29 Nov 2013

And Nøgne-Ø isn't Craft anymore


The news that Norwegian macro brewer Hansa bought a majority stake in Nøgne-Ø has naturally created a lot of buzz in the beerosphere (beerosphere, why not?), very similar to what happened a few years go with Goose Island, among others.

What I found fascinating, though hardly surprising, was the reaction of not few people. Judging by some of the comments, it seems they feel betrayed because some sort of imaginary promise has been broken. Some people have gone as far as to accuse the owners of Nøgne-Ø of “selling out”; like teenagers or hipsters lamenting that the obscure indie band they love so much has decided to allow Nike to use one of their songs in a commercial, only that it's worse. You can philosophically accuse an artist of “selling out”, as art is not supposed to be about money, but a brewery? A brewery starts as a business, it was about money from the beginning!

People like differentiating between shareholders and the owners of microbreweries, saying that for the former money comes first, while for the latter what comes first is beer. I believe they are wrong, money comes first in both cases. Yes, the owners of a microbrewery will have a closer relationship with the product their company makes and sells than the CEO of SAB-Miller or an accountant in Diageo, but at the end of the day, it's always about the money; the differences are in the strategies, policies, expectations and scales. If the most important thing was the love of beer, as many seem to believe, then they would remain home brewers or at most semi-commercial nano brewers selling basically directly to the end consumer as a source of extra income or to further finance their hobby.

That's not the case of Nøgne-Ø and countless others. It was profit that drove them to sell their beers through the state owned bottle shop monopoly in Norway; it was profit that drove them to sign international distribution deals to make their beers available in who knows how many countries already. They willingly compromised on quality in order to make more money. Between the brewery and the end consumer there can be three degrees of separation; there's no way on earth that the owners, or anyone in the company, can be certain about the conditions in which their product will be at the end the chain. They can only hope for the best, hope that the distributors, retailers and pub owners will take proper care of their beers, but even enthusiasts with the best intentions can fuck up royally sometimes; passion doesn't make up for a lack skills and knowledge.

To be fair, though, I can understand that some people, especially those who make a point of supporting independent companies, feel this as a loss; I don't think I would be too happy myself if Heineken or Staropramen bought Únětický Pivovar. I would likely take my money elsewhere, as there are plenty of really good independent breweries to choose from, but I wouldn't hold it against the owners, in fact, provided they kept the quality, I'd still buy the beer every now and again.

But let's look at this from a different angle. Let's say that you learn that this was the plan of Nøgne-Ø's owners all along: to set up a brewery, make it successful and build a strong brand relatively quickly, only to sell it to someone bigger after a few years (this is purely hypothetical, and, as far as I'm concerned, it's not an accusation), would your opinion on the beers change in any way? Would that make them suddenly worse? It shouldn't. Would you feel you'd been lied to? There, that'll teach you to blindly trust the words of anyone who wants your money.

Little update (forgot to add this): Congratulations to the owners of Nøgne-Ø, really. Good for them. And I wish them success with their new partners.

Na Zdraví!

PS: The timing of this news couldn't have been more appropriate, just when some people on the other side of the counter are, again, trying to define “Craft Beer” as something tangible for the consumer: beer that can only be made by an independent brewery. I wonder what BrewDog has to say on the matter.

13 comments:

  1. I don't agree that Nøgne Ø compromized on quality to get distribution, either domestically through Vinmonopolet or through their international distributors. If you follow this line of reasoning, you compromise on quality the minute you start serving your beer to anyone. Beer is, after all, a consumer good that has to be sold in a market.
    As for Hansa, it is not like being bought by Heineken. Hansa is a midget in the European beer scene.

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    1. Yes, it's a compromise. As I see it, the beer making process does not finish until the beer gets to the consumer. When you decide to sell through third parties, you are relinquishing the quality control of that, the most important IMO, part of process to people who do not have on your product the same stakes as you do. It's a necessary compromise if you want your company to grow and I don't see anything wrong with it, business is all about making compromises.

      There was one thing i wanted to write in the post that I forgot, my congratulations to owners of Nøgne-Ø and my wishes for success in this new phase. I believe they've done well.

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  2. Yes will Brewdog now withdraw the bottles from their online shop, and I presume also in their bars?

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    1. Good question. The beers were surely bought when Nøgne-Ø still had their craft credentials in order. On the other hand, I don't really know when they started negotiations with Hansa, so, hard to say. Maybe someone can come out with a spiritometer to figure it out.

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  3. Perhaps they got wind of the impending deal and that was the genesis of the 90% stipulation that craft brewers sell craft beer through their estates.

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    1. It wasn't bollocks then when I said that that point was oddly specific...

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  4. just a random thought, would Hansa themselves qualify as a craft brewery under the definition proposed by BrewDog?

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    1. Hmm. Good question. Is Hansa a publicly traded company?

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    2. Coming a little late to this discussion, but it always puzzles me that an outfit like Hansa Borg couldn't have done the same thing itself, and ditto AB InBev for Goose Island. It shows really how divergent the streams have become from the ur-river of beer that even a Hansa, sizable but independent and Norwegian-owned, did not see the utility of setting up a "craft" division around the time Nogne first emerged. One would think at least some people in the bigger shops would look at beer "qua" beer, its history, diversity, gastronomic potential, and realize that industrial-styled lager is only something developed at the tail-end of a history thousands of years old and is not the "be-all and end-all".

      I guess finally many have but they are manifesting it by buying or taking stakes in the new generation craft breweries rather than using their formidable technical brewing and business skills to do the same or better on their own. Can't figure it...

      Gary

      P.S There is the rare exception, e.g. Matt Brewing of Utica, New York, did the transition and some other smaller independents from the pre-craft era have done something similar in the U.S. It is starting too in England but there the transition is easier since English breweries always made great beer except where they gave up completely on cask ale perhaps.

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    3. Actually, at least back in early 2009 (oh! those heady days when I still believed the Craft Beer fairytale!) Hansa ran a sort of micro brewery. I wonder what happened to it.

      Anyway, I guess that buying a company with a well established brand and consumer base is a lot cheaper and less hassle than building one from scratch. Yeah, there's is the risk that some hardcore geeks might get upset, but I believe most people don't really care about ownership structures as long as the beer is good.

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  5. That is interesting that they had something in this vein before. Nogne makes good beers but I cannot imagine Hansa could not have done as well or better. Koff Porter and Carnegie Porter show that old-established concerns can make great beer if they want to and indeed these are templates for a lot of the great porter and stout we see today. The commercial logic you expressed Max must be right but still I scratch my head, I can't imagine the Hansa labs couldn't come up with great beer in any style if they wanted.

    Gary

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    1. I'm sure they can, and perhaps they could make even better beer than Nøgne-Ø, if they wanted - not long ago I read a piece about the pilot brewery in the St. Louis facilities of Budweiser, they made some really interesting looking stuff, but one thing is the beer, and another is the brand. Maybe Hansa has some interesting recipes up their sleeve and they might have a go at them through Nøgne-Ø, who knows.

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  6. Well that's true, no question the brand and "image" were important but surprised they couldn't come up with a hip name and image-to-match in the last 10 years… I guess it's not what they do, or did. :)

    Gary

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