Former Foster's boss damns bland beer

20:00, Dec 27 2013

It is a bit like your fortune teller grabbing you aside one day and telling you her tarot card readings were all made up, or your lifelong family doctor admitting on his retirement that herbal medicine and a few acupuncture needles in your back was actually a better bet.

But here is Trevor O'Hoy, former boss of Australia's biggest brewer, Foster's, and a 33-year servant of the company doing just that, pronouncing the unthinkable: that mainstream beers are simply bland and inoffensive.

"The majors produce deliberately quite bland products that are inoffensive, while craft brewers have spotted a gap and are providing these smaller-run, more exciting products," said O'Hoy, who resigned as Foster's chief executive in 2008 after a costly acquisition strategy that included the $3.7 billion purchase of winemaker Southcorp.

However, O'Hoy does not even attempt to say he did any different during his five-year leadership of Carlton & United Breweries, at the time the nation's largest brewer, thanks to its powerhouse brand VB. Rather, he openly admits he had no choice but to pump out bland beer as well to please the punters and his shareholders.

"Oh, absolutely, and I make no apologies for that because the big, big consumption from consumers are in those western suburbs of the country and they are wanting the big commercial brands - so that's fine.

"However, if you want to make it sustainable, be wary of what people are drinking in Brunswick Street or Paddington and all that."


To some extent O'Hoy is still the salesman and, of course, talking his own book, as the former Foster's lifer now sits on the board of Stone & Wood, a boutique craft brewer based at Byron Bay.

For he has seen the future of brewing, and it is all about craft beer meshing with the demands of a changing consumer who is open to experimenting with a large suite of tastes and flavours packed into a bottle of beer.

"The new consumer - and this applies to all products - is experimenting a lot more, which is interesting because I come from a world, a generation, where you stick with one brand for life. But the new consumer has multiple brands on multiple occasions on the one day.

"So it's a very different world and the craft brewers are filling a gap that's really been wanting to be filled for some time.

"And I think it's good news for the total sector because it creates more interest in beer."

Craft beer is seen by many in the industry as a game-changer, a liferaft that will help save beer as a category by clawing consumers back from rival beverages such as wine, spirits and ciders. While sales of traditional beer are flatlining or slightly negative, craft beer is growing at 13 per cent a year, albeit from a low base, and now accounts for 3.2 per cent of the total beer sector.

Craft brewers such as Stone & Wood are sprouting up all over Australia, with drinkers smacked with a huge variety of choices when they walk into a bar or drive through a bottle shop.

O'Hoy's connection to Stone & Wood, founded the year he walked from Foster's, stems from his old brewing days with the craft brewer, the creation of three former Foster's managers whom O'Hoy mentored.

"It's three middle-aged managers I mentored in my former life," he said.

"I might have over-mentored them because they have set up their own business now."

O'Hoy has a small personal stake in Stone & Wood.

Also now on the board of vitamins and supplements company Swisse, O'Hoy has loosened up his corporate dance card of late to accommodate new directorships and interests. He recently stepped down from the Australian Cricket Board, the North Melbourne Football Club and a position at Monash University.

He has landed back in the pubs and beverage game, sitting on the board of property group Redcape, which has a portfolio of 71 hotels and its recent pubs spinoff Hotel Property Investments that has under its wing 41 pubs and seven detached bottle shops.

O'Hoy also does not mind getting involved with a business that is out on the frontier, and this certainly applies - in a geographical sense - to his role with Mongolia's biggest beer and vodka maker and distributor, APU.

He sits on the board of APU, which has a 60 per cent market share of the local beer and vodka sector.

Asked what is big in Mongolian pubs these days, O'Hoy offered a simple snapshot of the average Mongolian drinker who, surprisingly, is not too different from drinkers out west. He said: "Mongolia is a rerun of what you are seeing in Western Australia - it's resources driving a mining boom and there are a lot of thirsty miners." Fairfax

The Dominion Post