Thursday, April 05, 2007

Beer: Big brewer goes undercover Organic was once beneath the threshold for big food manufacturers. They left organic to the hippies and the small-tiers. But things have changed, as companies from General Mills to Kraft have pursued the label and Wal-Mart has given its blessing. Organic is growing, unlike other sectors, and the margins are high. Organic is coming to the beer world, as well. Organic beer is made with organic barley and hops, and the brewing process involves no chemicals (You mean they use chemicals to brew regular American beer? - Yup.) And one of the drivers is good old Anheuser-Busch, the predominant US beer company. It is now test-market two organic brews, Wild Hops (a lager) and Stone Mill Pale Ale. After all, these people are willing to spring for a lot more per six-pack than your average Bud Lite swiller. But guess what? Nothing on the bottle label or the packaging says Anheuser-Busch. The name on the products is Green Valley Brewing Company, a new subsidiary of A-B. Actually, it's just a name - the beers are brewed in existing A-B breweries. As a feel-good lure, every purchase triggers a small donation to the Organic Farming Research Foundation. Drinkers of organic beer are seeking to get away from Big Beer, but A-B is confusing the issue by its coyness and discretion. Currently the organic beer market is shared by a set of US microbreweries, including Eel River, North Coast Brewing, and Butte Creek Brewing (California), and Wolaver's (Vermont). There are also a few organic imports from Australia and the UK. What A-B has is marketing and beer distribution muscle, enough to push the other organics off the shelf. Or maybe A-B will decide eventually there is no money in organics, and drop its organic line after having driven a number of small brewers out of business. After all, the potential market is pretty piddling by teh beer giant's standards. Alternatively, SABMiller and Coors may feel a need to rush into the market and buy up the little guys. See about A-B's takover of Rolling Rock here, 8:42:27 PM

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