Heineken NV reaps profit

on cost cuts, newer mkts

(Continued from page 1)
€588 million and sales of €7.54 billion.
Heineken's group beer volume fell 2.3%
on an organic basis, hurt by the weak glob-
al economic environment .
"Trading conditions remained challeng-
ing in Europe and the USA, but we realized
strong group beer volume growth in Africa
and Asia," said Chief Executive Jean-
Francois van Boxmeer in a statement.
Heineken said it remains cautious on
beer consumption in Europe and the U.S.
due to continued weak consumer spending
and planned austerity measures across
many countries.
In contrast, the company said volume in
Latin America, Africa and Asia is expected
to continue to grow.
First-half price increases will continue to
have a "limited positive effect" in the sec-
ond half, Heineken executives noted.
Mass Guild presents Summerfest
The Massachusetts Brewers Guild is
proud to announce that it will be hosting its
first annual Mass Brewers Summerfest on
Friday, September 3rd.
The event, which will take place outdoors
on Boston’s historic waterfront at the World
Trade Center Head House Concourse, will
celebrate local breweries, local beer and
local music.
The event will feature more than 80 dif-
ferent beers from the 20+ member brew-
eries in the Massachusetts Brewers Guild,
including some specialty beers brewed
exclusively for this festival by the brewers
in the Commonwealth.
“We are proud that Massachusetts is
home to some of the world’s best craft
beer,” says Drew Brosseau, president of
the Massachusetts Brewers Guild and
founder of Mayflower Brewing Company.
“We are excited to host this festival and
provide the opportunity for beer lovers to
join us in celebrating great local craft beer
made right here in the Commonwealth.”
The Mass Brewers Summerfest will
begin at 6:00 pm on Friday, September 3,
2010 at the World Trade Center Head
House Concourse, located at 200 Seaport
Boulevard, Boston. The cost is $35 per
person, including tax.
Tickets can be purchased on the
Massachusetts Brewers Guild website at
www.massbrewersguild.org.
Big Sky Brewing works to replenish Montana streams
Every year, as water is drawn off from Montana streams and rivers for agricultural use, some water-
courses go dry. This has a catastrophic effect on the state’s trout fishery.
Recently, the Big Sky Brewery, Montana’s largest brewer, has announced it has signed a three-year con-
tract for Water Restoration Certificates, part of a new water stewardship program launched by the
Bonneville Environmental Foundation last year.
Big Sky’s purchase of the certificates means that water flow will be restored to Prickly Pear Creek, a trib-
utary of the Missouri River, located near Helena, MT.
According to Bonneville, its Water Certificate Program is the first national-level, market-based solution
that allows business to balance their water use with restoration of natural water flows.
“Beer drinking and fly-fishing are two deeply-rooted Montana pastimes,” noted Chris Corbin, sales rep-
resentative for Big Sky Brewing Co. “We are impressed with BEF’s WRC program because it is a pri-
vate-sector solution with easily quantifiable results.”
Mr. Corbin said Big Sky’s purchase of the credits will result in 10 million gallons of water being restored
to the Prickly Creek during the next three years.
Our interview with Chris Corbin of Big Sky follows:
Modern Brewery Age: What appealed to you most about this Bonneville Water
Restoration Program?
Chris Corbin: Our brewery staff loves outdoor recreation. Half the brewery are rafting
guys, and the other half are fishermen. This kind of program lends to that lifestyle.
Besides that, the key ingredient for beer and fish is water! When you think of breweries
with sustainability initiatives, you think of Sierra Nevada or New Belgium. But we try to
do our part, because it is the right thing to do. We support environmental groups that
we believe in—like Trout Unlimited, and water conservation organizations like this one.
Regarding this water restoration program, the short version, there are over 5000 miles
of dewatered streams in Montana, and fishing and recreation in those streams is the
economic lifeblood of Montana. These are critical eco-assets. We are debating the
result of irrigation withdrawals, there is an administrative process for putting water
back in streams. From an ecological standpoint, this is a better way, and in terms of
bang for the buck, this the the way to go. This program is focused on restoring water
where it matters.
How does the program work in practice?
Streams around Montana are going dry every year, and these are critical spawning
tributaries for trout. We decided to give back the water we use to make beer. So we
calculated how much water goes into our beer. We excluded the process water, since
that goes back to a treatment facility, and focused on the water that is taken out, and
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5 MODERN BREWERY AGE WEEKLY, AUGUST 27, 2010

