On the House

Fun with A-B and InBev

I – and apparently most of the world`s financial markets – just love this Anheuser-Busch/InBev hostile takeover rumour. And really, who wouldn’t? The whole thing has all the tension and excitement of a prime time television cliff hanger.

Of course, since neither player is saying anything right now, save for some speculative comments by Adolphus Busch IV as reported in the Wall Street Journal, any consideration of the ramifications of such a deal are nothing more than idle speculation. So let’s speculate...

Scenario 1: Let’s say InBev does acquire – sorry, merge with – A-B, thus creating by far the world’s largest brewer in terms of both volume and revenue, as well as a seriously potent force in the U.S. beer market. Stands to figure that number two, SABMiller, would want to pull some strings to remain apace, and the logical first such move would be a consummation of its relationship with Molson-Coors already started in the U.S. market. End result: Two massive players effectively sharing the vast bulk of the lucrative North American market (including Canada, since InBev already owns Labatt), and no doubt beating the hell out of each other in a protracted battle for share.

Scenario 2: A-B fights back and beats down the InBev bid, causing the Belgians to look not to America, but London for a merger buddy, specifically the aforementioned SABMiller. The global beer powerhouse these two would create would be daunting in size, and an obvious call to action for Heineken and Carlsberg, who just finished carving up the carcass of Scottish & Newcastle. Again, Molson-Coors would be an attractive acquisition, albeit a tricky one given their existing ties with SABMiller, along with FEMSA Cerveza of Mexico and Sapporo and Asahi of Japan, although with their limited international holdings, these last three would likely be of lesser interest.

Scenario 3: Rather than let InBev run away with the prize, SABMiller digs in and makes its own play for A-B. American competition authorities could put a stop to this, since it would create an entity which would control roughly 70% of the market (if the deal with Molson-Coors is unravelled at the same time), or they could take as an example the Brazilian merger that created AmBev (before that company in turn merged with Interbrew and created InBev) and decide that a single dominating brewer is not necessarily a bad thing.

And so on, and so on. Of course, as noted above, all this is just idle speculation, but that doesn't make it any less fun.

Now This Makes Sense!

Months back, I went on record as saying that the much-speculated merger between InBev, the number two by volume brewery in the world, and Anheuser-Busch, number three, would not likely take place, at least not in the immediate future. The Busches are too fond of their company, my reasoning went, and their board far too likely to follow their lead. August Busch IV confirmed my position a short time later when he vowed the merger would not take place “on my watch.”

Now a new scenario is emerging, and it’s one which I believe makes a whole lot more sense, even if it’s still far from a done deal.

Reports emerging this week have InBev taking an unsolicited run at A-B, relying on the power of activist investors who would disregard the recommendations of the Busch family, which controls less than 4% of the company’s stock, according to a recent Wall Street Journal report.

While both companies are playing coy at present, this line of thinking is much more in keeping with the way InBev rolls. Canadians will certainly think so, at least, since we remember all to clearly the “merger of equals” between Interbrew and Labatt, which fairly quickly turned into an amalgamated and Belgian-controlled company. More recently, Brazil’s AmBev has felt the overpowering influence of Belgium working to wrest control of company that emerged from its merger with Interbrew. Simply, judging from past performance, the Belgian side of InBev doesn’t like to lose power or control, so if A-B was not going to submit peacefully, then it makes sense that InBev could take a more aggressive position.

This is one big brewery deal that could become very interesting to watch, more so, even, than the recent drama-packed takeover of Scottish & Newcastle by the combined forces of Heineken and Carlsberg.

Saints Preserve Us!

Today, we shall talk about my favorite beverage in the world! OK, my second favorite, after milk...er, third, after tea...wait, pinot noir...

Today we shall talk about my fourth favorite beverage in the world! I am completely enamored of a newly fashionable liqueur, the stylish and beveled St~Germain Elderflower Liqueur!!! Holy smokes, I love me some St~Germain! Love! Love! Lu-uh-uh-ove!

Why do I love it so much? Have you tasted it? It tastes like the scent of honeysuckle on a breeze, like fresh, musky lychee fruit, like succulent peach nectar, like liquid happiness! All packaged in a beautiful beveled glass bottle bearing a remarkable resemblance to a top-heavy femme. And apparently, there is a guy in France traipsing around the Alps on a bicycle picking elderflowers just for me! Right now! As we speak!

Being a simple goddess, I prefer the signature St~Germain cocktail...a delectably large tot of the liqueur with champagne, club soda and a saucy twist of lemon. But in perusing their website, I found numerous cocktails that I will hasten to try, not least because of their clever asides embedded within their recipes. Such witty repartee reminds me of someone.. thinking ..thinking...

I discovered this elixir several years ago at one of our golf tournaments, when one of my distributors donated a case of the minis, also festively clad in the sexy bottle. (sidebar: it just tickles me that mini’s are just that.. teeny, tiny Lilliputian versions of themselves..same bottle, same labels... it cracks me up to see the teensy little Crown Royal bottle or the Dimple Pinch or the Tanqueray... but then, we have established that I am easily amused...). I had never even heard of St~Germain before. The minis were destined for the goody bags.

