22 Nov 2012

Big brewers must diversify to thrive - DB head

7:07 am on 22 November 2012

The long serving head of DB says big brewers can only thrive by branching into new businesses like craft beers, cider and cafe-style pubs.

After nearly 20 years, Brian Blake is stepping down as managing director of the brewer but will stay on as chairman.

Mr Blake took the role when DB was struggling against Lion, and served during the years of the beer battles when the two brewers commanded 98% of the market.

He said he leaves DB in an extremely strong financial position.

Despite a declining beer market and tough economic conditions, DB had achieved three consecutive years of double digit profit growth.

But Mr Blake said the company, which is now fully owned by Singapore's Asia Pacific Breweries, has been forced to change with the emergence of craft beers.

"We developed a strategy, what we call aligned competency, so we've said there are certain things we're good at, how do we push the boundaries and get into businesses that are close to the boundaries?"

Mr Blake said one example is 'gastro-pubs' which is a joint venture between DB and three men who are experts at running pubs.

He said DB provides the capital funding and governance, as well as being good at concept development, but its partners are very good at running pubs.

Mr Blake said DB also went into the Australian beer market and now more than 10% of its volume is going into Australia.

He said DB will continue to look for new businesses, for example it's just acquired Redwood Cider Company which is growing rapidly.

Today's customer needs

Mr Blake said the challenge for brewers is to meet the needs of today's customers.

He predicts that over time the concept of what a pub is and what a cafe is will merge.

"There will be a transition where there will be a whole lot of outlets that people will go to that you won't necessarily call them pubs or taverns or cafes they'll be somewhere in-between, and I think that will be a huge opportunity for the beer industry."

Mr Blake said he will continue to work with Asia Pacific Breweries and hopes to take on new directorships.