The Beer Industry's 15 Minutes of Fame

FILED JULY 31, 2009

Dear Client:

Every year on the first week of March we have our Beer Summit. But this week, the mainstream media has appropriated the term to refer to President Obama's meeting at the White House with Professor Gates of Harvard and Sgt. Crowley.

Almost as soon as the White House invitation was announced, the media have been in a frenzy about which brands of beer each will drink. It has been a 24 hour stream of publicity for nature's perfect beverage: beer. Soon it emerged that President Obama quaffed a Bud Light (Dave Peacock was at his inauguration, but it's likely that Obama just wanted to pick the safest choice as it's the largest beer brand), Gates reportedly likes Diageo's Red Stripe, but he ultimately sipped on a Sam Adams Light, and Crowley, in a pick which has puzzled the press for some reason, drank a Blue Moon. Joe Biden drank a non-alc Buckler. A photo-op showed the four of them drinking beers in the White House picnic area in clear steins. The Huffington Post headlined the choices: "Red, Light, and Blue". Clever.

The publicity will likely help these brands, particularly Blue Moon, Red Stripe, and Sam Light, which are less known than Bud Light. Bud Light might actually get some negative feedback, with all the news reporting that it is foreign-owned.

BIG PR COUP FOR BEER. This is the greatest earned media opportunity for the beer industry since A-B sent the Clydesdales to the White House upon Repeal of Prohibition. After all, two antagonists ironing out their differences over a beer with the President of the United States and his bully pulpit is, as the Associated Press put it, an "all-American bonding gesture." Beer was being hailed as the beverage of diplomacy, the great leveler, the lubricant on the rails to peace. It was the equivalent of 10 "Here's to Beer" Superbowl ads.

VERY PUBLIC LAUNDRY. But if there's one thing I know about this business that we all love, is that this is a very competitive industry. VERY competitive. If you think the craft brewers didn't spring from their beds yesterday declaring "carpe diem", then you are mistaken. While the Beer Institute and the Brewers Association worked together to get signatures for the tax rollback bill, they certainly broke ranks during this PR window. American owned craft and regional breweries wondered, very publicly, why they weren't being featured in this love-fest. First there was the Wall Street Journal piece, which said that the American beer industry is "hopping mad" that nobody picked an American-owned beer (this was before Sam Light was in the race), with the reasoning that ABI is Brazilian/Flemish, Blue Moon is owned by SABMiller (based in London) and MolsonCoors (with an HQ in Canada), and Red Stripe is owned by London-based Diageo and brewed in Jamaica. "We would hope they would pick a family-owned, American beer to lubricate the conversation," said Sierra Nevada's Bill Manley to the WSJ. Jim Koch echoed, decrying "the foreign domination of something so basic and important to our culture as beer." Newly renevated Genesee, which needs to fill capacity, said "we just hope the next time the President has a beer, he chooses an American beer, made by American workers, and an American-owned brewery like Genesee." Genesee did congratulate Obama for choosing beer as the beverage of choice.

And then you have Richard Neal, a Massachusetts Congressman, who wrote a letter to President Obama, obtained by BBD, saying that ABI (which he calls Imbev, sic, but who am I to chastise for typos?) and MillerCoors control 94% of the beer market, that both are foreign-owned, and that there are "faux" craft beers out there (a not-so-oblique reference to Blue Moon) that "enjoy all the marketing and distribution advantages" of the Big Two brewers. The Congressman suggests a beer from his district, Sam Adams, the largest American-owned brewery. The letter, which the Congressman likely got help to write by a brewery, ends by taking a mild swat at distributors: "As distribution is one of the highest hurdles craft brewers must contend with, I stand ready if you need any assistance obtaining any of these high quality Massachussettes-owned and brewed beers." I suspect Jim Koch has his fingerprints on that letter. And it ultimately succeeded, with Gates drinking a Sam Adams Light, although this got much less press than Red Stripe leading up to the beer summit.

But that's not all. Several craft brewers took to the airwaves on Fox Business and CNBC and CNN to decry the foreign-owned theme. Magic Hat's Martin Kelly was among the guests. Martin said it's great to see this visibility for beer on a national scale in the American culture but he was disappointed that "an American-owned brew was not featured at the White House."

The NBWA and the Fun Bunchers have remained silent, except for the Woman's Christian Temperance Union, which said the group is "disappointed" that the president is serving beer at all, suggesting they should serve lemonade or tea instead. (Ed. Note: I didn't realize the Woman's Christian Temperance Union was still around. Glad to know they're out there somewhere being so sublimely ineffective that nobody has heard from them in years).

But in the end, the American-owned craft brewers saw their limited opportunity and grabbed the brass ring and made the most PR hay. If there's a news-watching American that does not know today that Bud Light is foreign-owned, I'd be surprised. The day's publicity was worth tens of millions of media exposure.

But we've heard that the White House, who was apparently ignorant of the parentage of their favorite brews, isn't very happy with this publicity of them choosing foreign owned beers (since LBJ it has been an unwritten rule that all beer served in the White House be American). They don't want it to obscure the larger reason for the beer summit. We've learned there was lots of behind-the-scenes haggling. In the end, it's likely that Professor Gates' thirst for Red Stripe fell on a political sword in favor of the White House's desire to have an American-owned beer present in Sam Adams Light. Well done, Jim. Beer and politics, politics and beer. They've always gone together like peanut butter and jelly, or so my late mentor Joe Huggins always told me.

OUR TAKE. Despite the intra-industry bickering which has seeped out into the mainstream this week, in the end this was fantastic press for beer, particularly American-owned beer. But while we in the industry see our dirty laundry on a daily basis, it was almost painful to see it broadcast to the public. It would be a shame if because of the bickering and the fact that the industry helped cause a distraction, President Obama stops talking about beer and starts saying nice things about soda pop, or heaven forbid, milk.


More bad news for the on-premise. Three more states this year have passed laws making it mandatory to install ignition interlocks on first-time DUI offenders, bringing the total to 11 states. And now, a current version of a federal transportation funding bill, which could be debated by Congress this fall, would require all 50 states to mandate the devices for anyone convicted of drunken driving or risk losing federal highway money, reports USA Today. Sound familiar? That's the same tactic used by MADD to get the uniform drinking age to 21 in the 1980s. Sarah Longwell, managing director of the American Beverage Institute, said: "As this creeping mentality about 'don't drink and drive' as opposed to 'don't drive drunk' takes over, you're seeing more officers inclined to arrest people" below the legal limit for intoxication, she says. Also, they are expensive, and the offender has to pay for them, diverting funds which could be used for treatment, says Carl Wicklund, executive director of the Lexington, Ky.-based American Probation and Parole Association (APPA), which represents 35,000 probation and parole professionals.

Until tomorrow, Harry

"We are not retreating - we are advancing in another direction."
-Douglas MacArthur

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