tag:theconversation.com,2011:/id/topics/breweries-7177/articlesBreweries – The Conversation2022-11-30T11:28:04Ztag:theconversation.com,2011:article/1939932022-11-30T11:28:04Z2022-11-30T11:28:04ZBritish pubs are closing at an alarming rate – but the hospitality sector is fighting back<figure><img src="https://images.theconversation.com/files/497218/original/file-20221124-24-xhtjhh.jpg?ixlib=rb-1.1.0&rect=65%2C8%2C5398%2C3604&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Raise a glass to your local this winter.</span> <span class="attribution"><a class="source" href="https://unsplash.com/photos/Hozdtk6Y8bs">roman synkevych / unsplash</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>A licensed venue <a href="https://www.morningadvertiser.co.uk/Article/2022/10/20/number-of-licensed-premises-closed-in-2022">closed every hour</a> in Britain during the third quarter of 2022 and the nation’s pubs are “<a href="https://www.thecaterer.com/news/pubs-vanishing-increasing-rate-2022-altus">vanishing</a>” at an alarming rate. Such troubles show no signs of easing, with hopsitality industry bodies warning more than one-third of the sector is <a href="https://www.ukhospitality.org.uk/news/621638/">at risk of failure</a> in early 2023 due to the rising cost of doing business. </p>
<p>After <a href="https://www.bbc.co.uk/news/uk-england-manchester-62468609">surviving COVID</a> (many of them barely), UK hospitality businesses are now facing <a href="https://www.theguardian.com/business/2022/aug/30/thousands-of-uk-pubs-face-closure-without-energy-bills-support">soaring energy bills</a>. Celebrity chef Tom Kerridge recently revealed that electricity costs for his gastropub in Buckinghamshire have <a href="https://www.independent.co.uk/life-style/food-and-drink/tom-kerridge-energy-bills-pub-b2158245.html">risen by 600%</a> this year. Food and drinks businesses are also dealing with <a href="https://www.bighospitality.co.uk/Article/2022/06/23/record-staff-shortages-causing-hospitality-to-lose-21bn-in-trade">difficulties finding staff</a> and an unstable political environment that is not <a href="https://www.morningadvertiser.co.uk/Article/2022/07/18/bii-how-can-government-support-pubs">prioritising small business support</a>.</p>
<p>On the other side of the bar, customer numbers and spending power are in freefall due to the <a href="https://www.bbc.co.uk/news/topics/cljev4jz3pjt">cost of living crisis</a>. Consumer confidence is at a <a href="https://www.marketingweek.com/consumer-confidence-record-low/">record low</a> at a <a href="https://www.morningadvertiser.co.uk/Article/2022/11/03/impact-of-economic-uncertainty-and-rising-energy-costs-on-confidence-in-hospitality?utm_source=newsletter_daily&utm_medium=email&utm_campaign=03-Nov-2022&cid=DM1040351&bid=2073940985">particularly difficult time</a> for the hospitality business – the month of December often brings in <a href="https://www.morningadvertiser.co.uk/Article/2022/01/19/Did-pubs-bars-or-restaurants-experience-worst-Christmas-trade#:%7E:text=December%20is%20such%20a%20crucial,staff%20productivity%20are%20factored%20in.">three times as much trade</a> as a normal month. Hospitality bosses are also concerned that upcoming <a href="https://www.bbc.co.uk/news/business-63791844">transport strikes</a> could add to their woes if Christmas parties are cancelled. The industry believes strike action in December 2022 alone could cost the trade <a href="https://www.ukhospitality.org.uk/news/624328/STRIKE-RESOLUTION-NEEDED-AS-HOSPITALITY-SET-TO-LOSE-1.5-BILLION.htm">£1.5 billion in sales</a>.</p>
<p>Smaller, independent or family-run hospitality businesses are particularly exposed to such pressures. But breweries are struggling with similar problems. This is already an <a href="https://www.sciencedirect.com/science/article/pii/S1876610215007195">energy-intensive industry</a>, making power price rises even more painful. Supply issues have also caused the price of carbon dioxide used in the brewing process <a href="https://www.ft.com/content/1899f5c0-498b-4606-8627-22df949aec96">to rise tenfold</a> between this year and last. When combined with cashflow problems stemming from pandemic-era lockdowns, this has resulted in nearly <a href="https://beernouveau.co.uk/2022-closures/">50 brewery closures so far in 2022</a>, with more expected in the coming months. </p>
<p>This state of affairs is not just affecting badly run pubs or independent businesses – all pubs are at risk. The Five Bells Inn in Devon, <a href="https://www.top50gastropubs.com/Pubs/UK/Devon/the-five-bells-inn.html">a highly regarded gastropub</a>, has <a href="https://www.morningadvertiser.co.uk/Article/2022/11/03/Top-50-Gastropub-the-Five-Bells-Inn-Cullompton-closed?utm_source=newsletter_daily&utm_medium=email&utm_campaign=04-Nov-2022&cid=DM1040667&bid=2074917209">recently announced its closure</a> due to “lockdowns and the economic downturns they caused”. Nationwide pub chain Wetherspoons hasn’t escaped these pressures either, recently putting <a href="https://www.thesun.co.uk/money/19939462/wetherspoons-sells-off-thirty-two-pubs/">32 pubs up for sale</a>.</p>
<p>When local pubs and breweries close it’s <a href="https://www.bii.org/BII/Campaigns/not-just-a-pub.aspx">not just a pub</a> that is lost, it’s often a <a href="https://www.tandfonline.com/doi/full/10.1080/00343404.2014.989150">community hub</a>, particularly in <a href="https://journals.sagepub.com/doi/abs/10.1177/0269094214544276?casa_token=W651ohl46aoAAAAA%3A9OUIh81GNGZ3GDP5fYpX5AbQOL1j7j9Jt7FwksErlsDsVVbZq89EpDkb29BUZiK1tkL-w348E3a_&journalCode=leca">rural areas</a> where hospitality businesses might be the lone employers and are often a significant part of local supply chains. In Britain especially, losing a pub – not to mention losses in the thriving beer and <a href="https://www.tandfonline.com/doi/full/10.1080/00076791.2015.1027692?casa_token=eaUovX-YOEgAAAAA%3AdkIC_kPGcNUXyW-i2_OpV1sbmFFgyfr8HCY3ALEnfaP2ifiZ84IJG35rhnnLjUAKEtQ7PY1OYK7y">brewing culture</a> – can extinguish a part of the local <a href="https://link.springer.com/chapter/10.1057/9781137466181_14">heritage and culture</a>, and a key element of the <a href="https://www.beerguild.co.uk/news/englands-pubs-toast-tourism/">tourism and visitor economy</a>. </p>
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<h2>Survival techniques</h2>
<p>Pubs are trying to adapt to survive in this increasingly difficult environment. Some are trying “<a href="https://www.beerguild.co.uk/news/cambridge-pub-the-tollemache-arms-launching-dining-in-the-dark-to-battle-rising-energy-bills/">dining in the dark</a>” events during which venues turn out the lights and operate by candlelight. Others have launched <a href="https://www.morningadvertiser.co.uk/Article/2022/11/04/star-pubs-bars-to-offer-work-from-the-pub-packages">work from pub packages</a> designed to entice people to “work from home” at their local rather than their kitchen table. With these initiatives, businesses are trying to attract new customers or even just offer something different to entice cash-strapped regulars. </p>
<p>Some publicans are also cutting down the space they use or even <a href="https://www.instagram.com/p/CkOQqxaMvep/">moving to smaller venues</a> in response to higher costs, while others are <a href="https://www.bbc.co.uk/news/uk-wales-63501972">reducing the variety of drinks they offer</a>. But these efforts won’t be enough to save many pubs with spiralling costs driving the <a href="https://www.bbc.co.uk/news/uk-scotland-scotland-business-63379044">average price of a pint of beer to £7</a> in some cities. This is likely to make a pint unaffordable for people that are already tightening their belts ahead of a difficult winter. </p>
<p>So what can be done to help brewers and pubs survive the difficult upcoming months? The industry has called for more <a href="https://campaignforpubs.org.uk/supportpubsnow/">government support</a> in the form of statutory rent codes that provide the right to a rent review, a freeze on beer duty, reduced VAT and tailored support packages for costs such as energy. </p>
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<p>Sadly the recent autumn budget statement from the government included little help for pubs and breweries, aside from <a href="https://www.bii.org/BII/BII/News/CEO-Updates-Articles/BII-responds-to-the-Chancellors-autumn-statement.aspx">business rates support</a>. It was received with disappointment across the industry and led to protests in the days after the UK’s chancellor of the exchequer, Jeremy Hunt, announced the details. </p>
<p>In times of greater economic prosperity people could be encouraged to “use it or lose it” with regard to their local pubs and breweries. But consumers have lost a lot of spending power in recent months, as shown by a <a href="https://www.morningadvertiser.co.uk/Article/2022/11/03/Hospitality-sector-sales-see-decline-in-October?utm_source=newsletter_daily&utm_medium=email&utm_campaign=03-Nov-2022&cid=DM1040351&bid=2073940985">7.1% fall in hospitality sales</a> in October. Similarly, Christmas bookings for pubs have <a href="https://www.morningadvertiser.co.uk/Article/2022/11/21/christmas-bookings-at-pubs-in-decline?utm_source=newsletter_daily&utm_medium=email&utm_campaign=21-Nov-2022&cid=DM1043720&bid=2086963973">dropped by 20%</a>. </p>
<p>For those consumers who do have money to spend on hospitality, no matter how little, thinking carefully about where to spend it could mean the difference between a pub or brewery surviving this winter. Choosing a local pub, an independent that may be struggling to survive, or ordering beer from a local brewery could ensure that business is still there the next time you go for drinks.</p>
<p>A <a href="https://campaignforpubs.org.uk/supportpubsnow/">Campaign for Pubs petition</a> has also been set up by industry groups including the <a href="https://britishpubconfederation.co.uk/">British Pub Confederation</a>. And another hospitality organisation, the Campaign for Real Ale (CAMRA), has suggested helping to save local pubs at risk of closure through <a href="https://camra.org.uk/campaign_resources/">community ownership</a> or by nominating them as an “<a href="https://camra.org.uk/campaign_resources/nominating-a-pub-as-acv-a-camra-guide/">Asset of Community Value</a>”. The latter means that, if put up for sale, locals have six weeks to delay the sale for up to six months to get time to put together a bid to buy it and keep it open to serve the community. </p>
<p>The UK hospitality industry is warning of a “<a href="https://www.theguardian.com/business/2022/oct/24/we-need-help-now-uk-hospitality-warns-of-tidal-wave-of-closures-as-crises-loom">tidal wave of closures</a>”. Without more help, many of Britain’s pubs and breweries could disappear for good.</p><img src="https://counter.theconversation.com/content/193993/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Local pubs and breweries are disappearing across the UK due to the rising cost of living and doing business.Victoria Wells, Professor of Sustainable Management, University of YorkNadine Waehning, Lecturer in Marketing, University of YorkLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1636312021-07-20T12:13:50Z2021-07-20T12:13:50ZFor some craft beer drinkers, less can mean more<figure><img src="https://images.theconversation.com/files/411972/original/file-20210719-17-ui278b.jpg?ixlib=rb-1.1.0&rect=787%2C147%2C2043%2C1369&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">For years, the market was inundated with heavy IPAs. Now drinkers are starting to push back.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/recession-increase-in-popularity-of-home-brew-jeff-lindsay-news-photo/1080969168?adppopup=true">Bruce Milton Miller/Fairfax Media via Getty Images</a></span></figcaption></figure><p>My prepandemic summers were always packed with travel – trips to Europe for work and play, and, most recently, a road trip across the American West. At the end of a sweltering day of activities, I’d routinely wind down with some social drinking.</p>
<p>In recent years, though, I started to notice a shift. Beer lists had grown to include more and more low-alcohol options.</p>
<p>Whether I was in Braunschweig, Germany, a suburb of Salt Lake City, or at home in Central Texas, I found myself no longer forced to choose between the likes of Stella Artois or Miller Lite if I wanted something that wouldn’t put me under the table. Now I could expect to find a bevy of local or national options with an alcohol by volume, or ABV, in the 4% to 5% range – below the 5.9% average of a craft beer and well below the 7% India pale ales that had been flooding the market.</p>
<p>I even started seeing more nonalcoholic beers like <a href="https://www.heineken.com/us/en/our-products/heineken-0-0">Heineken 0.0</a>, which was first released in Europe in 2017 and then in the U.S. in 2019.</p>
<p>It seemed to me that low- and no-alcohol beers were becoming much more popular, but I wasn’t sure. So like a good scholar, I decided to look to the data to find an answer.</p>
<p><a href="https://doi.org/10.1007/978-3-030-41654-6_7">In a recent study</a> I conducted with my colleagues at <a href="https://www.txstate.edu/">Texas State University</a>, we looked at industry literature and <a href="https://www.fus.edu/intervalla/volume-7-questions-of-taste/virtual-pub-crawl-assessing-the-utility-of-social-media-for-geographic-beer-research-in-the-united-states">social media mentions</a>, popular media articles and changes to alcohol regulations. We found that there is, in fact, a growing interest in consuming – and improved technology for producing – beer with less alcohol.</p>
<h2>The rise of big ‘small’ beer</h2>
<p>Beer has a complicated history in the U.S. Prior to the industry consolation that is the contemporary norm, small, local breweries dotted the country. <a href="https://theconversation.com/how-prohibition-changed-the-way-americans-drink-100-years-ago-129854">Prohibition devastated the industry</a>, but, when it was repealed in 1933, <a href="https://www.chicagoreviewpress.com/audacity-of-hops--the-products-9781613737088.php">there was a period of rebirth</a>.</p>
<p>Although brewing and the consumption of alcohol did <a href="https://uncpress.org/book/9781469652177/alcohol/">not completely stop</a> during Prohibition, overall consumption was drastically reduced. Any drinking that did take place was driven behind closed doors.</p>
<p>However, the repeal of Prohibition returned alcoholic beverages to the public arena. As alcohol restrictions and regulations were loosened or removed altogether, the <a href="https://oxford.universitypressscholarship.com/view/10.1093/acprof:oso/9780199693801.001.0001/acprof-9780199693801-chapter-1">volume of production rose rapidly</a>.</p>
<p>Over the course of the 20th century, <a href="https://www.chicagoreviewpress.com/audacity-of-hops--the-products-9781613737088.php">technological innovations</a> – ranging from improvements to the pasteurization process, to better transportation infrastructure, to advancements in packaging engineering – allowed breweries to scale up their operations.</p>
<p>It was during this period that American brewers like Budweiser <a href="https://doi.org/10.1080/00076791.2015.1027691">uncovered an untapped market for light-colored, low-ABV beer</a>.</p>
<p>To this day, the U.S. is known for its <a href="https://doi.org/10.1080/00076791.2015.1027691">bland macro brews</a>: Budweiser, Miller and Coors. But despite that long history – or perhaps because of it – the country’s <a href="https://doi.org/10.1111/foge.12034">craft beer industry</a> has exploded over the past couple of decades.</p>
<p>In 1983, <a href="https://www.cambridge.org/core/journals/journal-of-wine-economics/article/craft-beer-in-the-united-states-history-numbers-and-geography/51285F0DA449C6DE7B00D8D201FD7F6A">there were 14 craft brewers in the U.S.</a> In 2000, the <a href="https://www.brewersassociation.org/statistics-and-data/national-beer-stats/">Brewers Association</a> counted 1,566 craft breweries. By 2020, the number had swelled to 8,884.</p>
<p>What brewers have dubbed the “<a href="https://www.goodreads.com/book/show/18139968-the-craft-beer-revolution">craft beer revolution</a>” is characterized by its sophistication and specialization; craft brewers have traditionally produced a dizzying array of brands and styles, <a href="https://www.joshuambernstein.com/complete-beer-course">moving the market</a> toward “bigger” – meaning bolder, stronger – brews.</p>
<p>This has led to a paradox. Large-scale producers became known for brewing “small” – low in alcohol and, ostensibly, low in flavor – beer. Meanwhile, smaller breweries became known for making “big” – more flavorful, higher in alcohol – beers.</p>
<h2>Changing times, changing tastes</h2>
<p>While among most beer aficionados, heavy, high-alcohol beer is still popular, demand for lower-alcohol or nonalcoholic options is rising.</p>
<p>The Brewers Association highlights a shift toward “mindful drinking,” indicating that consumers are increasingly keeping an eye on the carbohydrate, gluten or alcohol content of their drink of choice. In fact, <a href="https://www.brewersassociation.org/insights/2020-points-and-2021-predictions/">two-thirds of drinkers</a> say they take into account one or more of these attributes when drinking.</p>
<p>Meanwhile, more Americans are “<a href="https://www.npr.org/sections/health-shots/2019/06/23/732876026/breaking-the-booze-habit-even-briefly-has-its-benefits">sober curious</a>,” insofar as they are willing to take a short break from drinking or choose to abstain from alcohol altogether. These individual choices are part of an overarching social shift making, as NPR put it, “<a href="https://www.npr.org/sections/thesalt/2017/10/06/555909072/teetotaling-made-trendy">teetotaling trendy</a>.”</p>
<p>There’s long been the cultural belief that only people recovering from alcoholism drink nonalcoholic beer. In our study, though, we found that people were increasingly drawn to nonalcoholic beers for a number of reasons.</p>
<p>Someone may be allergic or intolerant to alcohol, taking a medicine that contraindicates alcohol consumption, or have religious or personal preferences that tend toward abstention. Others want to retain the ability to be responsive or responsible for later activities, like serving as a designated driver, operating heavy machinery or being “on-call” for work.</p>
