Tuesday, February 22, 2005

A-B’s Bare Knuckle Stout topples Guinness at Hooter's.

During a pleasure trip to St. Louis in June, 2004, I visited the Anheuser-Busch brewery for the first time ever. My good friend Jay came along for a “V.I.P. Tour” arranged by Tim at North Vernon Beverage Co., who earnestly pleaded with me to “not say anything bad.”

Not to worry, Tim.

At the conclusion of the hour-long tour, which was predictably laden with sugary hagiography and sheer statistical overload, we were allowed to have three beers as a reward.

These were served from the tap in heavy-duty throwaway plastic drinking vessels with the consistency of glass.

I sampled Budweiser (my first in a decade), Amber Bock (“stamp out and eliminate redundancy”) and A-B’s newest contribution to world brewing culture, Bare Knuckle Stout.

As for the former, well, the best any ordinary lager beer can be is pouring from the tap at its place of birth.

Drinking Amber Bock, I was reminded that when the factory in Louisville that supplies food-grade red dye shut down temporarily due to an explosion, A-B common stock nudged down.

Dry and creamy, nitro-infused, the Bare Knuckle Stout seemed a credible, if thin and indistinct, imitation of Guinness. Served blind, I’d guess it to be a microbrewed stout, and a decent one. Nothing more, nothing less.

At the time, sitting in the A-B hospitality room, I lectured the earnest young summer intern tour guide: Will brand-loyal Guinness drinkers drink Bare Knuckle under any circumstance? Will the price point have to be lower to coerce them? Given that Bud and Michelob Ultra drinkers are unlikely to trade up, then who’ll buy the new beer?

It’s now winter, 2005, and A-B’s Bare Knuckle Stout has arrived in the Southern Indiana market. We begin to see the giant brewer’s marketing methodology.

As a “jump ball,” my friend and regular customer Dave sent the following note:

“My cousin has confirmed that Hooters in Jeffersonville is indeed charging the same price to customers for Bare Knuckle as they did for Guinness.”

That’s right. First, Bare Knuckle actually replaced Guinness at Hooter’s, which leads one to speculate on the nature of, ahem, incentives offered above or below board.

Then, even more bizarrely, the price point for Bare Knuckle is the same. You’d expect to see a lower price as an introduction, then an escalation once the hook is set.

Is it profiteering?

Quite some time back, when Foster’s Lager for the American market first ceased to be brewed in Australia, retailers were told pointedly that the brand’s transplanted home in Canada meant that (a) Foster’s still was “imported,” (b) that consequently the wholesale price would be less than when it was imported from Australia, (c) the same price as before could be charged the consumer, and (d) “Foster’s is Australian for Beer.”

Of these premises, (a), (b) and (c) were true, but (d) was and remains false.

Actually, much to my surprise, a quick phone call to L. C. Nadorff, New Albany’s A-B house, reveals that Bare Knuckle is available only in 1/6 barrel kegs (5.16 gallon). Factored for unit size, the wholesale price is almost exactly the same as for Guinness.

What does this mean? I’m baffled. It’s true that 1/6 kegs are easier to handle for retailers and require no special tap fitting, but without a lower price point, little of it makes sense.

Back to the “incentive” program, anyone?


The New Albanian said...

I should add that for the same wholesale price, retailers are getting two gallons of Bare Knuckle for free (when based on the purchase of 3 sixth barrels vs. one 13.2 gallon Euro keg of Guinness).

barenada said...

That's certainly not the big wholesale savings I was expecting to hear about. I must say I'm pretty much astonished myself. I wonder, as you already have, "Who'll buy the stuff?"

I just don't understand A-B's reasoning here. Do they honestly expect that loyal Guinness drinkers, who for the most part already eschew A-B's products as a matter of course, will simply switch because they say it's "just as good" as Guinness? I'm sorry to have to tell them that the sheep are already in line for their lagers - the stout line is formed by much more discerning customers.

Or perhaps the feel that they can lure some of their lager sheep to the (more expensive?) stout. This could actually work in the short run, but how does A-B plan to keep these newly-enlightened customers from wandering completely off the pasture in search of even wider beer horizons.

Okay, that's enough with the damn metaphors. You get my point I'm sure.

barenada said...

The more I think about this, A-B's decision to venture timidly into the "real beer" arena could end up being the best thing to happen to small-scale brewers in a very long time.

Think about it. The world's largest purveyor of swill telling its customers, "Here, try this. It's different than what you usually drink."

Once people realize that there is such as thing as a beer that's not a watery lager, at least some of them are bound to start searching in earnest for something they really like.

I speak from personal experience here, and I'm sure that most people reading this, a 'blog about beer, could tell a similar tale.