Due to the exBEERimental nature of Brülosophy, the overt sharing of each author’s opinion is rarely warranted, as central to our mission is avoiding the appearance we’re trying to change people’s minds. We’d rather use this as a platform to encourage brewers to question what they’ve accepted as fact, try things out on their own, and ultimately think for themselves, at least when it comes to brewing. I think we’ve done a pretty decent job at this, only occasionally slipping into conjecture while producing content I like to think is equally as informative as it is entertaining.
That’s not what this about.
Over the last couple years, I’ve received a surprising number of questions about stuff not really relevant to the general mission of Brülosophy, many regarding similar topics. As someone both interested in what others think and open to the sharing of ideas, I thought it might be fun to take a departure from the norm by introducing a new series, Brü’s Views, intended to provide a peek into the inner workings of each contributor. A focus on the more -losophy side of the equation, if you will. The current plan is to intermittently publish our personal thoughts, raw and unadulterated, on a hot topic in the beer and brewing world, without consulting with each other first. At times we’ll agree, other times we won’t, and we love this! An overarching goal of this series is to demonstrate that despite our differences in opinion, we can discuss them respectfully in a way that cultivates understanding rather than divisiveness. Of course, we plan to keep things entertaining and boredom-killing while maybe even inciting further conversation.
Finally, I feel compelled to address the marginal number of people who tend to take the opinions of others personally, so I made a brief disclaimer:
What follows are only opinions openly shared by each contributor without the intent to hurt anyone’s feelings or change people’s minds. Each contributor shared their honest thoughts with the expectation people who disagree are cool and won’t be shitheads about it. If you find yourself feeling offended or upset, grab a beer and chill out because they are only opinions!
Cool? Cool. Let’s get to it!
On Craft Brewery Buyouts
| Ray Found |
I love beer. I love the uniqueness, I love the flexibility small brewers have to go out on limbs, I love the staggering variety of beers available at stores and restaurants. In my eyes, this creativity and choice has only been possible thanks to the myriad independent craft brewers making beer they love and releasing it to a public they hoped would love it too. The “big beer” conglomerates were never going to bring us that type of diversity, it just complicates their supply chain and muddies their marketing.
It happened anyway because passionate people brewed great beer that didn’t taste nearly the same as other beer on the market. And now, with craft beer becoming a sizable chunk of the market, the mega-breweries are meeting the challenge, not with creativity and passion, but with money and business tactics.
For the craft brewers who take the option to sell their business, I get it. I really do. Every business needs an exit strategy, and for brewers who have invested years of their life to build a brewery, often risking everything, a buyout is a really good option. They get rewarded for their hard-earned success, their beer gets wider distribution, and they get to see their brand continue to grow. Hard to argue with that.
Beer drinkers, at least in the short-term, also stand to benefit. Previously hard to come by beer suddenly becomes available nationwide, even in places craft beer has struggled to make inroads. Hell, Goose Island IPA has become the new help-I-am-trapped-in-an-airport beer, and while I think it’s a middling IPA, it is better for me that tap not be occupied by yet another Bud Light gimmick or Michelob Ultra. In that regard, acquisitions can serve to improve choice at locations normally lacking.
What’s the problem?
To me, it’s in the way alcohol distribution is regulated. Even if all the players do exactly what they should, the system could still fuck over the craft beer enthusiasts in the long-term. Mega-brewers can exert so much control over the distribution chain, they can effectively restrict choice. By buying up much of the shelf space currently allotted to craft beer, distribution of novel and independent breweries becomes increasingly difficult. They use their incredible economies of scale to make sure their “craft” offerings cost significantly less than regionally favored beers. I don’t think this is evil, it’s good business, I just wish it didn’t work this way.
What can we do about it?
We can change the game. The popular craft breweries will continue to be snatched up as long as the distribution works the way it does today– shelf space will be limited and our choices restricted by the conglomerates.
