Blade could cut through in Australian beer market

It looks like R2D2’s love child, is a cross between a slushy maker and coffee machine and could be about cut a path through Australia’s draught beer market.

The Blade could also wound the Federal Government’s hopes its recent excise changes could open the café and small restaurant doors for small Australian breweries.

A concept devised by Heineken, Blade is a counter-top beer dispensing system that has attracted considerable popularity in Europe.

And Lion, which has a licence agreement in Australia with Heineken, has been quietly testing the device in smaller venues around country. The Sip understands a unit has been sold in Perth, yet without any fanfare.

Indeed, when contacted about the Blade, Lion’s spokespeople opted not to comment. More on the reason for that stance later.

So how does the Blade work? And why could it be so significant in the local beer industry.

Essentially the unit has two parts – the dispensing unit and the 8-litre one-way plastic kegs that fit into a chamber creating the pronounced dome effect.

At this stage there is only one brand of beer available in the disposal kegs and no surprises it is Heineken. But in Europe, Heineken 0.0 and Birra Moretti have been added to the range. And if there is demand for the Blade expect some of Lion’s labels, such as James Squire and James Boag to squeeze into the cannisters.

The kegs have their own pressurised release module and come with their own tap line. They are locked into the dispenser and simply removed when empty. Another keg that has been chilled in a refrigerator overnight can be a ready-made replacement. There is no risk of contamination because there is a new tap line with each keg. A wipe of the housing chamber is all that is needed to keep the unit clean.

There is no need for chilled lines, gas, kegerators, tap tower or cool rooms – just a regular power point.

And that might impact some of the Federal Government’s targets after implementing a uniform excise rate for all kegs between 8 and 48.5 litres on July 1.

“The concessional draught beer excise rates to kegs of 8 litres or more will level the playing field for craft brewers, which typically use smaller sized kegs, to distribute their beer to pubs, clubs and restaurants,” said then Treasurer Scott Morrison when announcing the tax changes last year.

But were small cafes, restaurants, even barber shops going to spend thousands of dollars on infrastructure and equipment to seek a 10-litre – even a 30-litre – keg for the benefit of a small number of clientele who would prefer a draught beer over a can or bottle?

The success of Blade in Europe has been in those smaller premises with one keg about to deliver around 14 pints. Not bad for a hospitality venue with room for about 60 people. And no cleaning required. Blade could also have a place in the home beer market.

It is believed a Blade keg of Heineken will retail at around the $60 mark. The dispenser is believed to cost around $850.

The Blade unit conjures memories of Lion’s ill-fated Tap King experiment which featured similar two-litre kegs and a powerless propriety and retractable head for pouring. And that is why Lion might be a little gun shy to heavily promote the system until there is further "market testing".

Tap King proved to be literally a fizzer. Too much foam from the pressured containers resulted in far too much wasted beer and disgruntled consumers. Tap King was dethroned in January 2016.

While there has been a positive response to the Blade in the UK, particularly for Heineken 0.0 which has grown in popularity amongst more health-conscious millennials, the “Brew Lock” system used by Blade has been the subject of a bitter court row in the US with AB InBev over patents. It resulted in Heineken withdrawing units from North America.

However, there are no such legal issues in Australia. Or the UK where Blade has been dubbed the “Nespresso for Beer”. The dispenser fits on a footprint around the same size as an A4 piece of paper meaning it takes less room than a coffee machine.

Blade has been used in corporate boxes at Tottenham Hotspur’s new stadium and on European cruise ships.

Heineken has targeted its 0.0 kegs in Blade systems for 3000 outlets in 2019 and while its distribution is in its infancy in Australia, Lion are carefully watching its progress to determine its likelihood of success across the country.