Small Beers from Big Brewers

Over the past few years it has become quite apparent that the country's big brewers have been trying to cash in on the popularity of boutique beers. Total beer sales in the United States have been relatively flat for more than a decade now and sales of imports have stabilized around 5% since rising rapidly in the 1970's and early 1980's. As the number of small breweries and brewpubs increased nearly ten times throughout this period so did, of course, their market share. This niche was initially so small that big brewers paid little attention to it, but it is the only segment of the market to show consistent growth over the last ten years or more. This has drawn interest from market analysts and brewers anxious to "jump on the bandwagon".

One of the first companies to venture into this area was Adolph Coors of Colorado. In the early 1980's they introduced George Killian's Irish Red and Herman Joseph's Super Premium. Killian's was licensed to Coors by George Killian Lett, a member of an old Irish brewing family that closed shop in 1956. Although it is vaguely reminiscent of a traditional Irish Ale this beer is lighter in body and the taste smacks of adjuncts. Herman Joseph's is not an all-malt beer either, the connotation of "super premium" is an out of date reference to pricing practices. Years ago the big brewers brewed in only one location such as Milwaukee or St. Louis, and shipped their products 500 or 1000 miles to different markets. In order to recoup their transportation costs their beer was priced higher than local products, thus "premium beer" was born.

Another big brewer to the micro market is the Miller Brewing Company. Since its takeover by tobacco giant Philip Morris in 1969 Miller has shown great flexibility and market awareness. By repositioning Miller High Life toward the blue collar crowd (if you've got the time we've got the beer), and introducing Miller Lite they moved from the number seven brewer in the country to number two in seven years. By shifting the focus of Miller High Life the company had vacated the "super premium" market which was now dominated by Anheuser Busch's Michelob. To compete with Michelob, Miller began brewing Lowenbrau in the United States in 1977 and spent $11 million advertising it. Lowenbrau was previously imported from Germany. Miller continued to use the same packaging and trumped up the 600 year heritage of this great beer, forgetting to mention that they were now using adjuncts and a significantly different brewing process in its production. Anheuser complained to the Federal Trade Commission, who threatened to sue Miller. The FTC also urged the Bureau of Alcohol, Tobacco and Firearms to allow Anheuser to advertise Lowenbrau's domestic origins, (as of 2000, Lowenbrau is being brewed in Canada to German specifications, and is much better for it). Miller's subsequent efforts in the boutique market have been more successful. Several years ago they purchased the family owned Leinenkugel brewery of Chippewa Falls, Wisconsin. This old brewery produces a very nice lager known as Leinenkugel Red. Miller has maintained a hands off policy here and allowed Leinenkugel to operate mostly independently.

In the early 90's Miller introduced three products known as "Miller Reserve", a pilsener, an amber ale and a stout, (all discontinued). All were 100% barley and proclaimed this on the label. Some connoisseurs attempted to degrade these products for one reason or another but on the whole they were all respectable. The pilsener lacked distinction and needed to be more highly hopped but both the amber ale and the stout were good products for the price. Velvet Stout is not a common style, it is English in origin and is still produced there by a few brewers, one of whom is John Courage. Miller's Velvet Stout was not dry like Guinness, not sweet like a milk stout nor as rich as an imperial stout, but it exhibited a nice full bodied, well roasted and somewhat nutty character. Another Miller product is Red Dog. Supposedly produced at "a microbrewery in Wisconsin" the Miller name is not attached to the product. This beer is actually produced at the Plank Road Brewery, this brewery was purchased by Frederic Miller in 1854, it is still owned by the company. Red Dog is a pseudo-boutique beer, it is not an all malt, as its taste and price reflect, yet it is being marketed as one. It is most likely directed at the uninformed consumer who wishes to try new products.

After many years of test marketing and indecision Anheuser Busch finally introduced two new beers to the market which were aimed at the microbrew niche, Elk Mountain and Red Wolf. Their origins are attributed to "The Specialty Brewing Group of Anheuser Busch". No where on the label do they indicate that they are all malt beers and the taste confirms this. It seems that these products are aimed at the same market as Red Dog and while they may be a step up for AB they are not representative of what this company could do if it wanted to.

A major stepping stone for big brewers entering the micro market is that new, high quality products are an indirect admission of the inferiority of their other top of the line brands. For this reason they will often try to dissociate these new products with the company as a whole. This is especially evident in the case of Anheuser Busch. Elk Mountain will not be stocked with Budweiser in the stores, it will be with the premium products, Anheuser wants to gain in the micro market without losing in the "Bud" market.

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© C. Renegar Jr.