Global Brewers' Strategy

To say that beer is experiencing a transition period sounds almost like an euphemism. Beer markets are becoming extremely difficult to read due to their increasing fragmentation. Global brewers feel the threat and the need to react.


Yet, their war is a particularly hard one to fight. They know that their enemy is ‘craft beer’, yet no one knows what that term actually means, as there is no global agreement. When you don't know who your enemy is, fighting your war gets a bit more complicated.


Within such a confusing landscape global brewers feel disorientated. Despite a promising growth in developing economies, the loss of market share in Europe and North America is far from reassuring. Global brewers are seriously struggling to tackle the issue.


They used to buy smaller competitors and, in most cases, kill their brands immediately afterwards. Such a strategy has become obsolete. In order to have a presence in the craft beer segment, global brewer’s current strategy is to ‘innovate’ their offer. This might be achieved by:


  1. Buying prosperous craft breweries and let them operate under their original name;

  2. Turning former premium regional brands into stereotyped craft(ish) ones;

  3. Applying science to brewing and experimenting on yeasts.


I don’t think many of you really need examples for the option number one. However, in case you do, just think of all the recent AB-Inbev acquisitions in the US (too many to list), UK (Camden Town) and even Italy (Birra del Borgo).


As far as the second option is concerned, below you find a few pictures to summarise what Heineken did to its regional brands over the the past few years. The focus is on: craft(ish) packaging, popular craft beer styles, and often a stem glass to replace old fashioned pint/pilsner glasses.


Heineken UK: Caledonian 



Heineken Netherlands: Brand




Heineken Italy: Moretti



Let's now move to option number three. Probably the most fascinating to beer enthusiasts, although most of us would not admit it - we are clearly too afraid to appear supporters of the big players. The sad truth is that only global brewers are capable to engage with projects that demand scientific know-how and large investments, with rare exceptions. Some global brewers are making the most of this strength by experimenting on an ingredient that is too often overlooked by smaller players: yeast. Yeast is great. Yeast is THE ingredient. One may replace barley with sorghum, or hops with a mixture of herbs; yet, no yeast, no party. An endless combination of flavours may be achieved by experimenting on yeasts.


Carlsberg recently worked on the Re-brew project: a beer whose yeast was extracted from an 1883 bottle found in their cellars. The beer made the news, although it was not particularly 'experimental'.



 A fairly similar (yet more successful project I believe) is Heineken’s H41. The beer is brewed using a bottom-fermenting yeast (Saccharomyces eubayanus) found in 2011, in a cool climate region of Patagonia on the beech tree fungus Cyttaria.


I must stress the fact that Heineken did not commission, nor was involved to any degree in this research, but simply used the results to create H41. In case you want to know more, I invite you to have a look at the document where Diego Libkind, who discovered the yeast, writes about his study.


The modern lager yeast (Saccharomyces pastorianus) is now believed to have originated by the hybridisation between Saccharomyces eubayanus (since 2011 found in China, Tibet and Mongolia) and Saccharomyces cerevisiae (ale yeast). This discovery is a particularly exciting one for any beer enthusiast and I was glad to see Heineken Master Brewer Willem van Waesberghe presenting on this matter at the last Beer Bloggers and Writers Conference in Amsterdam.


The H41 tastes like no other lagers currently brewed and is characterised by a pungent note of clove. This certainly recalls a German weizenbier, but also the Finnish Sahti. It might be worth mentioning that Sahti was originally fermented at relatively low temperatures and the fermentation was induced by adding juniper twigs to the wort.


The future of this project is disappointingly uncertain. Heineken, like other big players, has no idea how to turn such a promising project into a real success. Its main interest is clearly not to benefit the beer world with something exciting. 


Although the strategies I outlined above are having some success, global brewers are still far from a final solution to their problems. For many young drinkers global brewers represent the establishment. Today's society is fighting the establishment as the establishment has failed society (no wonder Europe experienced a craft beer boom following the 2008 economic crisis). If global brewers want to regain market share in Europe and North America, they should simply change people's perception of their image: they should stop representing the rule, the controlling group.


And here is how I would undertake this process:


Firstly ...


...then of course...


...and most importantly...



Jacopo Mazzeo


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