World Famous in Denmark

Ambling southwards from Copenhagen’s Sortedams Sø back to the city centre, we came upon a beautiful bank of flowers in Hjalmar Brantings Plads. As we stopped to admire the view, an elderly gentleman joined us.

“What brings you to Copenhagen?” he asked.

We explained that we’d been at the Mikkeller Beer Celebration earlier that weekend.

“You know Mikkeller?” he replied, incredulously. “We have a saying here: ‘World famous in Denmark’!”

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When we left the beer festival on Friday evening we saw something even more extraordinary. Turning the corner around the Tivoli gardens and onto Hans Christian Andersens Boulevard, our senses were assaulted by the sight, sound and smell of scores of vintage American motor cars roaring up and down the street, revving their engines and burning rubber. The noise was cacophonous, the air was thick with acrid smoke, the spectacle arresting. Against the sedate calm of the Rådhuspladsen and the fairy-tale charm of Tivoli, it felt like Motörhead night at the BBC Proms.

The thought of that contrast recurred two days later at War Pigs, the restaurant, microbrewery and taproom operated by Mikkeller and Three Floyds Brewing. We were in Denmark, but the vibe was one of hyper-Americana. The beer was “craft”. The food was barbecued meat sold by the pound. The music was rock, with lyrics extolling the virtues of the rebellious temperament, the freedom to get tattoos and grow impractical beards, the open road, the strangely baby-boomerish gumbo of sex and petrol and guitar solos. The mood was summed up when Deep Purple’s “Highway Star” came over the sound system, with its defiant insistence that nobody’s gonna take my car, I’m gonna race it to the ground.

Back in the real world, Denmark is a global leader in the wind power industry and generates more than 70% of its energy from renewable resources. The U.S. barely manages 15%. The average American consumes two and a half times more oil per day than the average Dane. The average-earning single Dane pays 36% in tax, the third-highest level in the world behind the Belgians and Germans. The average-earning American pays 26%. The list of countries with the highest tax burden for average-earning married couples with one working spouse and two children is very different from the list of those with the highest-taxed singletons—but Denmark is in there, too, in second place behind Turkey, on 25%.

Mikkeller General Store

Authentically Danish

Sticking it to the man and letting the devil take the hindmost as you push the pedal to the metal just isn’t the done thing in Denmark. The culture is less “War Pigs” and more “Mikkeller General Store”—the outlet two doors along from the microbrewery where discerning consumers can buy Mikkeller cans and merchandise, artisanal breakfast cereals, or some of the Bean Geeks chocolate that is produced on-site.

Like much “hipsterism”, the ironic redneckery of the War Pigs scene is a curious mix of the earnest and the arch, a Tivoli fantasy for the almost grown-up.

Or perhaps it is just a kind of false consciousness?

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Mikkeller isn’t “world famous in Denmark”. Generally, that is a jokey way of saying that someone or something is extremely well-known only in one very small place. Mikkeller, however, is well known to craft beer drinkers scattered promiscuously across four continents. It is a world-famous craft beer brand.

From its earliest days as a “gypsy” brewer, collaborating and borrowing other breweries’ kit to make experimental beers, Mikkeller has been a capital-light, employee-light business. Twelve years on, its value resides even more clearly in its brand rather than its fixed capital assets, or even its products. Revenues come from a global network of retail bottle shops, bars and restaurant collaborations, as much as from its own beers—Mikkeller makes less than 25,000 hectolitres each year, at various locations in Europe and also in the two small breweries it now owns in San Diego and New York.

There is a “Viking” element to this business model, and it has nothing to do with tattoos and beards but everything to do with elevating trade and commerce above manufacturing and craft, with travelling light and being strikingly visible. One thousand years ago, horned helmets and longboats constituted an instantly recognisable brand that spread itself from Constantinople to the edge of the American continent. In microeconomics, they would say these models are built on intangible capital – especially relationship capital and structural capital – rather than tangible capital.

Craft beer is often cited (by craft beer drinkers) as an industry that somehow exists outside the normal practices of modern capitalism. But Viking capitalism, and Mikkeller capitalism, is late-capitalism distilled.

