DB promises ‘game-changer’ beer before Christmas

DB Breweries’ new boss Andy Routley is aiming to stir up a complacent beer market with what he hopes is a game-changing product launch before Christmas.

“You will see something from us in the next three months that will be a little bit different – a new product that will restore the category and make consumers think differently,” he says.

“The category has lost its relevance and doesn’t present a compelling story to consumers who are switching to wine or spirits and cider.”

Mr Routley, 49, isn’t giving anything away yet but industry innovation is evident both here and overseas in areas such as boutique brews, flavoured and low-alcohol beers. Nevertheless consumption is declining – by 3-4% on some figures – while the global brewers are responding through acquisition and consolidation.

Mr Routley’s background, before being appointed as Brian Blake’s successor at DB in March, includes a five-year stint at SABMiller, whose new chief executive Alan Clark is talking up further takeovers (see box).

Just four companies – the others are Anheuser Busch InBev, Heineken and Carlsberg – have 60% of the global market.

On the local scene, DB – now wholly owned by Heineken after its takeover of Asia Pacific Breweries (now Heineken Asia Pacific) – has been performing well with three years of double digit profit growth and gains in market share. It leads the premium, craft and mass market with its Heineken, Montieths and Tui brands.

But Mr Routley says the sector is “lethargic” and DB has an agenda to re-energise it by presenting different ideas and meeting consumer needs that aren’t being addressed.

Innovation isn’t limited to product development – Mr Routley says the company is using 25% less water and energy in its brewing processes and aims to reduce that by another 25% in next three years.

As an Englishman, Mr Routley also wants to know why New Zealanders are reluctant to pick up the cider habit – in the UK, apple and pear-based drinks are the equivalent of 14% of the beer volume; here it is less than 5%.

Even so, the category increased 30% last year with DB strongly positioned with a 40% share through its Monteiths, Old Mout and imported Rekorderlig brands.

Although DB isn’t focused on wine, it does have other strings to its bow with a direct stake in the hospitality industry through its 18 joint-venture Barworks gastro pubs in Auckland and its Drinkworks operation, which exports DB’s branded products to Australia. This excludes the Heineken brand dut include Tui, Monteiths and Tiger beers plus a growing market for its cider products.