<h2>Making lower-alcohol beer more palatable</h2>
<p>Low-alcohol beer in the U.S. long has suffered from an image problem – namely, the perception that low- and no-alcohol brews taste bad. (And, let’s be honest, many do.)</p>
<figure class="align-right ">
<img alt="An ad for Budweiser depicts a psychic over a crystal ball with a Budweiser bottle in it." src="https://images.theconversation.com/files/411956/original/file-20210719-25-10fjn8n.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/411956/original/file-20210719-25-10fjn8n.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=950&fit=crop&dpr=1 600w, https://images.theconversation.com/files/411956/original/file-20210719-25-10fjn8n.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=950&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/411956/original/file-20210719-25-10fjn8n.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=950&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/411956/original/file-20210719-25-10fjn8n.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1193&fit=crop&dpr=1 754w, https://images.theconversation.com/files/411956/original/file-20210719-25-10fjn8n.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1193&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/411956/original/file-20210719-25-10fjn8n.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1193&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Budweiser has pulled off what some might call an act of wizardry: a low-alcohol beer produced in huge volumes with a relatively inoffensive taste.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/menu-for-budweiser-reads-drink-budweiser-americas-social-news-photo/179348042?adppopup=true">Jim Heimann Collection via Getty Images</a></span>
</figcaption>
</figure>
<p>That’s because the brewing process <a href="https://doi.org/10.3390/pr8111382">can be especially complicated</a> for low- or no-alcohol ferments, which has made it difficult to brew high-quality, low-alcohol beer that tastes good. <a href="http://mentalfloss.com/article/12940/scientific-reasons-respect-light-beer">Some even say</a> that Budweiser isn’t given nearly enough credit for brewing a consistent, relatively palatable, low-alcohol product at such a big scale.</p>
<p>But in recent years, <a href="https://doi.org/10.3390/pr8111382">several studies</a> <a href="https://doi.org/10.1007/978-3-030-41654-6_7">have been dedicated</a> to improving the production protocols and flavor of low-alcohol beer. Although brewing <a href="https://www.smithsonianmag.com/history/the-beer-archaeologist-17016372/">is an ancient art</a>, it has also shown <a href="https://innovationmanagement.se/2018/05/01/the-innovation-that-fuels-the-craft-brew-revolution/">impressive adaptability</a> as times and technology have changed.</p>
<h2>The state of the art</h2>
<p>Combine the better taste with low-alcohol beer’s real or perceived health benefits, and <a href="https://www.reuters.com/article/us-beverages-alcohol/big-brewers-see-strong-potential-for-weak-beer-idUSKCN0ZT0FB">there’s a real niche developing</a> for the style.</p>
<p>That doesn’t mean standard-alcohol – and even high-alcohol – beers are going anywhere anytime soon. Among craft brewers and craft drinkers, IPAs remain the <a href="https://www.brewersassociation.org/insights/beer-style-growth-may-not-matter-brand/">most prominent beer style by far</a>: Over 2,000 brands make and sell them.</p>
<p>Yet the craft brewing industry is increasingly aware of these shifts in drinker preferences and the social benefits of <a href="https://www.youtube.com/watch?v=cdaP7RAc_I8&amp;amp;amp;list=PLSfGHGA7VwdF7WNAfhPFv2RDI02ISLga5&amp;amp;amp;index=40">moderating alcohol intake</a>. Recent trends toward appreciating beer with no or low alcohol <a href="https://wellbeingbrewing.com/pages/our-values">make space for moderate or nondrinkers to participate</a> in the craft beer movement.</p>
<figure class="align-center ">
<img alt="Six-packs of beer for sale in a refrigerator." src="https://images.theconversation.com/files/411968/original/file-20210719-25-g8ckqi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/411968/original/file-20210719-25-g8ckqi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/411968/original/file-20210719-25-g8ckqi.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/411968/original/file-20210719-25-g8ckqi.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/411968/original/file-20210719-25-g8ckqi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/411968/original/file-20210719-25-g8ckqi.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/411968/original/file-20210719-25-g8ckqi.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Lagunitas’ DayTime IPA – which has 4% ABV – is part of a shift among smaller brewers to offer something for everyone.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/lagunitas-beer-is-offered-for-sale-on-may-4-2017-in-chicago-news-photo/678733830?adppopup=true">Scott Olson/Getty Images</a></span>
</figcaption>
</figure>
<p>Now, thanks to the work of food and fermentation scientists, the creativity of brewers and the willingness of consumers to keep experimenting, the list of options that have lower-than-average alcohol and that are actually tasty is growing. </p>
<p>German beer giant Beck’s nonalcoholic lager and Athletic Brewing’s <a href="https://www.nny360.com/artsandlife/columns/beerguy/beer-nerd-athletic-s-run-wild-ipa-is-a-lot-better-than-na-beer-has/article_e2ccdc9d-ac2c-5a98-9308-cd6bd86078f1.html">Run Wild nonalcoholic IPA</a> are just two examples of how breweries large and small are trying to tap into the nonalcoholic beer market.</p>
<p>[<em>Over 100,000 readers rely on The Conversation’s newsletter to understand the world.</em> <a href="https://theconversation.com/us/newsletters/the-daily-3?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=100Ksignup">Sign up today</a>.]</p>
<p>Meanwhile, most craft brewers now offer some kind of “<a href="https://www.craftbeer.com/craft-beer-muses/session-beers">session beer</a>” – so called because, thanks to their lower alcohol content, they’re suitable for longer drinking sessions. Sales of session IPAs, for instance, <a href="https://www.craftbeer.com/craft-beer-muses/makes-ipa-still-popular">increased 199% in 2015</a>.</p>
<p>Even beyond session IPAs, lower-alcohol brews across styles – gose, Helles lager, Kölsch, saison, and pilsner – are <a href="https://vinepair.com/wine-blog/in-defense-of-the-session-ipa-a-trend-that-doesnt-need-to-die/">increasingly visible, available and popular</a> in both pint <a href="https://www.growlermag.com/we-blind-tasted-31-na-beers-and-found-7-we-actually-enjoyed/">and</a> <a href="https://www.esquire.com/food-drink/drinks/g1569/good-alcoholic-beers/">print</a>, which is just another way of saying that, now more than ever, you can readily find a low-alcohol or nonalcoholic brew in your glass or on your screen.</p><img src="https://counter.theconversation.com/content/163631/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Colleen C. Myles does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Thanks to shifting tastes and improvements to the brewing process, more craft brewers are offering low-alcohol and nonalcoholic options – and are going toe to toe with America’s beer giants.Colleen C. Myles, Associate Professor of Geography, Texas State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1559402021-03-05T13:12:48Z2021-03-05T13:12:48ZWomen used to dominate the beer industry – until the witch accusations started pouring in<figure><img src="https://images.theconversation.com/files/387808/original/file-20210304-15-bf0kqb.jpg?ixlib=rb-1.1.0&rect=21%2C21%2C3534%2C2713&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Three women dressed in Middle-Age period garb as alewives.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/barmaids-in-costume-from-the-festival-inn-east-london-which-news-photo/613511756?adppopup=true">Hulton-Deutsch Collection/Corbis via Getty Images</a></span></figcaption></figure><p>What do witches have to do with your favorite beer? </p>
<p>When I pose this question to students in my American literature and culture classes, I receive stunned silence or nervous laughs. The Sanderson sisters didn’t chug down bottles of Sam Adams in “<a href="https://www.youtube.com/watch?v=tfteLe_G5MY">Hocus Pocus</a>.” But the history of beer points to a not-so-magical legacy of transatlantic slander and gender roles.</p>
<p>Up until the 1500s, brewing was primarily women’s work – that is, until a smear campaign accused women brewers of being witches. Much of the iconography we associate with witches today, from the pointy hat to the broom, may have emerged from their connection to female brewers. </p>
<h2>A routine household task</h2>
<p>Humans have been drinking beer for almost 7,000 years, and the <a href="https://www.womenshistory.org/articles/women-and-beer-forgotten-pairing#:%7E:text=Women's%20involvement%20in%20brewing%20beer,in%20Mesopotamia%2C%20and%20possible%20earlier.&text=Historically%20women%20were%20involved%20in,also%20brewed%20their%20own%20beer.">original brewers were women</a>. From the Vikings to the Egyptians, women brewed beer both for religious ceremonies and to make a practical, calorie-rich beverage for the home. </p>
<p>In fact, the nun <a href="https://www.washingtonpost.com/lifestyle/food/hops-the-beer-ingredient-most-drinkers-love/2014/02/10/fd5daab0-8f57-11e3-84e1-27626c5ef5fb_story.html">Hildegard von Bingen</a>, who lived in modern-day Germany, famously wrote about hops in the 12th century and added the ingredient to her beer recipe.</p>
<p>From the <a href="http://www.bbc.com/earth/story/20161130-why-the-stone-age-could-be-when-brits-first-brewed-beer">Stone Age to the 1700s</a>, ale – and, later, beer – was a household staple for most families in England and other parts of Europe. The drink was an inexpensive way to consume and preserve grains. For the working class, beer provided <a href="https://newhistories.group.shef.ac.uk/the-medieval-beverage-of-choice-alcohol-or-water/">an important source of nutrients</a>, full of carbohydrates and proteins. Because the beverage was such a common part of the average person’s diet, fermenting was, for many women, <a href="https://www.atlasobscura.com/articles/women-making-beer">one of their normal household tasks</a>. </p>
<p>Some enterprising women took this household skill to the marketplace and began selling beer. Widows or unmarried women used their fermentation prowess to earn some extra money, while married women partnered with their husbands to run their beer business. </p>
<h2>Exiling women from the industry</h2>
<p>So if you traveled back in time to the Middle Ages or the Renaissance and went to a market in England, you’d probably see an oddly familiar sight: women wearing tall, pointy hats. In many instances, they’d be standing in front of big cauldrons.</p>
<p>But these women were no witches; <a href="https://www.researchgate.net/publication/298992595_Beer_in_the_Middle_Ages_and_the_Renaissance">they were brewers</a>. </p>
<p>They wore the tall, pointy hats so that their customers could see them in the crowded marketplace. They transported their brew in cauldrons. And those who sold their beer out of stores had cats <a href="https://www.jstor.org/stable/41388926">not as demon familiars</a>, but to keep mice away from the grain. <a href="https://www.vice.com/en/article/xw9egk/witches-hats-alewife-brewster-history">Some argue that iconography we associate with witches</a>, from the pointy hat to the cauldron, originated from women working as master brewers.</p>
<p>Just as women were establishing their foothold in the beer markets of England, Ireland and the rest of Europe, <a href="https://www.history.com/news/how-medieval-churches-used-witch-hunts-to-gain-more-followers">the Reformation began</a>. The religious movement, which originated in the early 16th century, preached stricter gender norms and condemned witchcraft. </p>
<p>Male brewers saw an opportunity. To reduce their competition in the beer trade, some <a href="https://digpodcast.org/2018/10/21/witches-brew-how-the-patriarchy-ruins-everything-for-women-even-beer/">accused female brewers of being witches</a> and using their cauldrons to brew up magic potions instead of booze. </p>
<p>Unfortunately, the rumors took hold.</p>
<p>Over time, it became more dangerous for women to practice brewing and sell beer because they could be misidentified as witches. At the time, being accused of witchcraft wasn’t just a social faux pas; it could <a href="https://www.historic-uk.com/CultureUK/Witches-in-Britain/">result in prosecution or a death sentence</a>. Women accused of witchcraft were often ostracized in their communities, imprisoned or even killed. </p>
<p>Some men didn’t really believe that the women brewers were witches. However, many did believe that women shouldn’t be spending their time making beer. The process took time and dedication: hours to prepare the ale, sweep the floors clean and lift heavy bundles of rye and grain. If women couldn’t brew ale, they would have significantly more time at home to raise their children. In the 1500s <a href="https://digpodcast.org/2018/10/21/witches-brew-how-the-patriarchy-ruins-everything-for-women-even-beer/">some towns, such as Chester, England</a>, actually made it illegal for most women to sell beer, worried that young alewives would grow up into old spinsters.</p>
<p>[<em>Get the best of The Conversation, every weekend.</em> <a href="https://theconversation.com/us/newsletters/weekly-highlights-61?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=weeklybest">Sign up for our weekly newsletter</a>.]</p>
<h2>Men still run the show</h2>
<p>Men’s domination of the beer industry has endured: <a href="https://apnews.com/press-release/pr-wiredrelease/7d27a05d2226d7d3667616b2e24ce705">The top 10 beer companies</a> in the world are headed by male CEOs and have mostly male board members.</p>
<p>Major beer companies have tended to portray <a href="https://www.fastcompany.com/90460642/heineken-tries-fails-playing-gender-stereotypes-alcohol-marketing">beer as a drink for men</a>. Some scholars have even gone as far as calling beer ads “<a href="https://doi.org/10.4135/9781483326023.n6">manuals on masculinity</a>.” </p>
<p>This gender bias seems to persist in smaller craft breweries as well. <a href="https://www.craftbrewingbusiness.com/featured/woman-looking-work-craft-beer-ask-female-leaders-share-stories-advice/2/">A study at Stanford University</a> found that while 17% of craft beer breweries have one female CEO, only 4% of these businesses employ a female brewmaster – the expert supervisor who oversees the brewing process.</p>
<p>It doesn’t have to be this way. For much of history, it wasn’t.</p>
<p><em>Editor’s note: This article has been updated to acknowledge that it isn’t definitively known whether alewives inspired some of the popular iconography associated with witches today. It has also been updated to correct that it was during the Reformation that accusations of witchcraft became widespread.</em></p><img src="https://counter.theconversation.com/content/155940/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Laken Brooks does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Today, beer is marketed to men and the industry is run by men. It wasn’t always that way.Laken Brooks, Doctoral Student of English, University of FloridaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1249232019-11-07T13:46:54Z2019-11-07T13:46:54ZCraft beer is having an identity crisis, as big breweries muscle in on the market<figure><img src="https://images.theconversation.com/files/300611/original/file-20191107-10930-1t8yq47.jpg?ixlib=rb-1.1.0&rect=711%2C36%2C4620%2C2935&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/hostonusjun-252016various-bottles-craft-microbrews-ipas-446130109">Trong Nguyen/Shutterstock.</a></span></figcaption></figure><p>The British beer industry has grown at an astonishing rate over the past decade, with the number of new breweries <a href="https://www.uhy-uk.com/news-events/news/uk-craft-beer-boom-sobers-up-adds-just-eight-breweries-versus-390-the-previous-year/">constantly on the rise</a>. In the last eight years, there has been a <a href="https://www.thedrinksbusiness.com/2018/10/this-chart-shows-how-the-uks-beer-market-has-changed-in-eight-years/">20% increase</a> in trademarks for beer in the UK. And as of 2019, the UK has the second largest number of breweries per person in the world (<a href="https://www.foodandwine.com/beer/country-most-breweries-capita">behind New Zealand</a>). It’s estimated that the overall number of breweries in the UK <a href="https://www.uhy-uk.com/news-events/news/uk-craft-beer-boom-sobers-up-adds-just-eight-breweries-versus-390-the-previous-year/">reached 2,274</a> at the end of 2018.</p>
<p>This British beer craze is undeniably linked to the global craft beer movement, which originated in the US <a href="https://www.craftbeer.com/craft-beer-muses/the-roots-of-american-craft-brewing">in the 1970s</a> and has spread <a href="https://www.beveragedaily.com/Article/2017/03/20/Top-10-craft-beer-producing-countries">across markets</a> including Italy, Spain, Australia and Canada. Yet, when asked what “craft beer” is, no one knows. The perceptions of producers don’t necessarily align with those of consumers. And that could spell trouble for craft brewers.</p>
<h2>Trouble brewing</h2>
<p>There’s now early evidence that the growth of the sector is stagnating, as the number of new breweries opening has <a href="https://www.thedrinksbusiness.com/2019/04/is-the-craft-beer-gold-rush-over-uk-brewery-openings-plummet-in-2018/">begun to plateau</a>. According to <a href="https://www.ons.gov.uk/businessindustryandtrade/manufacturingandproductionindustry/bulletins/ukmanufacturerssalesbyproductprodcom/2018provisionalresults">the latest data</a> from the UK’s Office for National Statistics, overall beer sales dropped from £3.7 billion in 2017 to £3.2 billion in 2018. </p>
