HOT TRUB
January 10,
2001
Edited by: Peter LaFrance (peter.lafrence@beerbasics.com)
Presented by: American Brewer
===================================
Vol. 2 No. 2
This newsletter will post items of special interest to brewers, members of the
brewing and distilling community, and members of the media that covers the
beverage alcohol business.
Should you wish to contribute in any way to this venture please contact Peter
LaFrance at peter.lafrance@beerbasics.com
If you wish to be dropped from this list please respond to this posting to peter.lafrance@beerbasics.com and
include the word remove in the Subject: line.
===============================================
On Monday the University of California, Davis, released a paper presented in the Journal of the Institute of Brewing, that offered the thesis that the human eye detects differences in beer color that are missed by equipment currently used in breweries. According to brewing expert Charles Bamforth of the University of California, Davis, brewers need better methods to check beer color, especially for ales and stouts. Breweries use a machine called a spectrophotometer to check beer color during production, but this measures only light of a certain wavelength, said Bamforth.
As an experiment, Bamforth's laboratory compared the standard method recommended by the American Society of Brewing Chemists with a human test. A British ale, a U.S. lager, a European lager and a stout were diluted so that they all gave the same reading on the spectrophotometer. The human judges easily spotted color differences that the machine did not pick up. According to Bamforth, the study shows that consumers see beer color in ways that a one-wavelength machine does not pick up. Humans cannot replace machines on the bottling lines, but brewers need to find better ways to check on beer color and hue, especially for production of darker beers.
Color is an important selling point for beer. Brewers need to check the consistency of batches of beer, and with the trend to microbrews, more amber beers, stouts and ales have come onto the U.S. market. Deeper, more complex colors are an important part of the style of these beers.
According to a report from Reuters early this week, shares of brewing companies fell Wednesday after some unfavorable comments about the industry by analysts, including a downgrade of the stock of Adolph Coors Co. Coors shares fell to $74-7/8 on the NYSE after Douglas Lane of Merrill Lynch cut the stock's rating to "accumulate" from "buy," citing rising input costs and lower volume growth. Shares of industry leader Anheuser-Busch Cos. Inc. and Miller Brewing Co.'s parent, Philip Morris Cos. Inc. also dipped significantly.
"We've not been particularly optimistic about the prospects of these brewing companies at the valuation levels they were at in mid-December, partly because the fundamentals looked to be slowing in November and December," reported Goldman Sachs analyst Marc Cohen. For the past quarter, sales volume growth rates have slowed at the manufacturing, shipments, and more importantly, at the consumer retail level, Cohen said. He added that brewers had a strong December 1999 as people prepared for millennium celebrations, so comparisons coming into the end of 2000 were difficult.
After reports last week that the Interbrew/Bass deal had been put on ice, market mavens drew a bead on South African Breweries, Carlsberg, Heineken and Guinness, waiting to see how these players would react to the changes taking place in the international beer market.
A report published by the market gurus at Canadean (a European market research group), made the point that market giant Diagio/Guinness is concentrating on the "brewing of stout and the international exploitation of the valuable Guinness brand", with Europe responsible for the lion's share of volumes, but the key market in the future will be the US.
The same report pointed out that South African Breweries, now number six worldwide, has increased its total beer volumes by 50% in five years with the success of SAB's international strategy largely because it does not depend on a flagship brand. The Canadean report points to markets in China and Eastern Europe as critical factors in SAB's future development.
-30-