That’s Kräftig stuff
Billy Busch, half brother to August Busch III, has finally started serving his Kräftig beer in St Louis bars – only to get served a USD 600,000 suit by consultancy Rio Creative in a breach of contract. Rio filed a suit on 21 November 2011 against the William K. Busch Brewing Company and company founder William K. “Billy” Busch, St Louis media reported.
Rio Creative alleges that it provided consulting, creative and project management services to Mr Busch regarding the development of a microbrewery and incurred expenses totalling more than USD 650,000 from May 2009 through March 2011.
Rio further alleges that Rio’s founder Jeff Hutson was promised he would have an ownership stake in the microbrewery for his individual efforts.
To date, attempts to reach the William K. Brewing Company for comment were unsuccessful.
Whatever the outcome, the suit only adds a bit more controversy to an already highly controversial undertaking by a member of the Busch clan.
Billy Busch was not held to the non-compete agreement following the 2008 Anheuser-Busch takeover by InBev that prevents other family members from re-entering the beer industry. That’s why he could push ahead with a project of his to have his own beer and eventually his own brewery. According to the St Louis Post-Dispatch newspaper, when the brewery unveiled Kräftig Lager and Kräftig Light (German for "strong") in St Louis recently, the audience applauded James F. Hoffmeister, Busch Brewing’s President and CEO, who promised to "build our headquarters and our brewery" in St Louis in the next few years.
Until a local facility is built, Kräftig Lager and Kräftig Light will be brewed under contract in Wisconsin.
Reports say that Billy Busch has already brewed 7,200 barrels (8,500 hl) of Kräftig, or about 100,000 cases. The company aims to brew 2 million barrels (2.4 million hl) every year, the bulk of which at a brewing facility it plans to build in St. Louis within three years. Mr Hoffmeister aspires to "4 or 5 million barrels" as if that were almost a given.
The Kräftig team declined to disclose the scope of its investment, but its ambitions certainly make the effort audacious and unusual.
The Kräftig team deliberately eschews the craft brewing label. Instead Mr Busch wants to position Kräftig as a premium mainstream beer. At about USD 6.70 a six pack (EUR 5.0), it’s less expensive than many craft beers, such as Sam Adams or Sierra Nevada, but more expensive than Budweiser.
Beer industry observers are watching this strategy closely.
Over the past ten years, mainstream beers have lost market share as smaller craft brewers have gained sales. Beer sales overall will decline for the third year in a row this year, while craft beer will climb to about 6 percent of the market.
