Brouwerijen Alken-Maes N.V.

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Brouwerijen Alken-Maes N.V.

Waarloosveld 10
Waarloos,
Belgium
Telephone: (32) 015 30 90 11
Fax: (32) 015 31 41 91
Web site: http://www.alken-maes.be

Wholly Owned Subsidiary of Scottish & Newcastle plc
Incorporated: 1988
Employees: 750
Sales: EUR 200 million ($250 million) (2006)
NAIC: 312120 Breweries

Brouwerijen Alken-Maes N.V. is Belgian’s second largest brewery group and one of the country’s oldest. Based in Waarloos, the company produces more than 30 different beers, including its flagship pils brands, Maes and Cristal. Other company brands include the brown beers Zulte, Judas, Brown Ciney, and Special Ciney; blond beers Blond Ciney and Hapkin; and the white beer Brugs. The company produces a number of Belgian specialty beers, such as the “Abbey” beers Grimbergen, Optimo, and Dubbel, as well as the Lambic, or spontaneous fermentation beers Mort Subite and Kriek. Alken-Maes also brews and distributes Kronenbourg 1664 and Foster’s under license. Alken-Maes’s annual production is focused at its main Alken brewery, while specialty production takes place at the Mort Subite plant in Kobbegem. In January 2007, the company announced plans to close a third production site, the Union brewery in Jumet. In addition to its brewing operation, Alken-Maes provides specialized banking and real estate services to the Belgium hospitality and catering market. Alken-Maes has been a fully owned subsidiary of the United Kingdom’s Scottish & Newcastle since 2000.

FIRST BELGIAN PILS PRODUCER IN 1923

While Alken-Maes was formally created in 1988 through the merger of the Maes and Alken breweries, the company represented the continuation of a Belgian brewing tradition reaching into the late 19th century. Belgium had long played a central role in European brewing culture, developed as a specialty in the region’s monasteries and abbeys. One of the oldest of the Belgian beer brands stemmed from the Grimbergen abbey in Flemish Belgium, dating to the mid-12th century. The region also proved among the most inventive, developing a number of its own beer types, many based on the use of sugar, fruit, and other ingredients. These included the lambic ales, such as Gueze, Faro, Kriek, and the like.

Through the 19th century, the Belgian beer market remained highly localized. The use of artisanal production techniques, the dependence on casks, rather than bottles, and the difficulties of transportation, meant that a brewery’s production rarely traveled farther than its local area. While brewers enjoyed a degree of social stature in their communities, most breweries tended to be small, family-run operations with few employees. These factories encouraged the growth of a highly diversified, yet fragmented industry. Late into the second half of the 19th century, the Belgian market counted some 2,750 brewers.

Technological advancements, as well as continuing technological limitations, also played significant roles in fashioning the Belgian market. The important discoveries of Louis Pasteur and others, particularly concerning the role of yeast and bacteria in the fermentation process, led to the development of newer production methods, such as the use of thermometers, pasteurization techniques, and specialized yeast strains. In this way, brewers had begun to achieve more stable and more consistent beers. Longer shelf lives allowed brewers to begin transporting their products farther from their local base. Yet the low penetration of industrial production equipment—notably steam engines and later electrical machinery—meant that the country’s production was more or less limited to traditional top-fermentation beer types, which were brewed at higher temperatures. As a result, the Belgian beer market remained dominated by its full-bodied, heavily flavored ales.

The social stature typically accorded the kingdom’s brewers attracted the interests of a number of businessmen. Among them was Egied Maes, a brick-maker in Rysbroeck Sauvegarde, who took over the tiny Brouwerij Sint-Michael in Waarloos in 1880. That building had been in operation since the first half of the century; in 1849, it was acquired by Lieven Van Hooymissen, who operated the brewery for nearly 30 years. Yet Van Hooymissen fell into debt, notably to Egied Maes. When Van Hooymissen was unable to pay his debts, Maes decided to take over the brewery, selling his brick-making business. Maes later added two other breweries, one in Sint-Katelijne-Waver, and the other in Boechout, which he turned over to two of his sons. In addition to the brewery, Maes also operated his own cask-making workshop, supplied by lumber from the family’s own forest holdings.

Over the next two decades, Egied Maes rose to a degree of prominence in the local community. Production at his brewery grew strongly, yet remained an artisanal process. The brewery’s market also continued to be highly local, with its farthest customer located just three kilometers away. By the dawn of the 20th century, Maes’ brewery was just one of nearly 3,500 throughout Belgium; by then the country counted one brewery for every 200 people.

