| Can Brewery Consolidation Be Good?
by Scott B. Michaels
I don't know about you but I've been very leery about the big
brewers taking over their smaller craft competitors. It seems to be a
powerful trend in the industry and not a good one. I understand
brewing is a business but when giants like A-B step in bad things
follow. I was moved to write you Bob when I read about Duvel’s very
recent acquisition of Firestone-Walker. Yes, it's the same Duvel that
invested in the Cooperstown, NY's Ommegang in the late 1990s and
now owns it outright. It's the same Duvel that purchased Kansas
City’s Boulevard a couple of years ago. So as a huge fan of
Firestone-Walker I began to worry. It makes me wonder is really
such a thing as “good” consolidation?
The breweries bought by Duvel have operated, as far as I can tell,
autonomously and have maintained their beers and brewery culture
without a whole lot of interference from Duvel. I found nothing to
indicate that Ommegang, Firestone Walker and Boulevard are
associated. They aren’t distributed together, they don’t make up
walls of product in bottle shops or take over hosts of lines in
taprooms unlike other companies that do.
It seems Duvel has given its brands the support they need to grow,
but also the space they need to be independent. That may not always
be the case, but in a time where craft breweries are being acquired at a
steady pace and beer-industry consolidation seems to
be an unstoppable force, Duvel, as of now, is doing it the right way.
Having said all of that, somehow I still don't trust them.
Please don't call me a conspiracy nut but might it be that when a big
company like AB InBev buy a craft brewery its eventual aim is to
flood the market with there own version of the beers to confuse
consumers and eventually drive its craft rivals out of business?
Is their secret goal to make the world safe for Budweiser?
Now that might be far fetched, at least in the case of Duvel, but it is
possible. But why are small craft breweries so ready to sell (out)?
It seems that once a brewery experiences huge growth they run out
of capacity which hinders their profit potential. Many, not all,
desperately want to expand and that's when to turn to investors and
takeovers. It really shouldn't surprise anyone. After all, America beer is
a $100 billion per-year industry and as craft beer continues to grain
market share, more groups want a share of the pie.
Now despite all my concerns I do acknowledge that there are benefits
to these consolidations for the consumer if the craft breweries are
allowed by their new owners to continue to make the same quality
beer and not cheapen ingredients or appeal to the lowest common
taste palate. I think the most important benefit is mainstream
exposure for some great craft beers. If someone’s appreciation and
love of craft
beer is developed by being able to enjoy them for the first time
thanks to larger distribution then it's a good thing. Also, increased
capacity might make famous, "rare" beers more commonly available
for those of us who have never had them before. That too is good.
I know there's little if anything we consumers can do to impact
all of this except perhaps say a small prayer to the beer gods that
everything turns out alright and the craft revolution remains healthy
and undaunted. So there you have it Bob. Thanks for listening and
thanks for such a great column. It's one of my favorites!
Thanks for your article Scott. I too am worried about this juggernaut
of consolidations. The craft beer revolution was founded by small,
independent, local breweries who were often forced to battle the big
guys every step of the way. Now that craft beer is winning it doesn't
seem right time to take a big profit and surrender.
I'd like to invite everyone to send me their own columns about anything
related to beer/drinking/booze just as Scott did. I select the best and
publish them here. So join in and get writing.
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