Sadly for some, after cracking it open, sucking it down and rejoicing in the sublime glow, I then absconded with as many minis as I could find without actually wrestling the bags out of our golfer’s hands.

Fast forward to about a month ago. We were having a farewell dinner for one of our comrades who was leaving. (another sidebar: a futile and wasteful practice, because we must have the highest percentage of boomerang employees on record...the latest was only gone for 3 weeks before she came back. “Hey, sad to see you go! Here’s an expensive party! See you in a few weeks!”). As I waited at the bar, I, being a writer of menus and also unable to sort through the myriad of options for cocktails entrenched in my brain, rendering it impossible to order in any semblance of quickly, picked up the sticky bar menu and right there at the top of the page was my old friend, The St~Germain Cocktail, singing her siren song of promises of deliciousness.

“I’ll have this”, says I. I said that about four more times through out the evening...which is awesome!! It is light enough in ABV for me to have several, which I promptly did.

Now, you may be asking yourself, why the long stretch of time betwixt discovery and enamored? Well, as I have noted in past blogs, I’m actually not much of a drinker. I am a lover of all things beverage, but not a consumer so much. So, since I hadn’t seen it around anywhere, nor had anyone presented it to me (bad reps!), I had forgotten about it.

But thanks to that sticky menu and my revolving co-worker, I was reminded and am now firmly in the cult of Germain. And now that I know there are bicycling Frenchmen risking life and limb in the mountains of France just for me to possess the heavenly nectar, I shall not ever again forget. In fact, it is the only liqueur I have actually me myself purchased in years! (I am a ‘buyer’, which means I don’t actually ever have to buy anything to have the world’s best liquor cabinet. Ironic.)

So, if you haven’t tried it yet, do yourself a favor and hie on down to the liquor store and pay your money. You will not be sorry!

And if I see a rash of baby goddesses named Oenoli in the future, I will know you appreciated that advise. Vive la France! Vive la St~Germain!

(All goddessy opinions are free and sincere. No recompense was paid for this or any endorsement. Though I’m open to that. I can be bought.)

If you have a question or comment for the One Most High, email her at [email protected]

7 Questions: Ardmore Scotch Whisky Distillery’s Manager

Alistair Longwell
Manager
Ardmore Scotch Whisky Distillery

The Ardmore Scotch Whisky Distillery is located in Speyside, Scotland and was built in 1898 by Adam Teacher, son of its founder, William. One of the largest distilleries in Scotland, for many years the whisky produced there was the “fingerprint malt” for the Teacher’s blended Scotch whisky. However, in recent years the Single Malt produced there has become increasing popular, both in the U.S. and around the world.

In fact, the Scotch market is hot, and the interest among malt enthusiasts continues to drive Single Malt Scotch growth at a healthy rate, up 6.5%, while overall consumption patterns have pushed the entire category up slightly in 2006, up by 0.1%, according to the Cheers On-Premise Handbook 2007. And much like other spirits categories, Scotch has benefitted from the industry’s move towards super-premium products. Riding this wave of interest, earlier this year, Ardmore Traditional Cask was released in the U.S., the first single malt from Ardmore to be widely available in the U.S. The distillery’s manager. Alistair Longwell, visited America for the first time to inform bartenders and consumers about Ardmore. Here, Longwell informs us about this unique Single Malt release, his work at the distillery and the rich history behind Ardmore.

The Beverage Information Group: What are your main responsibilities as the manager for Ardmore Distillery?

Alistair Longwell: As Distillery Manager, I am responsible for ensuring that the high standards of quality and tradition as set forth by Adam Teacher, the son of our founder William Teacher, are maintained and followed through daily. I rely heavily on the wonderful Ardmore staff employees who are equally as dedicated to producing the finest single malt in the world.

BIG: Are you also considered a brand ambassador for Ardmore? How much of your time is spent at the distillery, and do you travel as well to help promote Ardmore?

Longwell: While Simon Brooking is Ardmore’s Master Ambassador, I also have the opportunity to reach out to consumers, educate them on Ardmore and help represent this unique product. I spend a lot of my time in the Distillery working with our employees to ensure that we are producing the best product we can. I travel all over the world helping to promote Ardmore and its full, rich taste. Recently, Ardmore Traditional Cask was released in America and I had the opportunity to go to New York for the first time. I was able to engage with our new consumers and fully inform the American media about Ardmore. I visited (and drank!) with bartenders and consumers who are just now being introduced to Ardmore and share the rich history of our brand.

BIG: Have the issues of safety and compliance become more important over the years at the Distillery and if so, in what ways?