<p>There are a couple of reasons for this. Since 2015, off-trade sales (in supermarkets, bottle shops and other outlets) have accounted for <a href="https://www.statista.com/statistics/309046/on-and-off-trade-beer-sales-share-in-the-united-kingdom-uk/">more than 50%</a> of overall beer sales. Meanwhile, <a href="https://beerandpub.com/statistics/pub-numbers/">as pubs have continued to close</a> across the UK over the past 20 years, there’s been <a href="https://beerandpub.com/statistics/uk-beer-market/">a decline</a> in sales of beer consumed on premises. This puts extra pressure on craft brewers to find other routes-to-market for their products – including international markets. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/300695/original/file-20191107-10935-1nde8bx.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/300695/original/file-20191107-10935-1nde8bx.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=377&fit=crop&dpr=1 600w, https://images.theconversation.com/files/300695/original/file-20191107-10935-1nde8bx.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=377&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/300695/original/file-20191107-10935-1nde8bx.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=377&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/300695/original/file-20191107-10935-1nde8bx.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=474&fit=crop&dpr=1 754w, https://images.theconversation.com/files/300695/original/file-20191107-10935-1nde8bx.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=474&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/300695/original/file-20191107-10935-1nde8bx.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=474&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
</figcaption>
</figure>
<p>Yet, according to the <a href="https://toolbox.siba.co.uk/documents/Facts%20&%20Figures/SIBA%20British%20Craft%20Beer%20Report/The%20SIBA%20British%20Craft%20Beer%20Report.pdf">latest report</a> by the Society of Independent Brewers (SIBA), more than half of their surveyed members were not exporting, while those that were exporting, sent only 1% of their total production abroad. </p>
<p>In fact, in 2017 the UK <a href="https://www.statista.com/statistics/302734/exports-of-beer-total-volume-in-the-united-kingdom-uk/">exported 560m litres</a> of beer – that’s less than half the amount of beer imported in the country the same year (<a href="https://www.statista.com/statistics/302737/imports-of-beer-total-volume-in-the-united-kingdom-uk/">1,005m litres</a>), which shows that British breweries face fierce competition from imported beer as well. In this competitive environment, the overall market share of craft beer in the UK still <a href="https://toolbox.siba.co.uk/documents/Facts%20&%20Figures/SIBA%20British%20Craft%20Beer%20Report/The%20SIBA%20British%20Craft%20Beer%20Report.pdf">remains below 5%</a>. </p>
<p>Despite these challenges, there are still plenty of opportunities for British brewers to attract consumers away from industrial and imported beers and grow the thirst for British craft beer abroad. That is, provided there can be some agreement on what “craft beer” is. </p>
<h2>The craft beer battle</h2>
<p>In contrast to other countries, such as the US and Italy, there has never been a broadly accepted definition or classification of “craft beer” in the UK. Despite <a href="https://www.brewdog.com/blog/defining-craft-beer-at-siba">heated debates</a> between the <a href="https://www.camra.org.uk/join/">Campaign for Real Ale</a> (CAMRA) and Scottish company BrewDog, and <a href="https://boakandbailey.com/2016/04/what-happened-to-the-united-craft-brewers/">efforts by some major players</a> to lead the discussion on the definition and values of craft beer, there’s still no clarity on what the term specifies, or what kind of quality or criteria must be met. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/300627/original/file-20191107-10940-1qdoayd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/300627/original/file-20191107-10940-1qdoayd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/300627/original/file-20191107-10940-1qdoayd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/300627/original/file-20191107-10940-1qdoayd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/300627/original/file-20191107-10940-1qdoayd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/300627/original/file-20191107-10940-1qdoayd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/300627/original/file-20191107-10940-1qdoayd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">What even is ‘craft’?</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/generating-ideas-his-brewery-thoughtful-young-243234397?src=fd45cde4-52df-43f9-8928-ec6aa8147a68-1-9">G-Stock Photo/Shutterstock.</a></span>
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</figure>
<p>One possible reason for this could be that attempts at collective action by British brewers have been highly fragmented, with multiple brewers’ associations and networks sometimes perceived by those in the industry to serve opposing interests. For example, SIBA and the United Craft Brewers both share the same vision about the craft beer market but serve smaller versus larger players, respectively. </p>
<p>Depending on whether you speak to a consumer, a smaller brewer or a larger one, the “craft” label holds very different meanings. </p>
<h2>The producers’ perspective</h2>
<p><a href="https://pureportal.strath.ac.uk/en/publications/exploring-the-uk-micro-brewing-industry-factors-facilitating-and-">Our research</a> with brewers across Scotland and England found that those who identify themselves as “craft” brewers:</p>
<ul>
<li><p>Are typically beer aficionados who have decided to transform their enthusiasm into a living and set up their own businesses – with the vast majority being micro-businesses employing fewer than ten people.</p></li>
<li><p>Are motivated by a lack of tolerance towards the standardised, predictable beer flavours that have so far dominated the market.</p></li>
<li><p>Tend to use traditional – instead of industrial – methods to make beer and experiment with different types of beer, hop varieties, old or quirky recipes and unusual or exotic ingredients.</p></li>
</ul>
<p><a href="https://issuu.com/societyofindependentbrewers/docs/the_siba_british_craft_beer_report?e=28684874/68424516">Research conducted</a> by SIBA among their members identifies that one of the key issues faced by micro craft breweries is the fact that big national and international brewers have begun mass-producing their own “crafty” products. </p>
<p>In recent years, beer industry behemoths have <a href="https://www.theguardian.com/business/2017/oct/09/bitter-rivalry-conflict-brews-as-craft-beer-makers-take-on-big-firms">aggressively sought to capitalise</a> on the popularity of craft beer – either by establishing their own microbreweries, or acquiring existing ones and marketing them separately using large budgets unavailable to smaller firms.</p>
<p>The smaller brewers in our research also questioned whether pioneers of the craft beer movement, which have now grown into large businesses, still classify as “craft” breweries. Discussions over size and “selling-out” have become key dimensions of the craft beer debate, from the perspective of producers.</p>
<h2>The consumers’ perspective</h2>
<p>Any discussion about what craft beer stands for must also include the people who drink it, given that changing consumer demands and habits have helped fuel the craft beer movement since its inception. We conducted a <a href="https://pureportal.strath.ac.uk/en/publications/craft-as-a-contested-term-authenticity-and-meaning-among-british-">series of in-depth interviews</a> with British consumers, who had various levels of beer knowledge and found that they considered “craft beer” to be “the most misused and misunderstood term in the whole beer industry”. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/300629/original/file-20191107-10919-1o4r9k0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/300629/original/file-20191107-10919-1o4r9k0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/300629/original/file-20191107-10919-1o4r9k0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/300629/original/file-20191107-10919-1o4r9k0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/300629/original/file-20191107-10919-1o4r9k0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/300629/original/file-20191107-10919-1o4r9k0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/300629/original/file-20191107-10919-1o4r9k0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Discerning tastes.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/woman-drink-beer-beverage-hang-out-567977533?src=40379d1e-5c47-4b16-b5aa-fed16e207661-1-23">Rawpixel.com/Shutterstock.</a></span>
</figcaption>
</figure>
<p>This shows that British consumers are already very confused about what craft beer stands for. When asked what they think craft beer is, our respondents highlighted not only the independence and size of the business making it, but also the scale of production and nature of ownership. This aligns with the unique, exclusive food and drink experiences that consumers increasingly desire. </p>
<p>Our research showed that consumers define craft beer not only as a product, but as a process. For consumers, the term “craft” carries connotations and values relating to the producer, the ingredients, the method, the unique artistic skills instilled in the process, as well as the constant novelty. </p>
<p>In the UK, the term “craft beer” has so many associations that there’s a danger it may end up meaning nothing at all. This would jeopardise the future of a promising sector, as the UK has a long history of brewing and the potential to become a key player in the global craft beer market. That’s why it’s now crucial to establish a well-defined identity and clear standards, that would signal the superior quality and craftsmanship of British craft beer to consumers across the world.</p><img src="https://counter.theconversation.com/content/124923/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>In the UK today, the term ‘craft beer’ has so many associations that there’s a danger it may end up meaning nothing at all.Maria Karampela, Lecturer in Marketing, University of Strathclyde Juho Pesonen, Head of Research at the Centre for Tourism Studies, University of Eastern FinlandNadine Waehning, Course Leader for MSc suite and Lecturer in Marketing, York St John UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1076662018-11-28T14:32:33Z2018-11-28T14:32:33ZMore than 11,000 pubs closed since 2001 – but breweries could revive local watering holes<figure><img src="https://images.theconversation.com/files/247752/original/file-20181128-32197-1l9bcco.jpg?ixlib=rb-1.1.0&rect=9%2C67%2C2890%2C1927&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A sorry sight. </span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/draco2008/2568627948/sizes/l">Draco 2008/Flickr.</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><p>The number of pubs in the UK has <a href="https://www.ons.gov.uk/businessindustryandtrade/business/activitysizeandlocation/articles/economiesofalesmallpubscloseaschainsfocusonbigbars/2018-11-26">fallen by 22%</a> over the past two decades: from around 50,000 in 2008, to 39,000 in 2018. But the losses aren’t spread evenly. One in four independently owned pubs has shut up shop, while the number of boozers owned by large chains such as JD Wetherspoon has stayed almost steady, dipping from 6,000 to 5,800 over 20 years. </p>
<p>These figures from the Office for National statistics (ONS) confirm the trends regularly reported by organisations such as the <a href="http://www.camra.org.uk/news/-/asset_publisher/1dUgQCmQMoVC/content/pub-closures-are-making-us-all-poorer-says-camra">Campaign for Real Ale</a> and the <a href="https://beerandpub.com/2016/09/25/bbpa-releases-new-stats-handbook-uk-alcohol-consumption-remains-stable-18-per-cent-down-on-2004-peak/">British Beer and Pubs and Association</a> (BBPA). </p>
<p>There are various reasons behind the closures: increasing <a href="https://beerandpub.com/2018/10/24/over-3700-pubs-could-close-unless-the-chancellor-extends-business-rates-relief-states-new-bbpa-report/">real costs and business rates</a> – particularly for independent pubs – a shift toward <a href="https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/drugusealcoholandsmoking/bulletins/opinionsandlifestylesurveyadultdrinkinghabitsingreatbritain/2017">healthier and more sober lifestyles</a> among young people, <a href="http://www.ias.org.uk/Blog/By-tackling-cheap-off-trade-alcohol-we-can-support-pubs-AND-reduce-harmful-consumption.aspx">cheaper alcohol prices</a> from off-licences and supermarkets and <a href="https://ukie.org.uk/press-release/2018/03/uk-games-market-grows-124-record-%C2%A3511bn-2017">the growth of home entertainment</a> have all dulled the appeal of going to the pub. </p>
<p>Measures to keep pubs alive have not had much much impact over the years. Between 2013 and 2015, a cumulative tax cut of 3p per pint reportedly <a href="http://www.ias.org.uk/uploads/pdf/ias%20reports/sb10042016.pdf">reduced beer duty</a> by 14%, compared to 2012. But <a href="https://beerandpub.com/2017/07/10/bbpa-publishes-latest-cost-benchmarking-data-for-tenants-and-lessees/">according to the BBPA</a>, beer duty rose by 42% between 2008 and 2012, and 5,000 pubs closed in that same period. The beer duty freeze and business rates relief for small shops announced in <a href="https://www.gov.uk/government/publications/budget-2018-documents">the government’s recent budget</a> could be too little, too late to help independent pubs.</p>
<h2>Country versus city</h2>
<p>The closures have hit urban pubs harder than pubs serving rural areas and villages, with 26% of city pubs shutting their doors for good between 2001 an 2018, compared with about 21% of rural pubs. In fact, employment in rural pubs has gone up almost 24%, while employment in urban pubs declined by just over 2%. Around 10,000 pub jobs vanished in major cities across England and Wales, while pubs serving smaller cities and towns created 3,750 more jobs since 2001. </p>
<p>In response to these difficult times, many pubs in the UK have <a href="https://www.emeraldinsight.com/doi/abs/10.1108/IJCHM-12-2015-0717">changed their business strategies</a>, and now go far beyond serving beer to try to attract more customers and see off competition from European-style cafes, which also sell alcohol into the night. For example, there are growing numbers of “themed” bars and pubs cropping up in cities and towns, which sell drinks while offering a unique activity, environment or atmosphere: from sport bars equipped with big screens to broadcast games, to fantasy-inspired bars designed to offer unique experiences to customers. An example is ABQ, the Breaking Bad-themed bar in London. </p>
<p>Tougher competition in urban areas has led many small pubs to close down, while larger pubs are becoming more common. The urban pubs that survived since 2001 are likely to have increased in size, attracted investments from large chains and gradually absorbed the custom from pubs that have closed. In this sense, there are still opportunities available for pub owners in smaller towns to grow their businesses. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/247753/original/file-20181128-32185-rkq0dq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/247753/original/file-20181128-32185-rkq0dq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/247753/original/file-20181128-32185-rkq0dq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/247753/original/file-20181128-32185-rkq0dq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/247753/original/file-20181128-32185-rkq0dq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/247753/original/file-20181128-32185-rkq0dq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/247753/original/file-20181128-32185-rkq0dq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Posh pub grub.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/plated-steak-steamed-pudding-vegetables-474132505?src=YYrKRCUrRttuxpw3CmxqwA-3-14">Shutterstock.</a></span>
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</figure>
<p>In rural areas, many pubs have started focusing on serving good food alongside booze, becoming gastro-pubs. Some have even ended up competing with top-rated restaurants: <a href="https://inews.co.uk/inews-lifestyle/food-and-drink/best-dining-pubs-uk-michelin/">14 pubs</a> across the UK were awarded the Michelin star in 2018. This has brought about a shift in the clientele rural pubs seek to attract, as they invest in kitchen staff and facilities to target tourists and people from out of town, in order to remain profitable. </p>
<h2>Places for people</h2>
<p>It’s highly likely this change in strategy has affected the social life of rural communities and villages, which was once supported by these pubs. <a href="https://journals.sagepub.com/doi/abs/10.1068/a43586">My own research has found that</a>, particularly in rural and remote areas, pubs are seen by local residents as essential places to meet and talk. When these businesses close or change their business strategies, local people’s opportunities to socialise vanish with them. </p>
<p>It’s not all bleak for the UK beer and pubs industry, though. The decline of pubs since early 2000s has been offset by a significant increase in the number of UK breweries. There are now more than 2,000 breweries operating in the country – up 64% since 2012. My own calculations, based on <a href="https://toolbox.siba.co.uk/documents/Facts%20&%20Figures/British%20Beer%20Reports/SIBA%20Members%20Survey%202018.pdf">data from the Society of Independent Breweries</a> (SIBA), reveal a steady growth in the number of pubs owned or leased by breweries – up 25% and 19% respectively, from 2014 to 2017. </p>
<p>Often, breweries acquire pubs dismissed by large companies, and rebrand them to sell their own beers. What’s more, one in three breweries surveyed by SIBA in 2017 had a functioning tap bar operating on the site of the brewery itself. Like local pubs, these places are slowly becoming part of the fabric of local communities, providing a place for customers to meet and enjoy their beer.</p><img src="https://counter.theconversation.com/content/107666/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ignazio Cabras provides expert consultancy for the Society of Independent Brewers (SIBA)
