Hot Job? ‘Share of Stomach’ Comes to Beer Boardrooms

beer stomach-belly

It is certainly not a wholly American value, but competition sometimes feels more deeply rooted in our everyday lives than it should be.

After all, there’s a reason why “#winning” became a cultural phenomenon after Charlie Sheen made it part of his personal mantra.

The idea of victory is so ingrained in our cultural expectations, we love equating things with battles. We “fight the good fight” for all sorts of reasons – politics, tobacco use and boredom. We’ve even been waging war in beer for years, going back to Jim Koch’s 1994 “declaration of war” after Anheuser-Busch purchased a stake in Redhook.

No matter how trivial the task, we love shifting the thought process to win or lose, love or fear. The spectrum is wide, but we set forth with clear goals.

Which is why, as the beer industry grows and competition becomes intensified, I’m particularly curious about how bigger companies want to fight off those around them in a never ending battle to win over our wallets, pint glasses and throats, in a very literal way.

For as much as beer enthusiasts love to study the intricacies of the recipes that concoct our favorite beers, it’s rare we look behind the curtain not just at the people that are creating our brews, but those calling the shots. Look across the administrative boards of America’s biggest breweries and there’s most certainly a common theme – a majority of these employees have long, decorated backgrounds within the brewing industry among giants like Heineken, MillerCoors, Anehuser-Busch and more.

But as competition becomes more intense, it’s logical that these companies that have financial means look toward other industries that long ago faced similar challenges of overstuffed aisles.

It’s a coming trend prophetically predicted by Good Beer Hunting’s Michael Kiser, who almost a year ago noted that a change in vernacular among beer execs could soon impact the perception of beer and its consumers. Hearing beer referred to as “product,” “liquid” and in “share of throat” was something new for the industry (emphasis mine):

But increasingly, I’m hearing this language spreading outside the sales channel as more and more people are hired from outside the beer industry to fill critical roles in sales and marketing to meet the dramatic growth of the segment. There just isn’t a large enough talent pool from within the industry any longer to feed these machines.

Sam Adams didn’t have a great 2015, outside of IPAs and no need to remind you of the plight faced by AB InBev, trying to thwart the never-ending march of craft beer.

So recent hires by both companies caught my eye, pulling new staff from the intense battleground of the food industry.

“We would always talk about ‘share of stomach,’ which is about grabbing the amount people consume in terms of food,” Rashmi Patel recently told me, referencing the five years she spent at Kraft Foods Group before joining Anheuser-Busch in July 2015. She’s the company’s new vice president of Share of Throat, a real title for a real marketing team focusing on AB’s collection of flavored malt beverages (Ritas, soda) and Oculto.

Patel’s choice of words – and title – speaks a lot about how Big Beer is working to address an issue of diminishing market share. “Share of stomach” is a term long-used within the much more competitive food industry, where meals and snacks and just about anything else you can fit in your belly is viewed in literal terms by the people trying to sell you those products.

In 2009, before Patel’s time at Kraft, that company viewed innovation and product diversification as key to success with a consumer base of more curious and maturing tastes. (Sound familiar?) For example, Kraft changed their approach to salad dressings to focus attention to ingredients, packaging and advertising. (Sound familiar?)

After all that effort to change the way they made and marketed their product – also meeting consumers where they wanted – “we began to see that [salad dressings] share performance turn around,” she said. (Sound familiar?)

To be fair, Anheuser-Busch isn’t the only big company going this route. The last two big hires by Boston Beer, maker of Sam Adams, follows suit. Beginning this month, two experienced food industry employees join the company.

Frank Smalla, also coming from Kraft, will be Boston Beer’s new senior vice president for finance. Quincy B. Troupe, coming from Campbell Soup Company, is set to become the latest senior vice president of supply chain as well.

In press releases announcing both changes, president and CEO Martin Roper noted both hires are “particularly important as our business continues to expand and becomes more complex.”

Again, a key choice of words, especially with knowledge of how cider and malt beverages are fast taking over share of Boston Beer’s production volume, which itself is changing to fit in new styles and tastes. From 2010 to 2014, Beer Marketers Insights estimated a drop of more than 26 percent in Sam Adams production volume as Angry Orchard and Twisted Tea went up.

Boston Beer Production Volume Share by Percent

2010 2011 2012 2013 2014
Beer 88.9 84.8 78.9 68.3 62.3
Tea 11.1 15.2 18.3 16.2 14.4
Cider 2.8 15.6 23.2

The beer market is changing constantly in terms of sheer volume of beer and breweries. This is having a direct impact on how larger businesses must pivot to not just stay relevant, but keep investors happy. “Share of stomach” creates a mindset as much as it does a business plan. “Share of throat” follows along.

The vernacular of beer is a curious one, always adding words and acronyms, evolving to the literal and figurative tastes of the industry. As the number of businesses continues to grow, the language is changing, too. Even if Jim Koch’s “declaration of war” felt a little over the top, it does represent a business mindset. Sometimes people forget that among all the collaboration brews and lifelong friendships between industry veterans, beer is still a business and “winning” is still a goal.

Which is why it’s worth paying attention to the latest crop of generals recruited to beer’s ranks, who may offer a transformative point of view earned from so many food fights before.

Bryan Roth
“Don’t drink to get drunk. Drink to enjoy life.” — Jack Kerouac

 

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6 thoughts on “Hot Job? ‘Share of Stomach’ Comes to Beer Boardrooms

  1. Pingback: Catching Up with Beertography | This Is Why I'm Drunk

  2. Pingback: With Eyes on AB InBev, Are We Missing Another Beer Fight? | This Is Why I'm Drunk

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