Why is the same Budweiser available in so many different packages? Because it fills shelves, and if Budweiser is sitting there, something else isn’t. Every shelf location, every menu space, every tap handle occupied by Goose Island, Lagunitas, Ballast Point, or Golden Road, for example, is a “what could have been?” What new, local, ultra fresh beer is not on tap today because the “craft” portion offerings are covered by conglomerate-owned breweries?
Think about that next time you get excited to see Goose Island IPA at the airport Chili’s.
| Greg Foster |
Craft beer. Small, private, loved violently. And for good reason– independent breweries are entirely responsible for the surge of amazing craft beers we are blessed with today. The diversity of the craft beer market has made this possible, and it is only natural to be concerned by the recent trend of Big Beer brewery buyouts.
But I’m not a romantic drunk, I’m a pragmatic scientist, and I’m finding it hard to complain about buyouts when there are so many practical benefits for everyone involved, consumers included. For example, the very day we decided to address this issue for the first Brü’s Views, I did some independent “research” on the matter, you can imagine the delight on my face when I happened upon the following impossible shelf of beer at a local grocery store.
Alpine Brewery is (or was) a tiny operation in Southern California known for having some of the most highly regarded IPA in existence. They are so popular that I have never even seen a single bottle of any Alpine IPA in Los Angeles. Now, suddenly here I am faced with an entire shelf of Alpine’s IPA offerings. The reason, of course, is a significant increase in distribution made possible by Green Flash’s recent acquisition of Alpine. Obviously, Green Flash is still considered a craft brewery, though the point remains– larger breweries increase production and thus availability.
Most beer enthusiasts I know scoff at the idea of a top-tier independent brewery being bought out by a conglomerate, but I see a lot of positive benefits. These larger breweries, AB InBev in particular, employ some of the most brilliant minds in the brewing industry. Tapping into this resource alone could be immensely valuable to any small-scale brewery wishing to up their game. Utilizing larger brewery supply chains can provide access to an increased availability and variety of ingredients that are of higher quality and fresher than what might otherwise be available. Lastly, there is the obvious benefit of increased capital making it possible to increase production and distribution. In other words, a buyout provides a vast array of new possibilities that simply wouldn’t be available to a small brewery.
I’m not saying all buyouts are always going to be net positive. On the contrary, large soulless companies that care only about the bottom line can obviously be detrimental to the creative experimentation required to thrive as a small business. Additionally, the increase in distribution can come at the expense of local breweries fighting for the same shelf space. These issues are cause for serious concern, and if we ever get to the point that aggressive monopolistic competition begins to threaten the craft beer movement, I’ll be the first to advocate boycotting the big corporations.
For now, I’m not seeing these problems. Craft beer is continuing to thrive and expand even with these buyouts, so I have to consider their theoretical and tangible benefits. If it wasn’t for the Alpine acquisition, I surely would not have savored a delicious bottle of Alpine Duet a couple nights ago. That is a very real and practical benefit for me since the alternative of driving to the brewery in Bumfuck nowhere just isn’t going to happen. Sure, Alpine could have continued to happily make their small batches of beer that I would almost never have the chance drink, but little good that would do me. I just can’t fault them in the slightest for selling out, since I sure as hell would have done the exact same thing.
| Malcolm Frazer |
And the world yawned.
The recent glut of smaller “craft” breweries being bought out, along with the seemingly inevitable merger of AB InBev and SabMiller, has me… yawning. I feel as if I should be upset and want to rally the troops so we’re all upset together, but then nothing happens, so I decided to not give a fuck. Kinda.
If you follow anything that delves into beer history, you know this is nothing new, the same cycle has occurred at least twice in the UK and apparently we’re moving are into round 3 here in the US. The buying up of little businesses, and the subsequent consolidation, rarely results in lower prices or improved choices for the consumer– that’s not why they’re doing it!
