“I don’t think we’ve taken share directly from beer. Frankly, it’s arrogant and embarrassing when I hear spirit industry executives pounding their chests about how clever they have been at taking share from beer.” So said Sazerac prexy Mark Brown at Beer Insights Spring Conference, perhaps surprising those who may have expected a bit of chest pounding. Sazerac is 166-yr old spirit co that doubled its biz every 5 yrs for 35 yrs, now 50X bigger than in 1981, #5 globally, and oh yeah, owned by Bill Goldring, who also owns 50% of MC mega distrib Crescent Crown. So Mark, who started career in beer biz, knows whereof he speaks. Yet question remains: why has spirits outperformed beer and gained significant share of alc bev biz in US?
“Convergence of unrelated events,” in Mark’s view. Big beer “has its own set of problems which it created over 30 years,” primarily “sustained sophomoric advertising and abandonment of market sectors” and commoditized beer, to which “consumers responded accordingly.” Ad comment no surprise and acknowledged by many in beer. Market sector point is that US big brewers, in efforts to drive big brands, “left a huge white space” that craft brewers filled with choice and taste. Put another way, “in the world according to Augie [Busch] there would just be one beer. Any deviation from that was an unnecessary pain in the ass.” Be great to have 95% of biz in single SKU with black and white label. But that’s North Korea, Mark quipped, not world we live in. Big distillers meanwhile, “did not leave the white space” and climbed aboard premiumization train much sooner and enthusiastically.