Tag Archives: Heineken

Purchasing Authenticity

October 11, 2021 The Beer Professor Leave a comment

Back in May, the Wall Street Journal ran an article about Grimbergen Abbey in Belgium. Like many European abbeys, Grimbergen, located in Brussels’ northern outskirts, has a long and storied history of brewing beer. It is not an unbroken history, however. The abbey’s first beer was brewed by Grimbergen’s Norbentine monks in 1128. Periods of unrest meant that brewing ceased three times during the abbey’s history, with the most recent occurring during the French Revolution (1789-1799). After the Revolution, brewing never returned to the abbey. and, in the middle of the twentieth century, the monks licensed the brand to a local Belgian brewery, Brouwerij Maes . In 2008, such was Grimbergen’s success, the brand name was purchased by the Danish brewing giant Carlsberg. And it was Carlsberg who made the decision that Grimbergen should once again be brewed at the abbey. With Carlsberg money, a new 10,000 square foot state-of-the art brewery has been constructed to bring brewing back to Grimbergen.

As I read the Wall Street Journal article, one sentence stood out and hit me squarely in the eye – “The resurrection has furnished its sponsor, Carlsberg, with its own kind of holy grail: unique and authentic brews.” In particular, it was the adjective authentic that struck me as an interesting choice. Earlier this year, I published a book chapter which I titled “Craft Beer Tourism: The Search for Authenticity, Diversity, and Great Beer“. In researching material for that chapter I read quite a bit about the concepts of authentic/authenticity.

To better understand the meaning of any word, a good place to start is a dictionary. Perusing online dictionaries reveals the following definitions of authentic – “not false or imitation“, “being what it is claimed to be“, and “not false or copied“.

But what about consumers? How do they perceive and define authenticity? In a paper published in the journal Organization Science in 2014, Balazs Kovacs, Glenn Carroll, and David Lehman, explored how the ownership structure of restaurants impacted consumer views of authenticity. Interestingly, the first step in their study was to survey consumers and identify both synonyms and antonyms that consumers associated with the adjective authentic. Consumer-identified synonyms for authentic included genuine, real, and legitimate, while antonyms included false, phony, and scam.

For a growing number of consumers, authenticity appears to be increasingly valued. Indeed, according to B. Joseph Pine and James H. Gilmore, in their 2007 book Authenticity: What Consumers Really Want, “in industry after industry, in customer after customer, authenticity has overtaken quality as the prevailing purchasing criterion.” When it comes to authenticity it seems that ownership of the company producing the product or providing the service matters. Analyzing the language used by restaurant patrons in 1.2 million reviews of over 18,000 restaurants on the Yelp platform in three cities – Los Angeles, New York, and Dallas – Balazs and his colleagues found that consumers perceived independent, family-owned restaurants as being more authentic than chain, non-family-owned restaurants. In other words, when it comes to authenticity, ownership matters.

The relationship between ownership and authenticity has been something of a thorny issue for several decades within the world of brewing. Those of you who are craft beer enthusiasts have probably sampled one of the wonderful beers brewed by Trappist monks in one of their fourteen abbeys in Europe and the United States. Trappist beers are considered among the best in the world. For example, Westvleteren 12 XII, a Belgian Quad brewed at the Sint-Sixtus Abbey in Westvleteren in Belgium was recently rated the third best beer in the world by reviewers at RateBeer.com. Such has been the popularity and high quality of Trappist beers over the decades, other breweries started to brand and market some of their beers as “Abbey Ales”. One example of such an “Abbey Ale” is Leffe, which is brewed by the global behemoth AB InBev. While once brewed by monks at the Abbey of Leffe, today the beer is brewed at the Stella Artois Brewery in Leuven, Belgium. Mass produced “Abbey” Ales attempted to cash in on the popularity of Trappist beers. They did so by utilizing images that suggested a monastic connection, such as an image of an abbey or a monk drinking beer.

The Leffe label includes an image of an abbey

As noted by Michael Beverland and his colleagues in a 2008 paper published in the Journal of Advertising, the breweries who marketed these beers “successfully positioned their products as Trappist-styled products through subtle marketing and use of imagery, color cues, and font styles to suggest authenticity.”

