It's Not Craft, It's Crafty
by Greg Katzman
In the U.S., we drink $200 billion worth of the hops-brewed libation
annually. What many Americans might not know is that most
domestic beer, 90 percent in fact, is dominated by just two
companies: Anheuser-Busch InBev and MillerCoors. Innovators,
however, are challenging that dominance in the form of craft beer
breweries. In fact if you're a regular reader of BeerNexus or a friend of
Bob, that's about the only kind of beer you ever drink.
Small mom-and-pop-style breweries — or larger ones like Sam Adams
— now account for about 6% of domestic beer sales. That may seem
like a small number, but it's been growing every year since the early
1990s, while big brewers' share is declining.
There are now more small breweries than there were before
Prohibition, when beer was largely a regional business. Sounds good
but there are issues in this beer paradise. First off, every brewer
wants to be on grocery store shelves at eye level and craft brewers
say big beer is increasingly pushing them out of those prime spots.
Second, there's the issue of what the Brewers Association calls "crafty"
beers — beers owned by big beer companies disguised as small craft
beer. A common example is Blue Moon, a Belgian-style beer, which
many people think is a craft beer. It's not of course, it's owned by
Craft brewers understandably argue that this limits consumer choice.
For instance, if a bar stocks the top brands from a big brewer along
with these "crafty" beers, consumers are essentially only buying from
a single company. Look on the label you say. Sorry, often times the
origin is top secret. Instead you'll find some pseudo sound craft name
(Third Shift, Tenth and Blake, etc.) designed to do one thing - fool
you. I believe big beer should print its names on the bottles. There
should be a transparency of parent company ownership, on the beer
label so the beer lover has a chance to know who's behind those
brands.Branding matters to many beer drinkers, especially those who
care about the brands they consume and who owns those companies.
I've heard my good friend Bob say simply let the beers compete in the
marketplace and the true craft beer will surely win. I agree but sadly
that tenant of free-market capitalism won't work in this case. Sad to
say but the producers with the best product at the lowest price will not
win; it's not the reality of the beer business. Big producers use their
capital to keep competitors from the market place. Big producers work
toward the oligarchy of nothing but big producers.
Even federal law does not protect true craft brewers. The laws
generally force the small brewers to fight for distributorship not letting
them do it themselves. That clearly benefits Miller/Coors and
Budweiser.. That's most certainly not a free market in any way.
Capitalism isn't the problem, government regulation is a problem. Keep
in mind there are also states such as Ohio where beer over 12% abv is
not allowed. This again only benefits the big guys who don't make
anything stronger than 6% adjunct lagers or 8% 40 ouncers.
It's my believe that government should be out of the alcohol arena. If
that happens the survival rate of small brewers will increase
dramatically. Look, competition is a good thing but excessive
regulations stifle it; more regulations would almost certainly benefit
Miller/Coors and AB-InBev . That would hurt the smaller brewers which
means when there are less competitors allowing big beer to charge
whatever they want as you will have no other options.
Don't feel bad for the big boys by the way. The big breweries will
always be college kids who drink their swill because they haven't yet
learned what real beer tastes like or simply want to get drunk on a
budget. And don't feel bad for them because they are the ones trying
to limit competition in the marketplace. Talk to a start-up brewery and
ask them how easy it is to get a distributor or shelf space. Ask them
about the perks big beer gives and the threats they make. Ask them
how big beer will force them to take one of their slow moving products
just to gobble up shelf space and keep craft competition out. Why
would the retailer listen you ask? If you want to get your Coors or
Bud Lights then you better listen.
Hope I didn't get too carried away there. I'm just passionate about
good beer. I really have nothing against big beer as such, just their
Thanks to Greg for writing such an interesting and thoughtful column.
It's a controversial topic to be sure but an important one to beer.
Please remember I encourage all my readers to send me their articles
and just maybe you'll see yours in print just like Greg!
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