So I’m torn. I appreciate free enterprise and feel like there is a positive to this phenomenon. The good folk who successfully start, run, and grow their businesses have an end-game, a way to cash out, and its big time! It’s like a lottery ticket but instead of hoping for a random number to hit, the odds are tilted by working harder, smarter, and better than everyone one else. Why did Heineken buy 50% of Lagunitas? Because Lagunitas is good, popular, successful, and growing like crazy. And they wanted to sell! Sure, they could have run it like a nepotistic family affair, but that’s not always an option in a multiple person partnership, which these days is often required to be successful in the competitive brewing world. What options do owners have other than running their business until they die? Sell! And who do you sell to? The highest bidder! It makes sense.
I’m cool with all of this, right?
Wrong! My mind is way more fucked up and confusing than that. I just understand and applaud the previous owners if that’s the scenario. Good for them, they win.
If I’m at a bar offering Lagunitas or Elysian beers and nothing else, I will drink it, because it’s good beer. However, if something made by a smaller local brewery is available, as is almost always the case, I’ll choose it every single time. But that’s nothing new for me, I’ve always preferred local and fresh, and I want choice. I might occasionally try Beer Brand X if I’m out at a larger food chain, it’s usually decent, at least enough to make it on the menu.
Anyone who looks at the car I drive, the clothes I wear, or the appliances in my house will find examples of hypocrisy. I wish it weren’t that way, but it’s a compromise, sometimes I pay a little more for Made in the USA while other spending decisions are based on budget or convenience.
Thankfully, I don’t have to make such decisions very often when it comes to beer, the options in Western PA are great and getting better all the time, and the way I see it, if I don’t drink and support these amazing local breweries, either will the people in my backyard. So regardless of my thoughts on all of the recent buyouts, my general sentiment hasn’t really changed, the best thing I or anyone can do is continue to drink locally made beer! With this as a priority, perhaps the breweries incentive to sell and the conglomerates incentive to buy will be reduced, but I could be wrong, maybe it’s like pissing in a lake and claiming you raised the level.
| Marshall Schott |
A little ditty to accompany my opinion:
I was a teenager living in a suburb of Seattle during a pretty rad time for music lovers. Between the ages of 13 and 16, I regularly attended rock shows (no one dared call them concerts) hosted by grungy teen centers—for $3 I saw bands like Botch, Nine Iron Spitfire, and Vade, while $5 bought me a center pit spot for bands such as Jawbreaker and Sunny Day Real Estate. Amazing music made by the best bands on the planet!
That is until they sold out by way of signing to a non-independent label that actually paid them for their work, a move that all but guaranteed banishment from my social circle’s bank of musical interests.
In the nearly two decades since, I’ve learned this mentality was driven far more by my desire for connection to a social group, my need to feel like I belonged, than it was any actual detesting of successful musicians or the music they would ultimately produce. In fact, now that I’m far enough removed from those days, I can admit I often enjoyed many of the songs these bands released on the major label debut, I just pretended I didn’t back then because it wasn’t cool.
I can’t help but see some similarities between this and the way some talk about the recent buyouts of craft breweries by major conglomerates. I’ll admit, there’s a part of me, that tiny piece influenced by the remnants of my self-righteous past, that wants to roll my eyes and pontificate about how this move just proves they’re only in it for the money and not the craft.
But, the significantly larger part of me doesn’t give a flying fuck! Money is the lifeblood of business. Period. When I hear professional brewers say things like “we brew the beer we want to drink” or “our focus will never be on revenue,” I cringe because a business’ success is precisely a function of satisfied customers exchanging money for goods. Simply put, successful breweries brew the beer those willing to pay for it want to drink. The rest is just marketing, which is totally fine by me!
I’m not here to shit on other opinions, people value what they value for whatever reasons they choose, I’m beyond cool with that. But for me, I can’t help but wonder why the fuck it matters. My thinking about the issue mirrors that of my current mentality when it comes to music– if the quality remains the same, I’ll continue to purchase and drink the beer; if the quality goes to shit, I’ll happily move on to newer and potentially better beer. And honestly, good beer isn’t that hard to make, plenty of new and arguably more forward thinking breweries are popping up by the day. I sometimes wonder if maybe these buyouts aren’t a good thing for the industry, providing opportunities for smaller breweries to impress their local big-beer-hating constituency. I don’t know. But I have to trust the parties involved know what they’re doing at least a little better than me.