</span></em></p>Boarded up pubs are becoming a common sight, and it’s having a real impact on rural village life.Ignazio Cabras, Professor of Entrepreneurship and Regional Economic Development, Northumbria University, NewcastleLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/938882018-04-01T18:25:32Z2018-04-01T18:25:32ZWhy Canada’s craft beer explosion isn’t leading to big acquisitions<figure><img src="https://images.theconversation.com/files/212655/original/file-20180329-189810-1rrlxbj.jpg?ixlib=rb-1.1.0&rect=254%2C875%2C4341%2C2529&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Pints of craft beer are seen on the bar at Main Street Brewing in Vancouver. Craft beer is experiencing an explosion in popularity.</span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Darryl Dyck</span></span></figcaption></figure><p>Not only was beer a passion for Bob and Doug McKenzie, popular members of the Second City comedy troupe during the 1980s, it was also a unit of measurement for the Canadian duo.</p>
<p>The number of brown stubby bottles of Molson Canadian or Labatts Blue they quaffed was the yardstick used to assess qualities ranging from the length of time to the value of a good.</p>
<p>Beer was a relatively homogeneous product back then, making it possible for one stubby bottle to serve as the unit of measure as easily as any other. What would the beer-guzzling hosers make of “beer” today as craft brews take off, eh?</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/04u58ifxmRA?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Twist tops confounded SCTV’s Bob and Doug McKenzie in the 1980s. What would they make of craft beer?</span></figcaption>
</figure>
<p>As it has in other countries, the beer market has changed considerably with the decline of mass-marketed, light-bodied lager beer such as Canadian and Blue and the rise of craft beers differentiated by a number of attributes from taste to location.</p>
<p>But what exactly is a craft beer? Is the brewer small and/or local? Does the beer itself incorporate more specialty hops or innovative ingredients such as fruit and spices? </p>
<p>While there is no pan-Canadian definition, the <a href="http://www.ontariocraftbrewers.com/content.php?nextpage=brewphilosophy">Ontario Craft Brewers Association </a>defines craft beer as being small (less than 400,000 hectolitres), independent, and traditional.</p>
<p>The <a href="https://www.brewersassociation.org/statistics/craft-brewer-defined/">Brewers Association in the United States</a> defines a craft brewer as producing less than six million barrels (around seven million hectolitres) annually, being less than 25 per cent owned by a non-craft brewery and using traditional or innovative ingredients for the majority of their production. </p>
<p>Many beers that were initially produced by local craft brewers have since been purchased by larger, multi-national breweries and are now available in a much wider geographic area thanks to the distribution network of those large larger breweries. Does that mean the beer is still a craft beer?</p>
<p>At the peak of the McKenzie brothers’ popularity in 1985, there were only 10 breweries in Canada, and three companies owned those 10 breweries. </p>
<h2>From 120 breweries to 10</h2>
<p>The consolidation from 120 brewers after Prohibition <a href="http://www.thecanadianencyclopedia.ca/en/article/craft-brewing-in-canada/">to the 10 in 1985</a> was the culmination of a 60-year trend driven by government regulations and economies of size associated with improvements in <a href="https://www.tandfonline.com/doi/abs/10.1080/00076791.2015.1065819">brewing and transportation technology</a>. </p>
<p>The trend toward homogenization and consolidation in beer production was reversed in the 1980s with the beginning of the global <a href="http://www.choicesmagazine.org/choices-magazine/theme-articles/global-craft-beer-renaissance/the-craft-beer-revolution-an-international-perspective">“Real Beer movement</a>.</p>
<p>The sales of craft beer have risen tenfold in the last decade and it now accounts for six per cent of the market. <a href="https://news.ontario.ca/omafra/en/2016/06/provincial-and-federal-governments-investing-over-16-million-in-craft-beer-sector.html">Government incentives</a> and consumer demand for locally anchored food experiences have fostered <a href="https://link.springer.com/chapter/10.1007%2F978-3-319-58235-1_3">this growth in Canada</a> and <a href="http://www.choicesmagazine.org/choices-magazine/theme-articles/global-craft-beer-renaissance/the-craft-beer-revolution-an-international-perspective">globally</a>.</p>
<p>The current production of approximately 20 million hectolitres of <a href="https://industry.beercanada.com/statistics">beer</a> in Canada is close to 1985 levels but more than 700 breweries are now brewing it. </p>
<p>The trend toward more breweries has accelerated recently with the numbers nearly doubling over the last five years, and the growth coming almost exclusively from those firms producing less than 50,000 hectolitres, which now represent over 95 per cent of all breweries in <a href="https://industry.beercanada.com/statistics">Canada</a>.</p>
<h2>Two extremes</h2>
<p>The number of large brewers has also grown, but there has been a hollowing out
of the middle — there are no longer any medium-sized breweries that produce between 50,000 and 75,000 hectolitres of beer.</p>
<p>The evolution of Canadian beer production into the two extremes of the size distribution parallels the situation in the United States. Craft beer production has grown dramatically in the U.S., expanding from roughly five million barrels in 2004 to nearly 25 million in <a href="https://www.brewersassociation.org/statistics/national-beer-sales-production-data/">2016</a>. </p>
<p>This production comes from more than 6,000 craft breweries, and the vast majority are small craft breweries with limited distribution.</p>
<p>The difference between the U.S. and Canadian market is the existence of large, regional craft breweries; the three largest craft brewers account for approximately one-quarter of all craft beer produced in the <a href="https://link.springer.com/chapter/10.1007/978-3-319-58235-1_2">United States</a> </p>
<p>However, these are precisely the type of breweries that have been targeted by multinationals for acquisition, e.g., Ballast Point by Constellation Brands and Lagunitas by Heineken.</p>
<h2>Regulations stem from temperance era</h2>
<p>The Canadian craft beer sector may grow to become like the U.S. where, as breweries grow, they face the threat of acquisition. But it’s unlikely that Canadian craft breweries will grow significantly to become attractive for such a buyout.</p>
<p>Canadian regulations on the sale of alcohol stemming from the <a href="http://www.thecanadianencyclopedia.ca/en/article/temperance-movement/">temperance movement at the beginning of the last century</a> have limited the opportunities for microbreweries to sell outside their locations other than through local bars and restaurants. </p>
<p>Policies that impose lower taxation rates on smaller breweries provide a further disincentive for growth beyond a certain size in most Canadian jurisdictions. </p>
<p>Production costs associated with distribution and supply issues complicated by the distance between population centres in Canada have also constrained the size of new breweries.</p>
<p>While we have seen some acquisition, purchasing small Canadian craft breweries unproven outside of their local domain could be highly risky for large multinationals. </p>
<p>The resulting evolution of Canadian beer production into either small or large brewers is consistent with the change happening in many other agri-food sectors. </p>
<p>There is a "valley of death” for mid-size producers too large to capture local demand premiums and too small to achieve economies of size in production and distribution.</p><img src="https://counter.theconversation.com/content/93888/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Alfons Weersink receives funding from Food from Thought, sponsored through the Canada First Research Excellence Fund, and from the Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA). </span></em></p><p class="fine-print"><em><span>Michael von Massow receives funding from the WALMART foundation to undertake food waste research. He has received funding from Longo’s in support of the Guelph Food Retail Laboratory. He has also received funding from the Ontario Ministry of Agriculture and Food. </span></em></p>Canada’s craft beer industry is exploding. But antiquated regulations stemming from the years of the temperance movement is preventing big acquisitions by larger brewers.Alfons Weersink, Professor, Dept of Food, Agricultural and Resource Economics, University of GuelphMichael von Massow, Associate Professor, Food Economics, University of GuelphLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/917372018-03-13T10:39:27Z2018-03-13T10:39:27ZWhy bland American beer is here to stay<figure><img src="https://images.theconversation.com/files/209974/original/file-20180312-30989-klloff.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Americans tend to prefer beers that have corn or rice 'adjuncts,' or fillers.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-vector/man-beer-retro-clip-art-56756380?src=qF-aGOZRWm1RU8jWXH16mg-1-18">RetroClipArt/Shutterstock.com</a></span></figcaption></figure><p>Although craft beer has experienced explosive market growth over the past 25 years, the vast majority of Americans still don’t drink it.</p>
<p>Only about <a href="https://www.brewersassociation.org/press-releases/2016-growth-small-independent-brewers/">1 in 8</a> beers sold in America is a craft beer. For the first time, the <a href="https://www.washingtonpost.com/news/food/wp/2018/01/13/for-the-first-time-the-three-best-selling-beers-in-america-are-light-beers-can-craft-brewers-catch-up/?utm_term=.3d44be4b56f9">three best-selling beers</a> in America are light beers: Bud Light, Coors Light and Miller Lite. Bud Light alone has a greater market share than all craft beers combined. </p>
<p>So while the selection has broadened dramatically, most people’s tastes have not. Even craft beer companies are adjusting to this reality: A recent <a href="http://www.chicagotribune.com/business/ct-biz-top-selling-beers-20180116-story.html">Chicago Tribune article</a> noted that craft breweries are releasing beers that are “less hoppy and in-your-face” in order to appeal to the majority of Americans who prefer “big corporate lagers.”</p>
<p>In other words, they’re brewing blander beers.</p>
<p>How did Americans come to prefer such bland beer? As an economic historian, I’ve extensively researched the political economy of alcohol prohibition, and the unique history of the U.S. temperance movement might bear some responsibility for country’s exceptionally bland beer.</p>
<h2>The ‘lager bier craze’ clashes with teetotalers</h2>
<p>Unlike European countries with beer preferences and styles that have evolved over centuries, America lacks a homegrown brewing tradition.</p>
<p>The classic American beer is an “adjunct pilsner,” which means that some of the malted barley is replaced with corn or rice. The effect is a beer that’s lighter, clearer and less hoppy than its counterparts in countries like England, Germany and Belgium.</p>
<p>In colonial America, English-style beers and ales predominated, but rum and then whiskey were the drink of choice. Cider, easier to make at home, overtook beer by the early 19th century. </p>
<p>However, the American beer market grew during the great mid-19th century wave of <a href="http://www.beerhistory.com/library/holdings/beerbarons.shtml">German immigration</a>. German lagers were an immediate hit, partially because the German brewing method of <a href="https://beerandbrewing.com/dictionary/2Kudv5620R/bottom-fermentation/">bottom fermentation</a> – which involves a relatively long fermentation period and cold storage – made for a more consistent, storable product than top-fermented ales. The lagers were also mellower, though they were dark and hearty compared to what would become popular later.</p>
<p>But the “lager bier craze” dovetailed with another big trend: <a href="https://books.google.com/books?id=MJbBqn3XWqAC&lpg=PP1&dq=temperance%20movement%20in%20america&pg=PP1#v=onepage&q&f=false">the temperance movement</a>, which at various times sought to reduce problem drinking, reduce drinking more generally and eradicate alcohol consumption completely. From 1830 to 1845, the temperance movement gained momentum as more and more Americans were taking voluntary “<a href="https://books.google.com/books?id=BuzNzm-x0l8C&pg=PA108&dq=%22temperance+pledge%22&hl=en&sa=X&ved=0ahUKEwjFvfPEjefZAhUGRqwKHR71CDQ4ChDoAQg5MAQ#v=onepage&q=%22temperance%20pledge%22&f=false">temperance pledges</a>” and giving up spirits and cider. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/209972/original/file-20180312-30983-1pkwh26.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/209972/original/file-20180312-30983-1pkwh26.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/209972/original/file-20180312-30983-1pkwh26.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=465&fit=crop&dpr=1 600w, https://images.theconversation.com/files/209972/original/file-20180312-30983-1pkwh26.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=465&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/209972/original/file-20180312-30983-1pkwh26.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=465&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/209972/original/file-20180312-30983-1pkwh26.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=584&fit=crop&dpr=1 754w, https://images.theconversation.com/files/209972/original/file-20180312-30983-1pkwh26.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=584&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/209972/original/file-20180312-30983-1pkwh26.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=584&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">A print from the 1800s promotes ‘lager bier’ as a ‘healthy drink’ and a ‘family drink.’</span>
<span class="attribution"><a class="source" href="https://upload.wikimedia.org/wikipedia/commons/thumb/5/59/Lager_Bier_%28LOC_pga.02166%29.jpg/1280px-Lager_Bier_%28LOC_pga.02166%29.jpg">Library of Congress</a></span>
</figcaption>
</figure>
<p>German brewers always <a href="https://www.tandfonline.com/doi/full/10.1080/00076791.2015.1027691">maintained</a> that beer was a “temperance beverage,” unlike ardent spirits such as whiskey. And indeed, European temperance movements did tend to regard beer as relatively harmless. </p>
<p>But activists in the American temperance movement – which by then had become more about abstinence and intertwined with evangelical Protestantism – didn’t buy the argument. The 1850s saw the first big push for <a href="https://www.ncbi.nlm.nih.gov/books/NBK216414/">state-level prohibition laws</a>, which ended up being passed in a handful of states. Those laws didn’t last for a variety of reasons (including the Civil War), but they did serve notice to the brewers that they needed to work harder to convince the public that beer was a temperance beverage.</p>
<h2>Perfect for a midday drink</h2>
<p>In the 1870s, American beer would become mellower still with the advent of a new type of lager: the Bohemian pilsner. Clearer, lighter and blander than the Bavarian lagers that had previously dominated the market, pilsners looked cleaner, healthier, more stable and less intoxicating.</p>
<p>As an 1878 issue of the trade publication Western Brewer <a href="https://www.tandfonline.com/doi/full/10.1080/00076791.2015.1027691">noted</a>, Americans “want a clear beer of light color, mild and not too bitter taste.”</p>
<p>Brewers and drinkers who wanted to avert the temperance movement’s gaze naturally chose light pilsners over dark lagers. But lighter beer also was a good fit for the long hours of American factory workers, <a href="https://books.google.com/books?id=pcOvAwAAQBAJ&pg=PA149&lpg=PA149&dq=midday+beer+factory+worker&source=bl&ots=-cWg0Xi-Ku&sig=lSqQTDeD4Cf1n5LGj0zDViS1fRA&hl=en&sa=X&ved=0ahUKEwiniIHdkufZAhUCR6wKHT0GCO84ChDoAQhEMAg#v=onepage&q=midday%20beer%20factory%20worker&f=false">many of whom ate at saloons between shifts</a>. Coming back to work drunk could get you fired, so if you wanted a beer or two with the salty saloon fare, the weakest beers were the best bet. </p>
<p>Pragmatism and personal taste soon became intertwined. Anheuser-Busch introduced Budweiser in 1876 – whose rice adjuncts produced an even milder beer – to great success. Pabst Blue Ribbon, with its corn adjuncts, became a national sensation as well.</p>
<p>In 1916, Gustave Pabst, the son of Pabst Blue Ribbon’s founder Frederick Pabst, <a href="https://books.google.com/books?id=0Vo5AQAAMAAJ&pg=PA350&lpg=PA350&dq=pabst+the+discrimination+in+favor+of+light+beers+in+those+countries+where+the+anti-alcohol+sentiment+is+strongest&source=bl&ots=yuqeME3t27&sig=uMdCP8Ahkjl2ULz1iADi8pDPoVs&hl=en&sa=X&ved=0ahUKEwjF_c7qzeTZAhWCuFMKHS7KA6wQ6AEILzAA#v=onepage&q=pabst%20the%20discrimination%20in%20favor%20of%20light%20beers%20in%20those%20countries%20where%20the%20anti-alcohol%20sentiment%20is%20strongest&f=false">told</a> the United States Brewers Association that “the discrimination in favor of light beers (is strongest) in those countries where the anti-alcohol sentiment is strongest.” </p>
<p>Nonetheless, the drumbeat of the temperance movement started getting louder.</p>
<h2>Prohibition leaves its mark</h2>
