Ab-InBev Votes Leffe Off The Island

IN MY YOUNGER DAYS, I LIKED to sit around bars with my friends drinking beer and arguing over our selected desert-island records, those albums we felt we couldn’t do without even if we found ourselves shipwrecked somewhere. Nowadays I find it just as enjoyable to haggle over desert island beers. I notice my loyalties on the domestic-beer side are constantly fluctuating, thanks to the absurd amount of innovation emanating from American craft brewers, but on the import side my list has remained fairly consistent: Guinness, Negra Modelo, Moretti La Rossa, Leffe Brown.

So imagine my disappointment when I heard a few weeks ago that Anheuser-Busch had decided to throw in the towel on Leffe Brown, along with Lowenbrau and Tennent’s. “As a leader of the beverage industry,” company president Dave Peacock wrote his distributors, “we are always focused on the optimal packaging to meet the needs of our consumers and retailers. Following the most recent assessment of our portfolio, we have decided to no longer import the Lowenbrau brands, Leffe Brown and Tennent’s.” Lowenbrau and Leffe Brown, he added, “will not be transferred to another importer.”

Well. That was a blow particularly as, in my city of New York, Leffe Brown had finally become reasonably easy to track down among the burgeoning ranks of Belgian cafes and good-beer bars. The Belgian import has been offered on draft only, unlike its not-quite-as-interesting sibling Leffe Blond, which remains available in bottles and on draft through A-B. True, the discontinued brands had sold a relative pittance for A-B. Once a major import, Lowenbrau had sold a mere 40,000 cases in the 12 months ending in Thanksgiving 2009, while the Scottish import Tennent’s had managed no more than 3,600 cases, according to Information Resources Inc. Not being available in bottles, Leffe Brown wouldn’t show up in scanner data.

Assuming these brands’ draft volume is similarly negligible, simple arithmetic would seem to justify the moves. But even while trying to look beyond the narrow view of a disgruntled fan of an obscure beer that’s about to vanish, I do have to wonder about the logic behind Leffe Brown’s discontinuation. Though it’s still small, it would seem to have a valid role to play for a megabrewer that desperately needs to find ways to make itself relevant within those proliferating good-beer bars, places whose strict views of authenticity cause them to reject even such admirable examples of the brewer’s art as Blue Moon and Leinenkugel’s that are too readily identified with a mass brewer (in these cases MillerCoors). By now, A-B’s Belgian import Stella Artois – never a beer of great distinction in the first place – is pretty much a mass import, which leaves the company with the excellent Hoegaarden and Leffe Blond, some marginal craft entries of its own that don’t get much respect, and a handful of allied brands like Goose Island and Redhook. In other words, A-B does not offer much depth in its portfolio to those of its wholesalers who care to go after these lucrative, exclusive and highly influential accounts. Wouldn’t you think it would be a strategic goal for A-B to crack them?

For a company that, like many of its peers, has been terrified of losing beer-consumption occasions to spirits, Leffe Brown is a beer that easily holds its own, with a sophisticated taste profile, a great story behind it and an association with Belgium, a trendy beer-producing nation. Unlike such reasonably-respected other offerings in A-B’s superpremium book, such as Goose Island, this is a brand that is owned by its parent company. And one more point: brands like Leffe Brown reach consumers who do more than fume about the loss of brands they love; they also blog, and not always politely.

Mind you, A-B isn’t the only one to make these short-sighted tradeoffs. The remarkable Moretti La Rossa has suffered similar neglect over the years at the hands of its owner Heineken, and Diageo deep-sixed the iconic Dragon Stout for extended periods. On the non-alcoholic side, I’ve been struck by the long futility of the major beverage players in realms like high-end bottled water, with Coca-Cola accelerating the erosion that Evian was enduring before it entered the Coke portfolio and Pepsi generally paying that segment no regard at all, even during the segment’s heyday.

But back to Bud. I have to say I heard an off chord in Peacock’s memo when he wrote that “streamlining our portfolio creates room for large-scale innovations” like Bud Light Lime, Bud Light Golden Wheat and Select 55. It’s not that finding winners at the premium tier shouldn’t be regarded as crucial; I wish A-B well in bettering its past record of spike-and-crash innovations. But mentioning Leffe Brown and Bud Light Lime in the same breath sounds like “we’re dropping the foie gras in order to concentrate on spam.” Golden Wheat and Select 55, if they succeed, might confer needed scale on A-B, but it will do nothing to buttress its props at the progressive edge of the business. To say those efforts are expendable abdicates any hope of playing a leadership role in the one segment that has continued to grow right through the recession. Shouldn’t there be room for both?

Longtime beverage-watcher Gerry Khermouch is executive editor of Beverage Business Insights, a twice-weekly e-newsletter covering the nonalcoholic beverage sector.