These days, I enjoy listening to the music that tickles my ear without pretense, in the same way I’ll happily sip a Coors between an overhyped DIPA and another craft beer made in a huge factory. I don’t care. It’s just beer. I’d rather spend my time focusing on my own brewing anyway.
Whether you’re drinking a super expensive sour delivered to you overnight from Belgium or a Silver Bullet from your Uncle’s ice chest, Brülosophy would like to wish you and your family a very Happy Thanksgiving. Cheers!
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9 thoughts on “Brü’s Views | On Craft Brewery Buyouts”
Marshall, I raised my eyebrow while reading your notion, “I sometimes wonder if maybe these buyouts aren’t a good thing for the industry, providing opportunities for smaller breweries to impress their local big-beer-hating constituency. I don’t know. But I have to trust the parties involved know what they’re doing at least a little better than me.” I never looked at the current situation like that, and upon reflection, feel this is a reasonable view to take. Thanks for expanding my mind a tiny bit!
Cheers!
Who is donating to amerika politicians that sponsor beer labeling laws? Oh yeah, pretty much InBev.
I don’t expect the points in your article to change until
a) poltics change or
b) microbreweries pool money for politicians to sponsor bills against inbevs current interests.
Wow. Very thought provoking article. As a person who loves beer and has no problems tipping a few Hamm’s and Old Style’s with my brothers, I think the buyouts are the logical end to this type of market. Put yourself in their shoes. You may have started out single with a couple of friends, working 12 to 16 hours a day or more. Ten years pass by, you might have a family now and dozens of employee’s counting on you for their livelihood. A big company comes in offering not just money but long-term stability including affordable healthcare, etc. Not sure how many small business owners would turn that down. That being said, I would have a problem with the owners if they took the buyout and subsequently told their employees, “Thanks for your service. There’s the door. Good luck”.
Some things I would love to know though; how many craft brewers have turned down buyouts? For those who took the buyout, were their breweries shuttered? (Isn’t that what got Heineken in trouble in the 70’s?) Also, how many old, defunct recipes that would have once been called “craft beer” are now being made by larger breweries?
Like I said, thought provoking article. You are defiantly true to your name, “…those that drink beer will think beer.”
Happy Thanksgiving.
Please allow me to offer my take on the three tier system which is currently the law in all 50 states and is a holdover from the days of prohibition. If you look back to the years before 1978, the year that Jimmy Carter signed a law making home brewing legal for the first time since prohibition, you will see that there were no craft beers on the shelves anywhere in this country. The reason was that distributors had no craft brands to sell. It was not because they did not want to provide the consumers with a choice. I have been involved in the beer industry since 1997 first as a marketing manager for an 8,000 bbl small brewery and now as a sales manager and purchasing agent for a northern California beer distributor.
I can tell you that the reason the big breweries are buying the craft breweries is because craft beer sales in the US have grown by double digits each year for the past five years and now accounts for about 8% of total US beer sales. The big brewer’s tried to compete with their own brands, BLUE MOON, RED HOOK etc. But marketing and name change does not good beer make they had little success.
Now with the number of US small brewers increasing year after year and having passed 2,000 openings this year, it is easy for almost every beer drinker to find great craft beer close to home. The worst thing for beer is to put it in a container and ship it across the country subjecting it to poor handling and temperature change. If you can’t find a New York brand in California or a San Diego brand in northern California it is most likely because there are high quality craft beers brewed right in your area already. It is not the fault of the system.