<p>By the late 19th and early 20th century, the temperance movement had returned in force. Efficient organizing campaigns by the Woman’s Christian Temperance Union and the Anti-Saloon League led to a new wave of state and local prohibitions and, finally, <a href="https://prohibition.osu.edu/anti-saloon-league">a push for national prohibition</a>. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/209975/original/file-20180312-30979-1pj0sjr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/209975/original/file-20180312-30979-1pj0sjr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/209975/original/file-20180312-30979-1pj0sjr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=377&fit=crop&dpr=1 600w, https://images.theconversation.com/files/209975/original/file-20180312-30979-1pj0sjr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=377&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/209975/original/file-20180312-30979-1pj0sjr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=377&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/209975/original/file-20180312-30979-1pj0sjr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=473&fit=crop&dpr=1 754w, https://images.theconversation.com/files/209975/original/file-20180312-30979-1pj0sjr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=473&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/209975/original/file-20180312-30979-1pj0sjr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=473&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">An 1888 photograph of the New Hampshire Woman’s Christian Temperance Union.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/keenepubliclibrary/4537662459">Keene Public Library and the Historical Society of Cheshire County</a></span>
</figcaption>
</figure>
<p>National constitutional prohibition, as decreed by the <a href="https://en.wikipedia.org/wiki/Eighteenth_Amendment_to_the_United_States_Constitution">18th Amendment</a> and the <a href="https://www.archives.gov/education/lessons/volstead-act">Volstead Act</a>, was devastating to the beer industry in the short term. But in the long term, it further laid the groundwork for a nation of bland beer drinkers. </p>
<p><a href="https://www.tandfonline.com/doi/full/10.1080/00076791.2015.1027691">Careful estimates</a> by economist Clark Warburton found that alcohol consumption during Prohibition may have actually risen for wine and spirits but fell by two-thirds for beer, which was harder to conceal. Although Prohibition may have introduced a generation of young people to <a href="https://theconversation.com/the-prohibition-era-origins-of-the-modern-craft-cocktail-movement-109623">cocktails</a>, they had hardly any exposure to beer – and certainly hadn’t acquired the taste for hearty beer. </p>
<p>In March 1933, eight months before the 21st Amendment repealed Prohibition, Congress <a href="https://www.alcoholproblemsandsolutions.org/cullen-harrison-act-early-start-national-repeal/">modified</a> the Volstead Act to allow the production of “non-intoxicating,” low-alcohol beer and wine, with a maximum of 4 percent alcohol by volume. </p>
<p>The new, watered-down beer was a huge hit with the public, which hadn’t tasted a full-strength legal beer since 1917. Dark beers and ales had accounted for some 15 percent of the market before World War I. But in 1936 their share was just 2 to 3 percent. In 1947, researchers at Schwarz Laboratories analyzed the alcohol, hop and malt content of American beers in the 1930s and 1940s and <a href="https://www.tandfonline.com/doi/full/10.1080/00076791.2015.1027691">remarked</a> that many of these early post-repeal beers were “too hoppy,” “too heavy and too filling” for consumers’ tastes. The report noted “a corrective trend” in which brewers sharply reduced their hop and malt content.</p>
<p>More adventurous brewers and drinkers were also stymied by post-Prohibition laws. State and federal policies effectively <a href="https://beerandbrewing.com/the-day-homebrewing-was-legalized/">banned homebrewing</a>, and most states required a “three-tier” system of brewers, distributors and retailers that made it more difficult to make and market specialty beers.</p>
<p>The blandification of American beer continued for another 70 years. During World War II, <a href="https://books.google.com/books?id=hHNNBAAAQBAJ&pg=PA132&dq=mittelman+beer+3.2+war&hl=en&sa=X&ved=0ahUKEwiR0bmHrefZAhXQyVMKHUD_DZAQ6AEIJzAA#v=onepage&q=mittelman%20beer%203.2%20war&f=false">American troops got 4 percent alcohol beer</a> in their rations, exposing yet another generation to the joys of weak beer. The hop and malt content of beer <a href="https://www.tandfonline.com/doi/full/10.1080/00076791.2015.1027691">fell sharply and steadily over this period</a>. Hop content fell by half from 1948 to 1969, and the rise of “lite” beer in the 1970s accelerated the trend. Hop content fell 35 percent from 1970 to 2004.</p>
<p>Despite the phenomenal rise of craft beer, light beers are still dominant. The craft beer explosion <a href="https://www.processhistory.org/craft-beer-dighe/">is a remarkable story</a>, but perhaps we should stop calling it a revolution. </p>
<p>For now, bland beers are still king.</p><img src="https://counter.theconversation.com/content/91737/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ranjit Dighe does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The unique role of the temperance movement in US history might explain why, when it comes to Americans’ tastes, bland beer is still king.Ranjit Dighe, Professor of Economics, State University of New York OswegoLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/683832017-05-24T15:06:35Z2017-05-24T15:06:35ZBig alcohol is poised to expand into Africa. Why this is bad news for health<figure><img src="https://images.theconversation.com/files/170546/original/file-20170523-5782-13lvwn3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>The alcohol industry is doing exactly what the tobacco industry did several decades ago to ensure growth and increase profits: expanding into Africa as an underdeveloped market. As a result, exposure to alcohol in African countries is expected to increase in the next few years. With it comes <a href="http://www.bmj.com/content/351/bmj.h6087">alcohol-related health and social problems</a>.</p>
<p>Strategy hints coming out of the <a href="http://www.timeslive.co.za/sundaytimes/businesstimes/article1836806.ece">US$ 103 billion merger</a> between SAB Miller and AB InBev provide a good reference point. The merged entity’s strategy clearly shows that Africa will be a critical <a href="http://www.ab-inbev.com/content/dam/universaltemplate/ab-inbev/investors/releases/11November2015/Investor%20Presentation%20-%20Building%20the%20First%20Truly%20Global%20Beer%20Company%20-Final.pdf">driver for growth</a>. <a href="http://www.worldfinance.com/wealth-management/africas-untapped-beer-market">Competitors</a> like <a href="http://www.bizcommunity.com/Article/196/82/132044.html">Pernod Ricard</a> and <a href="https://www.forbes.com/forbes/welcome/?toURL=https://www.forbes.com/sites/greatspeculations/2015/04/30/diageo-could-africa-be-the-motor-for-growth/&refURL=https://www.google.co.za/&referrer=https://www.google.co.za/">Diageo</a> are not far behind. </p>
<p>The alcohol industry is <a href="http://money.cnn.com/2016/05/13/news/alcohol-sales-fall/">under pressure</a> and needs to develop new sources of growth and profits. Markets in the developed world are under threat as a result of saturation. This is coupled with the fact that only a limited numbers of new drinkers are entering the market each year due to low population growth rates. </p>
<p>The expansion into developing economies comes as warnings about the <a href="http://www.sciencedirect.com/science/article/pii/S0140673612620893">harm</a> that alcohol causes are gaining traction. As a result several countries have <a href="http://www.who.int/substance_abuse/activities/gsrhua/en/">revised</a> their guidelines on alcohol consumption. In the <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/489795/summary.pdf">UK</a> for example, there’s a move to regulate the sale and marketing of alcoholic drinks. And in <a href="http://researchonline.lshtm.ac.uk/1367685/">Scotland</a> a minimum price for alcohol is about to be introduced. </p>
<p>As a result the alcohol industry is targeting less regulated but more affluent low and middle income countries. Africa is becoming a key <a href="http://onlinelibrary.wiley.com/doi/10.1111/add.12468/abstract;jsessionid=536328C1D79591080051A024681EFDAE.f03t02">focus</a>.</p>
<p><a href="http://www.sciencedirect.com/science/article/pii/S0140673612620893">Studies</a> show this is bad news for the continent. Alcohol is a risk factor for non-communicable diseases such as liver cirrhosis, heart disease and a range of common cancers of the breast, throat and mouth. Alcohol also <a href="http://www.worldbank.org/en/news/feature/2013/09/09/global-burden-of-disease-findings-for-sub-saharan-africa">interacts</a> with other health challenges such as HIV, road traffic accidents, violence – including domestic violence – and mental health.</p>
<h2>Alcohol use in Africa</h2>
<p>Sub-Saharan Africa provides particularly fertile ground for growing market share due to the high proportion of the population in many countries who <a href="http://forut.custompublish.com/getfile.php/2430323.994.qqcrwxxybe/Endal+Bakke+Half+the+world%5C%5C%5C's+population+do+not+drink.pdf">don’t yet consume alcohol</a> (especially among <a href="http://www.add-resources.org/african-women-are-non-drinkers.4947859-79090.html">females</a>), the <a href="http://www.un.org/esa/socdev/documents/youth/fact-sheets/YouthPOP.pdf">high youth population</a> in most countries, and the <a href="https://www.weforum.org/agenda/2016/05/what-s-the-future-of-economic-growth-in-africa/">growth in GDP</a> in certain countries. Low advertising costs, weak regulation, <a href="http://apps.who.int/iris/bitstream/10665/112736/1/9789240692763_eng.pdf">high-intensity consumption</a> of beer in these markets make for an ideal environment for global brands.</p>
<p>The dangers of alcohol are well documented. Across the globe, more than <a href="http://www.who.int/substance_abuse/publications/global_alcohol_report/msb_gsr_2014_1.pdf">3.3 million</a> people die from harmful use of alcohol each year. More than 20% of deaths from liver cirrhosis, certain cancers of the mouth and throat, interpersonal violence and self-harm are due to alcohol use.</p>
<p>Alcohol is responsible for more than <a href="http://www.thelancet.com/journals/lancet/article/PIIS0140-6736(16)31460-X/fulltext">7% of all deaths</a> globally and it was the 9th leading risk factor for death and disability globally in 2015, up from tenth place in 2005 and eleventh in 1990. In the southern sub-Saharan Africa region alcohol ranked fifth as a risk factor for death and disability. With rising alcohol exposure, the extent to which alcohol contributes to various negative health outcomes are expected to also increase. </p>
<h2>Using tobacco tactics</h2>
<p>The global alcohol industry’s new focus in low and middle income countries mirrors the moves made by big tobacco companies in penetrating these markets.
Transnational tobacco corporations have succeeded in driving up smoking in African markets through <a href="https://link.springer.com/article/10.1007/s10552-012-9914-0">aggressive marketing strategies</a>. Their strategy included disguising marketing as <a href="http://www.who.int/tobacco/media/en/tob-industry.pdf">corporate social responsibility</a> programmes.</p>
<p>Alcohol firms are using the same <a href="http://onlinelibrary.wiley.com/doi/10.1111/add.13048/abstract">strategy</a>. Under the guise of corporate social responsibility they have run campaigns to promote “responsible” and <a href="http://www.sab.co.za/alcohol-issues/tavern-talks-bozzas-tavern/">“moderate” drinking</a>. </p>
<p>Alcohol companies also position themselves as being committed to promoting the consumption of lower alcohol products. For example AB InBev’s campaign, called <a href="http://www.ab-inbev.com/better-world/a-healthier-world/global-smart-drinking-goals.html">Global Smart Drinking Goals</a>, states that its objective is to: </p>
<blockquote>
<p>Ensure no- or lower-alcohol beer products represent at least 20% of AB InBev’s global beer volume by the end of 2025.</p>
</blockquote>
<p>This may appear to be a positive message, but <a href="http://onlinelibrary.wiley.com/doi/10.1111/add.13048/abstract">research</a> on similar strategies suggests otherwise. It indicates that this is unlikely to be about substituting regular beer products for lower alcohol beverages. Rather the aim is to increase the overall size of the beer market through an expanded range of products.</p>
<p>Alcohol companies have also developed low-cost, entry-level products aimed at attracting new consumers, citing the greater safety of commercially produced products over homebrews. </p>
<p>An example is the introduction of commercially manufactured ‘<a href="https://www.bloomberg.com/news/articles/2012-03-15/sabmiller-tries-selling-african-home-brew">Chibuku Shake Shake</a>’ beer by SABMiller in Zambia. It’s based on a locally brewed traditional sorghum beer but is marketed as offering more consistent quality and safer than the home-brew variant. </p>
<p>The promotion of brewers products as safer alternatives forms part of a wider corporate social responsibility agenda aimed at highlighting the positive social impact that companies are having. A good example is <a href="http://www.diageo.com/en-row/newsmedia/pages/resource.aspx?resourceid=2730">Diageo’s water sanitation project</a>.</p>
<p>Another <a href="http://journals.co.za/docserver/fulltext/m_sajbl/5/2/m_sajbl_v5_n2_a12.pdf?expires=1489518543&id=id&accname=guest&checksum=722FBA029D87B54F08C4D3D690A905A5%20pages%20104-105">strategy</a> used successfully by tobacco companies as well as alcohol companies is government partnerships. </p>
<p>These have become an effective avenue through which the industry <a href="http://onlinelibrary.wiley.com/doi/10.1111/add.13048/abstract">influences</a> and limits regulation. For example, national alcohol policy documents from four sub-Saharan countries (Lesotho, Botswana, Malawi and Uganda) have been found to be identical and reflecting the alcohol industry’s <a href="http://onlinelibrary.wiley.com/doi/10.1111/j.1360-0443.2009.02695.x/full">preferred policy</a> wording.</p>
<p>As the global alcohol industry moves to expand across the continent, more research, policy and public attention needs to be paid to industry practices and governance mechanisms to help understand and prevent the negative impact this will have on the population’s health. Industry expansion into African markets will be sold as being progressive, as providing new jobs, access to safer and healthier alcohol products. Perhaps nearer to the truth would be to describe this as <a href="http://www.camy.org/about-us/staff/">David Jernigan</a>, the leading health academic who has analysed the impact of alcohol and its marketing did, labelling it <a href="https://books.google.co.za/books/about/Thirsting_for_Markets.html?id=uJ9bXwAACAAJ&redir_esc=y">“Thirsting for Markets”</a> and as possibly even as part of the recolonisation of Africa.</p><img src="https://counter.theconversation.com/content/68383/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Karen Hofman receives or has received funding from the IDRC Canada, BMGF, the MRC SA, USAID. </span></em></p><p class="fine-print"><em><span>Charles Parry does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Under pressure to create new markets, big alcohol producers are scouring the African continent in what promises to yield negative socioeconomic consequences.Karen Hofman, Program Director, PRICELESS SA ( Priority Cost Effective Lessons in Systems Stregthening South Africa), University of the WitwatersrandCharles Parry, Director of the Alcohol, Tobacco & Oher Drug Research Unit, South African Medical Research CouncilLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/706792016-12-23T06:41:35Z2016-12-23T06:41:35ZCocktails have transformed from drinks into aphrodisiac experiences<figure><img src="https://images.theconversation.com/files/151051/original/image-20161220-26712-ajfont.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">santypan/Shutterstock.com</span></span></figcaption></figure><p>For the philosopher Bertrand Russell, drinking alcohol was a sign of misery: happy people – a category that for the rapacious Russell included sexually satisfied people – did not seek escape in booze.</p>
<p>Yet for the rest of us mere mortals, sexy drinks and sexy feelings often go hand in hand. Sure, necking a few pints in a grungy pub probably has a similar effect – scientifically – to sipping away at a succession of perfect negronis on an Italian beach. But today’s trendiest booze makers and bar people insist on going rather further than the simple imbibing of alcohol. Their USP is the presentation of truly, shall we say, intoxicating drinking sessions, theatrical and layered from conception to construction to presentation. They want their drinks to invoke lust: aphrodisiac, embodied, enervating.</p>
<p>Gin is the centrepiece of the sensual cocktail revolution. These days, it’s an elixir with special powers. In Britain alone, there are now a record <a href="http://www.telegraph.co.uk/news/2016/03/28/britains-love-of-gin-sees-number-of-uk-distilleries-double/">233 gin distilleries</a> (the number was 116 in 2010). </p>
<p>Gin bars, such as The Ginstitute in Notting Hill and speakeasies such as the Stac Polly in Edinburgh and Gin Bathtub in New York, have sprung up. Meanwhile, LA’s giant gin bar The Flintridge Proper offers 200 bottles of gin, and makes its own blend with foraged botanicals, including wild sage and rosemary, star jasmine, and lemon from an employee’s back garden. Luxury boutique gins like the thyme, olive and basil-infused Spanish Gin Mare are now to be found where the Bollinger used to be in the houses of the swanky. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/151378/original/image-20161222-17318-q0l8ey.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/151378/original/image-20161222-17318-q0l8ey.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=402&fit=crop&dpr=1 600w, https://images.theconversation.com/files/151378/original/image-20161222-17318-q0l8ey.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=402&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/151378/original/image-20161222-17318-q0l8ey.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=402&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/151378/original/image-20161222-17318-q0l8ey.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=505&fit=crop&dpr=1 754w, https://images.theconversation.com/files/151378/original/image-20161222-17318-q0l8ey.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=505&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/151378/original/image-20161222-17318-q0l8ey.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=505&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Gin distilleries and homemade botanicals are blossoming.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/25375488@N06/7670372492/in/photolist-cFNEvA-cFNB1S-cFNBVj-zrxkJp-e3hvt8-e3ofZL-e3hvqH-e3hvsB-e3ofZ7-azgcW-cFNWEY-cFNDtE-cFNTBC-9Eby12-e3og13-e1A4DC-e3hvrx-86LALK-cFNNbC-e3hvsa-boW4Yv-e3ofZj-5VbVXb-cFNPQq-5iyz7N-2pCe5g-boW4JB-boW4uM-9DzpAs-6y1uT5-s66MG-4csATK-boVwa2-ft2aNy-cFNCA9-2enbb-cFNVzC-2pGC65-5n3kdk-5pxjXq-zomNr7-9Dwx3i-dbkyTH-4nMma9-FeFWZS-2pCcM8-2pC9xn-5KpjCo-2pGkwE-kvFPK">25375488@N06/flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>But what’s so aphrodisiac about gin? Mostly, the botanicals (the plants, spices and essences) it’s brewed with. With gin-makers getting ever-more creative in their use of botanicals, we – the lusty customers – are getting hit with more infusions meant to <a href="https://www.ginfestival.com/news/aphrodisiac-gins">inspire</a> carnality. </p>
