Beer market challenge is to tap employees for ideas

By Selwyn Parker

DB Boss Brian Blake is champing at the bit to get on the road and participate with staff at grass-roots level.

Brian Blake has been stuck in his office for most of the last six months, chafing to get out on the road.

But he has been so engrossed in a strategy for expanding profits in a shrinking beer industry - "right-sizing to the market", he says - that he hasn't had the time.

But any day now, he plans to escape the office and practise what he calls "participative management". Blake is chief executive of DB Group, the perennial rival for Lion Nathan in a mainly two-horse race. Between them, the brewers still share 88 per cent of the market despite the proliferation of competition from boutique breweries, independent importers and the heavily discounting Melbourne's Carlton and United Breweries.

But, confounding the opponents of more liberal drinking laws who said that the wider availability of liquor would increase consumption, the beer market gets smaller every year despite the explosion of licences issued to brasseries, restaurants and bars.

Ten years ago beer consumption stood at 122 litres per capita a year; now it's about 84 litres a year.

This isn't as bad as it might seem for the brewers. Although we're drinking less, we're drinking differently. We either drink up or down.

That is, up to more expensive packaged brands like DB Group's Heineken and Amstel and Lion Nathan's Steinlager and Stella Artois, or down to your DB Draught and Lion Red.

Blake, who describes brands as "the heart and soul of DB Group", has been busying matching the company's resources so they are deployed where they are most effective in this contradictory environment. This realignment can be simply summarised: the biggest-earning brands attract fatter resources in the form of advertising and promotion, people, research and capital investment.

In this, Blake follows his former boss and brand manager par excellence, Erik Korthals Altes, who often said that discounting to win market share was a short-sighted strategy. "Price is often the most convenient way of achieving volume," Blake explains. "But with discounting you end up in a spiral. You destroy all the value in a brand."

With the nuts and bolts of the strategy screwed into place, it's time for participative management. For Blake, this is a hybrid of teamwork and bossmanship. You share ideas, but somebody has to make up their mind.

"Nobody has a mortgage on good ideas," he says. "But you have to be careful that you don't venture too far into consensus management.

"Senior management can't abdicate its responsibility to make key decisions."
Managing a brewing company is an all-round job that requires a good head for numbers, highly-tuned brand management skills, and the common touch. After that, it's all about the head-banging pursuit of market share.

Blake goes about the job in a similar way to the chief executive of his competitor, Lion Nathan's Sydney-based Gordon Cairns. Both have quick eyes, fit comfortably into the bonhomie of the hospitality business, and love a brand-bashing stoush. Indeed nothing engages their attention more completely than the issue of market share.

Also like Cairns, Blake sets considerable store on communication - the distribution system, if you like, of participative management. He organises this in several tiers.

Once each month, Blake heads a formal review with the eight key managers who report to him. He later sits down for a tete-a-tete with each manager individually to go over the results.

Every three months, he fronts up with all the senior managers in each division, one at a time. That's DB Breweries, Corbans, Allied Liquor Merchants, New Zealand Liquor. "In these meetings we try to spend less time on results and try to look forward," Blake explains.

And every six months, he spreads the participation wider in "focus forums" to DB Group's top 150 people. Blake would like to do more.

In the old days he would also launch himself into road shows - 22 of them every six months. He'd like to get back to that.

So much for the spoken word. Blake also corresponds regularly with the top 150 people through letters, memos and internal newsletters. And DB Group has its own newsletter.

The motive behind all this communicative effort is Blake's conviction that most of the good ideas come from the troops rather than the generals and DB Group isn't going to tap anything like its full potential unless all the employees buy in. "That's the real challenge," he says.