Why Guinness failed is why the Monster will prevail, and what craft beer can learn.
Estimated read time 4 min.
Not to get too heady on you, but the common thread between this week's top stories is Aristotle. "To know thyself is the beginning of all wisdom.” It's just as true today as it was 2,300 years ago. But what does that have to do with beer?
Stay In Your Lane
THE NEWS: Diageo, the parent company for Guinness, just announced that it is closing down production at its Open Gate Brewery in Maryland. The brewery, restaurant, and taproom opened in 2018. Reports say that about half of the overall staff at the location will lose their jobs, approximatley 100 people. That’s the really crappy part of this story.
Reportedly, the Maryland Open Gate Brewery was a multi-faceted $90 million project. The primary purpose of the facility’s 82-barrel brewhouse was to produce Guinness Blonde American Lager, the brewery’s flagship. That beer never captured the fancy of American beer drinkers to the degree Guinness hoped it would. Go figure.
“It took an army of people to build. It’s one of the proudest moments of my life.”
THE GIST: Few brands on earth are so singularly identified with one particular thing. People know exactly what to expect when they hear the word Guinness and it is not blonde, American, or lager. Know thyself. Know your brand. Stay in your lane. Kleenex is facial tissue. Guinness is stout. We all love to branch out and try new things but don’t discount your brand’s identity, especially if it's that strong.
The restaurant and taproom will remain open and Guinness will continue to produce beer at the site, using a 10-barrel system to brew what it calls “select experimental beers.” The 82-barrel system will go quiet.
News of the closure comes on the heels of Guinness’ announcement that it will open a smaller, 75-employee location in Chicago this summer. At the Chicago Open Gate, the mainline Guinness beers will come from Ireland, with the on-site brewery producing what it calls experimental, creative beers. We’ll see what people think of Guinness hazy IPA, Guinness lemon-peach radler, and Guinness barrel-aged saison.
Unleashing the Beast
THE NEWS: In January 2022, Monster Energy spent $330 million to acquire CANarchy, a company that owns several breweries including Cigar City, Oskar Blues, Deep Ellum, and others. That was Monster's first foray into the alcohol biz. Earlier this year Monster introduced its first alcohol product, The Beast Unleashed, distributing it across six states. Now, Monster Energy says it expects to distribute its hard seltzers across the entire nation by the end of this year.
THE GIST: This is an example of something foretold in the Taster Tray's 2023 predictions document. (It's still available. See the referrals section below). Large players, like Monster Energy, are getting into the alcohol beverage industry to capitalize on consumer interest in hard seltzer and ready-to-drink cocktails. In simple terms, craft producers will struggle to compete with those large players in that market space.
Try to keep up with that.
The folks who consume hard seltzer and RTDs, generally speaking, are not craft consumers. Lower price is more important than higher quality. Brand familiarity is more important than choice. Because of their scale, the big producers can operate on smaller margins, saturate the national market with advertising and broad distribution, and offer consumers lower prices.
Like we said earlier, stay in your lane. Know thyself. Do you disagree? Has your brewery, or a craft brewery you know of, enjoyed seltzer- or RTD-fueled success? Shoot us some feedback via email or the form below. We read it all.
Around the Web
Two California breweries merge, creating the largest Black-owned brewing company in the U.S. Full Circle Brewing and Speakeasy Ales & Lagers, both Black-owned, just announced that they are merging into one. Read the story (by The Business Journal).
This week we learned that Sapporo, which now owns Stone Brewing, is about to start using Stone's facility in Virginia to produce Sapporo beers. It will double Stone's overall production. Read the story (by ProBrewer).
Here's some feedback from last week's newsletter. [email protected] said, "Would have been better without the TikTok business, but no big deal to ignore. Trends and buyouts information stands on its own."
So how did we do this week?
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This week's Taster Tray was composed by Kendall Jones.