An Industry in Ferment

Does the name Van Munching ring a bell? If you've been around a while, it probably does. From the repeal of Prohibition until 1990, the Van Munching family owned the exclusive American rights to import Heineken beer. Their name was mentioned in every ad for the brand.

Beer Blast, by Philip Van Munching, is a first-hand account of an all-too-common business story: a clash between young MBAs and the experienced, seat-of-the-pants managers. The author has plenty of motivation to tell his side of the story: Heineken's executives took over his family's business and eventually forced him out.

Van Munching claims that Heineken's U.S. executives--most of whom knew nothing about marketing beer--tried to fix what wasn't broken in the first place. For years, his father and grandfather had successful represented Heineken in a highly competitive market, surviving currency fluctuations and competition from yuppie brands such as Corona. His story is reasonably objective account of what happened, though it's told in more detail than the average reader might prefer.

But the Heineken soap opera is only part of the book. Having grown up in the business, Van Munching had a close-up look at the way beer has been marketed. And that's the real focus of Beer Blast. It describes the all-out battle for market share which began after World War II and shifted into high gear when Philip Morris bought the Miller Brewing Company in 1970. The Miller takeover touched off a marketing arms race: between 1975 and 1994, U.S. brewers upped their production by 37 percent, but boosted their advertising budgets by 500 percent.

With proven marketing ability--remember the Marlboro Man?--and access to oceans of capital, Philip Morris relentlessly promoted Miller beer and added capacity to meet demand. In 1973, Miller changed the industry forever when it brought out Lite Beer. Lighter beers weren't new; they just hadn't been marketed properly. Miller got it right, using retired athletes and the famous slogan, "Less Filling, Tastes Great" (translation: "you can drink more of this stuff"). Miller Lite was a smashing success which breweries have tried to duplicate ever since. In their quest for what Van Munching calls The Next Big Thing, they've tried everything from cold-filtering to dry beers. But there hasn't been a second coming of Miller Lite.

For a while, it appeared Miller would grab the number-one spot from Anheuser-Busch, which was distracted by a family feud and a crippling Teamsters strike. But the makers of Budweiser fought back, employing what Van Munching calls a "denigrate, regulate, emulate" strategy: criticize your opponent's product and the way it is marketed; and, if that doesn't work, brew a copycat version. The formula was simple, but it worked; Anheuser-Busch pulled away from its rivals.

Over the years, the Beer Wars have been fought on strange battlefields. One is the Bureau of Alcohol, Tobacco and Firearms. The agency has little real power, but complaints against rivals--with allegations too complicated for 30-second ads--are taken seriously by business writers. Breweries also took their fight to the airwaves: Miller grabbed every advertising minute it could get on major sporting events, while Anheuser-Busch countered with guerrilla marketing at trash sports venues and the then-obscure ESPN. And sometimes they've taken the low road, accusing rivals of brewing with polluted water or supporting unpopular political causes.

One highly visible, and controversial, battle in the Beer Wars has been the wooing of young adults. Even after Congress forced states to raise the legal drinking age to 21 (whether that was wise is another question), brewers hawked their product at spring break beaches and advertised heavily on networks catering to young viewers. Van Munching takes the industry to task for these tactics, warning of long-term repercussions--including possible tax hikes and advertising curbs.

After describing two decades of marketing triumphs and disasters, Van Munching offers his "11 Basic Laws of Beer Marketing." They can be summarized as follows: Your brand is your most important asset; don't squander it by cutting prices and running trendy ads. The author's bias is understandable: for years, his family handled a highly-respected brand which outsold all other imports; they could afford to stay above the battle.

Beer Blast is a well-told story of how of America's brewing industry came to be dominated by three brewing giants, and why brands like Rheingold, Stroh's, and Pabst sank into oblivion. The author is both knowledgeable and entertaining; he's as equally at ease explaining Brewing 101 and why Zima was an embarrassing flop. His ability to tell a story makes Beer Blast a perfect read on a lazy Sunday afternoon. Beer in hand, of course.