SAB most likely Foster’s buyer
(Continued from page 1)
"We see SABMiller looking to correct the
size gap with ABI.... An acquisition of
Foster's would also reweight the EBIT port-
folio from around 75 percent emerging
markets to around 60 percent," Nomura
analyst Ian Shackleton told Reuters.
SABMiller has largely focused on emerg-
ing markets, but analysts say Australia is
attractive as the most profitable market in
the world per liter of beer brewed. Foster's
has a half share of the Australian beer
duopoly, and annual price increases have
kept margins high.
Other potential bidders include Asahi
Breweries, Molson Coors and Coca-Cola
Amatil, but none have the war chest that
SABMiller would bring to the bidding.
Big Sky brewer Matt Long
SAB CEO Graham Mackay has said that
the company has the desire and the finan-
Big Sky Brewing works to rewater Montana’s streams...
(Continued from Page 9)
cial resources to do another big deal.
"SABMiller has not done a really big deal not going back in. So we bought certificates for 10 million gallons.
since 2005, and...we think SABMiller will These certificates really work for smaller tributaries, since they can broker water trans-
be very interested in the Australian beer fers. The Clark Fork Coalition, for example, negotiated with farmers to buy water from
market," one banker told Reuters. a bigger water district, and put the water back into a creek that needed it.
In an article in Reuters, Matthew Webb of Dewatered streams make for poor habitat. No water, no fish, just like no water, no
JP Morgan Cazenove said three big tar- beer. Probably more people at our brewery fly fish than don't. And I used to work for
gets might interest SABMiller. In addition to one of these organizations, so I had seen this program in action. They called me, and
Foster’s, these targets include Molson I pitched it to the brewery. I knew what was going on, the need for restoring stream
Coors and Africa’s Castel. flows. We're the largest brewery in Montana, so it’s up to us to be a leader.
Mr. Webb told Reuters that he puts a val- We signed a contract for three years. The way we want to do it, we'd like to do other
uation on Foster's beer business at $11 bil- streams as well. Our signing up every year restores flows for that stream every year.
lion, or 13.3 times historic core EBITDA The key to this program is continuity—they need people to continue to buy these cer-
profits. tificates. This is not the only major environmental program we’ve got going. We
Foster's holds a 52-percent market share recently got a state transportation sustainability award for incentivizing our employees
of the Australian market, competing to get to work by carpool, bus or bike. Every hundred days we cost share a bike, or
against Kirin-owned Lion Nathan with 43 give the employee a check.
percent. Heineken owns the Foster’s brand
in Europe, and SABMiller owns the beer How are things going for you business-wise?
brand in the United States and India. The craft segment is doing well in Montana. What's amazing is you go into a small bar
in rural Montana, they'll have Miller, Coors Light, Bud Light and Moose Drool. We
Swapping beer for wine can lead started out in all bottles, that's still 80% of our business. But we've come out with cans,
to weight loss, UK’s CAMRA says and we were the first brewery to use the aluminum bottle. As it turned out, that alu-
Research by Britain’s Campaign for Real minum bottle package didn’t work so well for us, as a craft brewer, so we discontin-
Ale (CAMRA) has shown that drinking beer ued it last year. Now we're canning, and it’s surprising, but some products seem to do
rather than wine could translate to losing better in cans. Scapegoat Pale Ale wasn't selling so great, so we put that in a can, and
almost 10 pounds in a year. now that package is outselling the bottle. And it’s a great beer to take fishing.
Beer contains fewer calories than wine,
the study notes. A glass of white wine con- You said you’re seeing more craft penetration in rural parts of the state?
tains an average 131 calories, 46 more Yeah, we’re selling in a lot of small rural bars. It’s great to have that presence, but
than a half pint of ale, with 85. those bars don't really turn the kegs for us. Our best markets are still Missoula and
"Beer has been blighted by a reputation Bozeman, and those are college towns. We also do well up in Whitefish, near Glacier
for being more fattening," Prof Charlie National Park. People that come into the state like to try to local flavor. When I'm fish-
Bamforth noted. "The major source of calo- ing the Big Hole River, there is always this crusty saloon where I stop off for a Moose
ries in any alcoholic drink is the alcohol Drool. It's workin'. We still get a very small portion of beer drinkers, but more people
itself, and because beer has the lowest are headed over our way.
average alcohol content among alcoholic
drinks, it's also lowest in calories.” Thanks for your time, Chris.

9 MODERN BREWERY AGE WEEKLY, AUGUST 27, 2010