Pete Coors: Grappling with the ever-changing world of beer

[NRman]

http://blogs.denverpost.com/beer/2014/0 ... eer/13551/

“Basically the biggest trouble we have is on-premise sales,” he said. “We have a lot of bar owners who are enamored with craft beers. They are beginning to take off the premium light handles and putting bottles behind the bar instead and replacing the handles with craft beer handles. We lose 50 percent of our volume when that happens.”

The company is trying to compel bar owners to keep their beers on tap by impressing them with facts.

“We have done research that shows it’s not in the economic benefit for a bar to do that,” he said. “Having a premium light brand, whether it’s Coors, Miller or Bud on tap actually improves the economics of their business. People stay in their seats an average of 18 minutes longer when they have a light premium beer on tap. That means they are spending more money, leaving bigger tips. We have a little algorithm and an app that we give to our distributors to evaluate and analyze these businesses and bars.”

[JeffPorter]

Yes we've got research. Research that's, like, totally independent...

It's almost sad when you realize the only idea they have in order to keep up is to simply acquire craft breweries.

On the other hand it's nice to see how much voting with your wallet works.

[iguenard]

Those numbers are actually most probably true.

What he doesn't get, is that most places now are getting public pressure to sell craft beers, or lose business.

What they dont say, is that the new generation of pubs, while it is important to be in the black, won't do so at the expense of getting Coors in. They'd rather close or sell some other crap beer thats at least local.

Craft Beer isn't about big business. Its about big taste, big ideas, and big ass beards.

[G.M. Gillman]

Doesn't the logic fall apart if you charge more for the craft beer, which seems reasonable given the hike in quality?

Gary

[JeffPorter]

Doesn't the logic fall apart if you charge more for the craft beer, which seems reasonable given the hike in quality?

Gary

I could be wrong but I imagine the margin for a bar owner would be about the same, as the expensive craft beer would just cost him or her more as well.

[The Mick]

The standard craft beers, like the mad tom's, mill St, spearheads, beaus, etc, are the same price as the big boys, at least within a $1 or two, excluding the major value brands like Pabst or something. Charging even a dollar more per pint, using a 58 L format keg, works out to an extra $100/keg.

So I would imagine that the numbers in this 'study' are based on some very strong assumptions by Coors.

[G.M. Gillman]

Jeff, I don't know (maybe any bar owners reading can give their view) but I'd have thought that there is opportunity for incremental profit to the bar owner here, i.e. he should be able to lever selling a "better" product into more money. Also, some days bars offer special low prices on macro products, Molson Wednesdays and that kind of thing, but except for a small number of craft products, the consumer pays full freight for them always.

Anyway, I am saddened to read how Coors is looking at this.

Gary

[Craig]

Jeff, I don't know (maybe any bar owners reading can give their view) but I'd have thought that there is opportunity for incremental profit to the bar owner here, i.e. he should be able to lever selling a "better" product into more money. Also, some days bars offer special low prices on macro products, Molson Wednesdays and that kind of thing, but except for a small number of craft products, the consumer pays full freight for them always.

Anyway, I am saddened to read how Coors is looking at this.

Gary

It's also not that uncommon to see the macro stuff going for 7-8 bucks a pint downtown. I wouldn't be terribly surprised to find out that the markups work out better if you're not selling craft beer.

I think the bar owner argument for craft beer is more about marketing than markup. People seek out the craft beer. If you're just selling the macro stuff you need something else to draw people in, be that a killer patio, good food, lots of TVs, etc. Craft bars can get by on the draw of being a craft bar.

Bars geared towards locals can keep local customers by having a few taps of craft options.

[atomeyes]

The standard craft beers, like the mad tom's, mill St, spearheads, beaus, etc, are the same price as the big boys, at least within a $1 or two, excluding the major value brands like Pabst or something. Charging even a dollar more per pint, using a 58 L format keg, works out to an extra $100/keg.

So I would imagine that the numbers in this 'study' are based on some very strong assumptions by Coors.

depends.
we all know that kegs cost X dollars.
but sometimes kegs cost "x" dollars.
other times kegs cost "x" dollars *wink* wink*
and then sometimes you buy a keg and a free patio set comes with it.

we know that breweries of all sizes play this game and that, often, there is no true cost to a keg of beer.

next time you go to a restaurant and they have more than 1 tap dedicated to 1 brewery, ask yourself "man, that restaurant owner must really love that brewery?" or "man, I wonder how much under-the-table money the restaurant owner got to guarantee that tap space to that brewery?"

[saints_gambit]

It's all a representation of the fall of America's claim to global cultural hegemony. Instead of being able to dictate to a society the products that they should be consuming, craft beer represents the devolution of the 20th century power structure into regionalized pockets and the potential redistribution of manufacturing power.

Of course Pete Coors doesn't understand why he's losing. Craft beer is not a product people consume entirely rationally. Craft beer is a signifier of the emotional response of young generations to an established power structure they view as having failed them.

[G.M. Gillman]

I see what is big business about it but not what is "American" about it. Stella Artois isn't American, or Diageo.

Gary

[saints_gambit]

I see what is big business about it but not what is "American" about it. Stella Artois isn't American, or Diageo.

Gary

The ability to dictate to the consumer what they should be purchasing is one of the key goals of the hundred million dollar advertising campaigns that beer companies had in the 1990's. It may not be uniquely American, but I'm relatively confident in saying that it's something they pioneered through the unidirectional medium of television.

Basically, the advertising doesn't work beyond the era of television. People suddenly have the ability to access more information and curate their own personal tastes. What we're doing now is debating the reason this is failing and we're doing it on a forum. This post might be read by hundreds of people. Previously, the amount of discourse would have been between you and the guy next to you at the bar when the ad was on the TV. Now we can shout down the Coors Light account on twitter. As soon as the media became participatory on a broad scale, brands that depend on enforced consensus began to fail. I'd bet that the wide spread of the internet corresponds directly to the decline of macro brewing market share. I'm going to go out on a limb and state that the advent of that technology corresponds more or less directly to the decline of the American Empire.

Consider Coors Light as an artifact. What is the sum total of our knowledge of the product? It's about 4.0% alcohol. We don't know how much of it is adjunct. We don't know what hops they use. We don't know much about the beer itself.

We know one piece of information per advertisement. We know it is cold. We know that the packaging has a new e-z flow hole so it drinks faster.

This is not information about the product. This is information about the product's packaging. It's reduced to a single impression: Cold. Easy. As long as the discourse was restricted to a single piece of information, Coors Light grew.

If craft beer is anything, it is informational. The variety of information you might learn about the product is pretty wide. The amount of sensory information you might get is wider than you get with Coors Light. It encourages discussion. It encourages complexity of dialogue.

Macro is TV. Craft is The Internet. Macro is unidirectional promotion of cultural homogeneity in the name of business. Craft is bidirectional discussion of information. Macro allowed you little to no choice, not unlike the three channel era. Craft allows you to create a friends list, seek out information and block links from buzzfeed.

[Belgian]

Craft Beer isn't about big business. Its about big taste, big ideas, and big ass beards.

Ahh, the ass beards. I've never gone for the full-on Yeti look... Just not hairy enough by craft brewing standards.