<p>Cardamom, cinnamon, chocolate, honey and nutmeg are all examples, and can all be found in contemporary versions of mother’s ruin. Some brands are even more explicit: X-Gin, another luxury gin, bills itself simply as “a pure aphrodisiac”. Its combination of juniper berry with 15 herbs “and several of the best spices known to man” makes it, apparently, “gin for the queens, Gods and kings”. And, presumably, their orgies.</p>
<p>But gin alone can’t pull off the scene. So tonic is no longer tonic but a magical dance with aroma. And cocktails are not necessarily just drinks anymore, but an exercise in sensuality, where nose, eyes and tongue are marshalled in one smooth operation. A little sherbet here, a whiff of edible perfume there, a spray of violet essence, a flash of colour or fire or sugar.</p>
<p>Which is exactly the kind of thing that Smith and Sinclair, “adult play” experts and makers of essentials like, erm, edible cocktail lozenges, are offering at a pop up at the Sanderson hotel’s Purple Bar, Fitzrovia, London (until Christmas Eve). The result is, in fact, somewhere between the sublime and grotesque. Potions include the likes of lapsang suchong whisky, gold-dusted rose-infused gin stirred with a giant sugar diamond, and those naughty cocktail pastels in flavours such as spiced rum and whisky sour, equivalent to half a shot each.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/151381/original/image-20161222-17312-1ikri0l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/151381/original/image-20161222-17312-1ikri0l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/151381/original/image-20161222-17312-1ikri0l.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/151381/original/image-20161222-17312-1ikri0l.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/151381/original/image-20161222-17312-1ikri0l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/151381/original/image-20161222-17312-1ikri0l.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/151381/original/image-20161222-17312-1ikri0l.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Edible alcohol – why not?</span>
<span class="attribution"><span class="source">Zoe Strimpel</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>Your date is meant to be dazzled by fizzing smoke spewing from the “Thyme for Tea” cocktail, which is presented in a teapot; marvel at the way the (slightly sickly) maraschino-liqueur-filled “Violet You’re Turning Violet” turns a deeper shade of purple as it was being poured, and yelp with joy when a spoonful of chocolate sherbet was topped with Bailey’s, while a rather surprising edible Christmas essence is sprayed overhead. The intention is to dazzle and scramble senses, and – presumably – to tip you into bed when you’ve downed tools. On our visit, the former was rather more successful than the latter.</p>
<p>Meanwhile, over at the Green Bar at the plush <a href="http://www.hotelcaferoyal.com/">Hotel Café Royale</a> on Piccadilly, bar honcho Derren King has built a wardrobe of gin and botanicals that are more sophisticated than the Smith and Sinclair sensual assault and perfect for an awkward date. After making an intuitive read of each person’s tastes and even moods, he produces a botanicals-infused gin to match. </p>
<p>This is a delightfully gender-neutral exercise. My (male) date that night was given a rose-petal flute called a Red Queen (gin, sour cherry, clove, orange, champagne) while I was presumed to want a more austere White Queen (gin, lemongrass, lychee, lemon and champagne). Then I was “matched”, Bumble-like, with more drinks. My Tanqueray with lemon and lime, tea reduction, rose and lychee, plum wine and egg white was full to bursting with “look at me” cocktail tricks, while my more spartan friend – keen to assert his masculinity – was assigned celery gin, celery, fresh basil and olives in martini form. This was almost <em>too</em> masculine – he had to grit his teeth to swallow it.</p>
<p>Perhaps it’s fitting that sensory cocktails have taken flight in the age of Tinder, in which dates too often feel mechanical, bonds week, conversation a bore. If the app often fails to infuse dates with chemistry, the new breed of high-functioning cocktails can help.</p><img src="https://counter.theconversation.com/content/70679/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Zoe Strimpel does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Today’s trendiest booze makers and bars insist on going rather further than the simple imbibing of alcohol.Zoe Strimpel, PhD Candidate, University of SussexLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/567912016-05-04T10:11:18Z2016-05-04T10:11:18ZCan you imagine a world without Budweiser? We can<figure><img src="https://images.theconversation.com/files/121078/original/image-20160503-17469-13kpvo8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Long live the king?</span> <span class="attribution"><span class="source">Bud beer via www.shutterstock.com</span></span></figcaption></figure><p>Budweiser, the so-called King of Beers, may be on its last kegs.</p>
<p>It may seem odd to picture the demise of the flagship brand of the world’s largest beer company. But Anheuser-Busch – the U.S.-based unit of AB InBev – is following in the footsteps that led to the irrelevance of a host of other once-dominant companies – <a href="http://www.forbes.com/sites/daviddisalvo/2011/10/02/what-i-saw-as-kodak-crumbled/#6727d0e920f5">Eastman Kodak</a>, <a href="http://www.nytimes.com/1997/07/18/business/woolworth-gives-up-on-the-five-and-dime.html">Woolworth’s Department Stores</a>, <a href="http://www.innosight.com/innovation-resources/upload/Disruptive-Innovation-Primer.pdf">Bethlehem Steel</a> and <a href="https://hbr.org/2013/11/blockbuster-becomes-a-casualty-of-big-bang-disruption">Blockbuster Video</a>, to name a few. </p>
<p>While AB InBev <a href="http://fortune.com/2015/10/30/ab-inbev-earnings/">shareholders are cheering</a> each move to boost short-term profitability by snapping up other companies – <a href="http://www.bloomberg.com/news/articles/2016-01-14/ab-inbev-faces-in-depth-u-s-antitrust-review-on-sabmiller-deal">including the US$110 billion takeover</a> of rival SABMiller – CEO Carlos Brito may be unwittingly digging Anheuser-Busch’s grave by ignoring long-term trends. </p>
<p>How could the rational pursuit of profits and growth through acquisition mean the beginning of the end for Anheuser-Busch? </p>
<p>This, we would argue, is a case of <a href="https://hbr.org/2015/12/what-is-disruptive-innovation">disruption theory</a> in action. And the disruptors are the growing ranks of craft brewers that are collectively changing the industry and beer consumption habits as consumers <a href="http://www.businessinsider.com/many-millennials-havent-tried-budweiser-2014-11">increasingly shun Anheuser-Busch and its products</a> – the disrupted – for beers made locally and with a wider variety of higher-quality ingredients. </p>
<p>It’s something we’ve witnessed firsthand, in our own research and through an online community called <a href="http://craftingastrategy.com/">Crafting A Strategy</a> that two of us set up to share knowledge in the beer industry.</p>
<iframe src="https://datawrapper.dwcdn.net/ftDmm/1/" frameborder="0" allowtransparency="true" allowfullscreen="allowfullscreen" webkitallowfullscreen="webkitallowfullscreen" mozallowfullscreen="mozallowfullscreen" oallowfullscreen="oallowfullscreen" msallowfullscreen="msallowfullscreen" width="100%" height="450"></iframe>
<h2>New market disruption</h2>
<p>Harvard Business School Professor Clay Christensen coined the phrase “<a href="http://www.claytonchristensen.com/books/the-innovators-solution/">disruptive innovation</a>” in 1995 to describe how a new product or service initially takes root at the bottom of a market and then relentlessly moves upmarket, eventually displacing established competitors.</p>
<p>Eight years later he and Michael Raynor <a href="http://www.claytonchristensen.com/key-concepts/">described three criteria needed for a new market disruption</a> to occur. </p>
<p>Let’s consider each criterion in turn in the case of the beer industry. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/121091/original/image-20160504-17469-le5ax4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/121091/original/image-20160504-17469-le5ax4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=380&fit=crop&dpr=1 600w, https://images.theconversation.com/files/121091/original/image-20160504-17469-le5ax4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=380&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/121091/original/image-20160504-17469-le5ax4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=380&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/121091/original/image-20160504-17469-le5ax4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=478&fit=crop&dpr=1 754w, https://images.theconversation.com/files/121091/original/image-20160504-17469-le5ax4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=478&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/121091/original/image-20160504-17469-le5ax4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=478&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Prohibition became the law of the land in 1919.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/cizauskas/23789036064/in/photolist-Cfa2Cd-9bs2sF-obEyZU-dk3poM-ouz5H9-7DeB9p-6Xgo91-ouVAYi-oweSZp-6WUUvH-oddooH-oeYXys-nz4Qm8-ouXWRm-pUqcsJ-qbmZJ6-4ibvW3-5J7PVM-oeY8Ew-ocTPLB-oeXqP4-7DhpHQ-ouzXDg-oeYEFZ-ounf4R-owJPpn-ouyhFi-9bs2r6-oeZcwg-owqsx7-bB1VZX-wk3ubf-ou9B2A-wjPpuY-oeSB9H-9bv9i3-ouvX7n-ouTRU8-ouxyG9-odHtcH-ouAk8P-ov2BRj-osRPBu-hyBGRd-owPV1n-owTmND-ouTCaz-oeS9gf-oeYKMa-of1HHj">Flickr/Thomas Cizauskas</a></span>
</figcaption>
</figure>
<p><strong>1. Large populations of consumers who have not had the means to make the product themselves and have gone without it altogether.</strong></p>
<p>For most of the 20th century, high-quality craft beer was in short supply. </p>
<p>The bigger brewers mass-produced what one <a href="https://books.google.com/books?id=JMVSUEjTCWgC&pg=PA48&lpg=PA48&dq=We+don%E2%80%99t+make+beer;+we+make+flavored+water+for+people+who+don%E2%80%99t+like+beer&source=bl&ots=fw6q7qdsbl&sig=A5XO2jBw5MFH-9ILzTMcmRmP-ro&hl=en&sa=X&ved=0ahUKEwjTlu2p_7PMAhVBqh4KHc8XCFMQ6AEIHDAA#v=onepage&q=We%20don%E2%80%99t%20make%20beer%3B%20we%20make%20flavored%20water%20for%20people%20who%20don%E2%80%99t%20like%20beer&f=false">anonymous Midwest “braumeister” described</a> as “flavored water,” while home brewing <a href="http://www.homebrewersassociation.org/homebrewing-rights/statutes/">was illegal</a> in the U.S. until relatively recently. </p>
<p>In the <a href="http://www.sciencedirect.com/science/article/pii/S0007681304001004">words of Bill Coors, Adolph Coors chairman and CEO,</a> in 1987: </p>
<blockquote>
<p>You could make Coors from swamp water and it would be exactly the same.</p>
</blockquote>
<p>The repeal of Prohibition in 1933 didn’t include home brewing, which meant few people knew how to brew and new brewery start-ups were rare. The <a href="https://eh.net/encyclopedia/a-concise-history-of-americas-brewing-industry/">number of brewers</a> dwindled from several thousand prior to Prohibition to about 100 in the late ‘70’s.</p>
<p>That marked a turning point, as a new federal law finally made home brewing legal again. But other laws remained in force in the '80’s and '90’s that didn’t allow early craft brewers to sell directly to consumers, forcing them to first sell to a wholesaler that would then distribute the beer to a retail grocer or bar. This system meant the only way to make a reasonable profit was <a href="http://beeronomics.blogspot.com/2011/10/on-brewpubs-and-economies-of-scale.html">to go big and leverage economies of scale</a> to ensure your product was featured by distributors. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/121092/original/image-20160504-22761-1gqhpm8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/121092/original/image-20160504-22761-1gqhpm8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=458&fit=crop&dpr=1 600w, https://images.theconversation.com/files/121092/original/image-20160504-22761-1gqhpm8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=458&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/121092/original/image-20160504-22761-1gqhpm8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=458&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/121092/original/image-20160504-22761-1gqhpm8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=576&fit=crop&dpr=1 754w, https://images.theconversation.com/files/121092/original/image-20160504-22761-1gqhpm8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=576&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/121092/original/image-20160504-22761-1gqhpm8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=576&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Revelers celebrate with a pint after prohibition is repealed.</span>
<span class="attribution"><span class="source">Bar drinking via www.shutterstock.com</span></span>
</figcaption>
</figure>
<p><strong>2. Customers who use the product need to go to an inconvenient, centralized location.</strong> </p>
<p>There were <a href="https://www.brewersassociation.org/statistics/number-of-breweries/">only 89 breweries in America in the late 1970s</a>, and their distribution model meant that consumers had very few choices. In particular, they had inconvenient or no access to craft beer. They generally drank Bud, Pabst, Schlitz, Miller, Coors, etc. By 1981, these brewers <a href="https://eh.net/encyclopedia/a-concise-history-of-americas-brewing-industry/">controlled 76 percent</a> of the U.S. market. </p>
<p>In other words, you had a large population without easy access to well-crafted beer and a system that centralized production and tightly controlled distribution. This created an opportunity for disruption, in the view of <a href="https://hbr.org/2012/12/surviving-disruption">Christensen.</a> The question was, would something change that allowed a larger population to make beer and sell the product more directly to consumers?</p>
<p><strong>3. A technology/business model is developed so that a large population can begin owning and using, in a more convenient context, something that historically was available only in a centralized, inconvenient location.</strong> </p>
<p>In the beer story, that game-changing innovation was the brewpub business model. This became possible after laws began to change in the <a href="http://www.beerhistory.com/library/holdings/chronology.shtml">1980s</a> to allow over-the-counter sales of beer produced in-house. </p>
<p>Yakima Brewing and Malting Inc. opened in Washington state in 1982 and was closely followed by California’s <a href="http://www.californiacraftbeer.com/the-history-of-craft-beer-in-california/">Mendocino Brewing</a> in 1983. The advent of microbreweries coincided with <a href="https://hbr.org/2015/10/why-more-mas-is-a-sign-that-scale-is-no-longer-an-advantage">other industry trends</a> that made it easier to make a profit from small production. There was also growing <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2620918">ideological opposition</a> to <a href="http://pubsonline.informs.org/doi/abs/10.1287/orsc.2015.1000">the incumbent sector</a>.</p>
<p>Collectively, these changes drove the craft beer revolution in the U.S.</p>
<p>Noted beer historian <a href="https://eh.net/encyclopedia/a-concise-history-of-americas-brewing-industry/">Dr. Martin Stack</a> summed up the innovation this way: </p>
<blockquote>
<p>Microbreweries represented a new strategy in the brewing industry: rather than competing on the basis of price or advertising, they attempted to compete on the basis of inherent product characteristics. </p>
</blockquote>
<p>The result? The number of new breweries has grown exponentially, <a href="http://www.bloomberg.com/news/articles/2016-03-22/i-ll-toast-to-that-u-s-brewery-count-hits-all-time-record">recently surpassing the 1873 U.S. record of 4,131 breweries</a> that now occupy every state. </p>
<h2>Why disruption works</h2>
<p>Disruption works because the initial business models or technologies of the eventual disruptors don’t perform as well as existing ones, so little attention is paid by the incumbents. N. Taylor Thompson <a href="https://hbr.org/2013/09/what-markets-do-and-dont-get-about-innovation/">succinctly summarized</a> new market disruption as: </p>
<blockquote>
<p>a cheaper, more accessible, and worse-performing (business model) that turns non-consumers into customers. </p>
</blockquote>
<p>From a financial perspective, chasing a smaller group of nonconsumers (like craft beer drinkers) who want only beer that costs a lot to make seems like a relatively foolish use of assets. Instead, executives at AB InBev, which is also known for beers including Corona, Stella Artois and Michelob, understood that making light lagers at a <a href="https://finance.yahoo.com/q/ks?s=BUD+Key+Statistics">30 percent to 33 percent operating margin</a> allowed them to earn the most money out of each dollar spent. They ignored craft for so long because craft breweries typically operate on an unattractive 2-5 percent margin. </p>