Longwell: We have always taken the safety of our employees and compliance with industry regulations extremely seriously. The Ardmore Distillery uses many of the same traditions and equipment that were used when production first started in 1898. We are committed to a program of renewing our traditional wooden washbacks to maximize the flavor production, while many other distillers have moved to stainless steel. We firmly believe that the flavors evident in Ardmore Traditional Cask are in some part due to the traditional production methods we employ during malting, mashing, fermentation, distillation and maturation.

BIG: Several of the Ardmore Distillery employees were recently honored by Tom Flocco, president and CEO of Beam Global Spirits & Wine, the supplier of Ardmore. For example, awards were presented to three generations of Grant employees, for their combined 100 years of service. It’s rare to find that kind of service to a company these days. Why do you think the Distillery has been able to retain employees for that length of time?

Longwell: At the heart of the Ardmore Distillery lies the passion of dedicated employees and their commitment to upholding quality methods of traditional distilling. The Grants represent three generations of their family that are faithful in maintaining Ardmore traditions. As a family, they help illustrate the fact that Ardmore is steeped in a tradition that not only brings about a great tasting single malt whisky, but also creates family heritage. Beam Global Spirits & Wine regularly honors employees who stand out as extraordinary examples in bringing the company’s vision of Building Brands People Want to Talk About, to fruition.

BIG: Ardmore Traditional Cask was released in the U.S. in March, the first single malt whisky from Ardmore widely available in the U.S. The Single Malt category seems to be growing in popularity. To what do you attribute this increased interest in Single Malts; what makes them unique, as compared to other types of Scotch whisky?

Longwell: There definitely has been a surge of consumer interest in the U.S. market for high-end premium whiskies - the single malt sub-category saw 13% growth in 2007 alone. On a global scale, growth is also strong as popularity of single malts is on the rise in emerging markets. For example, Taiwan saw almost 40% growth last year. Single malt whisky is the uniquely distilled spirit from one particular malt whisky distillery. The flavors tend to be fuller and more distinctive than those apparent in blended Scotch whisky. These are created by mixing a range of single malt whiskies with lighter grain spirits. For many years Ardmore was produced solely as the “fingerprint malt” for the internationally renowned Teacher’s Highland Cream Blended Scotch whisky, providing a substantial percentage of that blend’s full flavor.

BIG: Describe the flavor profile of Traditional Cask. What is distinctive or unusual about its distillation process and how does that affect the taste? Ardmore is the only fully-peated Highland Single Malt. This step can be time-consuming and expensive. Tell us a bit about this process and why it is necessary at Ardmore.

Longwell: The fully-peated Ardmore Traditional Cask offers the rich, sweet signature flavor profile of traditional Highland malts, but with smoky peat undertones typically reserved for Islay whiskies. The careful quarter cask production process – which the Ardmore Distillery is only the second to employ – results in a whisky that beautifully combines the unique flavors of smoke, vanilla and sweet, ripe fruit and spice. The Traditional Cask’s definitive character and flavor profile is an ideal step up for those that want to break away from the taste of traditional Scotch whiskies.

As you mention, the full-peating is very rare for a Highland Malt Whisky. The process was insisted upon from the very earliest days to maintain a unique, peat-smoke richness. For background, Ardmore is double cask matured, initially in ex-bourbon oak barrels and then in quarter casks; a type of cask extensively used in the 19th century but used less and less as the industry expanded. Quarter casks are significantly smaller than ex-bourbon barrels and allow greater contact with the oak during maturation. The result is a more rounded flavor, accompanied by a subtle sweetness and spice.

BIG: What’s your favorite way to enjoy Ardmore Scotch? Are these whiskies best served straight up, or can some be mixed in cocktails as well?

Longwell: The full-bodied smoothness of Ardmore can be appreciated best at a bottling strength of 92 proof, but also is enjoyed with water or over ice. If a touch of water is added, then the flavors increase with the addition of a sweet ripe fruit start followed by the tang of peat.

Latest Poll Results: Craft Brewers Should Just Pass on Costs

In our most recent poll, we stated that higher ingredient costs and other supplier costs have some microbreweries scrambling. These costs have risen sharply; for example, the price of barley has risen to roughly $400 per metric ton (compared to about $125 - $135 in 2005). In some cases, craft breweries can’t even get the right types of hops they need to make their beer, as these supplies have been quite limited. We asked how microbreweries should handle this crisis, and the majority of respondents had a definite point of view. Nearly 70 percent agreed that craft breweries should just pass on these costs directly to customers, simple as that. After all, they concurred, craft brews are enjoying a wave of popularity in the U.S., showing very strong growth, compared to other beer segments.

However, approximately 20 percent had a different point of view, and this group agreed that these brewers need to find ways to use cheaper or alternative ingredients and/or packaging, if at all possible. The third segment – just over 10 percent, said the best course of action for craft brewers is to cut back on production and/or limit distribution until supplier costs become more reasonable. The fourth possible answer -- Merge with larger brewing companies, as they have more bargaining clout and can better absorb cost increases – received no votes. To respond to our current poll, visit Bevinfogroup.com.