Not surprisingly, the Trappists felt threatened by the growing number of “Abbey Ales” that seemed to be causing confusion among beer drinkers. As a result, they took steps to mitigate the confusion. In 1998, to protect the authenticity of their product, the Trappists established the International Trappist Association (ITA) and trademarked “Trappist”. According to the ITA website, the Association was established to “inform consumers of the origin and authenticity of Trappist products with no ambiguity.” In addition, the intent of the Association is to protect ” the fundamental values associated with every Trappist product” and to ensure that “the Trappist name is not used improperly” and “does not mislead anyone”. Only beers made within the walls of a member abbey may carry the “Authentic Trappist Product” label.

The “Authentic Trappist Product” seal on the label of a bottle of Trappist Ale brewed at Saint Joseph’s Abbey in Spencer, MA

In some respects, the “Authentic Trappist Product” label is similar to the “Independent Craft” seal” that was launched by the Brewers Association in 2017. This label can only be used by authentic craft breweries. The creation of the Independent Craft seal was driven by similar developments that had necessitated the creation of the Authentic Trappist Product label. As a result of the emergence of “crafty” beers (think Blue Moon) and the purchase of craft breweries by mega-breweries (think AB InBev’s purchase of Goose Island Beer Co.), there was increasing confusion in the marketplace as to which beers were brewed by an authentic craft brewery and which were made by a brewery owned by AB InBev, Heineken, etc. Between, 2011 and 2017, AB InBev purchased ten craft breweries in the United States, including Goose Island Beer Co. in Chicago, Il (purchased 2011), Four Peaks Brewing Co. of Tempe, AZ (2015), and Wicked Weed Brewing of Asheville, NC (2017). Other former craft breweries purchased by large multinational brewing companies include Lagunitas Brewing Company of Petaluma, CA which was purchased by Heineken in 2015 and Atwater Brewery of Detroit, MI which was purchased by Molson Coors in 2020.

The Independent Craft seal on display at Sun King Brewing in Indianapolis, IN

Multinational giants such as AB InBev purchase craft breweries because it is the most straightforward route to gain a foothold in the lucrative craft beer market. They are, in effect trying, to purchase the authenticity that is associated with craft breweries. This was made quite apparent by Andy Goeler who worked for AB InBev and was assigned to Goose Island after its acquisition. According to Mr. Goeler, “we bought Goose Island for what Goose Island was: authentic, very credible”.

Why do companies value being able to promote their products as authentic. According to Kovacs and his colleagues in the aforementioned article “many modern organization go to great lengths to project an image of authenticity, believing that it will create value” for them. In other words, authenticity, or the appearance of authenticity, sells. With respect to beer, a 2018 study by Jarret Hart in the Journal of Wine Economics found that consumers were willing to pay between $0.72 and $1.04 more for a pint of beer produced by an independently-owned craft brewery than one produced by a “craft brewery” that was owned by corporate breweries such as AB InBev.

Ownership, and transparency regarding ownership, matters. Unfortunately, large multinational brewers are not always transparent when it comes to ownership. This is why labels such as “Authentic Trappist Product” and “Independent Craft” are necessary. They help consumers distinguish the authentic from the inauthentic. As stated by Michael Beverland and his colleagues in the aforementioned 2008 study, “identifying a product as authentic” helps “consumers gain control over their consumption decisions”.

Further Reading:

Beverland, Michael B., Adam Lindgreen, and Michiel W. Vink. 2008. Projecting authenticity through advertising: Consumer judgments of advertisers’ claims. Journal of Advertising, Volume 37, Issue 1, pp. 5–15.

Hart, Jarret. 2018. Drink beer for science: An experiment on consumer preferences for local craft beer. Journal of Wine Economics, Colume13, Issue 4, pp. 429–441.

Kovacs, Balazs, Glenn R. Carroll, and David W. Lehman. 2014. Authenticity and Consumer Value Ratings: Empirical Tests from the Restaurant Domain. Organization Science, Volume 25, Issue 2, pp. 458-478.

