Mike Short, the head of Pilsner Urquell
Our guest in this week’s edition of One on One is Pislner Urquell’s CEO Mike Short (61). Mr Short, originally a nuclear engineer, joined the South African beer producer SAB Miller in 1990 after a career stretching from the aerospace division of Rolls-Royce to the submarine service of the Royal Navy. Before becoming the head of the top Czech beer producer in 2005, Mr Short was the head of a brewery in Hungary, another member of the SAB Miller group. Is the submarine service a good starting point for a career in the beer making industry? That was my first question for Mike Short.
“It sounds a long way away, I suppose, but I think in many ways, yes. It is a very closed environment so you are forced to learn skills around management and how to deal with problems in a small community, and how to deal with issues that are, in this situation, life-threatening. Obviously, we don’t get much life-threatening stuff in the beer industry but it forces you to learn how to manage people. I found that part of submarine service the most interesting. You are in confined spaces; we were submerged for six to eight weeks at a time, so there was a long period when you were forced to rely on each other. You learn about interdependency, you learn how every person onboard that submarine depends on every other. It’s a strong hierarchy but it’s not the command-control situation you might get in the army. It is much more comradely, in a way, and people helping each other. For me, it was very formative, learning about interpersonal management styles.”
You served on submarines in the 1970s. Did you ever come close to a combat situation, as those were the times of the cold war?
“I don’t know. Again, that sounds strange because the submarines I was in were the Royal Navy patrol submarines. We were in fact in a position to launch an attack in the cold war situation, it was around then. Our role was to stay quiet, deep and undetected. The job was to stay out of trouble but in a position to launch the missiles, should you have to. It’s quite terrifying when you think back to it but that was the time we were in. So we weren’t there as combat submarines but you could see several submarines come back with damage to the haul or to the fin, and only the captain and officer on the watch might well have known the situation. So there were things going on, definitely.”
Before becoming the CEO of Pilsner Urquell, you were the head of SAB Miller breweries in South Africa and Hungary. What are the differences between managing people in South Africa on one hand, and in Central Europe on the other?
“In South Africa, we had fascinating intercultural questions with Nelson Mandela coming in as president. He introduced 11 official languages. This was typical of his way of dealing with multicultural issues. It sounds crazy but it was a stroke whereby he took away the issue of language. We worked in parallel with the transition of South Africa from an apartheid-ridden country to a free democracy. Working in industry during that period was en extremely exciting and it allowed the intercultural diversity to become an asset rather than a burden which it had been forced to be under apartheid.”
“Central Europe also went through a similarly traumatic experience, with the end of socialism and the start of the free market. In that period, people also had to learn how to break away from a dominant regime that suppressed personal ambition and initiative into an environment where each person learns how to manage himself and work with his partners. There is quite a way to go in terms of interracial tolerance, across Central Europe and across Europe, for that matter. Europe is still generally quite tribal. One of the challenges I’ve had in those 20 or 30 years is to learn the best of each culture and how we can blend those cultures. I personally believe that the European Union is an instrument for doing that. I see big changes already but I think that is the evolution forward, ahead of us. Working in Hungary first and now working here is fascinating for me to watch how there were changes, year by year, in this respect.“
Your company has more then 50% share of the Czech beer market. What is your ultimate goal? Do you want it all?
“51% in the short term would be fine.”
What would you say in response to all those complaints about the unification and globalization of the Czech beer market? About the fact that small brands are disappearing and nowadays in many places the only beer to be had is the one made by your company?
“I would challenge that. There are 40 brewing companies in this country. That is absolutely exceptional. Even Germany is becoming much more conglomerated. I think that this country has retained strong local breweries with very strong positions in their home towns and home regions. Even though they might not be big on a national scale they have very many strong and loyal customers and consumers around each city of the country through its own local brands. That’s fabulous. It gives diversity and it gives alternatives to all the brewing companies. The support the global brewing companies bring, and the way SAB Miller has tried to manage with Plzensky Prazdroj, is to preserve everything that’s good around Prazdroj.”
With all the modern technologies you are using, would you say that the beer you produce, and especially Pilsner Urquell, is the same as it used to be some 10 or 15 years ago?
“We have gone for very modern technology. However, the recipes are absolutely traditional. I say to people that it is a bit like taking your grandmother’s favourite cake recipe and cooking it in a modern kitchen. The great thing about this is that whereas your grandmother hoped to get a temperature of, says, 75 degrees Celsius, she would never be able to get it. It would be 60 degrees, or 80 degrees. But cooking her cake we can get 75 degrees every time. You are in fact able to execute the recipe exactly as it was intended every time. That’s the advantage of modern technology. The recipe, the ingredients, the purity of the recipe are absolutely as Josef Groll defined it back in 1842.”
Are SAB Miller breweries in the Czech Republic using Czech raw materials, hops especially?
“Yes. Hops from Zatec, and Czech barley of course.”
Are the preferences of Czech beer drinkers here and abroad the same or do you find that some brands of your beer are more popular here and other abroad?
“I think tastes in beer abroad are a bit blander. A lot of people are first taken aback a little by high bitterness of Pilsner Urquell, for example. But when they get used to this balanced bitterness and matching high sweetness of the brand, they can see how the flavour profile is far more interesting than lots of the European beers drunk in those countries, particularly if you go further west. If you go the United States, there are very low-bitterness brands. Typically, for example, a mainstream American beer would have bitterness unit measures, as we call them, around eight. Pilsner Urquell has 37. So there is quite a different balance of hops, which is the bittering agent of beer, together with the caramel sweetness, and we get to match that in our brands. We produce very rounded flavoured beer that people who are not used to it grow to like over a period of time.”
Is Pilsner Urquell going to be more expensive next year?
“We put the price up on the November 1, as I am sure most people know. That was a response to the dramatic increase in the price of barley and hops. As for next year, I can’t say. To be honest, we have to see. There is an ongoing increase in prices and costs of raw materials, of energy which is moving the prices of food and beverages generally forward in this country. We don’t like to see it but we have to keep looking at it understanding the impact on the performance of our company.”
You have lived here for almost three years now. Did you find it difficult to settle in the Czech Republic in the beginning?
“Whenever you go to a new country, and I’ve lived in seven countries in the world, it always takes a while to understand people, how they think, how things work; it takes time to find one’s way around. I live in Prague and I work largely in Plzen, and I have the best of both worlds. Prague is a most beautiful city, Czech people are very agreeable to work with, very pleasant people, easy to communicate with and talk to. I also enjoy the Plzen environment, that town is fabulous; it is really being developed as a very strong provincial town. We have hopefully ongoing good relationships with the Mayor, with the Mayor’s office, with the authorities in Plzen. I love the country, the people; I love the environment and the scenery. My wife and I are very happy here.”
As one of our listeners pointed out, the Pilsner Urquell labels say ‘Brewed in Pilsen, Czech’. Is that the way you prefer to call the Czech Republic?
“This is a controversial question. We didn’t think about whether it was a problem or not. Clearly, I always say ‘the Czech Republic’. It’s open to debate, anything can be changed. That wasn’t meant for any particular reason, it kind of happened by the time we first wrote the label. Whether we should write the Czech Republic or not, I don’t know. I think it’s quite a clear message anyway, I am not sure it is a relevant issue; I am not sure whether it’s a problem. But I am always open to ideas.”