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Mikkeller is an extreme example, but a lot of craft beer businesses follow a similar model. Manufacturing processes and equipment often provide the marketing imagery for this industry (think of all of those websites gleaming with shiny fermenting vessels, taps, pipes and valves), but often manufacturing is less important than marketing – the constant stimulation of demand with new recipes, new adjuncts, new one-off limited edition brews, new collaborations, new social media interjections, new can artwork, new merchandise, new ways to keep on leveraging and building the brand.

This is the equivalent of the oil-conserving, high tax-paying Dane keeping an American pimpmobile in his driveway.

It is also how a relatively simple and industrial product such as beer gets turned into “craft”. But that seems a long way from the sort of thing that, say, William Morris would have understood by “craft”. Usually, debate about who has the right to describe themselves as an “independent craft brewery” focuses on the word “independent”. Perhaps that focus is in the wrong place?

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The response from craft beer drinkers and commentators whenever an independent craft brewery is acquired by one of the big multinational brewing concerns always surprises me. The apparent shock, disbelief and feeling of betrayal seem odd to me, not only because these breweries are businesses established to make money from selling a consumer product, but because these acquisitions, far from going against the grain, are completely natural and predictable.

The latest wave of anguish in the UK came as Beavertown Brewery sold an undisclosed stake in its business to Heineken. Beavertown is similar in some ways to Mikkeller. Collaborations are important to its business. It has a striking visual brand identity. Its “Extravaganza” event is a bit like a Mikkeller Beer Celebration for London. It currently makes about 40,000 hectolitres of beer each year. That beer is great, but who would deny that what makes the business stand out from the dozens of competitors it has in London is not the manufactured product, but the funky, contemporary, painstakingly cool brand?

This is what a multinational such as Heineken wants to get a piece of. Heineken, just like the big food companies Nestlé and Kraft, does not buy manufacturing facilities. It has those, and with its immense free cash flow it can build more whenever it chooses. What it buys are brands that come with modest manufacturing facilities attached. Heineken comes to the transaction with all the tangible (and human) capital; Beavertown comes with the intangible capital. Indeed, the main thing the deal will achieve in the immediate term is the construction of a 450,000-hectolitre brewing facility, increasing Beavertown’s production capacity tenfold and catapulting it straight into the first rank of UK breweries by size.

In other words, by virtue of the value of its brand identity, Beavertown is about to graduate from being a mere marketing business to being a genuine manufacturing business.

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The other thing that’s surprising to me about the response to craft-brewery acquisitions is the common refrain that “macrobeer” aims to take over all beer production and that every brewery is “at risk”. In fact, the history of such acquisitions makes it clear that only a certain type of brewery is targeted. That type has a strong brand identity and a business that is capital-light, nearing or at capacity for current demand, but easily scalable. If you are making foeder-aged Saison in a barn in Sussex, or dominate the very local cask-beer market, or specialise in traditionally-fermented lagers, or simply don’t do funky visuals or social media preening, AB Inbev is unlikely to come calling. If your “values” are evident in your product and processes rather than listed on your website, Heineken won’t be on the phone to you.

Again, it is not the tangible capital they want, or the genuinely “crafted” product – it’s the brand. That’s what links seemingly very different businesses such as Belgium’s Bosteels (with its instantly recognisable Kwak glassware) and Beavertown (with its instantly recognisable can designs).

Is this why independent craft breweries currently make such a fuss about processes such as barrel-ageing and traditional lagering? Is investing in genuinely crafted products and the tangible capital required to make them (as opposed to marketing potentially scalable products that just happen to be made in small batches) a way to signal resistance to macrobeer? Perhaps. But then again, Beavertown itself did precisely this with its Tempus barrel-aged beer project.

Sometimes a signal is just another part of the marketing noise. After all, the best brands distract us from the hard realities of commerce with an ideal of what we want the underlying business or product to be. They create a false consciousness in the consumer, just like the irresponsible car with its “big fat tyres and everything” in the driveway. Or the conceit that the local craft-beer hero is world famous in Denmark rather than simply world famous, with the ruthless commercial efficiency of a Viking trader.

3 thoughts on “World Famous in Denmark

  1. Pingback: Can We Read a Beer in the Same Way We Read a Book? | Pursuit of Abbeyness

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