Here, There, Everywhere
Red Stripe beer might be the "the taste of Jamaica," but its brewer,Diageo, soon
plans to make it at a U.S. brewery operating in three landlocked states. And while
Beck's touts itself as "the world's No. 1 German beer," Anheuser-Busch InBev is
moving production to the American heartland in St. Louis for its U.S. consumers.
Even Foster's, which MillerCoors markets as "Australian for beer," is really a U.S.
brew -- made in Texas, not Down Under.
Imported beers -- which rose to popularity beginning in the 1960s on the notion that
beer made elsewhere was better and different -- are becoming decidedly more
American. Big brewers are moving production stateside in search of cost-savings and
flexibility even as the brands keep their foreign catch phrases. The shift follows the
trend of other industries, like cars (see sidebar), where increasing domestic
production by foreign companies has blurred the definition on what exactly is
considered an "import."
Import beers have definitely lost the cachet they once had. Now, if you are going to
sell an import beer in the premium category what really matters most is catchy
advertising rather than point of origin.
But the debate is far from over. Pure-play importers like Heineken USA and Crown
Imports are holding firm in their belief that place still matters, with both saying they
have no plans to move production stateside. "If you play in the import segment, you
need to be an import," said Laurent Theodore, U.S. VP-marketing for the Heineken
brand. Consumers buying Heineken beer are "buying the place of origin," he added.
Mexican-brewed brands like Crown's Corona and Modelo Especial still believe they
have a leg up with Hispanic consumers. Origin is still important for Latinos some of
whom view beer as a patriotic symbol.
Brewers making the move to the states are calculating that the financial upside of
local brewing outweighs any potential marketing risk. Indeed, beer executives say
marketing will even be enhanced, because by lowering fixed costs such as shipping,
companies can free up more money for brand building.
Beer is heavy and it is in glass, so it's expensive to ship and glass breaks. If the
company moves closer to the consumer, you are likely to reduce those two variables.
Also, domestic production eliminates the issue monetary policy such as a weak dollar
raising costs for imported goods. Also, with domestic-beer sales in a slump, there
might be excess capacity at U.S. breweries, which could induce even more imports to
A-B InBev will move Beck's production for U.S. consumers to St. Louis by early next
year. The decision was made after extensive consumer research studies that showed
most buyers aren't as much concerned about where the beer is produced as how it's
produced - meaning that the formula won't change. In June, the brewer shifted
production of Bass English Ale to upstate New York. And Kirin, a "Japanese-style
pilsner" sold by AB InBev in the U.S., has long been brewed in Los Angeles.
Liquor giant Diageo will contract with LaCrosse, Wis.-based City Brewing to make
Red Stripe for its U.S. consumers beginning next year, while keeping production at
Jamaica-based Desnoes & Geddes for sales in Jamaica, Brazil, Canada and Europe.
City Brewing runs breweries in Pennsylvania, Wisconsin and Tennessee. Foster's
has stuck with its "Australian for Beer" ads even though the brand hasn't been
imported from Down Under since 1993. MillerCoors moved brewing to Fort Worth,
Texas, two years ago and before that the brand was made in Canada.
Geographical lines are even being blurred for domestic beers. Consider A-B
InBev-owned craft brewer Goose Island, which this summer moved production of "312
Urban Wheat Ale" -- inspired by its hometown Chicago area code -- to upstate New
York. Boston Beer Co.'s Sam Adams "Boston Lager," meanwhile, makes batches in
Pennsylvania and Cincinnati. Coors Light, whose ads plug "Rocky Mountain cold
refreshment," is not just brewed in Colorado, but in states such as Ohio and Virginia.
As for me I don't really care where it's brewed as long as it tastes the same. Think of
it this way. - if renown chef Gordon Ramsey came to my kitchen to cook dinner it
would be his dinner, not mine. And that's a good thing.
beernexus.com - SPECIAL REPORT
Where is that beer really made??