While companies such as Picobrew and Whirlpool’s Vessi were showcasing their high-tech methods for brewing beer at CES 2017 in Las Vegas, two giants of the beverage industry confirmed a partnership that could shake up the market for home-based brewers. AB InBev, the world’s largest beer brewer, and JAB Holdings, the corporate parent behind the Keurig pod-based drink system, announced they are teaming up to create a home-brewing system that can deliver beer and spirits to consumers.
The deal should come as no surprise given that JAB Chief Executive Olivier Goudet is also the chairman of AB InBev.
The announcement leads to more questions than answers, but the partnership is likely to take advantage of the technology behind Keurig’s Kold machine which offered single-serve sodas. Considered a bust, Kold was discontinued in the summer of 2016 when customers who owned the product were given refunds. Some of the Kold features, such as “Party Mode,” which allowed a user to crank out more than 30 drinks in a row, will be useful for the new unit.
The new appliance will be able to serve beer, spirits, cocktails and mixers. Given that those beverages require vastly different brewing methods, In-Bev and JAB might be looking at two machines. Beer requires a lengthy fermentation process which would be challenging to distil into an on-demand dispenser. For beer lovers, the two companies could develop a popularly priced home-fermentation machine along the lines of Whirlpool’s Group W Indiegogo project, Vessi. Such a machine might carry the branding of AB InBev’s popular Budweiser or Stella Artois, targeting the fan bases of those already popular brands.
The AB InBev/JAB Holdings partnership will have little impact on the higher-end home beer brewing market. Entrepreneurs looking to build DIY systems are focused on experienced hobbyists who want to create highly customized brews. Home brew masters are rarely novices and are more likely to want machines that allow them to focus more on the art of brewing rather than the mechanical process. The brewing appliance created by the new partnership will target those wanting to up their home entertaining game rather than sophisticated drinkers.
The Keurig for the cocktail set is an easier play for the two companies, with a retooled and improved version of the Kold (a 2.0) ready to tackle that segment. The robotic bartender market is already well established with such companies as Barbotics, Blend Bow and Bartesian already creating interest with early adopters. Bartesian is making cocktails in second utilizing a proprietary cocktail capsule. Neither InBev nor JAB owns any companies in the spirits business, but plenty of brand names in that space would be eager to partner with someone able to crack the mass market with an adult beverage Keurig machine.
On the surface, building a market for home beer making could appear to be a conflict for In Bev. In actual practice, companies such as Starbucks, Dunkin Donuts and even JAB’s Peet’s Coffee did not lose branded-store customers when they expanded their reach to include retail channels and Keurig K-Cups. In fact, by allowing beer drinkers to enjoy a fresh Bud or Stella from their home taps could extend customer brand loyalty to bars and restaurants. The challenge for the two companies will be to create an easy-to-use set of ingredients and recipe to replicate the branded brews while allowing the advanced home brewer the opportunity to put his or her signature touch on the final product.
One thing is certain—anything proprietary that results from AB InBev/JAB alliance will be more closely guarded than Keurig’s original K-Cup design. The patent for Keurig’s single-serve pods expired in 2012 because of the ambiguous wording of its original claim. Failure to protect its IP cost the company billions as competitors lined up to create pods for the popular machine.