Christopher Adams

The Business Herald’s markets and banking reporter.

British boss grabs handle of famous brewery

New DB chief faces challenge of a market in which consumption of beer is falling.

DB Breweries' managing director Andy Routley wants to take the company, which includes brands like Tui, to a new level. Photo / Mark Mitchell
DB Breweries' managing director Andy Routley wants to take the company, which includes brands like Tui, to a new level. Photo / Mark Mitchell

Andy Routley had some big boots to fill when he became managing director of DB Breweries in March.

The 49-year-old Briton replaced Brian Blake, a Kiwi who'd been at the helm of the Otahuhu-based brewer for the best part of two decades and remains its chairman.

Routley, a 25-year veteran of the consumer goods and beverages sectors, including a four-year stint as global marketing director for Miller beer at London-listed brewing giant SAB Miller, says he feels blessed to have taken over a well-run business.

DB - whose brands include Monteith's, Tui and Double Brown - has just posted three consecutive years of double-digit profit growth, he says, but there's an opportunity now to take DB to the "next level".

"That's exactly what we're trying to do," he says.

Routley, however, admits he's got a challenging task ahead. New Zealand's big brewers - like those in many developed countries - are facing a market in which beer consumption is falling.

While beer accounted for 81 per cent of the total alcoholic beverage category in 1996, its share had slumped to 61 per cent by last year, according to Statistics NZ.

And while craft beer accounts for only a small proportion of the total market, its popularity is surging and smaller-scale brewers - there are around 70 of them in this country - are nipping at the heels of the big boys such as DB, Lion and Independent Liquor.

Routley says the falling consumption levels suggest there's some "consumer lethargy" towards mainstream beer brands.

"Our job, as one of the market leaders, is to re-energise a category that's clearly been struggling for some time from a lack of relevance."

Routley says the mainstream beer market has become heavily commoditised, with too much focus placed on price rather than adding value for consumers.

"We haven't been creating brands and products that are different," he says. "One of the actions we're taking is making sure we invest in developing more master brewers at DB than we've ever had before - people who can be responsible for the craft and ensuring the quality of the liquid that goes into our beer and our cider is of the very best quality."

Routley uses Tui as an example of the changes DB is rolling out under his leadership.

He says the brand, best known for its cheeky "Yeah Right" billboard advertising, continues to win industry awards but is "a bit maligned" for what it has become.

"Tui is still New Zealand's most popular beer brand, but we haven't been talking enough about the ways in which we can make it a slightly more appealing proposition," Routley says.

He says DB is planning to release new Tui brews in 2014, when the brand will mark its 125th anniversary.

But while Routley says DB needs to "talk about the beer" more when marketing Tui, the billboards will remain a key part of the brand's advertising strategy.

"The Yeah Rights have been going about 20 years now I think," Routley says. "They're a topical, sometimes irreverent and light-hearted reflection on life in New Zealand."

One of the most recent Tui billboards - "My shout, I've got shares in Moa beer" - took a swipe at the craft brewer over its poor August trading update, which resulted in a big drop in its NZX share price.

Moa retaliated, dispatching a PR release in which it challenged Tui to a "beer-off" but said it had failed to find the brand's owner.

"We phoned the Tui Brewery in Mangatainoka who told us to talk to DB Breweries who gave us the runaround," Moa founder Josh Scott said in the release. "But it turns out they are owned by a Singapore company anyway, who are owned by the Dutch, who had never heard of Tui."

DB's parent company, Singapore-based Asia Pacific Breweries, became a wholly owned subsidiary of Dutch brewer Heineken following a takeover last year and will be renamed Heineken Asia Pacific next month.

Routley, who's taken over the responsibility of signing off on the Yeah Right billboards from Blake, says Moa seems to have taken the billboard quite seriously.

"We're not in the game of having a pop at the category or players in the category, long-term," he says, adding that DB never intended to start a battle with Moa.

"We'll move on and we're not going to engage in any debate with Moa or anybody else in the category. It was just one of the observations that Tui makes."

It's not the first time Moa and DB have clashed.

In 2011, when Moa proudly announced it had become the first craft beer-maker to sell its products in New Zealand duty-free stores, DB swiftly issued a press release that rained on its smaller competitor's parade.

Its Monteith's products had been "in and out" of duty-free stores in this country since 2007, the release said.

Moa general manager Gareth Hughes hit back, saying Monteith's is mass-produced and can't claim to be a craft brand.

"You can market and make people think you're making a craft beer but the reality is that to really craft it we've probably got as many guys working in our brewery as they have working at the big breweries at any given time," Hughes said.

Routley says that argument is a "debate rather than a science".

"Monteith's comes out of our own craft environment down in the Greymouth brewery, predominantly," he says. "We believe we have a 27 per cent share of the craft segment, primarily through Monteith's."

Routley says the rise of craft beer is providing great "stimulus" for the category as a whole.

"We're committed to developing the craft category through brands like Monteith's and we may have other ideas in future in terms of how we build this category."

Routley says business has been good at DB during his first few months in the job. Market data indicate the company - which has a roughly 35 per cent share of the New Zealand beer trade - has gained about a percentage point of market share in the last six months.

Routley says the sales boost provided by Heineken's sponsorship of UEFA Champions League football tournament was partly responsible for that growth, while the Monteith's Brewers Series range, which is targeted at craft drinkers, had also been selling well.

"Those two brands have really been our growth drivers."

Outside of business, Routley has three young sons - twins Josh and Ben and younger brother Sam - with wife Becky.

The family relocated from the south of England to Mission Bay for Dad's new job.

Routley was born in London, grew up in Brighton and studied maths at Loughborough University, in the East Midlands, before entering a graduate training programme with Mars.

His last role before coming to New Zealand was as British managing director of US-based consumer goods firm Church & Dwight, whose products include laxatives, antiperspirants and Trojan condoms.

He says he's happy to be back selling beer and claims his favourite drop is Monteith's.

Asked what his favourite beer was before taking the role at DB, he makes another politically acceptable choice.

"Heineken."

Routley's also a rugby fan and isn't afraid to disclose his allegiance to the English team in his biographical information on the DB website.

That, of course, provided Moa with some more ammunition for its Tui billboard reprisal.

Andy Routley

Age: 49.
Born: London.
Role: Managing director of DB Breweries.
Previous two roles: British MD of consumer goods firm Church & Dwight; global marketing director for Miller beer at SAB Miller.
Family: Three sons under 10 with wife Becky.

- NZ Herald

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