It's about the beer
Gina Miller and Bill Keeper
Hey Bill, -
Here they go again. AB InBev is continuing a regional acquisition strategy (they haven't
duplicated a state yet) also used by MillerCoors to counter declining light lager sales. Gee,
how can that be? Do drinkers want taste in their beer? Anyway, the larger players are
gobbling up smaller craft breweries which is no surprise since they've been racking up
double-digit annual sales growth in recent years. AB InBev is focused on well-known,
middle-tier breweries that have deep footprints in their respective regions, the most recent
How big is this strategy you ask? AB InBev's craft beer buyouts since 2011 have included
Chicago-based Goose Island for $38.8 million, Blue Point in New York for $24 million,
Oregon-based 10 Barrel Brewing for an estimated $50 million, Golden Road Brewing in
California for an undisclosed sum, and Elysian in Seattle for an estimated $60 million. And just
within the past week, AB InBev announced plans to acquire Four Peaks Brewery in Arizona
and Camden Town Brewery in London.All the smaller deals are coming as AB InBev is awaiting
the completion of a proposed $107 billion acquisition of SABMiller, which owns Chicago-based
MillerCoors. Under the terms of that deal, Denver-based Molson Coors announced plans to
pay $12 billion for the 58 percent of MillerCoors it did not already own. Ah, I see I've got your
attention now Bill.
As I see it AB InBev has successfully built an impressive but empty palace on the back of the
worst beers ever brewed and a billion dollars a year in relentless, offensive marketing. Now, as
they gaze longingly at the small-but-vibrant party going on over in craft beer, they're trying
desperately to buy some of that growth potential and even respect. Good luck guys, but I'm not
falling for it.
What's this, I'm just getting started and I'm at my space limit. Okay, then I'll just cut to my
biggest concern over all of this. AB Inbev might be buying out these little brewers just to use
them as a way to squeeze out the distribution of other smaller brewers. This is probably the
one good reason not to drink an AB InBev owned brand.
That's it from me, chug-a-lug, Bill.....see you next time.
You get no argument from me with your major worry. Not only do I share your concern but so
does the US Government - now there's a first Gina. The U.S. Justice Department is probing
allegations that Anheuser-Busch InBev is seeking to curb competition in the beer market ,
making it harder for new or small craft brewers to get their products on store shelves, The key is
that AB InBev pushes some independent distributors to only carry the company's products and
end their ties with the craft industry, So if a distributor wants to carry not only a Bud label but
also craft beers AB owns (which drinkers want in ever increasing numbers) then the distributor
better not be selling those beer from any other competitors. Get it, Gina?
I want to, but truly can't,blame a craft brewery for desiring a big pay-day and selling out to an
industry giant. Still, somehow doing that tarnishes the brand. I know many craft beer lovers
agree with me. We support a craft brewery over the years and now tthen they abandon us.
Gina, of course I don't think that their beer will instantly become undrinkable when AB takes
over—I would fully expect their quality to remain high in the short run. However I'm worried that
the quality will eventually slip as cheaper ingredients of much lower quality are substituted.. I
know some serious beer geeks (not me) who are convinced that AB did this to the Goose Island
and Elysian products. Now before we all get too upset over all this we can take solace in the fact
that brewing innovation will not end thanks to a ever increasing number of small brewers who will
keep the industry vibrant.
Please don't think that I believe that AB Inbev is buying craft breweries to turn their beers into
Budweiser. They're buying them for the express purpose of NOT doing that. They want a
foothold in the industry that they cannot get with their own "crafty" products. With that they can
then flex even more power over distributors. Unfortunately most consumers don't know or care
who owns the company who makes the beer (or anything else) that they are buying. If the
product stays good that's laudable. But the track record of AB mandates that serious beer
drinkers consider the future consequences of supporting the bought out brands.
I did hear one interesting suggestion the other day. It was that the craft brewers should get
together and come up with a brand/symbol to apply along the lines of what the Trappist
breweries did. Today if you don't see the Trappist symbol then you know you're not getting the
real deal. That's not to say that some abbey brews are not as good as Trappist ales, many are,
but at least the consumer would be more aware of just where their money is going.
Gina, I know we've had this discussion many times but with the merger of the macros pending
and the fast pace of their purchase of craft breweries the issue becomes even more pertinent
than ever before.
Whew, I need a good beer about now and I don't care who make it. What am I saying??
Here's looking at you Gina