International, Low Alcohol Beer, Trends

Beer for the Modern Adult?

May 13, 2019 The Beer Professor Leave a comment

“Beer for the modern adult” – that’s how Bill Shufelt, owner of Athletic Brewing Co. in Statford, CT, describes his brewery’s beer. All of the beer brewed at Athletic is non-alcoholic. While non-alcoholic beer may seem like an oxymoron it, along with its cousin, low-alcohol beer, is trending in the marketplace. And not just in the U.S market, but in overseas markets as diverse and as different as Belgium and China. Before exploring the numbers and reasons behind the growth of low-alcohol and non-alcoholic beer let’s start with some definitions.

In the United States, the Alcohol and Tobacco Tax and Trade Bureau defines beer as “beer, ale, porter, stout and other similar fermented beverages (including sake and similar products) containing one-half of one percent or more of alcohol by volume, brewed or produced from malt, wholly or in part, or from substitutes for malt.” It is, in my opinion, a quirky definition, but let’s not get into that here. They key point, for present purposes, is that for beer to qualify as beer it has to have an ABV of at least 0.5%. So everything below 0.5% ABV is either non-alcoholic and low-alcohol beer. Technically, non-alcoholic beer has an ABV of 0.0%, although the Oxford Companion to Beer notes that, “technically speaking, there is no such thing as non-alcoholic beer because beer contains alcohol by definition”. For the sake of simplicity, and for the purposes of this blog entry, I will use the term low-alcohol beer to refer to all beer under 0.5% ABV, and 0.0% ABV to refer to non-alcoholic beer. One of the challenges I found in researching this piece is that lines between the two are often blurred – so for example the term non-alcoholic beer is sometimes used in such a way that it also includes non-alcoholic beer.

Low-alcohol/non-alcoholic beer is not a new concept, of course. During Prohibition, it was in fact legal to brew beer that contained less than 0.5% alcohol – so-called ‘near beer’. In more contemporary times low alcohol beer has been produced in both the United States and Europe. Those of us who live in the United States are familiar with O’Douls, a low alcohol beer (<0.5% ABV), introduced by Anheuser Busch in 1990. My European friends are probably more familiar with low-alcohol brands such as Kaliber which is brewed by Guinness and St. Pauli N.A., brewed by Beck’s (which is now owned by AB InBev).

This image has an empty alt attribute; its file name is ODouls.jpg — O’Doul’s – A low alcohol beer introduced by Anheuser Busch in 1990

When I was drinking mass-produced beer in the 1990s, low alcohol beer had a bad reputation. It wasn’t so much that it didn’t give you a buzz (it wasn’t meant to after all), but rather that it just didn’t taste all that good. Toady the low alcohol beer market seems to be booming, and those who prefer low-alcohol beers no longer are restricted to an awful tasting product.

Just how popular is low-alcohol beer. Globally, the market for low alcohol beer was $13 billion in 2016; by 2024 it is projected to be $25 billion. And it’s growing popularity seems ubiquitous. In Belgium, in 2018, non- alcoholic lagers and wheat beers experienced a thirty percent market growth. Non-alcoholic and low alcohol beer is also gaining in popularity in China. In 2016, twenty-nine percent of new beers launched were in one of these two categories. Approximately eight percent of the beer produced by AB InBev is low or non-alcoholic. They project that by 2025, that will increase to twenty percent.

The increasing popularity of low and non-alcoholic beer appears driven by the consumers prioritizing healthier lifestyles. Why don’t they drink a healthier non-alcoholic alternative, I hear you ask. It is true that some juices may provide healthy alternatives to beer. They do not, however, deliver the lifestyle image provided by beer. Beer projects a particular lifestyle image; consuming low-alcohol or non-alcoholic beer protects that image, while not compromising an individual’s health.

