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Archives for August 8, 2006

The Next Big Little Niche

August 8, 2006 By Jay Brooks

Well I’ve known it’s been coming for a while now and have been sitting on it, because I’ve been researching a story about gluten-free beers. Today, Miller’s BrewBlog broke the story that Anheuser-Busch is readying a gluten-free beer for the market.

From the BrewBlog:

The brewer [A-B] on July 31 filed a brand label registration with the state of Missouri for a product called Red Bridge Sorghum beer. A-B previously had filed a trademark application with the U.S. Patent and Trademark Office.

A-B appears intent on jumping on a small bandwagon of brewers making beer with sorghum instead of barley. The dominant industry leader already has demonstrated its commitment to attacking tiny niches by rolling out organic beers.

Beers made with sorghum can be consumed by people with a condition called celiac disease. Exposure to gluten — a protein found in barley — triggers digestive problems in people with the disease.

Several craft brewers currently produce gluten-free beers. Unfortunately, because of ridiculously puritanical labeling restrictions that forbid any health claims on alcohol labels along with the fact the FDA has been criminally slow to adopt any standard of what gluten-free means (Europe by contrast has had a standard in place for years), they can’t really be labeled as gluten-free. Here’s a sample of gluten-free beers currently available from U.S. craft brewers:

  • Dragon’s Gold, from Bard’s Tale Beer
  • Hooligan Pale Ale, from Widmer Brothers Brewing
  • New Grist, from Lakefront Brewery
  • Passover Honey Beer, from Ramapo Valley Brewery

In addition, brewers in Australia, Belgium, France, Italy and the United Kingdom are all producing gluten-free beers. The gluten-free seminar at this year’s Craft Brewers Conference was surprisingly well-attended. When I queried several brewers there, I got the same response from all of them. “We get a lot of customers asking about this.”

My interest in these beers comes originally from my son, Porter, who is autistic. In reading about Autism Spectrum Disorder, I’ve discovered that a common symptom among the constellation of autistic indicators is stomach problems and often times a gluten-free diet helps immensely. Like much about autism, scientists and doctors aren’t exactly sure why this happens but I’m glad so far Porter doesn’t show signs of having this problem. But there are also millions of Celiac sufferers worldwide, and the number is growing. People with celiac disease, likewise, must also abstain from gluten, a part of most grains like barley and wheat. One out of every 133 people in the U.S. has celiac disease.

Here’s a short description of celiac disease from the Celiac Disease Foundation:

A lifelong autoimmune intestinal disorder, found in individuals who are genetically susceptible. Damage to the mucosal surface of the small intestine is caused by an immunologically toxic reaction to the ingestion of gluten and interferes with the absorption of nutrients. Celiac Disease (CD) is unique in that a specific food component, gluten, has been identified as the trigger. Gluten is the common name for the offending proteins in specific cereal grains that are harmful to persons with CD. These proteins are found in all forms of wheat (including durum, semolina, spelt, kamut, einkorn, and faro), and related grains, rye, barley, and triticale and must be eliminated.

It seems obvious to me that this is the next big small niche beer. I know that last statement was oxymoronic, but hear me out. Gluten-free beers aren’t going to be as popular as light beer or even porters, but with 1-in-133 Americans with celiac disease combined with thousands, perhaps millions, of autistic kids on gluten-free diets who will begin reaching the age of majority in the coming years, and you’ve got a sizable little market that’s likely to emerge. Now that A-B is entering this market, more attention will surely be focused on it. And A-B, regardless of anything else you can say about them, doesn’t take any action without first having thoroughly researched, tested and studied the market. So look for many more gluten-free beers in the market soon.

Filed Under: Beers, News Tagged With: Business, National

Foster’s Closing Ranks Again

August 8, 2006 By Jay Brooks

Back in June, Foster’s announced it was pulling out of its last remaining brewery in China. Now they’re also leaving India and Vietnam. Reportedly, Foster’s wants to concentrate on their domestic beer market and on selling wine.
 

Vietnam

The Vietnam operations are being sold to Asia Pacific Breweries. According to their press release, APB “will be purchasing the Vietnam assets of the Foster’s Group for $105 million. This transaction includes the rights to brew, market and distribute Foster’s Lager, Biere Larue, BGI, Flag and Song Han, in Vietnam.” This acquisition brings APB’s total ownershio to 29 breweries in ten countries.
 

India

Foster’s India is being sold to SABMiller for $120 million.

From the SABMiller press release:

Foster’s India currently operates one brewery based in Aurangabad in the state of Maharashtra with a licenced annual capacity of 350,000 hectolitres. The company produces, distributes and supports Foster’s Lager, Amberro Mild and Amberro Strong beer brands in the Indian market. In the year ended 30 June 2006, total beer sales were 236,000 hectolitres (2005: 209,000 hl) with Foster’s Lager representing 88% of total production and sales (2005: 85%).

India is the third largest market for the Foster’s brand globally and it has achieved a CAGR of 13% since operations commenced in 1998. It has a presence in 19 Indian states and has a substantial share of the mild beer segment in the strategic state of Maharashtra.

SABMiller India will look to extend Foster’s Lager nationally through its network of ten breweries and seek significant cost benefits from brewing and distributing the brand locally. The Aurangabad brewery will also provide additional capacity for SABMiller’s presence in Maharashtra as well as a platform for access to the Mumbai market.

SABMiller India is the subcontinent’s second largest brewer. Its brand portfolio includes Royal Challenge, Haywards 5000, Castle and the recently launched Haywards Black, India’s first stout beer.

The Foster’s Brand

First brewed in 1888 by the Foster brothers in Melbourne, Australia, Foster’s Lager is one of the world’s best beers. As one of only a handful of truly global beer brands, Foster’s in now available in over 150 countries. Foster’s is one of the fastest growing international premium beer brands in the world and has enjoyed international growth of 40% since 1997. Foster’s is brewed in 12 countries, at 17 locations with over 100 million cases of Foster’s sold annually.

Filed Under: News Tagged With: Asia, Business, Press Release

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