The struggle of “small beer”…

Once upon a time, big breweries ruled the country. They served a need – to provide affordable, sessionable alcohol for relaxation, and people bought into that need. Not that there was much of a choice. Over decades, “big beer” had total control of beer – from supply to culture. Isn’t it scary to think of the fact that one organization can mastermind a product and condition a nation of people with marketing and advertising? Wait – back to total control…

As the economy grew and the standard of living changed, beer remained an affordable everyday drink, largely consumed by local middle aged men – commonly of the working class – at open eateries. It was all about branding and promotions – most of the beers were of the same color and style(Standard American Lager if you wish) and beer was there to be drunk, not considered.

But a revolution was brewing elsewhere on the planet, and in time the government decided to give “small beer” a chance on the playing field. Microbreweries, intending to produce(in comparison) more flavorful and stylistically different beers, came into town and started grinding malt. But they did not see the mushroom-growth success that their predecessors elsewhere had enjoyed. What happened?

Contracts. Big beer tied up many upmarket venues, where no other beer could be sold but what was supplied under contract. And the new beers which were offered, were far from sessionable in comparison – therefore turnover and sales would suffer.

Cost. Big beer has the margins to save on cost – and it was a tough fight for microbreweries struggling to compete in pricing. Sure, brewpubs could sustain themselves just fine at their own venue, but for a brewery to grow – there has to be growth and expansion.

Sales. Again, there were no other markets available at that time in the region to send beer to. Restricted sales locally, limited demand regionally and limited to on-premise sales.

Culture. Big beer has dominated the playing field and conditioned the local mind and palate to believe that beer should only taste a certain way, and appear in a certain color. I believe there were trying times in pushing consumer education. Also, locals who could afford small beer would balk at bringing their family to the brewpub on a weekend afternoon – beer and family just did not seem to mix. And before I forget – not much love for locally made products. Also, who has a beer during the daytime before dinner? Blasphemy. Alcoholics.

Market. Again, after cost and culture, the bulk of initial customers of small beer were immigrants who were previously exposed to appreciating it.

Fast forward almost 20 years, and what has happened?

Imports. Small beer has found a new competitor of its own – imported small beer! Sporting more exciting packaging, a richer brand history, (often) more reliable quality and diversity and finally – very competitive cost given the other conditions. And the lack of support and belief in local produce hasn’t changed much.

Contracts. New bars are more receptive to the shift in demand for craft beer and are willing to take up craft-only. But by large, those are imports. We don’t see old bars throwing out their macrobrews for craft – that is still a long way off.

Cost. These are sketchy – lowered raw material and logistics costs are buffered by fluctuating rental and taxes. But still high – such that they are within 20-30% of imported craft.

Quality. Local small beer has not raised the game much in terms of their offerings. Tried-and-tested seems to have been the name of the game; and to their credit they have built their following around it.

Culture. Society is more accepting of a drinking culture now, especially when the spending power has grown substantially and drinking is not limited to a need, but extended to pleasure and sensation. But there lies the next hurdle – do people want to know about how the beer is lovingly made, or do they just want to drink and care a little less? The answer is quite clear.

Sales. After years of operation, some of the breweries have built up enough reputation and momentum to push their produce offshore. It is a breakthrough – the more you sell, the more room you have to play with and make more interesting one-off beers. Buy a new brewhouse, get triple-batch fermenters, improve quality control, save on raw materials… the potentials snowball. And then you can brew more interesting beers, speed up turnover, maintain product freshness…

But local beer is not winning, and I am saddened. Do you think it is important to drink local(apart from the economic impact of local businesses)?

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