The recent upsurge in interest in low and non-alcoholic beer has prompted some of the world’s major breweries to launch new products to add to their existing beer portfolios. In January 2019, the world’s second largest brewer, Heineken, will launched a new non-alcoholic beer in the United States – Heineken 0.0 (pronounced zero zero). The new beer, first introduced into Spain in January 2017, is now available in over thirty countries. Heineken 0.0 has only sixty-five calories. It also goes a step further than its low-alcohol cousins, in that it contains zero alcohol. In other words, the ABV is 0.0%. In marketing the new beer, Heineken suggest that people drink it at times when perhaps they would normally not drink beer – such as during an office lunch or after a workout. Other potential markets for non-alcoholic beer include drivers of motor vehicles, pregnant women, people taking medication, athletes, and those who abstain from alcohol for religious and other cultural reasons. Studies in Europe also show that avoiding a hangover and keeping in control are factors driving demand for non-alcoholic and low alcohol beer.

This image has an empty alt attribute; its file name is Heineken0.0.jpg — Heineken Zero Zero was recently introduced into a number of markets, including the United States

The growing demand for non-alcoholic and low alcohol beer is part of broader taste shifts impacting the alcohol industry. According to CNBC reporter Angelica LaVito, “consumers are increasingly shunning beer and instead drinking wine, spirits and hard seltzers, which they perceive as healthier than beer.” The shift away from beer and towards wine can be clearly seen in the two graphics below. In the first graphic you can observe the general decrease in per capita alcohol consumption, particularly beer, in the United States in the post-1980 period. The second graphic shows that in 1993, 47% of American who drank alcohol stated that beer was their preferred alcohol of choice. This compared to 27% preferring wine and 21% preferring liquor. By 2017, the percentage preferring beer had fallen to 40%, while the percentage preferring wine and liquor had risen to 30% and 26% respectively.

This is a trend that is also occurring in other countries. A recent article on the BBC website was titled, “Under-25s turning their backs on alcohol, study suggests”. The article reported on new research at University College London which found that the percentage of 16-24 year olds who do not consume alcohol increased from 18% in 2005 to 29% percent in 2015. In Belgium, a recent survey revealed that sixty-two percent of Belgians felt that they consumed too much alcohol.

In the United States, we have observed the growing popularity of so-called session beers – beers that are less than 5% ABV. A 2016 survey by Nielsen and CGA Strategy found that 45% of craft beer drinkers prefer session over beers with a higher ABV. Of the twenty-five fastest growing craft beer brands in 2016, thirteen were session beers. Almost every craft brewery produce session beers. Many have went to great efforts to ensure that from a taste perspective that they are an acceptable alternative to higher ABV beers. Thornbridge Brewery in Bakewell, U.K. disposed of four batches (sixty thousand bottles) of beer in their quest for a palatable low-alcohol beer. The end result was their Big Easy, a very drinkable Pale Ale with an ABV of only 0.5%. Athletic Brewing Co. of Stratford, CT is a craft brewery that produces only non-alcoholic beer. Athletic Brewing’s flagship beers are an IPA and a Golden Ale, while season offerings include an Autumn Brown Ale and a Harvest IPA. Crafting a non-alcoholic beer that did not compromise on flavor was a challenge for Athletic’s owner Bill Shufelt. It meant producing over one hundred test batches on home brewing equipment, before he was satisfied.

Market signals clearly demonstrate growing consumer demand for low-alcohol and non-alcoholic beer. This shift in consumer preferences impacts every brewery, from the smallest microbrewery to the largest multinational. And they are clearly responding, witness the seemingly growing number of non-alcoholic and low alcohol beers that are now available. Furthermore, breweries are working very diligently to ensure that those who choose non-alcoholic and low alcohol beers are not being compromised when it comes to taste. And it seems to be resonating with some consumers. Thirty-one percent of Germans between the ages of eighteen and twenty-four 18-24 agreed that non-alcoholic and low alcohol beer tastes just as good as ‘regular’ beer. More and more, we are seeing beer writers helping consumers navigate the increasingly crowded low-alcohol and non-alcoholic beer market by tasting and rating the various offerings.