<p>While being ignored, craft beer producers learned and improved without needing to focus attention on direct competition from the large incumbents, pushing operating margins higher and getting the attention of wholesalers who were keen to the <a href="http://www.mckinseyonmarketingandsales.com/a-perfect-storm-brewing-in-the-global-beer-business">changing buying habits among beer drinkers</a>. As a result, their operating margins soared, even as their scale remained relatively small. Boston Beer Company’s operating margins, for example, <a href="https://finance.yahoo.com/q/ks?s=SAM+Key+Statistics">have crept up to 16.3 percent</a>. </p>
<p>The <a href="https://www.brewersassociation.org/statistics/national-beer-sales-production-data/">numbers say it all</a>: while overall beer sales fell 0.2 percent in 2015, sales of craft surged 12.8 percent. Bigger craft brewers <a href="http://www.npr.org/sections/thesalt/2014/05/28/316317087/big-breweries-move-into-small-beer-town-and-business-is-hopping">are building factories</a> all over the U.S., and <a href="http://jom.sagepub.com/content/40/2/483">pipelines of expertise</a> are flowing toward craft as Anheuser-Busch executives migrate over.</p>
<p>But AB InBev’s response continues to follow the “disrupted” playbook and typical strategy for mature companies: mergers and acquisitions to defend their existing space and to increase average margins through economies of scale.</p>
<p>Most recently, the company agreed to buy fellow behemoth SABMiller, maker of dozens of beers including Leinenkugel’s, Miller Lite and Peroni and another brewer chasing the same high-margin beers American consumers <a href="http://www.wsj.com/articles/budweiser-ditches-the-clydesdales-for-jay-z-1416784086%22%22">increasingly shun</a>. Even attempts by SABMiller’s American division, MillerCoors, <a href="http://www.bloomberg.com/news/articles/2013-08-08/blue-moon-vs-dot-craft-beer-rivals-millercoors-strikes-back">to create “crafty”</a> beers are increasingly dismissed by consumers.</p>
<p>Here’s the irony: this merger <a href="http://craftingastrategy.com/blog/give-me-profitability-and-give-me-death">equates to</a> chasing a 30-33 percent margin on a $2 product (about $0.62) instead of investing in craft processes to make a 16-20 percent margin on a $5 product (about $0.90) that more and more people seem to want. </p>
<p>To make things worse for AB InBev, this craft beer movement seems to be not only spreading all over the U.S. but <a href="http://beergraphs.com/bg/238-where-in-the-world-do-people-drink-craft-beers/">also the world</a>. </p>
<h2>Chasing profits to death?</h2>
<p>Wessell and Christensen suggest that by the time incumbent firms realize a new market disruption is occurring, <a href="https://hbr.org/2012/12/surviving-disruption">it is usually too late</a>. <a href="http://www.reuters.com/article/a-b-i-ma-devilsbackbone-idUSL5N17F43V">Even a recent craft beer company buying spree</a> by Carlos Brito and AB InBev likely cannot stem the tide.</p>
<p>Case in point: its courtship of <a href="http://usopenbeer.com/2015-open/">highly acclaimed Cigar City Brewing</a> fell apart after the Tampa Bay brewer rejected AB InBev’s bid and <a href="https://cigarcitybrewing.com/oskar-blues-ccb/">opted instead</a> in March to become a part of private equity backed brewer Oskar Blues for <a href="http://www.denverpost.com/business/ci_29636788/oskar-blues-buys-cigar-city-brewing-deal-valued">$60 million</a>.</p>
<p>Cigar City likely left tens (perhaps hundreds) of millions of dollars on the table when it walked away from AB InBev. Late last year, for example, wine giant <a href="http://fortune.com/2015/11/16/constellation-brands-ballast-point/">Constellation Brands paid $1 billion</a> for the slightly larger craft brewer Ballast Point from California. </p>
<p>At the time, <a href="http://www.brewbound.com/news/fireman-capital-to-purchase-cigar-city">Cigar City founder Joey Redner said</a>:</p>
<blockquote>
<p>I was almost at the altar with someone else, but it never felt 100 percent right… It was a potentially life-changing opportunity and ultimately, I thought that I wasn’t going to be happy. No amount of money was going to make me happy.</p>
</blockquote>
<p>And his customers, the ones helping drive the trends reshaping the beer industry, must be very pleased, because AB InBev’s strategies are <a href="http://www.bloomberg.com/news/articles/2012-10-25/the-plot-to-destroy-americas-beer">creating a backlash.</a> The fear is that by buying up craft breweries they’ll end up destroying what they represent. </p>
<p>Was Cigar City’s move foolish or wise? Redner opted for less money, a better corporate fit and greater control in brewing the product Cigar City’s customers expect. </p>
<p>Regardless of whether that strategy is successful, we believe this move signals a tectonic shift in the global beer industry. Specifically, craft beer has diminished big beer’s longstanding competitive advantages built on scale, distribution and laws that minimized competition from small-scale brewers.</p>
<p><a href="https://hbr.org/2002/12/the-consolidation-curve">Large breweries have now, it seems, entered a strategic decline</a>, merging and acquiring each other and <a href="http://www.bloomberg.com/news/articles/2012-10-25/the-plot-to-destroy-americas-beer">chasing profits</a> at the expense of future customers.</p>
<p>Chasing higher profitability through <a href="http://www.bloomberg.com/news/articles/2012-10-25/the-plot-to-destroy-americas-beer">lower-quality products</a> and <a href="https://theconversation.com/beer-behemoths-struggle-to-fend-off-craft-brew-craze-47908">acquisitions</a> might please shareholders, but it also fits nicely into disruption theory’s playbook where new technologies, laws, consumer awareness and business models actively work against the long-held advantages of incumbents. </p>
<p>In 20 years, will cracking open a Budweiser on a summer day still be commonplace? Or will it be a relic of times past? If AB InBev stays on its current strategic course, the latter, while tough to imagine now, is the more plausible scenario.</p><img src="https://counter.theconversation.com/content/56791/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Samuel S. Holloway owns Crafting A Strategy, an online business knowledge sharing community for the beer industry. Content from Crafting A Strategy is cited in this article. Sam is a minority percentage owner of Oakshire Brewing, a small batch craft brewery based in Eugene, OR and serves on Oakshire's board of directors as an outside director.</span></em></p><p class="fine-print"><em><span>Mark R. Meckler is co-owner of Crafting A Strategy, an online business knowledge sharing community for the beer industry. Content from Crafting A Strategy is cited in this article.</span></em></p><p class="fine-print"><em><span>Rhett Andrew Brymer does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>It may be the world’s largest beer maker, but Anheuser-Busch’s days may be numbered thanks to the rapid rise of craft brewing and a little thing called disruption.Samuel S. Holloway, Associate Professor of Strategy and Entrepreneurship, University of PortlandMark R. Meckler, Associate Professor of Management, University of PortlandRhett Andrew Brymer, Assistant Professor of Management, Miami UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/490872015-10-14T13:25:56Z2015-10-14T13:25:56ZMerger of the world’s largest brewers comes at a high price<figure><img src="https://images.theconversation.com/files/98399/original/image-20151014-15149-sazezw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/thomashawk/507642542/in/photolist-LRNrC-ayr2jd-cBXSaW-hFddJL-4QBh4T-9bfnaR-83HJia-hT8YMy-83MioV-oyU2rY-99tWST-f7naef-99Gmb8-fXqgbV-cAT4ZQ-7eu1v5-kWEMLm-k5kTAz-ou3Gja-fuoyQq-87tFo8-ddiHBN-3nxB99-gvBCbs-sqGhjs-rvYGbE-9MgUcz-kpuzX-9LCot5-2j9US3-or8Nsh-o5Zdh2-oTeszG-5DNSky-s11buV-9UqC-qaPTJF-8jUCyx-a6MbkZ-6VxBsc-81udvL-5TKUWm-51pZ8W-9kxBY-6UU5yq-99XFbw-3prEo-kedoE-hVVfRK-39SiZX">Thomas Hawk</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span></figcaption></figure><p>The two biggest beer producers in the world are <a href="http://www.bbc.co.uk/news/business-34513520">set to merge</a> after SABMiller accepted Anheuser-Busch InBev’s US$104 billion offer. The deal will create a brewer selling one in every third beer worldwide, with brands like Budweiser, Stella Artois, Grolsch, Miller, Corona, Peroni under its umbrella.</p>
<p>As with all mergers and acquisitions, the idea is that by joining forces the new bigger-and-better company can implement economies of scale and scope, as well as increasing its market share – all resulting in greater profits. But there are no guarantees.</p>
<p><a href="https://hbr.org/2003/07/delusions-of-success-how-optimism-undermines-executives-decisions">Research</a> consistently <a href="http://fisher.osu.edu/supplements/10/10821/kaplanweisbach.pdf">finds</a> that between 60% and 80% of acquisitions fail to deliver the expected benefits and more than 50% destroy shareholder value. The reasons usually lie in the buyer being forced to pay too much for the company it is acquiring, botched integration and an over-estimation of the merger’s benefits. </p>
<p>Belgian brewer AB InBev has both a reputation and demonstrable track record for being able to effectively extract savings when acquiring new assets. For example <a href="http://www.forbes.com/2009/03/05/inbev-quarter-profits-markets-equity_drinks.html">when it took over Anheuser-Busch in 2008</a>. But mergers are a costly exercise for the bidder’s shareholders (and potentially customers). It is likely only the target’s shareholders who will be the main beneficiaries.</p>
<h2>Who really benefits?</h2>
<p>In major manufacturing operations economies of scale can be enormous which means breweries will be streamlined to focus on the largest and most modern. Economies of scope – where it’s cheaper to produce a range of products together than individually – will be substantial too. In terms of personnel, for example, head offices and country management teams are likely to be integrated. Plus, the combined purchasing power of the new bigger company should also realise substantial savings.</p>
<p>The deal will also give AB InBev access to growth markets in Africa and Latin America where it is currently not represented. Management will expect to benefit as they will preside over a much greater business resulting in greater pay, power and status. </p>
<p>But if drinkers are hoping the cost savings will be passed on to them I feel they will be sorely disappointed. They will probably find that choice will diminish as well. Indeed greater market power arising from mergers <a href="http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.163.2818&rep=rep1&type=pdf">usually results in higher prices</a>.</p>
<p>Thus, a major issue facing the merger of the world’s two largest brewers is the competition authorities, with antitrust regulators in the US <a href="http://www.ft.com/cms/s/0/c448ea08-5fa0-11e5-a28b-50226830d644.html#axzz3oWrK1Syn">likely to scrutinise the deal</a>. There is therefore a strong likelihood that they will have to dispose of some of their brands. For example, when AB InBev took over Grupo Modelo in 2013 it had to sell some of Modelo’s US assets, <a href="http://money.cnn.com/2015/10/13/investing/ab-inbev-sabmiller-beer-merger/">including Corona</a>. </p>
<p>It is also probable that product ranges will be reviewed and reduced to allow for greater investment in marketing the retained brands. This could see AB InBev having to divest a well-known brand, as it will have to appease the US competition authorities.</p>
<h2>Shareholder returns</h2>
<p>A combination of reasonably strong stock markets and low interest rates together with cash rich potential investors are largely responsible has seen an increase in mega-mergers, with this being hot on the heels of <a href="http://www.ft.com/cms/s/0/8f96a0f4-ea64-11e4-a701-00144feab7de.html">LaFarge’s US$50 billion merger with Holcim</a>. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/98400/original/image-20151014-15156-wux69s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/98400/original/image-20151014-15156-wux69s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/98400/original/image-20151014-15156-wux69s.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/98400/original/image-20151014-15156-wux69s.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/98400/original/image-20151014-15156-wux69s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/98400/original/image-20151014-15156-wux69s.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/98400/original/image-20151014-15156-wux69s.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The rise of craft beer has left the rest of the market flat.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/clehault/5029356555/in/photolist-8EqLu4-8EtYiJ-8EqNGe-8EtUeu-8EtV2q-8EtXWq-8EqL36-8EqNCk-8EtUob-8EqKU4-8EqNtn-8EqNwZ-8EqMDe-8EqNMF-8EqNk4-8H8nM7-nPoRNN-c1QyPC-cBjkGN-q6CQ6z-nrkbLK-dz2xUr-8skJ25-h7Amii-h7AS2A-h7Hnqx-rf2zNi-8skHVw-c9RXF5-9RZezz-sRdJBv-awdCPo-oENcYE-oqkjyL-oGyqKH-oqm1e4-dmRHpx-nwQDSC-nwznmw-nwA3iP-nQRxgr-nQRxcD-diKw9A-rZHbUS-zghCS1-eiBsPo-oyjH2F-eLYPPF-dSThVD-gmax3h">Christopher Lehault</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
</figcaption>
</figure>
<p>In the case of AB InBev a global beer market showing little growth may well be the major driving force. The market is <a href="http://www.cnbc.com/2015/02/27/beer-sales-set-to-decline-whos-to-blame-for-flat-beer-trade.html">largely flat</a> and in some regions is declining as other beverages such as wine continue to penetrate. Micro-brewers and their highly differentiated craft ales also continue to make progress. As a consequence cost, product and distribution rationalisation become an attractive way of increasing shareholder returns. </p>
<p>AB InBev has had to transfer many of the synergy benefits in cost savings to SABMiller’s shareholders through raising the price five times to win approval. They have clearly been structuring the offer to suit the two main shareholders who face a major tax bill if the deal was paid in cash. The offer is partially unlisted shares, which will allow shareholders to take profits at some stage in the future. </p>
<p>AB InBev’s determination to do this deal may ultimately be a problem for them. Advisor fees will run to hundreds of millions of pounds, much of which will be dependent on the deal succeeding. And when the stakes are so high, the impartiality of the advice they are getting is open to question. Mergers are costly and with AB InBev’s track record expect substantial redundancies and cost savings over the next year.</p><img src="https://counter.theconversation.com/content/49087/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Colley does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Why the merger of Anheuser-Busch InBev and SAB Miller benefits the target’s shareholders, but not the bidders and probably not customers.John Colley, Professor of Practice, Associate Dean., Warwick Business School, University of WarwickLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/479082015-09-29T08:40:56Z2015-09-29T08:40:56ZBeer behemoths struggle to fend off craft brew craze<p>Anheuser-Busch InBev, brewer of Budweiser, Stella Artois and more than 200 other brands, is already the largest beer maker in the world, <a href="http://www.stltoday.com/business/local/is-a-b-inbev-brewing-the-next-big-deal/article_781171ab-ac87-5808-b0f8-a2fa67589959.html">controlling</a> more than 20% of global sales. It may soon get a lot bigger: this week it reportedly <a href="http://www.reuters.com/article/2015/09/27/us-sabmiller-m-a-idUSKCN0RR0YY20150927">plans</a> to bid for its closest rival, SABMiller, in a deal that could create a company worth some US$275 billion. </p>
<p>If this transaction were to occur without either party being forced to sell off too many assets to meet the demands of government regulators – not a sure thing – it could create one of the world’s ten largest companies by market value. The resulting “<a href="http://www.stltoday.com/business/local/how-burger-king-public-offering-could-fund-megabrew/article_282d4dd2-7f69-11e1-a65f-0019bb30f31a.html">MegaBrew</a>,” a term coined by Sanford Bernstein analyst Trevor Stirling, would control as much as 30% of total beer sales.</p>
<p>The planned acquisition continues a <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2268705">dramatic trend</a> of fewer and larger brewers dominating the beer industry. Back in 2000, there were 22 major beer makers. A series of mergers, takeovers, joint ventures and majority purchases whittled that down to just four in 2012. These four giants, which also include Heineken and Carlsberg, are all headquartered in Western Europe and currently account for <a href="http://www.beerinsights.com">more than three-quarters</a> of US beer sales. </p>
<p>And soon that could be just three giants. </p>
<p>So what’s driving this intense consolidation in the beer industry? How are these behemoths handling the rapid rise of craft brewing? And what does it all mean for consumers? </p>
<p>The answers to these questions, as I’ve learned over my 17 years exploring food system trends – particularly industry consolidation – and their impact on sustainability, can be as complex as a hoppy IPA.</p>
<h2>The battle for growth</h2>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/96299/original/image-20150926-17729-5ahnoc.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/96299/original/image-20150926-17729-5ahnoc.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/96299/original/image-20150926-17729-5ahnoc.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=764&fit=crop&dpr=1 600w, https://images.theconversation.com/files/96299/original/image-20150926-17729-5ahnoc.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=764&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/96299/original/image-20150926-17729-5ahnoc.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=764&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/96299/original/image-20150926-17729-5ahnoc.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=960&fit=crop&dpr=1 754w, https://images.theconversation.com/files/96299/original/image-20150926-17729-5ahnoc.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=960&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/96299/original/image-20150926-17729-5ahnoc.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=960&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The chart shows the industry’s steady consolidation.</span>
