The Case of the Disappearing Near-Beer
It’s been a year since the best nonalcoholic beer ever made began disappearing from store shelves, a victim of economic warfare.
“People call us and they’re mad,” says Robert Bruno, sales manager for the defunct Firestone Non-Alcoholic, perhaps the most beer-like product ever to be made without alcohol. “They yell, ‘How come we can’t find it any more?’ And we tell them it was only a pilot project and we just couldn’t continue to do it and stay competitive.”
Firestone Non-Alcoholic was made for 30 months by Santa Barbara County winery owner Brooks Firestone. It was highly regarded by beer connoisseurs, but the venture died a year ago after Anheuser-Busch and Miller Brewing released lower-priced products, O’Doul’s and Sharp’s, respectively.
“We are a classic MBA case study,” Firestone says. “The assumption I made was that the (nonalcoholic beer) market segment was too small for any of the majors (brewers) to deal with. And economically speaking that was the case. But corporate responsibility turned out to be more pertinent to them (Miller and Anheuser-Busch) than I realized.”
The Firestone project began six years ago, using a proprietary method for making nonalcoholic beer developed by Michael Lewis, Ph.D., a professor of fermentation science at the University of California at Davis, and brewer Hale Fletcher.
After months testing various styles of beer, the first commercial release hit the shelves in May of 1988, at a time when the nonalcoholic beer market included few brands. The leading U.S. producer was J. Heilman Brewing with its Kingsbury brand. Imports sans alcohol were Clausthaler, Moussy, Kaliber and Wartek, and few others.
“At that time all the nonalcoholic American beers were like near-beer--a low-end, alcohol-removed beer,” says Firestone. “The premiums--the full-flavored, hand-crafted nonalcoholics--were all imported back then, and that’s what inspired me.”
Prices for the imported beers were in the $6 to $7 range for a six-pack.
“I felt the market was so small (less than 10 million 24-bottle cases of nonalcoholic beer were sold annually in the United States at the time) that Anheuser-Busch and Miller wouldn’t pay any attention to it.”
But in January of 1990, both major beer companies unexpectedly leaped in with nonalcoholics at an average shelf price of $3.50 per six pack. Firestone, priced at $4.99, was cheaper than some of the imports, but still wasn’t low enough for the demographic group most likely to buy a nonalcoholic beer.
High production and packaging costs kept the price of Firestone Non-Alcoholic up and “we just couldn’t compete,” Firestone says. “At that point, I was hopeful there would be room for a small premium within that marketplace--that we could be the Anchor Steam of the nonalcoholic world.”
But Firestone says production costs never dropped because he couldn’t grow as quickly as he needed to. “Really, we never got beyond the pilot plan stage. We could do a maximum of 6,000 cases per month, and we came close to that a couple of months.” Not enough to market successfully at below $4.99 a six pack.
When Firestone decided to discontinue production a year ago, the last remaining Firestone Non-Alcoholic inventory was discounted and showed up on store shelves at $3.99--”and then you should have seen it fly off the shelf,” says Bruno, who remains with Firestone Winery marketing wine.
He says that when the price difference between Firestone Non-Alcoholic and the majors’ brands was very small, “our quality became obvious.”
Even still, Firestone holds little hope that he’ll revive his Non-Alcoholic. He’s already sold the brewing equipment. Chalk it up as one of those ideas that was too far ahead of its time.
