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FEATURES

Czech Independents

from Marx to Markets

by Marshall Dunlap

Portland Brewing Picture
Zubr's slogan, "Chut sily – Sila Chuti" ("The Taste of Strength – The Strength of Taste") promotes Zubr as the beer for "real men"

Introduction • From Marx to Marketing
• Wooing Conservative Drinkers
• Battling the Competition
• Rebel Yell • Marketing to the High End
• Blue Blood Brewing • Strength in Strength
• Lasting Loyalties

The quality of Czech beer has never been better than it is today and the country’s beer culture has never been more vibrant.

Strength in Strength

While the Lobkowicz brewery emphasizes tradition as its main strength, a different brewery on the other side of the Czech Republic sees, in a sense, strength as its strength. The Pivovar Zubr (Zubr Brewery), in the North Moravian town of Prerov, was founded in 1872 as "the first Moravian brewery with a malt house.” It met with quick success in the region and abroad, as numerous awards from beer exhibitions at the end of the century attest.

A century later, the Zubr Brewery is proving to be no less successful. A modern joint stock company with a fiercely market-oriented approach, the brewery offers a large selection of classic lagers. With a yearly output of 350,000 hectoliters, it also ranks among the country’s larger mid-sized breweries. Furthermore, with an eye on economies of scale in distribution, Zubr joined the neighboring breweries of Litovel and Holba in a regional association called Moravskoslezske Pivovary (Moravian-Silesian Breweries). Together, the three breweries produce and distribute 1million hectoliters of beer annually.

Beginning in 1998, the Zubr Brewery expanded the distribution of its beers via a network of carefully selected European supermarket chains. It recently increased exports to 15 percent of the brewery’s output, reaching markets in Slovakia, Russia, Slovenia, Italy, Finland, Sweden and the USA. As part of its production strategy, the brewery has also added several varieties to its family of beers, including a low-sugar Zubr Light and a nonalcoholic Zubr Free. David Sabak, Zubr’s commercial director, proudly asserts that among the range of full-flavored beers produced by the brewery, every consumer can find one that suits his or her taste.

Zubr’s pricing and marketing strategy is based on the belief that the public will eventually reject bland, low-priced, so-called eurobeer. Sabak holds that consumers will increasingly demand stronger, more robust beers—and will be willing to pay more for them. Hence, Zubr’s slogan, "Chut Sily—Sila Chuti,” which means "The Taste of Strength—The Strength of Taste.” The brewery’s marketing campaign accompanying this slogan is by no means "weak" in its focus. It promotes Zubr as the beer for "real men" and is sponsoring the Zubr Tour of strength-related sporting events, such as weightlifting, boxing and mountaineering. In a style that suits its product, the brewery is aggressively out to prove that macho sells.

Lasting Loyalties

Another example of the merging trend among medium-sized Czech breweries is seen in Ustecke Pivovary (Usti Breweries), located in Usti nad Labem. In 1992, this grouping combined the formerly independent breweries of Krasne Brezno and Velke Brezno into a joint stock company owned entirely by domestic capital. The older of the two breweries, Velke Brezno, has been in operation since 1753. In addition to its flagship beer, Breznak, a pilsner-style beer available in 3.8 and 5.1 percent abv, the brewery produces a line of pale and dark real ale beers. The Krasne Brezno brewery was established at its present site in 1867, and produces the prize-winning Zlatopramen beers of 3.8 and 4.7 percent. Ustecke Pivovary ranks approximately ninth among Czech brewing companies, with a combined 550,000 hectoliters of output per year.

Usti nad Labem lies to the north of Prague, approximately 20 kilometers from the German border. Thus, Ustecke Pivovary’s primary market share is in north Bohemia. Likewise, the 3 percent of its output that is exported goes primarily to Germany. Ustecke Pivovary benefits from typical regional loyalty, selling over 80 percent of the draft beer in the local market. Vladimir Horak, chief export manager, notes that regional dominance is the key element to Ustecke Pivovary’s success. "The future of medium-sized breweries like ours," he said, "depends upon local consumer loyalty."

The last few years have marked tremendous change for the Czech brewing industry. In a land where beer is king, the king makers themselves have had to struggle to adapt to drastically different economic forces since the country's transformation from communism to a free market. Although beer has stood for centuries as one of cultural mainstays of Bohemia and Moravia, the suppliers of "liquid bread" have found that it takes more than history to stay afloat in a world of cut-throat competition. Increasingly, a brewery’s department of sales and marketing must achieve a level of success on par with the art of the master brewer himself in order for the brewery to survive.

The quality of Czech beer has never been better than it is today and the country’s beer culture has never been more vibrant, as even the briefest visit will demonstrate. Paradoxically, this tremendous demand for high-quality beer makes life more and more difficult for the breweries. Individual producers, once dominant within local markets, must face competition from each other and, more ominously, from the biggest domestic breweries.

This reality, while challenging to brewers, is good news for consumers. Competition is not a bad thing. Although there’s no evidence that the centuries-old quality of Czech beer was about to falter, a market-driven approach to consumer loyalty may ensure that the breweries keep up the good work. And the need to market a unique image will encourage every brewery to perfect its traditional styles, experiment with new flavor profiles, and not least, come up with ever more provocative and entertaining billboards.

There’s no doubt that in the home of the original pilsner, a premium, smooth-as-silk half-liter of beer will always be a few steps around the corner at the local pub. In Bohemia and Moravia, there are 8 million or so folks who will all drink to that.

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Marshall Dunlap is an American who must have been Czech in a past life. He has lived in Prague since 1991, where he owns and manages a company that provides export logistics, translation services and travel arrangements. He often visits the United States where his American company, Bohemian Crown Imports, markets and distributes luxury Czech stemware and their natural extension, Czech beer glasses.

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This story originally appeared in All About Beer Magazine in January 2000.


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