Traveling During Ramadan

June 15, 2018 The Beer Professor Leave a comment

Recently, I visited Goa in India. It takes a while to reach Goa. To get there, I flew from Detroit to Dallas to Doha (in Qatar), to Goa. I was traveling with a colleague who lives just outside of Dallas, so I broke up the outward journey by overnighting with him and his family in the Dallas area. It is a long way from Dallas to Goa – fourteen-plus hours to Doha, and another three-plus hours from there to Goa. Add to that a four hour layover in Doha, and it is quite a journey. I did manage to sleep for six or seven hours on the Dallas to Doha leg, so that made the flight considerably more pleasant. When flying, I tend not to drink alcohol. If I do, it might be a glass of wine with dinner. Flying dehydrates, and so water is usually my liquid of choice.

Anyway, after boarding my flight to Goa, I decided that I would indeed like a beer. As with my flight from Dallas to Doha, I was flying with Qatar Airways. They are the national airline of Qatar. I had noticed, on the flight flight from Dallas to Doha, that the beer choice was limited to Heineken. It was the same on the flight to Goa. When the cabin attendant (that is what they are called on Qatar Airways) came around and asked me what I would like to drink, I told her, a Heineken. As she reached beneath her cart to get the beer, she turned to me and asked if I minded if she poured it into a glass and not give me the can. As one who prefers their beer decanted anyway, I said that would be fine. “It’s Ramadan” she explained “and we cannot have labeled alcohol containers on display”. She proceeded to pour my beer, carefully out of sight of anyone, and handed me two small glasses of Heineken. Whether this was airline policy, was unique to that particular flight, or reflected the cultural sensitivities of this particular cabin attendant, I am not sure. I did notice on my return flight from Doha to Dallas that bottles of wine and cans of Heineken were on full public display.

My “two” glasses of Heineken on my flight between Doha and Goa

After the cabin attendant moved onto the next row of passengers, I looked around the aircraft, but did not see anyone else drinking beer. I must admit I started to feel a bit self conscious . Was I the only one on the entire aircraft drinking a beer? As I reflected on my layover in Doha, it struck me that I had not seen anything that resembled a bar. The duty free shop had been replete with candy, perfume, and cigarettes – but there was not a drop of alcohol in sight. A little research later revealed that there are a couple of restaurants in the airport, where a glass of wine or beer can be enjoyed with a meal. While it is a Muslim country, Qatar does allow the sale and consumption of alcohol. However, access is limited. It is available in four and five star western hotels. Alcohol is also available to expatriates through a permit system. Permits are administered by the Qatar Distribution Company, and individuals wishing to obtain one must apply. Once in possession of a permit, there are two outlets in the entire country, from which alcohol can be purchased. The amount of alcohol that an individual can purchase each month is dependent upon their salary. The rules regarding consumption of alcohol in Qatar are quite strict. For example, it is forbidden to drink alcohol in a public place, or to give alcohol to Muslims. Muslims caught drinking alcohol may be subject to corporal punishment.

Other Islamic countries also have highly restrictive laws when it comes to the consumption of alcohol. These include Afghanistan, Libya, Iran, and Saudi Arabia. Also, although not a predominantly Muslim country, alcohol is also prohibited in some states in India (fortunately, not in Goa). Of course, the United States had its own doomed experiment with Prohibition between 1920 and 1933. While I fully respect the sovereign right of each country to prohibit the production, sale, and consumption of alcohol as it sees fit, I have to admit that it would be difficult for me to live in a country where having a beer was either impossible or highly restricted. I simply enjoy beer, and the culture surrounding it, too much.

Ownership, Trends

Certified Independent

November 24, 2017 The Beer Professor Leave a comment

The beautiful Circuit of the Americas, where the US F1 Grand Prix is held

I was in Texas last month. I went there for the U.S. Formula 1 Grand Prix. This was my fourth time in Austin since 2010, each time to attend the U.S. F1 GP at Circuit of the Americas, a race track custom-built for the event. This year, as last year, I flew into Dallas. My friend Mike lives in Dallas. I spent the day with Mike, stayed overnight at his place, and he and I drove the four hours to Austin the next day. In Austin, we stayed with another friend, Bill. The U.S. GP is a three-day affair, starting with practice on the Thursday and culminating with the race on Sunday afternoon. I have Continue reading Certified Independent →

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Tag Archives: Heineken

Purchasing Authenticity

Beer for the Modern Adult?

Traveling During Ramadan

Certified Independent

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