<span class="attribution"><span class="source">Phil Howard</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>AB InBev, which has been <a href="http://adage.com/article/news/a-sabmiller-ab-inbev-merger-u-s/230264/">rumored</a> to be hunting SABMiller for years, is expected to offer $106 billion to buy the maker of Peroni and Grolsch. It would <a href="http://www.reuters.com/article/2015/09/27/us-sabmiller-m-a-idUSKCN0RR0YY20150927">combine</a> AB InBev’s strength in Latin America with SABMiller’s in Africa, where it controls 90% of the market. </p>
<p>Heineken rejected a bid from SABMiller one year ago, a combination that had the potential to stave off acquisition attempts from AB InBev, at least for the near future.</p>
<p>Although all four of the top companies are extremely profitable, they are experiencing <a href="http://www.antitrustinstitute.org/sites/default/files/Global%20Beer%20Road%20to%20Monopoly_0.pdf">flat or declining sales in many of their largest national markets</a>. That has left acquisitions – both of each other and smaller regional breweries – as one of the few options available to continue the rapid rates of growth demanded by their shareholders. </p>
<p>Their other main options for increasing profits include cutting costs and raising prices. And that’s where we get to consolidation’s negative impact on consumers.</p>
<h2>Price fixing and signaling</h2>
<p>In recent years, the prices for beer have <a href="http://blog.wblakegray.com/2013/02/is-budweisercorona-merger-really-bad.html">increased much faster than those for wine and spirits</a>, coinciding with the <a href="http://www.amazon.com/Concentration-Power-Food-System-Contemporary/dp/1472581113">greater market power</a> of the big four brewers. </p>
<p>In Europe, price fixing has often been to blame, while in the US the tactics have been more subtle, though the the result has been the same. </p>
<p>In 2007, for example, Heineken, Grolsch and Bavaria <a href="http://www.nbcnews.com/id/18176660/ns/business-world_business/t/eu-fines-brewers-m-price-fixing-probe/#.VgliK7ThsQ4">were accused</a> of holding secret meetings in the 1990s to divvy up markets and fix prices in the Netherlands, leading to $370 million in fines by European Union regulators. </p>
<p>In the US, no such meetings were even needed. In a classic example of “price signaling,” AB InBev, which <a href="http://www.ab-inbev.com/content/dam/universaltemplate/abinbev/pdf/investors/annual-and-hy-reports/2014/AB_InBev_AR14_EN_full.pdf">controls</a> about half the beer market, would regularly lift its prices, and SABMiller and other brewers <a href="http://www.justice.gov/opa/pr/justice-department-files-antitrust-lawsuit-challenging-anheuser-busch-inbev-s-proposed">quickly matched those increases</a>. </p>
<p>This behavior got the attention of officials at the Department of Justice, which took the rare action of blocking AB InBev’s bid in 2013 to take full control of Mexican brewer Modelo, maker of Corona and Pacifico. A <a href="http://www.bloomberg.com/news/articles/2013-04-19/ab-inbev-u-s-file-agreement-in-court-on-modelo-acquisition">deal later emerged</a> that allowed the acquisition to go through, but Modelo’s business interests in the US had to be sold to a rival company to prevent AB InBev, which <a href="http://www.ab-inbev.com/content/dam/universaltemplate/abinbev/pdf/investors/annual-and-hy-reports/2014/AB_InBev_AR14_EN_full.pdf">reported</a> $47 billion in sales last year, from having even more market power to control prices. </p>
<p><a href="http://www.ft.com/cms/s/0/17eb2264-6066-11e5-a28b-50226830d644.html">Most analysts</a> expect that if the AB InBev-SABMiller deal goes through, regulators in the US and possibly China will require similar selloffs to dilute the combined company’s market dominance. SABMiller controls about a quarter of the US market. </p>
<p>Regardless, the economic power of AB InBev will increase substantially on a global level.</p>
<p>One example of this increased power is the ability to dominate shelf space at retailers. Many retail chains give either AB InBev or SABMiller <a href="http://www.washingtonpost.com/business/beer-merger-would-worsen-existing-duopoly-by-ab-inbev-sabmiller/2013/02/01/efa78ce8-6b1c-11e2-af53-7b2b2a7510a8_story.html">direct control over the placement of all the beer they sell</a>, including competitors’ products. This gives them to power to place their own brands in the most visible locations, and allot them the most space. </p>
<p>This strategy is aided by offering numerous slightly different versions of the same product, such as the dizzying number of varieties of Bud Light that fill the refrigerator cases. The acquisition could leave AB InBev as the only “category captain” left. And that means your impulse choices would be strongly steered toward this firm. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/96542/original/image-20150929-30999-vmzqxv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/96542/original/image-20150929-30999-vmzqxv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/96542/original/image-20150929-30999-vmzqxv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/96542/original/image-20150929-30999-vmzqxv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/96542/original/image-20150929-30999-vmzqxv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/96542/original/image-20150929-30999-vmzqxv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/96542/original/image-20150929-30999-vmzqxv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Craft brewing has exploded in recent years.</span>
<span class="attribution"><span class="source">Craft beer via www.shutterstock.com</span></span>
</figcaption>
</figure>
<h2>The counter-trend of craft brewing</h2>
<p>While the big brewers consolidate, a countervailing trend is happening on the other end of the spectrum and shaking up the beer industry. </p>
<p>Although overall beer sales are leveling off in most industrialized countries, double-digit growth has occurred in the craft segment in recent years. To be <a href="https://www.brewersassociation.org/statistics/craft-brewer-defined/">considered craft</a>, annual production must be six million barrels or fewer, less than a quarter can be controlled by a non-craft brewer and most of its beer must derive from traditional and innovative flavors and ingredients. </p>
<p>US sales of craft brews <a href="https://www.brewersassociation.org/statistics/national-beer-sales-production-data/">surged 22%</a> in 2014, compared with about 1% for the overall market, according to the Brewers Association. As a result, craft beer’s market share doubled to 19% last year from 9% just <a href="http://www.bevindustry.com/articles/85377-craft-brewing-2011-volume-sales-grew-13-percent-">three years earlier</a>. </p>
<p>This means that as ownership has concentrated at one end of the supermarket beer aisle, it has diversified at the other end. Although the prices of craft brews tend to be higher, the number of options for beer drinkers has never been greater. At the end of 2014, there were 3,418 <a href="https://www.brewersassociation.org/statistics/number-of-breweries">craft brewing companies</a>, up 42% since 2012. </p>
<h2>The big brewers respond</h2>
<p>Big brewers have responded to the fast growth of craft with two strategies. The first is their conventional tack of acquiring selected craft brewers to offset the <a href="http://money.cnn.com/2015/07/30/investing/budweiser-bud-light-sales-anheuser-busch-inbev/">falling interest</a> in their own top brands, such as Budweiser. The other involves imitating their smaller rivals’ consumer-winning styles with “crafty” beers that <a href="https://www.msu.edu/%7Ehowardp/beer.html">hide their corporate parentage</a>. </p>
<p>Just this month, for example, AB InBev <a href="http://www.latimes.com/food/dailydish/la-dd-golden-road-brewing-buyout-20150925-story.html">purchased</a> Los Angeles-area brewer Golden Road (news you won’t find on the company’s website), and SABMiller <a href="http://247wallst.com/consumer-products/2015/09/10/millercoors-expands-craft-beer-effort-buying-into-saint-archer-brewing/">acquired</a> a majority interest in San Diego-based Saint Archer Brewing Company. </p>
<p>AB InBev has also created less mainstream brands that include Shock Top, Landshark and Wild Blue, while SABMiller developed Blue Moon, Batch 19 and Third Shift. Even the firm Blue Ribbon Intermediate Holdings, which has a “<a href="http://www.mycentraljersey.com/story/life/food/2015/07/21/draft-picks/30387635/">virtual monopoly on American heritage brands</a>,” such as Pabst, Schlitz, Stroh’s, Old Milwaukee and Heileman’s Old Style, outsources most of the brewing to SABMiller. </p>
<h2>An unstoppable trend?</h2>
<p>AB InBev and SABMiller have found some success with these strategies, but they have so far <a href="http://www.motherjones.com/tom-philpott/2014/07/craft-beer-revival">failed to compensate</a> for declining sales of their more mainstream brands. </p>
<p>The growth in craft and independent brews – and their multitude of distinct flavors and styles – shows no signs of slowing down. Each year, for example, the <a href="http://www.greatamericanbeerfestival.com/brewers/beer-styles/">Great American Beer Festival</a> adds to the number of styles that are judged in its competition – currently 92 plus a number of subcategories. </p>
<p>This trend, toward local and independent and away from mass-produced products, is a challenge the dominant players are facing in other industries as well, such as fast food, groceries and soft drinks. Although these huge companies are unlikely to disappear in the near future, the challenge of continuing to satisfy investors as well as consumers has encouraged defensive strategies that could be viewed as either bold or desperate.</p>
<p>Acquisitions are a temporary means of maintaining growth rates, but the success of smaller firms suggests that the bigger “MegaBrew” gets, the harder it may fall in the future.</p><img src="https://counter.theconversation.com/content/47908/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Phil Howard receives funding from the National Science Foundation and the U.S. Department of Agriculture. He is president of the Agriculture, Food and Human Values Society, and is a member of the International Panel of Experts on Sustainable Food Systems. </span></em></p>AB InBev’s expected bid for SABMiller continues a trend of industry consolidation at the top, but the strong growth in craft brewing is challenging that strategy.Philip H. Howard, Associate Professor of Community Sustainability, Michigan State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/179642013-09-17T05:36:20Z2013-09-17T05:36:20ZGlass half empty as 4,000 pubs prepare for last orders<figure><img src="https://images.theconversation.com/files/31189/original/hd7tq49x-1378906052.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Down the hatch: along with about 4,000 pubs.</span> <span class="attribution"><span class="source">Yui Mok/PA Wire</span></span></figcaption></figure><p>The latest issue of the <a href="http://www.thegoodpubguide.co.uk/">Good Pub Guide</a> warns that 4,000 pubs will close their doors over the next year because they serve indifferent food and drink and are “stuck in the 1980s”. This is a problem - not just for beer drinkers (although there are a lot of us in the UK) but because beer and pubs are so important for the British economy.</p>
<p>According to the British Beer and Pubs Association (BBPA), they account for almost 949,000 jobs, with £12.9 billion of wages and £19.5 billion of gross value added. In an era of high youth unemployment, the sector employs about 300,000 workers under the age of 25. </p>
<p>Strangely, while the number of pubs has declined, the number of breweries has increased exponentially. This is due to the separation between pubs and breweries which traditionally owned them. In the 1980s about 80% of British pubs were owned by the six big breweries. But in 1989 parliament issued the “<a href="http://www2.warwick.ac.uk/fac/soc/economics/research/workingpapers/2010/twerp_930.pdf">Beer Orders</a>” after recommendations made by the Monopolies and Mergers Commission. </p>
<p>These orders forced large brewers to either sell their brewery business or free from their ties half of more than 2,000 the pubs they owned. Breweries were forced to sell their pubs at very attractive prices, leading to the rise of the chains - the “pubcos” - dedicated to retail. What this meant was that the industry started to become dominated by companies whose imperative wasn’t necessarily to make and sell beer, but companies dedicated to making a profit for their shareholders - and the two aren’t necessarily the same thing.</p>
<p>Research data <a href="http://www.beerandpub.com/news/uk-beer-sales-drop-in-q3-need-for-urgent-freeze-of-beer-duty-escalator-say-brewers-and-pubs-bbpa-beer-barometer">from 2011</a> indicated that of about 51,000 pubs open in the UK, 55% were owned by pubcos. About 25% were working as independently owned businesses and the remaining were owned and managed by breweries. </p>
<p>Pubcos tend to invest in urban and town centres, where pubs can guarantee higher margins of income. This is one of the things that has caused the <a href="http://www.independent.co.uk/news/uk/home-news/pub-companies-closing-20-village-locals-a-month-598667.html">steep rates of decline</a> in rural areas, where tenants and lessees have been squeezed between increasing rents and a declining customer base (due to drink-drive laws amongst other things). The imperative of attracting new customers, especially non-locals, by turning pubs into gastropubs has frequently created friction between pub managers and their local customers. Freeholders may do better in rural areas, probably because they aren’t subject to the ties and prescriptive company policies that tend to dog tied pubs.</p>
<p>The greediness of pubcos is not the only factor explaining the decline of pubs. The <a href="http://www.camra.org.uk/beertax">higher levels of tax</a> payable by on-licence retailers compared to off-licence, the rise and rise of home-entertainment and the appearance and growth of European-style cafes and theme-bars especially in urban and town areas have progressively made traditional pub-nights less attractive. </p>
<p>The closure of so many pubs has had significant repercussions on employment, particularly for students and single parents, are attracted to the part-time jobs and flexible hours the industry offers. And when you think that according to the <a href="http://www.ippr.org/publications/55/8519/pubs-and-places-the-social-value-of-community-pubs">Institute of Public Policy and Research (IPPR)</a> each pub injects an average of £80,000 into its local economy, then the closure of a local pub can be devastating in some rural areas.</p>
<h2>Social capital</h2>
<p>The disappearance of the British pub is also destructive to communities. In rural areas, pubs are frequently the only places of aggregation for local residents, and work as village hubs, the centre for charitable and sporting ventures. Rural pubs rarely experience problems associated with <a href="http://www.sirc.org/publik/dandpd.pdf">binge-drinking and antisocial behaviour</a>, contrarily to pubs located in urban and town centres. The coalition government made the “Big Society” its political manifesto. It should then probably do more to preserve those places which foster engagement among individuals and build and enhance community networks. </p>
<p>The good news is that some communities are starting to react to pub closures by creating <a href="http://www.bbc.co.uk/news/uk-england-london-22016830">co-operative pubs</a>. Locals form a co-operative by raising the money to buy their pub, which is usually leased out to a manager (also local) afterwards. The same locals then become shareholders and customers at the same time, creating a virtuous circle which can provide a sustainable pattern of growth for local community pubs. This started out in rural areas but - interestingly - co-operative pubs are starting to appear also in town centres, supporting the idea that pubs work as centres of aggregation for entire communities.</p>
<h2>Breweries flourish</h2>
<p>Good news for pubs may arrive also from the brewing sector. The number of breweries has increased impressively in the past 20 years, mainly due to the <a href="http://www.emeraldinsight.com/journals.htm?articleid=873696">Progressive Beer Duty</a> which has favoured <a href="http://uk.reuters.com/article/2013/05/23/uk-britain-microbreweries-idUKBRE94M0MR20130523">the proliferation</a> of small and micro-breweries. </p>
<p>This has given Britain an impressive choice in terms of ales, but now the market seems close to reach a tipping point. With more than 1,100 breweries operating in the UK today, the question is how the demand will be able to absorb the supply, rather than which fiscal policy will best support this growth. </p>
<p>This is why breweries have started to buy pubs and use them as outlets. In addition, small breweries tend to compete and co-operate among each other - so outlet pubs can sell casks swapped with other breweries on weekly basis. Pubs may become valuable commercial spots for breweries once again, reversing somehow the side effect generated by the Beer Orders. This situation could give pubs some more chances to halt their decline.</p>
<p>In Britain, pubs are not just businesses, they are assets for their communities. While fiscal policies and other supportive campaigns can help to preserve their existence and make them sustainable businesses, their survival – especially in remote areas - is simply a matter of use it or lose it.</p><img src="https://counter.theconversation.com/content/17964/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ignazio Cabras receives funding from the British Academy. He is affiliated with CAMRA</span></em></p>The latest issue of the Good Pub Guide warns that 4,000 pubs will close their doors over the next year because they serve indifferent food and drink and are “stuck in the 1980s”. This is a problem - not…Ignazio Cabras, Lecturer in Economics, Business and Management, University of YorkLicensed as Creative Commons – attribution, no derivatives.