavors" or what everybody else calls bitterness. Craft, in his opinion, offers "...a bit of interest"—that an "local, anti-marketing, anti-global, anti-big" attitude. Mackay admits that for a business the size of SABMiller, it's tough to get the street cred that inherently comes with being a craft brewery. So SABMiller has formed relationships with some of those craft breweries of introduced what it considers to be craft lines. When asked if he thinks the "core craft consumer embraces that model, he says:
There's a huge debate in the craft world about us, all big brewers, because we're like the enemy. We're the other guys. They think we're stealing their authenticity. What we say is, "Let the consumer decide." If we're authentic enough for the consumer, that's authentic enough for anyone.
I'll buy that, but I'm fairly certain SABMiller could give a shit if the craft industry itself thinks they're "authentic" or not. To this point, Mackay is lined up pretty good, but the interview starts to go sideways when he talks about his company's separate "craft" division, Tenth and Blake:
For most beer, the proposition is emotional. It's not functional. The beer is not that different. And even if the beer is different, there are others that taste much like it. So you're trying to create new emotional associations in people's minds. To do that, you've got to act like a small company. You've got to incubate it for a long time. Tenth and Blake is set up to introduce things slowly and carefully and consistently like a small company.
And there we have it—macro brewing's biggest, and as far as I can see, most misunderstood (by itself) mistake when it comes to competing with craft-beer.

Craft beer isn't about authenticity or the proposition of emotional associations or even incubation. It's about beer—specifically, good beer. The big boys haven't focused on that in a long time—a very long time. What's amazing with this interview is that Mackay realizes this, and yet, is proposing his cockamamy emotion, horse shit. Whatever emotional connection may be had while drinking beer, it's more likely due to the comradery of friends at the pub or of family at a barbecue, but certainly not because you chose Otter Creek over Miller Lite. Blue Moon has been successful for SABMiller, but wouldn't you rather hang your hat on it's success do to fact that people like the beer rather than because they think it's from a small brewery? It always amazes me the breadth of which companies and CEOs go to swallow their own Kool-Aid.

Of course this, as it always does, comes down to the ol' mullah. Far be it from me to say that craft-brewers aren't in it to make money. Of course they are, but maybe that's not the only driving force. Once again Macaky has been led astray,
I don't think the craft movement in its current guise will continue to grow indefinitely. I don't think it can. It's not economic. Too many people won't make any money. Too many of them will go out of business. And I think it will become less fashionable. These things are fashion to some extent.
But, it's okay for SABMiller to pretend it's brands are craft until the bottom falls out. That's where the big breweries really miss the mark. They are playing to be the kid in the room with the most toys—regardless if those toys are missing pieces, broken or are out of batteries. Maybe, the tact best taken to compete with craft is to forsake quantity for quality, and find a few of the best toys and stick with them.

But they won't, because they never do.

But don't think the craft folks haven't drawn the battle lines, either...

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