The current system actually enforces regulations that prohibit things like tied houses, and pay for shelf space or tap handle schemes. In most states it also requires that huge grocery chains and mom and pop stores are charged the same wholesale price no matter if they buy 1,000 cases or just one. This protects the consumer by ensuring that the big breweries can’t buy up all the shelf space and reduce the consumer’s beer selection.
I encourage all beer drinkers to do two things.
1. Support their local breweries. Trust me if your local brewery doesn’t make good beer they will soon be out of business.
2. DRIVE IT FROM THE STREET. If you want to buy a beer and can’t find it on your store shelves ask the beer manager at the store for the brand. If enough people ask that store manager will ask the local beer distributors to bring it in. And assuming the distributor wants to make the retail store manager happy, they will do their best to find the brand and bring it in to inventory.
Just my opinion. CHEERS to all.
Thanks for this guys. I feel like these acquisitions CAN be worrying, but, as mentioned, that’s maybe an artifact of externalities driven by the f$%*#ed up distribution system as much as anything.
Marshall’s analogy is exactly one I made myself (well, I used Nirvana signing with Gefen and leaving Sub Pop, but close enough 🙂 ).
I really feel that beer geekery is sort of a latter day “indy rock” purity trip for a lot of people. As someone who was totally guilty of indy rock purity back in the day — but got over it — I try to avoid the same pretense now 🙂
I have several friends at the big recent San Diego acquisition. I’m overjoyed for them that a business they worked their asses off to build from, essentially, a dorm room and a tiny home-brew shop turned into a billion freaking dollars. I’m giving the benefit of the doubt until that proves to be wrong.
I agree strongly with Marshall. I would summarize his comments as: drink the beer you like.
I’m especially impressed by his insight into peer pressure. It’s frightening to see so many decisions being driven by peer pressure – aided by social media.
Additional congratulations to Marshall for having proof-read his input. I’m not an English teacher, but flagrant word omissions, incorrect usage, and careless writing are too easy to catch and correct to be ignored. Yeah, I know; I’m a curmudgeon and if it communicates, who cares about the small details?
Marshal, you should name or put a link to your “ditty”. I found it with some googling but…
As to the topic… Good for the brewers to have a retirement. I do like having what was a local brew but now many miles away, but I also buy local whenever possible – providing I like it better OR haven’t tried it before. There are a crap load of great local breweries to chose from but many don’t bottle so having a “big brand” that I like and can buy in bottle or cans is a plus.
The downside that is possible is that the biggies buy up the craft brewers that have some traction and crush the trent do interesting beer. Buying CraftBrewerX gets you some market but it’s still cheaper to brew your old swill, so some bean counter may well decide it’s better to kill off the craft lines forcing more sales of the main swill. That is the history so I always worried about repeats. On the other hand it feels like the “thinking” of much of the masses has changed and killing off local is not going to be so easy. So today if MegaCorp kills off their CraftBrewerX line folks are more likely to move to CraftBrewerY than back to MegaSwill.
Part of the formula is that “Big Beer” is not Bad beer, it’s just very limited beer. People have rediscovered the variety of beer and I don’t think that is going to revers soon. MegaBrew is all based on the concept that you should drink the same beer all the time. One flavor Every time. But the folks that drink craft beer don’t drink the same beer all the time. Look in their fridge and you will find multiple beers from multiple breweries. I don’t think you can sell these folks on “the herd drinks X” so you NEED to also.
Ok, guys, I do not have anything against craft breweries buying out craft breweries, or even Heineken doing buy-outs, they do have some names to protect here.
But AB-Inbev? AB-Inbev is not a brewery, it is a gigantic machine created just for generating bonuses for the management. They will do everything to influence the taste of people down, to make sure that they can produce their products cheaper. One local example here is Hoegaerden Wit. People do complain that it does not taste any more like the original.
Another thing that they are still under fire for here from the hobby brewing and craft brewing community is their buyout and subsequent closing of the Dewolf-Cosyns maltings.
For the rest, well, here in Belgium we do have a whole lot of different beers, but I do like it that I now can buy some American beers (like Goose Island :-)..