Global IPA Domination – Not in New Zealand’s Interests

Had your fresh-as Lagunitas IPA yet?

If you have, you know it’s a really good beer. But is it good for New Zealand?

Last year, Lagunitas went into a joint venture with Heineken which this year became a full-blown takeover, with the Dutch giant taking at 100 per cent stake in one California’s most-loved craft pioneers.

Heineken owns DB Breweries in New Zealand. DB are now bringing in Lagunitas, in chilled containers, direct from the US.

Patrick Mace, from Lagunitas, who was in New Zealand in June to check out the landscape and drum up support for the imported beer, told me the Lagunitas IPA served in New Zealand was as fresh, if not fresher, than much of the stock in the US – arriving here within six weeks of production.

And the sample I had at Dr Rudi’s in downtown Auckland was pretty damn nice. It’s a quaffable IPA with old school hops such as Cascade, Columbus and Willamette.

But would I go back buy another? Yeah-nah.

In short, I don’t want to line Heineken’s pockets at the expense of supporting a relatively small, independent Kiwi brewery who make equally good, if not better IPA.

And then there’s the whole business of what felt like a world domination message – not that it’s a bad thing to want to have your famous IPA available worldwide; that’s business. But the vibe I got was that Lagunitas want to become to IPA what Heineken are to green-bottle lager and that rankles.

As Mace told me over a beer, the reason Lagunitas founder Tony Magee did a deal with Heineken was that his start-up had grown as big as it could in America and to expand abroad he needed international know-how.

“If you’re not growing you’re dying,” Mace said. “Tony has these sayings, I call then Tonyisms … and he described us a battleship on the water with all these other breweries firing shots at us and we had to keep moving, keep growing, otherwise they’d sink us – and now here we are in New Zealand.”

Before the deal with Heineken, Lagunitas had done OK in the UK but Magee saw a global craft beer market evolving and wanted to be in front of that wave.

“Tony saw globe was ready for a west coast IPA and he said ‘I think it should be ours’. But you have to know your limitations – we could sell in English-speaking countries but how do we get in Mozambique, Ivory Coast, Germany, Belgium … even with New Zealand we didn’t know the culture here and we’d be cocky if we felt could just come in and do this.”

So Magee approached Heineken – not the other way around – to grow his business off the back of Heineken’s global distribution network and industry connections.

“By being 50-50 partners it was way to get beer our around the world and ahead of the wave. Heineken is opening doors for us to go around the world.”

Whether Lagunitas can conquer the world IPA market in the same fashion Heineken has grabbed the global lager market remains to be seen, but Dominic Kelly, at Hashigo Zake and Beer Without Borders, is one of those fiercely opposed to Lagaunitas washing up here.

“It’s possible DB have simply been told by Heineken that importing Lagunitas is something they have to do. Heineken spent a fortune acquiring Lagunitas, so they must expect all their other subsidiaries around the world to fall into line and import their new brand,” Kelly said. “But for DB bringing in Lagunitas also serves the same purpose that acquiring Tuatara did and that acquiring Panhead and Emersons did for Lion. It’s a patch for a hole in their portfolio that they need to preserve the strategy of tying down outlets.

“From what I gather DB are bringing in a lot of Lagunitas kegs. For us, the proportion of beer that we import in kegs, compared to packaged product, has been shrinking for years. That’s because new suppliers are appearing at a faster pace than free taps are. But DB don’t have that problem because they control thousands of taps around the country. Likewise when Lion bought Panhead; from what I gather the first thing they did was increase Panhead’s ability to fill kegs. It tells me that Lion and DB are using their new acquisitions (whether Panhead, Tuatara or Lagunitas) to help preserve the system.

“To cut a long story short, anything DB or Lion do to help retain their grip on their tied taps is bad for anyone that wants to sell beer on merit into the New Zealand market.”

 

Back to The Pursuit of Hoppiness: August 2017


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