BrewDog Acquires Stone Berlin

My best friend and I received 301 and 339. I'm lucky with numbers but not particularly with using them.

 

thanks. yes. also I believe warsteiner is one brewery that brews non-reinheitsgebot compliant versions of their beer for export. so, yes, in germany you'd be getting a vastly different beer. spaten doesn't do this as far as I know. so if you're equating that rhg-compliant munich helles with a non-rhg-compliant pils, id tend to question that comparison/classification pretty strongly.

 

every time I read that, I just shake my head that someone with so much experience and clout in the so-called "craft" brewing industry and so much on the line in the German brewing world could have so little clue.

 

Ah, that thread. It is an interesting background context both for that quote and for this discussion.

 

I find it pretty illuminating, too, especially in light of Stone's closing. If Koch truly and honestly went into the venture conflating in his mind the types of "traditional" beers the original article mentions -- Augustiner Edelstoff in particular -- with the types of beers Narziss was quoted on in that video (beers that truly have suffered and become, if not qualitatively bad, then at best monolithic), then he misread the market -- and the overall state of German brewing quality -- even more egregiously than I thought.

No one (there or here) is arguing that there is a ton of choice in most areas of Germany as regards beer and beer styles. All people have said is that the choices they are provided are of sufficiently good quality and price to obviate any "need" for a "savior" in the way US (macro) beer may have needed one. Couple that with a residual but real pride in their brewing history, traditions (which, yes, have taken a hit recently...as they realize), and existing pockets of beer "wonderfulness" they can easily visit and enjoy for themselves -- and you're gonna have a VERY tough time convincing them they need your American beers...at 3x the price and half the freshness and in a package they associate with true "crap" beer.

I think that that's been borne out. At least in the way Stone approached it.

 

Personally I agree with @Roguer that Koch was referring to the types of beers discussed/described by Narziss and acknowledging there were exceptions. But I do find it strange that the "TV beers" and/or the type of beers described by/referred to by Narziss are considered to be of sufficiently good quality since IIRC they represent the top selling beers in Germany.

As for Stone's approach to gaining a foothold in Germany I'd agree that a number of mistakes were made but disagree that they all had to do with arrogance. Such failures seldom have a single cause. Rather I'd suggest that among other things, decisions were made about expansion, as others breweries have done (e.g., Smuttynose, Green Flash, etc.), based on the anticipation of continued growth within the US that would support such a venture, and that the downturn in sales/income cost them the financial resilience to be able to cope with the unexpected (e.g., unplanned construction costs, etc).

Edit: I should note that I'm a great believer in what my Engineer friends call "Murphy's Law."

 

I'd agree it wasn't all to do with arrogance. I mean, for whatever attitudes were brash, Stone has always had the approach of strongly supporting the existing local scene, for example. And who would have thought (not me) that in a country as small as Germany and with such good infrastructure and logistics capabilities, that they would have been put at a disadvantage from a freshness perspective and seen as a poorer choice within that scene than a local IPA? As I have said many times, Germany is a CRAZY place and a very weird market. I wouldn't want to try and navigate it, even having lived there for a decade.

EDIT TO YOUR EDIT: man...Germans and Murphy's Law. If they could, they'd have written every single instance of how and where and when something MUST go wrong. Their #1 favorite expression is "So einfach geht das nicht" which translates as "Nothing is ever that simple"

 

And I too agree with @Roguer here.

I have discussed in several of my posts on this aspect of "financial resilience". I truly believe that this is the crux of the issue here for Stone Berlin. Through a variety of circumstances (Greg chose to spend a few paragraphs discussing the challenge of construction delays in his letter despite being counseled to not discuss this matter) Stone in not in a position to be patient here with their business of Stone Berlin. I very much hope that BrewDog has the wherewithal to be patient with BrewDog Berlin. The post by @TargaFlorio above concerning BrewDog's 'exposure' with whatever happens concerning Brexit may be the impetus for why BrewDog has such an interest in purchasing a brewery on the continent. If tariffs are imposed on UK brewed BrewDog beers they can circumvent them by supplying their customers in France, Spain, Germany, Italy,.., with the BrewDog products produced in their new Germany brewery. A win-win situation here.

Cheers!

 

Fair enough. But when pressed on it, Koch again demonstrated a profound lack of a deeper understanding on German beer and the German beer market.

 

I'd expect that Brewdog does have the resilience to cope given the level of "business savvy" they've displayed over the years.

