ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, September 3, 1996 TAG: 9609040068
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
DATELINE: MERRIAM, KAN.
SOURCE: LORENE YUE KANSAS CITY STAR
Flying Monkey beer has hit some turbulence - from beer industry giant Anheuser-Busch.
The owners of FMI Brewing Co., a 3-month-old brewery in a Merriam industrial park, say the ``king of beers'' is keeping Flying Monkey away from certain beer distributors.
The method: A recently introduced Anheuser-Busch philosophy called ``100 percent share of mind'' that asks independent beer distributors carrying Anheuser-Busch products such as Budweiser to focus on their brands exclusively.
A letter sent to FMI co-owner Robert Eilert from Michael J. Brooks, Anheuser-Busch vice president of sales, stated the company did not use any ``bullying'' tactics to enforce the philosophy. But the letter said the company thinks ``it is best for our wholesalers to be exclusive Anheuser-Busch distributors.''
Neither Miller Brewing Co. nor Coors Brewing Co. has a similar policy.
Anheuser-Busch's concept, Eilert said, has hampered Flying Monkey sales in Kansas.
``Our distributors in Wichita and Lawrence dropped us because of Anheuser-Busch,'' said Eilert, who owns the brewery along with Drew Jones.
Eilert and Richard Rossman, Crawford Sales Co. owner, mutually agreed recently to terminate their distribution contract. Crawford Sales was FMI Brewing's Johnson County, Kan., distributor. FMI continues its relationship with Miller wholesalers for distribution in Missouri.
``If we were a brewery that is a couple of years old, this would not be a significant problem - but in the first three months,'' Eilert said. Now Flying Monkey beer is being carried by Midwest Distributors Co. Inc. in Kansas. Midwest also distributes Miller products.
Eilert said wholesalers had to bow to high pressure coming from the St. Louis-based industry giant.
``Anheuser-Busch has 58 percent of the market share of Johnson County - in Johnson County the bread is buttered on one side with Bud and Bud Light on the other,'' Eilert said.
However, Rossman of Crawford Sales said he understands Anheuser-Busch's intentions.
``If you're a salesman and you have product A and product B, how do you give 100 percent to each product?'' Rossman asked.
Of the 36 wholesalers that carry Boulevard Brewing Co. products, several are also Anheuser-Busch distributors. Boulevard owner John McDonald said those wholesalers are also under pressure from Anheuser-Busch to adopt the ``100 percent share of mind'' approach. Boulevard, based in Kansas City, Mo., used to handle its own distribution in Kansas City, but now has a contract with Metro Distributors.
Pony Express Brewing Co., a small brewer based in Olathe, Kan., is carried by wine and liquor distributors.
Eilert can't comprehend why his company, a drop in the bucket compared with Anheuser-Busch, is getting edged out. His brewery will make 5,000 barrels, or 10,000 kegs of beer, each year. Anheuser-Busch produced 87.5 million barrels in 1995.
``We're not competing on a national level - we're a niche brewery, we're a neighborhood brewery,'' Eilert said. ``We have five employees, Drew and I included - I don't know what kind of threat we are,'' Eilert said.
But a threat they are to the beer giants. FMI Brewing Co. is one of 927 microbreweries, brewpubs and regional specialty breweries in the country making specialty beer as of June. And together, those ``drops'' are draining more of the market share than the big brewers are comfortable with.
Specialty beer sales represented 2 percent of the market last year, up from 1.3 percent the previous year.
``It's like a gnat that you don't pay attention to until it's a mosquito,'' said Jim Parker, Institute of Brewing Studies administrator. ``The craft beer market is getting to be a mosquito and it's getting slapped at.''
At Anheuser-Busch, the swatter appears to be its ``100 percent share of mind'' approach.
``I think this has been done because Anheuser-Busch has expanded its product line exponentially in the past few years and if a distributor wants to carry a specialty beer, they (Anheuser-Busch) say, `Well, we have specialty beers,''' Parker said. The beer giant recently introduced its American Originals line of three specialty beers and also produces Red Wolf brews.
Brooks, the Anheuser-Busch vice president of sales, said in a statement that his company is not making small breweries a target.
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