The beer business is undergoing a renaissance as brewers increasingly take on the market leader Almaza, owned by Dutch conglomerate Heineken International. First came 961 in 2006, the brainchild of Marwan Hajjar of Gravity Brewing, which introduced a greater variety of beer to the market than commercially brewed lager. The success of 961, named after the country’s calling code, prompted Almaza to introduce a malt beer to its portfolio and, last year, Almaza Light.
Now there are upcoming contenders in the market, yet at opposite ends of the spectrum. One is a craft brewery producing on a microscale, while the other is entering the big leagues with a $12 million to $15 million investment in the Bekaa Valley. Both producers want to up the quality of brew on offer as well as the amount of beer being drunk.
“I consider Hajjar a pioneer of brewing in Lebanon; he likes brewing beer and has done so much for craft beer here,” said Emile Strunc, who produces his eponymous beer in Jounieh at what he calls his “nano brewery,” an 18-square-meter room with two 50-liter kettles. “We would both like to see 50 to 100 breweries here for people to discover real beer and move away from the commercial variety.”
Strunc, who produces around 600 liters of beer a month, does not sell his creations at any outlets, but to friends and “friends of friends,” and is more interested in promoting good beer than turning a profit.
“It is not about the business but about sharing the beer,” said Strunc, who works as a negotiating skills consultant and brews in his spare time.
But Strunc’s beer – which includes black ale, Indian Pale Ale summer ale, Munchen, Vienna, Kolsch, organic and two wheat beers, Weiss and Dunkelweiss – is growing in popularity and his beer may be gracing the tables of certain restaurants very soon.
“It is reflective of where a certain Lebanese entrepreneurship is heading,” said Michael Karam, a wine writer and business journalist. “There is a big booze movement underway, first picked up by vineyards, then by Strunc, and now J2 vodka has been released in the market, which is distilled in Poland but owned by a Lebanese entrepreneur. So we are seeing a new entrepreneurial furrow being plowed.”
The big investment is by Kassatly Chtaura, a leading drinks manufacturer that is behind Buzz alcohol drinks and, since 2005, the wine Chateau Ka. Through a loan backed by the Central Bank, Kassatly is to invest up to $15 million to produce 20 million liters of beer a year, equivalent to the amount Almaza produces.
“Over the last 12 years we’ve been producing alcopops [Buzz] and non-alcoholic drinks [Freez] and doing well. Since we have the facilities to produce beer and want to expand, we are making this investment,” said Akram Kassatly, president of Kassatly Chtaura. “Half of the brewery is already there – the bottling, packaging and pasteurizing – so all we have to add is an annex for brewing and fermentation.”
A German firm has been contracted to develop the new 2,000-square-meter brewery, and brew masters are to come for six months to a year, with production slated to start in 2014. While the beer has no name yet, Kassatly is aiming at high quality production.
“It will be the same quality as in Germany or Holland. It will be 100 percent malt beer, so no headaches or bloating,” Kassatly said.
But the new brewery may face an uphill battle to get more people drinking beer instead of wine, cocktails and the popular spirits, whisky and vodka. Furthermore, an estimated 70 percent of Almaza is consumed in summer, with the drink considered a thirst quencher.
“I hope and wish this will change, and via advertising, encourage people to drink more in the winter,” Kassatly said.
This will require consumption to seriously balloon from the estimated 5 liters per capita a year currently consumed – low by comparison to Europe’s 75 liters per capita, Cyprus’ 58.1 liters, and the world’s largest consumer, the Czech Republic at 131.7 liters, according to Japan’s Kirin Institute of Food and Lifestyle Report.
Kassatly believes they can shake up the beer business here and bring consumption up to 10 liters per capita, adding that if the beer is not consumed locally, then it can be exported.
“We are not going to have to compete with Almaza, as our presence will make the market grow bigger, and there will be absolutely no risk of selling less. There’s always a place for a new brewery in Lebanon,” Kassatly said. “If capacity doesn’t sell in Lebanon, we will export it, and we will export to wherever Buzz does, with plans for Iraq, Syria eventually, and Africa.”
Strunc has noticed a change in attitude toward beer drinking in the country, and he is winning over converts to the taste of traditional beer.
“People are calling me up to taste the beer, and I’m happy about that as people are switching from industrial beer to something with more flavor,” said Strunc, who is half Lebanese and half Czech.
While getting people to drink more beer is one issue, a connected factor is the price. Almaza currently retails at a lower price than what Kassatly’s beer is expected to sell at, primarily due to the higher quality ingredients.
“Almaza has Heineken behind it, so it could start a price war,” Karam said.
Kassatly however is not concerned.
“Almaza doesn’t really have an interest to compete on price. We are going to do it with a premium product at a slightly higher price,” Kassatly said. “It will take two to three years to get known, so it is a long-term strategy. We are focusing on quality and will see how it develops.”
When it comes to pricing, malt beer costs more to produce, as do craft beers.
Karam is optimistic about Kassatly’s entrance into the market, given the producer’s success with its wine: “They got Chateau Ka into [high-end British supermarkets] Waitrose and Marks & Spencers, which considering they started in 2005, is one hell of an achievement.”
A lot of the success of Kassatly, 961 and craft beer in general will of course depend on the economic situation in the country and regionally, which is making any forecasts hard to formulate.
The Daily Star