Also, as you say, with or without tariffs they have a new brewing location for their European market. Add to that the fact that they already have a brewing contract in place for another line of beers that already has some name recognition and market penetration throughout Europe. In addition they have a number of international locations and more international savvy that most folks give them credit for.

So I'd not be surprised if they follow through on the idea of having their next general punk stockholder's meeting in Berlin and even scheduling a Brewdog Airlines flight from the UK to Berlin. Who knows they may even do a Brewdog Airlines flight from the US to Berlin.

 

FWIW I have made numerous posts in BA threads espousing my opinion that a root cause for why there is so much old beer on US beer retailers shelves is the same crap you describe occurs here as well. If the breweries and their partner Wholesale Distributors would eliminate the incentive via bulk discounting I am of the opinion this would notably improve the aspect of beer freshness on beer retailer shelves. In other words make multiple smaller orders throughout the year and don't order more product then you can distribute to retailers in a couple of months.

In the US the craft beer market is 'transforming' with new small, local breweries opening at a rate of about 3 new breweries every day. We beer consumers can obtain these locally produced beers fresh either via on premise drinking at the small, local brewery's tasting room or purchase a 4/6 pack at the tasting room and bring it home to drink. If the larger, distributing breweries do not adequately respond to these changing market conditions and figure out how to improve the freshness of their products on retailers' shelves they will continue to lose business and ultimately face the prospects of going out of business. Sierra Nevada had down business years in 2016 and 2017 and in 2018 just barely showed growth (over a poor year of 2017). If they do not have a drastically better performance in 2019 how long can this go on?

Cheers!

Edit: @nc41 just posted the below in a different thread:

"It’s a locals beer market, and that’s not just my opinion, it’s reality as to what I see on the shelf. Local breweries are dominating shelf and floor space. Out are Cali beers, old ass beers of any flavor. I’m looking at beers today and some were canned in June 18, it’s no wonder why locals are gaining market share. It’s damn tough to find beers that aren’t local under two months old."

 

I can't argue with your experience since I've never been in a German beer aisle, but is this really accurate? I just find it hard to imagine how the biggest selling beers would manage to get that old considering how much beer is sold in Germany. The velocity of sales has to be among the fastest in the world with the amount of beer sold, and considering how big of a percentage of sales are made up of the largest breweries brands. Even if the retailers buy massive volumes, I imagine this is the case also in the US (I mean imagine the volumes that must go through something like Walmart in a year), yet I don't get the sense that US macro beer sits around on shelves. How is this possible I wonder, it sounds shocking to me.

As an aside, as per this report from Bayerischer Brauerbund the 66 largest breweries (not necessarily 66 individual brewing companies) produced about 83% of the beer in 2018.

 

Patrik there are 'tons' of old beer on my local beer retailers shelves. As I discussed above in post #153 I am of the opinion that a fundamental issue here is the large quantity of beer sitting at the large warehouses of the Wholesale Distributors. They make a HUGE bulk buy from brewery A (lets say Sierra Nevada for example) in order to obtain bulk discount pricing. The Wholesaler then slowly depletes their stock of SN brands (e.g., SNPA) over a period of many months as orders come in from their customers (retailers). The net result is that the store may be receiving 'new' beer that is already 3-4 months old and then it will sit at the store for the duration it takes to sell out (and the store then reorders that brand).

Cheers!

 

Snowcrash000 is talking about Germany's biggest selling brands though, the equivalent of Bud, Miller, Coors, Keystone, Natural, Busch light etc. in the US. Are those beers sitting on shelves and getting old where you live?

 

Yup, Greg Koch purposefully made a decision to package Stone beer in cans despite the fact that German beer consumers did not have a favorable view of cans. Cans are indeed a superior packages as regards light ingress, air (oxygen) ingress, etc. Greg felt is was his 'job' to educate the local (German) beer consumers. Education can sometimes take a loooooong time.

The other thing to keep in mind is that Stone Berlin was to serve the broader European market and not just Germany. Do non-Germans have the same issue as regards cans as the Germans?

Cheers!

 

Well, I am not a consumer of beers like Keystone so I can't provide anecdotal input here.

What I do know is that AB has a business policy to remove their product as it approaches its best by date (e.g., 110 days for a beer like Bud/Bud Light) and they enforce this with their partner Wholesale Distributors.

I am confident there are no old Bud, Busch, Natural Light beers at my local beer retailers but I don't know what to say about Keystone and others.

Cheers!