Grolsch Goes to SABMiller

I just ran across the news that Grolsch shareholders have accepted SAB Miller's bid to buy a controlling share of the Dutch brewery.  This story, on its own, doesn't mean all that much to most of us, but the impact of global brewing consolidation is getting more and more apparent.

The buying offer made by SAB Miller was 48.25 Euros per share, which seems to be about 8 Billion total.  The International Trader had a few interesting points on the logic behind this move, along with a few of the risks involved.  However, the thing that caught my eye was this is that Grolsch is called a high margin beer.  I take this to mean that Grolsch is relatively cheap to make and sells for a premium, with its iconic flip-top and green bottle.

The South African Times seems to think, and I would have to agree, that this move will spur A-B to pick up another major brand.  This piece also talks about the long-rumored joining of forces between A-B and InBev - only now they paint the picture to suggest that A-B needs InBev more than InBev needs A-B.  There's a few other good nuggets to be found here, suggest you take a look.

Now, according to the Times UK, the biggest loser in all this could well be Heineken - and this makes sense to me as I consider marketing and shelf space.  If, all of a sudden, we start seeing Grolsch pushed as the Heineken alternative, with a green bottle all its own, that could hurt them in the long run.  The Times also suggests that this move may not be the end of SAB Miller's quest to consolidate, with a potential target found in Scottish and Newcastle.

Something else caught my eye in all this, SAB Miller's offer wasn't for current value, but based instead on 'future profitability'.  In this market, that isn't a gamble I'd want to take.

Again, this is probably something that won't impact you in any immediate fashion (unless you happen to have stock in Grolsch), but eventually all this consolidation will bite craft beer enthusiasts everywhere.  Just a couple of weeks ago, on the Brewer's Assn harvest phone call (discussing hop and barley harvests for the year and what that all means) it was mentioned that with consolidation comes less excess in ingredients - fewer brewers with 'left-overs' that have been so common and so vital for smaller breweries.  As consolidation continues and barley availability becomes more scarce, there could be some very real issues in the coming years, with regards to global ingredients.

Miller Chill

I went out to our favorite Mexican place tonight (one of our favorites, it should read) and ordered a Chile Verde Buritto that is a wonderful way to celebrate the Summer Solstice. After placing the order I was told I needed to try Miller Chill - "It has lime and salt". My wife laughed at the notion I'd pay the premium for the beer, which may have made me want to do it. I did it. "Sure, I'll take one" was my spontaneous reply. I debated getting a glass for the beer, but opted out figuring I was going to go all in on this tasting, drinking it the way the scientists/marketing gurus at Miller would want it sampled. It has been a while since drinking out of a bottle, felt weird.

Now, here's the deal. The beer isn't bad. It light in every way and I did pour a bit out to see what color it was (answer: yellow). The taste was what I think they wanted, Corona with lime. The lime was fairly subdued at first and the salt pretty much lost in the liquid. Again, not a bad beer. I don't have a lot more to say about the beers profile, but it should be noted that by the time my burrito showed up the beer's lime and salt came through more clearly - not sure if that was the temperature or the food bringing that out.

So, here's the zinger. This beer sucks. Why? Because it is supposed to. Calling this a good Mexican beer is the equivalent of calling Taco Bell good Mexican food. Sure, they go down easy and you can order both by the case with a good chance you'll finish, but why? Because they're cheap? No thank you. And no, I am not impressed that Miller found a way to put lime and salt in a light beer that otherwise has no character - no more than I believe adding lime and salt will make my six-pack of taco supremes taste better. Mexico puts out some fantastic beer, and sadly very few Americans seem to know. Some of the world's finest "Vienna-styled" lagers are produced there. Hell, one of the best Barley Wines I had this year was Cacupa's version that made it to the best of show round of Toronado's barley wine festival this year.

So what to do? If going on the brewers intention (brewer's intention... funny, more like if you believe what the focus group told the brewer) the beer definitely hit its mark. On top of that, I think this beer is going to be moderately successful for some time because of the way it is being marketed. When you compare it to Corona, it is comparable. I think they've misunderstood the appeal people have to actually putting in their own lime though, and eventually I suspect people would rather pick up the Corona sixers and a lime because that is what they're used to.

I don't know though, I just can't buy into the 'innovation' train the folks at Miller are on. I'd actually respect them more if they focused more on their flagship beers and didn't try to wow us with new packages and fun ingredients. So, with all this in mind, here's the score: 1.7/5

Yes, this is a harsh review. Again though, you can't convince me that Taco Bell is 'good' just because they have 'steak strips' in their otherwise crappy burritos.