ABI Industry News #2 (July 17)

Industry fights over who belongs in the “Craft” club

Lately the craft beer world has been stirred by ABI’s purchase of some of the biggest among craft breweries. Last week the Brewers Association has united craft breweries across the country in preserving the transparency of the “craft beer” label. Independent craft breweries now have a new label to distinguish their independence from big beer.

This week seven of ABI’s recently acquired brands made their complaints public in a video that outlines the Brewers Association’s crime against the market, saying that non- independent breweries still pumps out the same craft goodness, that they are missing the bigger picture of beer’s fight against wines and spirits, starting an in fighting will only help competitors.

Craft beer takes the highest end of the beer market above the premium beers like Corona and Hoegaarden, it’s proper to acquire and diversify portfolio into this segment of the market, but ABI is determined to leave little space for smaller brewers to breath.

The booming of craft beer came from Americans’ support for local, quality beers. When you take a local label and making it national and international it destroys its craft heritage and only brews further antagonization from those who support local . It’s true that the “independent” label does nothing to distinguish quality or taste but what it shows is an effort to preserve the balance to a market that is increasingly monopolized by big beer, and consumers benefit nothing from this non-competitive market. Beer is not fighting an upward battle against wines and spirits, beer is never going away, in fact when we live on Mars millenniums into the future, we will most definitely be making and drinking beer there.

ABI’s clever move to increase appeal of its craft beers to home brewers

As a strategy to get closer to home brewers, the biggest fans of beers, ABI offered up home brew kits from its most recently acquired craft breweries for home brewers to make their very own version of the craft beers. Among those offered are Goose Island Brewing, Elysian Brewing and Wicked Week from ABI’s portfolio. The move helps home brewers get to know the making of their beer and blur the lines between home brew and craft and mass brewed beer.




Constellation Brands CEO on its beer brands’ incredible upside

Constellation Brands, the importer of Corona, Modelo Especiale in US have seen 26% growth in the recent year, CEO Rob Sands shared with CNBC on the “Category Management” tactic that is bringing further growth to its already popular premium beer brands. As retail channels account for most of beer sales, getting more shelf space and more pack sizes on there is the winning strategy. For retailers, they are constantly looking to increase margins with its limited shelf space. Constellation approach retailers and proactively advise retailers on how their over allocation of shelf spaces to low margin brands is hurting their business, and as retailers look for higher margin brands they will be looking at Constellation’s portfolio. Excellent cost management by the big brewers pays off not in increasing volumes pumped out but certainly in the winning combination of lower cost and premium brand image. Beer is not only a staple beverage, it is also a symbol for lifestyle, according to Sands.

“How does a beer get hot?…….it’s an image thing, it makes them feel good when they drink it, it fits their image of themselves when they hold it in their hand”

– Rob Sands, CEO, Constellation Brands



KFC to sell beer in China

KFC recently debut its K PRO restaurant in HangZhou, a new dining restaurant brand that sells western style light meals and salads and away from greasy fast food that Chinese youngsters knows KFC as. To change the dining experience, K PRO is also planning introducing beer to its menu to appeal to younger consumers. This shows that even for fast food giants like KFC is recognizing young people’s change in attitude towards dining, and are addressing their need for more quality dining experiences and how premium beers is a crucial part of quality dining. First tier cities already has an abundance of competitions, while first tier consumers that are spending more for experience and quality it leaves little space for fast food originated food bars like K PRO. There’s opportunity for this combination of light meal and beer to go far elsewhere in China such as second tier cities like Hangzhou where food scene is still largely traditional Chinese food while audience are increasingly curious to try out new food. http://finance.sina.com.cn/chanjing/gsnews/2017-07-03/doc-ifyhryex5819609.shtml



In other news: Guy successfully checked in one can of beer at airport

In a surprising stunt that amazed the internet this week, an Australian man checked in a can of beer as luggage for his holiday trip from Melbourne to Perth. As the beer was over allotted volume to carry on board, he and his mate did it just to crack a joke, but to everyone’s surprise the can came out the other end at the destination undamaged.


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