Are there any possible benefits to more A-B InBev craft brewery acquisitions?
Based on the title, and our 20 character attention span society, somebody will think I support Anheuser-Busch InBev, and their recent acquisitions of breweries in the craft beer space.
Just to be clear, I do not. I think they should keep brewing their crappy beer, and leave the true artisans of the industry alone.
With A-B InBev’s recent purchase of Elysian in Seattle, Washington, and their volley across craft beer’s bow of a Superbowl commercial, Budweiser is becoming an increasingly hot-button issue in the craft community (once again).
Who A-B InBev Owns
Before Elysian, A-B InBev had bought 10 Barrel (Portland), Blue Point (New York), and of course Goose Island (Chicago). They also own a 32.5% stake in the Craft Brew Alliance, which is comprised of Redhook (Seattle), Widmer Brothers (Portland), and Kona Brewing (Hawaii).
Throughout history, crappy status-quo conglomerates tend to get taught a lesson in the wallet, and lose huge chunks of marketshare, or end up getting trampled all together. The US auto industry has never been the same after Japanese imports, and a little craft computer company has eroded Microsoft’s marketshare in both computer hardware, and handheld devices.
Anheuser-Busch InBev can see the writing on the wall, and does not want to fall victim to the same trend of lost marketshare in the industry, due to their inferior product. Something already happening — craft sales are up, fizzy water beer sales have flatlined, and trending down.
The A-B InBev Plan
It’s clear what they are up to in their acquisitions. Yes, they are buying something they could never do themselves — which is brew a quality product. But there is more to it than that.
A-B InBev wants more shelf space, and more market share in the regions they have bought into. They’re not just grabbing a few successful breweries, re-branding, and distributing nationally in hopes it sticks.
Anheuser-Busch wants to insert themselves into several key regional markets across the country, and squeeze them dry of competitors from the inside out. When these breweries sell, they are giving up chunks of turf that A-B InBev wants to turn against its new local (craft) rivals.
Take a look at these craft beer hotbeds, or geographically strategical locations:
- Chicago is right in the middle of the country, a hub if you will.
- Redhook and Elysian are in Seattle / Washington, and probably two of the bigger breweries up there.
- Widmer and 10 Barrel are in Portland / Oregon, which is Deschutes and Rogue Ales country.
- Blue Point is from New York, now an East Coast hub in a very small population of craft breweries.
The beer community as a whole is comprised of a wide range of consumer, with varying opinions and reactions to these acquisitions. The ultra-crafty will no longer drink said brewery’s product after “selling out”, others don’t seem to mind, and some don’t even know a buyout even happened.
Judging by the flood of Bourbon County Brand Stout pics on Instagram, I would say Goose Island has weathered the storm of outrage just fine. If anything, that stout is more prevalent now than ever, but I’ll get to that in a minute.
Is there any benefit at all to more Anheuser-Busch InBev acquisitions?
Again, I do not like seeing a company like Budweiser buying up true craft beer operations. In an exercise of pure “outside the box thinking”, I tried to come up with any possible reasons these acquisitions could be beneficial.
It Strengthens Craft
Going forward, craft breweries may be less inclined to accept an offer from a conglomerate, for fear of “sellout” backlash. Their poorly timed, ignorant and arrogant Budweiser Superbowl commercial has pissed off craft brewers big time, (as evidenced in their angry memes, hashtags, etc) and could hopefully galvanize the remaining group as a whole, protecting it from future intrusion. Independent craft brewers own a powerful weapon — quality beer, meant to be fussed over.
This isn’t a very moving reason for beer consumers, but odds are A-B InBev will want to increase production, meaning bigger plants and more jobs for people in some regions.
Sadly, craft beer is a product where the brewer often passes along some their cost to its loyal consumers. This could go either way, but A-B InBev has begun to put itself in a place to dictate pricing in some markets. They could raise pricing, and hopefully true craft brewers will not follow suit, a win for their drinkers. Or, provided craft outfits were able to sustain themselves, lowered pricing in a squeeze move by A-B InBev could possibly hold down costs. I am no economics professor, but it was worth pondering…
Distribution and Availability
At least selfishly, and provided you’re not a person to refuse the acquired brands, this is probably the biggest benefit. I don’t want to see my local favorites pushed off the shelf, which could happen. But if AB—InBev will make it easier for me to get my hands on some beer I’ve always wanted to try, but could never find in stores due to distribution, I’m okay with it.
The answer is no.
Some of the above points could become a reality, but only time will tell. Furthermore, I don’t really feel that any of those ideas make a compelling argument for tolerating A-B InBev’s meddling in the craft beer industry.
One thing is for sure — we have not seen the last, or second to last acquisition of a craft brewery by Anheuser-Busch InBev. They seem to pick off somebody in each craft beer market by region.
I wonder who the sellout will be in San Diego?