Maes turned over operation of the brewery to his two younger sons, Ferdinand and Theofiel, in 1901. The new generation immediately revealed their ambitions for the family business. In that year, the brewery was incorporated as Stoombrouwerij Mouterij StMichaël Gebroeders Maes, signaling the brothers’ intention to install the company’s first steam engine-driven production equipment. Instead, the company continued to use its traditional brewing methods into the World War I years. The war proved devastating to the Belgian brewing market, which, at the beginning of the conflict, still supported an estimated 3,200 breweries in Belgium. That number began to fall precipitously during the war. The German occupation of Belgium played a large role in the brewing industries decline, as the occupational forces stripped equipment from many of the country’s breweries. The need to replace and then upgrade operations proved financially impossible for many brewers. By the mid-1920s, only some 900 brewers were left in the country. The Maes brewery in Waarloos became one of the survivors; the family’s other breweries were forced to close.

COMPANY PERSPECTIVES

The Alken-Maes brewery group is the challenger in the Belgian beer market. Alken-Maes’s rich history and its continuous evolution have led to products which are strongly rooted in tradition and craftsmanship. Alken-Maes has four plants, where the brewery’s core business is practised with true passion. Together with the main shareholder, Scottish & Newcastle, the Alken-Maes management is developing the strategy to create value and market share growth for the second biggest brewer runner-up in the Belgian beer market. While doing so, Alken-Maes does not lose sight of its commitments to its partners, employees and the community.

Theofiel and Ferdinand Maes recognized that investing in modern production equipment was the only way their brewery would survive in the postwar period. The brothers acted quickly, adding the company’s first steam kettle in 1919. At the same time, the brothers built a new warehouse in anticipation of the increase in production. The new production equipment, which enabled the company to brew at lower temperatures, also allowed the Maes brewery to develop its own bottom-fermenting beer, called Helles. This type of beer had come into increasing demand since the start of the century, in large part due to the surging popularity of the Czech-brewed pilsener (or pils) beer type. The expansion of Maes beer portfolio quickly led to the broadening of its sales network, and by the mid-1920s the company supplied its beers to more than 20 local cafés. As was common in the Belgian beer market at the time, most of these cafés were owned by the Maes family. The other cafés in the group’s network also exclusively sold the company’s beers. In this way, the company was guaranteed outlets for its production.

POSTWAR CONSOLIDATION AND GROWTH

Maes continued to upgrade its production facilities through the 1920s, motorizing its milling room and installing electrical equipment, including an ammonia compressor. Yet at the end of the decade, the company faced new pressure from within the industry, with the appearance of the first Belgian-brewed pilsener beer. This was the work of the Alken brewery, located in Limburg, some 100 kilometers from Waarloos. That brewery had been owned by the Boes family since Arthur Boes took over the brewery in 1881. Boes became one of the first in the region to add steam-driven machinery. It was under son Edward Boes, however, that Brouwerij Alken achieved a national scale.

The younger Boes had succeeded in preserving the company’s copper kettles from the German occupying forces during World War I by dismantling the brewery and hiding its equipment. At the same time, Boes put into place steel vats, becoming the first in Belgium to do so, and was therefore able to maintain production throughout the war. Toward the end of the war, the company’s relative good health led it to being named as Belgium’s central brewery. Following the war, Boes expanded the company, buying rival brewery Wygaerts in 1922.

By then, Boes had come into contact with Jozef Indekeu, a brew master from an established brewing family. Together, Boes and Indekeu established a new company, NV Brouwerij van Alken, in order to expand the existing Alken brewery into the production of bottom-fermented beer. To this end, the company built a new brewery, which was ready for production by the beginning of 1924. The Alken brewery then began developing its own pilsener beer, becoming the first in Belgium to do so. That beer, launched in 1929 as Alken Cristal, quickly became one of the country’s most popular beers.

Alken’s growth remained strong. The company became one of the first to launch its own bottling operations, based on the 33-centiliter bottle. By the 1950s, Alken became the first in Belgium to introduce the new 25-centiliter format, which became immensely popular. This led to the company’s expansion of its own production facilities. In 1956, Alken joined what was to become the steady consolidation of the Belgian beer market, when it acquired a rival brewery. At the end of the decade, Alken added soft-drink bottling operations as well, joining the Coboco partnership and launching the Colibri brand. At the same time, Alken expanded its brewery again, adding new brewing and bottling facilities.

Expansion continued through the 1960s, with the construction of an entirely new brewery and bottling complex. The group’s strong position in the market attracted the attention of French foods group BSN (later Danone), which acquired a stake in Alken in 1978. By 1980, Danone had acquired full control of Alken, leading to the company’s merger with Danone’s other Belgian brewing interest, Anglo-Belge en Callebaut, in 1982. The company then became known as Brouwerijen Alken-Kronenbourg, until its merger with Maes in 1988.

KEY DATES

1880:: Egied Maes acquires a brewery in Waarloos, Belgium.
1881:: Arthur Boes acquires Alken brewery in Limburg, Belgium.
1929:: Under Eduard Boes, Alken brewery launches Belgium’s first pilsener beer, Alken Cristal.
1946:: Maes launches highly popular Maes Pils.
1969:: Maes acquired by Watney Mann.
1978:: Maes acquires Brasserie L’Union in Jumet; Alken acquired by BSN (Danone).
1988:: Maes and Alken merge to form Brouwerijen Alken-Maes.
2000:: Scottish & Newcastle acquires Alken-Maes.
2007:: Alken Maes announces plan to close L’Union brewery.

Maes, too, had grown strongly since World War II. The arrival of a new generation, cousins Michael and Eduard Maes, as the brewery’s leaders in 1926, brought a new effort to modernize and expand the company’s production. By the end of the decade, the company had gained the capacity to launch its own pilsener, Helles, in 1930. Due to a trademark conflict, Helles was renamed Prima, which finally became known as Prima Maezener in 1932. The company also launched its Maes Blond beer at this time.

NEW DIRECTIONS FOR THE NEW CENTURY

Following World War II, the company launched a new pilsener, Maes Pils, in 1946, and it quickly became the company’s flagship brand. In support of the new beer’s popularity, the company added its own bottling operations in 1948. Continued investments enabled the company to expand its production throughout the 1950s and into the late 1960s. By the end of that decade, however, the consolidation of the Belgian beer sector had forced the company to seek out a larger partner for itself. In 1969, the Maes family sold the company to British beer giant Watney Mann.

Under Watney Mann, Maes continued to build its market position. The company also expanded, buying the Brasserie L’Union in Jumet, which specialized in the production of top-fermenting beers. That brewery itself had been founded in 1864, later becoming a cooperative, consolidating much of the local market. L’Union continued to grow, particularly through a series of acquisitions that began in the 1950s.

In 1986, the Maes family moved to take back possession of the Maes brewery, a move that was completed through a management buyout in 1986. This set the stage for the merger of the Maes family’s holdings with those of the Alken group, creating Brouwerijen Alken-Maes in 1988. Danone, which had acquired control of Alken eight years earlier, retained a major share in the new company.

Alken-Maes immediately began asserting itself as one of Belgium’s major brewers. In 1989, the company expanded its portfolio through the acquisition of a 50 percent stake in Brouwerij de Keersmaeker. That company specialized in spontaneous fermentation varieties, including Kriek, under the Mort Subite label. Alken-Maes also reached a license agreement that year with the Miller Brewing Company to produce a European-styled lager called Miller Special Premium.

In 1994, Danone moved to acquire full control of Alken-Maes. That takeover was later revealed to coincide with the creation of a price-fixing cartel between Alken-Maes and Belgian market leader Interbrew, with the result that both companies were fined by the European Commission in 2001. By then, Alken-Maes had launched a new expansion effort. In 2000, the company acquired full control of de Keersmaeker. The same year, Alken-Maes further expanded its brand family with the acquisition of Brasseries Demarche and its brands: Brugs, a white beer, and Ciney, a top-fermented beer.

Alken-Maes itself found new owners that year when Danone exited the beer market, selling Alken-Maes and sister company, France’s Kronenbourg, to the fast-growing Scottish & Newcastle plc. The new ownership corresponded with continued expansion at Alken-Maes. In 2002 the company acquired Louwaege Brewery, maker of the Hapkin beer label.

By the middle of the first decade of the 21st century, renewed interest in traditional beer varieties led Alken-Maes to launch production of faro beer, a lambic beer that had largely disappeared from the market following World War II. The growing consumer response to the company’s other lambic beers, and especially the Mort Subite label, encouraged the company to expand its production capacity at its Kobbegem plant in 2006. By then, however, the company had decided to centralize production of its bottom-fermenting beers at the Alken plant, leading to its announcement in January 2007 that it would shut down the L’Union distillery in Jumet that year. As part of one of Europe’s leading beer and beverage groups, Alken-Maes remained one of Belgium’s top brewery groups.

M. L. Cohen

PRINCIPAL COMPETITORS

InBev; SABMiller plc; Heineken N.V.; Carlton and United Beverages Ltd.; Carlsberg-UK Brewing Ltd.; Greene King plc; BBAG Oesterreichische BrauBeteiligungs AG; Brauerei Beck GmbH and Company KG; Interbrew Nederland N.V.; Brau und Brunnen GmbH.