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Thoughts after a couple of early pints

I love Kaaba, in Lucemburská. It's a small café in a quiet, tree-lined, side street of Vinohrady with an intimate atmosphere and fantastic soundtrack. Or at least that's how I find it on Tuesday and Thursday mornings when I go for an early pint or two of very well tapped Polička Hradební Tmavé, one of the finest exponents of one of the most underrated Czech beer categories, tmavé výčepní. Much of that atmosphere is generated by the štamgasty, who are a pretty colourful bunch. It's really fantastic to sit down and chat about history, films, music, Argentina, politics and what have you with people like a retired Mariner, an Investigative Journalist or the Chairman of the Czech Monarchist Party while listening to Cream, Tom Waits, Max Raabe or Chet Baker.

This wouldn't be possible without the figure of the owner, a pretty interesting bloke himself, with a theatre background (not acting) and great taste for music, and with whom it's also very interesting to talk.

The other day I was having a conversation about beer about beer and the local beer scene with him and he told me how he got to Polička.

When he decided to start selling draught beer Pilsner Urquell was the most natural choice, the cans and bottles were selling really well. He got in touch with the company and the representative explained him that he couldn't help him because of the low volume this place could have. Someone later recommended him Polička and now he couldn't be any happier, not only with the quality of the beer, but also with the company as a business partner.

I love talking to people from "the other side of the counter". It helps you see things from a different perspective (something that is always good to do) and occasionally you get to hear something that can be almost a revelation, just like this time. After I left the place I started asking myself whether cases like Kaaba's aren't one of the reasons why some regionals are doing so well in a shrinking or, at best, stagnant market.

Some people might say that the attitude of PU's representative is nothing but an example of the arrogance of large companies. I see it more like a example of common sense in business. Let me explain you.

Some years ago, a senior manager of a large B2B service company, which in fact was the leader in its market, was explaining me their client portfolio. At the bottom of the pyramid there were a huge number of small clients who, according to this man, brought little value and required the allocation of disproportionate resources to keep them satisfied. He added that if it was up to him, he would get rid of the lot of them, which would result in a bigger profit margin for the company with the added bonus that they would be able to take better care of the important clients, which could result in bigger revenues. Unfortunately, the owners at the time, an investment fund from the US, were the kind of people who have growth at any price as sole strategy (a pretty dumb philosophy, which I believe is to blame for much of what's happening now in the world economy) and their policy did not allow for the loss of a single client.

For a company like Plzeňksý Prazdroj Kaaba would be one of those small clients and it's understandable that they weren't interested. And they never had to worry too much about that either, after all, this kind of owners can always go to the distributors or wholesalers to buy the beer, if they want to.

But that times have changed. It's always better to deal with the producer and some mid-sized and small breweries might be filling the hole left by the big boys. Žatec, in the last year or so they've shown up in who knows how many places, most of them quite modern and fancy.

I doubt the macros are in a position to reverse the trend.

This has little to do with personal taste or even optimism. It's a simply business issue. For your average regional brewer places like Kaaba are an interesting client, not only because every keg sold counts, but also because it offers them the possibility of reaching to new consumers. The owners, on the other hand, can buy beer that is cheaper than Pilsner Urquell (plus getting all the marketing goodies and even taps). And to make things more interesting, we should not forget that the regional brands are getting more awareness by the day and, if we look at cases like Jama's (a place where people didn't use to go because they had this or that beer), switching to a regional brand can end up being very good for the business. It's only a matter of time until more people realise about this.

And then they say an early pint of bad for you.

Na Zdraví!

Lucemburská 15 – Praha-Vinohrady
50°4'44.863"N, 14°27'15.196"E
Mon-Sat: 7.30-22, Sun: 9-22

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