Bloomberg News

Blue Moon Tells Beer Snobs to Drink Up and Show Respect: Retail

August 01, 2013

Blue Moon Tells Beer Snobs to Drink Up and Show Respect

Employees pour orange peels in to a brew kettle for Blue Moon beer at the brewery in Golden, Colorado. Photographer: Matthew Staver/Bloomberg

MillerCoors LLC has a message for beer snobs: Blue Moon is an authentic craft brew. So show a little respect.

Aficionados long ago dubbed Blue Moon an impostor cooked up by a megabrewer to exploit the explosive growth of artisanal beer. In recent months, small beermakers have stepped up their attacks -- calling suds like Blue Moon “crafty” for not spelling out their corporate parentage. Micro breweries have reason to be defensive: Blue Moon has grabbed what equals 15 percent of the U.S. craft market, expanded as far as Japan and spawned an Anheuser-Busch InBev NV (ABI) knockoff called Shock Top.

After years of quietly building its brand in the shadow of MillerCoors, Blue Moon is fighting back against the naysayers. It’s adding more artisanal brews, including a wine hybrid. Marketing emphasizes the beer’s provenance and Belgian-trained brewmaster. Blue Moon is even taking credit for helping to popularize craft.

“We should be proud to make beers that grow and are popular -- that’s the American way,” MillerCoors Chief Executive Officer Tom Long said in a interview. “Being small and unpopular, what’s the utility in that?”

Blue Moon’s decision to confront its critics is a tactical necessity. The brand is the centerpiece of MillerCoors’ Tenth & Blake Beer Co., created to capitalize on the rapid growth of craft and import brews and offset slowing sales of light beers.

Denver-based Molson Coors Brewing Co. (TAP:US), half owner of MillerCoors, rose 1.7 percent to $50.91 at the close while its other owner, London-based SABMiller Plc (SAB), rose 2 percent to 3284 pence.

‘Crafty’ Beer

The fight over Blue Moon’s legitimacy foamed over late last year when the Brewers Association, craft’s primary U.S. trade group, published a blacklist of companies, including MillerCoors, that didn’t fit its definition of a “craft brewer.” The association went on to brand some big beers “crafty” for excluding parent companies from the label.

Craft brewers are “small, independent and traditional,” according to the definition. That means they produce less than 6 million barrels a year -- it used to be 2 million until Sam Adams maker Boston Beer Co. (SAM:US) got too big to qualify. They also must be less than 25 percent owned by a non-craft megabrewer and meet certain ingredient thresholds.

Freddy Bensch, co-founder of Atlanta-based SweetWater Brewing Co., says megabrewers are simply trying to cash in without hewing to the handmade ethos of craft brewers.

Informed Decision

“It’s about empowering the consumer with the ability to understand who is really making their beer,” Bensch said. “So they can make an educated and informed decision on who to support with their hard-earned dollars.”

Large brewers can use their muscle with beer wholesalers to limit shelf space for small craft brews, according to Bart Watson, an economist for the Brewers Association.

MillerCoors has lashed out at the blacklist and notions of what is or isn’t craft. In a CNN.com op-ed, CEO Long defended the quality of Blue Moon and beers from the company’s Jacob Leinenkugel Brewing Co. and said such breweries operate autonomously.

“Blue Moon Brewing Co. has been around long before the vast majority of craft brewers,” he said in the interview. “What exactly is crafty about that?”

Which raises a question: Is Blue Moon a good beer?

Revived Category

Even craft brewers such as Sweetwater’s Bensch acknowledge its merits. Blue Moon is a “great representation of the style,” he said. “They pretty much single-handedly revived the white beer category with that beer in the U.S.”

MillerCoors has resisted putting its name on Blue Moon bottles and has no plans to do so. The brew’s creator, Keith Villa, said leaving the parent company off the label almost two decades ago was practical, not expedient.

It mirrored strategies employed by Toyota Motor Corp. (7203) for its specialty brand Lexus and Hallmark Cards Inc. for Shoebox greetings. Villa also worried consumers might be confused when the weird, cloudy Blue Moon didn’t look and taste like other Coors beers.

Many Blue Moon drinkers don’t care where the product comes from so long as it tastes good, said John Faucher, an analyst for JPMorgan Chase & Co. (JPM:US) in New York. He says Blue Moon is right to resist the pressure from the “snobby” craft industry.

“What’s the advantage of letting people know that it’s by MillerCoors?” Faucher said. “The downside is the beer-snob factor. If there is no upside from doing it, then why take the risk?”

Brewing Doctorate

Villa, who has a doctorate in brewing from Belgium and tours the world talking about Blue Moon’s pedigree, said the beer has been instrumental in recruiting consumers into craft beers, especially Belgian white.

Meanwhile, Blue Moon is adding brand extensions, including the Graffiti Collection, which includes Pine in the Neck, a double India pale ale brewed with juniper berries. Specialty releases include Caramel Apple Spiced and Peanut Butter ales. Facebook fans helped determine the ingredients for a limited winter mystery beer due in November.

While still pushing for more transparency, the Brewers Association has since removed the blacklist from its website.

“It’s not something we’re pushing or promoting,” Watson said.

Microbrewers have a complex relationship with industry giants. In October, craft makers will strut their hops at the annual Great American Beer Festival in Denver. Blue Moon is a sponsor.

To contact the reporter on this story: Duane D. Stanford in Atlanta at dstanford2@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net


Tim Cook's Reboot
LIMITED-TIME OFFER SUBSCRIBE NOW

Companies Mentioned

  • TAP
    (Molson Coors Brewing Co)
    • $76.89 USD
    • -0.11
    • -0.14%
  • SAM
    (Boston Beer Co Inc/The)
    • $223.51 USD
    • 0.70
    • 0.31%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus