Beer Maker Opens New Revenue Stream; Illycaffe Says it is not for Sale Amid Coffee Consolidation.
NEWTON: Investors are still digesting Coca-Cola's $5 billion buy of Costa Coffee. It's the latest in a string of major coffee acquisitions and what has been a deal-making frenzy. One family-owned company says it's not for sale on QUEST MEANS BUSINESS. The chairman of Illycaffe told me what's driving this coffee consolidation.</s>ANDREA ILLY, CHAIRMAN, ILLYCAFFE: I would say it's the exact opposite as a mature market</s>M&A. NEWTON: A critical mass, and by that you mean mass market as well. And if I hear your tone correct and that you don't think that that's a good development in this market.</s>ILLY: Oh, I think on its -- and particularly natural about that. Yes, there are less actors in the industry, the industry is becoming more competitive, so it would be necessary concerns more, difficult to stay in the market. But on the other opposite side, like it happened also with beer business at the time of the consolidation, you have a fragmentation of the market opening up with this new micro roasters which are very similar who or what their micro growers are. So all in all, I would say the market is changing a lot, which is also interesting from the consumer perspective, becoming more and more dynamic. The category has a very positive perception nowadays. Because coffee, not only makes you live better and longer because it's really the official beverage of active life, inspiration, success, social and professional success. But it's also good for health. And this is a message which is trickling down very quickly also in Asian countries which were traditionally non- coffee drinking -- non-drinkers, and now they're growing coffee consumption double digits. So this makes the category to grow more than it used to grow two decades ago, with still a huge potential for project expansion. So this is -- makes the category quite attractive. So I think it's really a good moment for coffee.</s>NEWTON: And here's a crush course and how to make beer look exciting on TV. If you yell out beer for a second there, young man, still he stands, the kind of grand tour but with beer. This is an advert for a streaming service, so it chose purely Craft Beer, it costs -- get this $4.99 a month in the U.S. and Europe. It's called the BrewDog and Network from a company that has never shied away from controversy. Now, the company fought off a battle with the Presley estate over the rights to the name Elvis Juice. It was criticized for launching Pink IPA, Beer for Girls on -- get this, international women's day. The company said it wanted to highlight inequality and it prompted its -- that promoted its streaming service by parodying a porn site, I kid you not. The managing director of this fast growing company is taking it though all in her stride.</s>TANISHA ROBINSON, CHIEF EXECUTIVE OFFICER, BREWDOG USA: And for BrewDog, nearly speak out on social issues and equality. You know, we thought and I think a lot of people got the joke, but you know, for us, we think that Craft Beer market is unserved when it comes to exciting content made by people that actually make Craft Beer. And we think that the network has a great way to address this.</s>NEWTON: OK, now another question to you though, is that we continue to read about more things the company is doing in terms of branching out, so we've just talked about the streaming, there's restaurant, hotel, so many things going on here. Do you worry that you're taking on too much, too soon, especially and at the bottom end of this, you do still want to sell beer, right? Kind of stick with what you know.</s>ROBINSON: Yes, absolutely, but our filter for anything that we do, whether it's the hotel or the network, is will it help us sell more beer? And so far we're seeing that pan out really well.</s>NEWTON: OK, but at what cost? All of these ventures cost you money and they could also lose money.</s>ROBINSON: Certainly they could, but so far we have over 5,000 paid subscriptions in our first few days with the network, so we are well on our way to hitting our goal there, and the hotel has over 2,000 prepaid nights and we're booked solid for the next 16 weeks, so we're -- or 16-weekends. So we think that you know, we can't grow and become the world's greatest and biggest, independent Craft brewer without making some big bets.</s>NEWTON: Right, it might be independent Craft brewing broadcaster as well, that is quite ambitious, though the ambitions are rooted in Ohio. Why Ohio?</s>ROBINSON: So Ohio is a phenomenal community, it's a really smart and open place, also logistically we're within 50 percent -- we're within 8 hours drive, I mean, 50 percent of the U.S. population, which means that we can get fresh beer to a lot of customers.</s>NEWTON: You know, another thing that you might face some tough competition with this, as soon as anyone sees any competition in this market, they tend to buy everyone else. There has been a lot of consolidation, do you worry about that in a way and especially, I know that in terms of brand placement and all that, this is a crowded field.</s>ROBINSON: It's definitely a crowded field, which is why we are -- we're doing -- and making this, make a splash. I think that there's a big opportunities through the network and through our messaging and marketing to make sure that customers are aware of who is independent and who is owned by big, blend, beer companies.</s>NEWTON: Big, blend, beer companies, no one would have consumed, that to me sure, that's for sure.</s>ROBINSON: We are definitely not that.</s>NEWTON: I love it. Here's the thing, you know, we've been covering here on our business shows, certainly the convergence between cannabis growth and recreational marijuana and the brewing companies, will that be something you guys are already looking into or might look into in the future.</s>ROBINSON: We're not really looking into that right now, but I would say that my dream collaboration is with Snoop Dog, so he definitely is known to have ties to that, but in my dream, it would be BrewDog with 2Gs obviously as the reference to Snoop Dog. And we probably do something also -- and then Hennessy Barrels.</s>NEWTON: Hennessy Barrels, I love it. Yes, Snoop Dog is connected, again, cannabis, first, if you were, you would select him. I'll give him a shot, you never know at this point, Tanisha. Thanks --</s>ROBINSON: Yes --</s>NEWTON: So much --</s>ROBINSON: Yes, absolutely --</s>NEWTON: And we'll continue to follow this streaming business. As we say, $4.99, half the price of Netflix, you're ready for it?</s>ROBINSON: Absolutely, we think -- we think that all of the big mainstream media has neglected this demographic of people that are really interested in Craft, spirits and beer, and all of the associated things that go with it. And we think that this is an unserved market that we are making event in.</s>NEWTON: And that is QUEST MEANS BUSINESS for this Labor Day holiday, I am Paula Newton, thanks for joining me, the news continues right here on CNN.