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BMC craft beer strategy

Discussion in 'Beer Talk' started by otispdriftwood, Jan 9, 2013.

  1. evilc

    evilc Initiate (0) California Jan 27, 2012

    We were told in another thread we "lack moral compass" by buying GI.
     
    steveh likes this.
  2. I agree with you completely that Inbev isn't going to mess with it. They would be foolish to. Additionally, they have every right to buy up craft brands, that's the nature of business. However, we all have out limits on what we are willing to tolerate from a company. Some of us don't mind the businesses practices of Abinbev, other's like myself, do. As such, even if the beer is excellent, I am going to pass. I'd rather my money go for a KBS instead of a BCBS or a Hennepin instead of a Sofie as I would rather see those breweries get bigger than Inbev get bigger. I know that's not what everyone believes in, and that's cool, but it's what I believe in.
     
    SammyJaxxxx likes this.
  3. evilc

    evilc Initiate (0) California Jan 27, 2012

    Here we go again....
     
    Chaz likes this.
  4. LeRose

    LeRose Advocate (545) Massachusetts Nov 24, 2011

    So while people are all wound up...opinion alert...

    I don't think InBev/AB/GI is the last acquisition of a craft brewery by a bigger entity we are going to see. I'm no marketing whiz or anything, but I think it is inevitable. You can only bring a business so far with passion for the craft, no matter what it is. And it seems to me that there are an awful lot of breweries and an awful lot of beers out there. That means more and more suppliers competing for the same market share which is still relatively small compared to the BMC volumes. The big fish eat the little fish, and yes the clever ones survive. Call it selling out if you want, but if my choice were close the business I built with blood, sweat, and tears or dancing with a partner with deep pockets, pretty sure I would choose the latter. Much depends on how deals end up structured. Could be LLCs with investment bucks, or takeovers, or even multiple smalls forming larger entities and partnerships. But I don't see how the current model is sustainable. It might not be this year or five years from now, but the landscape has to change. Yes craft demand is growing, but there is a lot of local and regional fanaticism, to some degree it is cannibalistic, and craft volume is still a fraction. As our COO here says, give me volume any day...that is where the cash is, says he...and shopping cart observation tells me a lot more BMC moves than "our" stuff.

    Oh I can hear the cat o' nine whistling thru the air...
     
  5. Overlord

    Overlord Initiate (0) California Jun 28, 2007

    Do a google search on disruptive innovation. See all of the historical examples of how entrenched businesses react? All of that is happening now or will happen soon.
     
    Chaz likes this.
  6. How bout this... If you don't care, that's cool. If you do care, that's cool too. Who gives a flying shit? Don't shove it down people's throat and don't sit there are berate someone for their opinion like you're going to change it. Crap... i forgot, its the internet.
     
  7. Derranged

    Derranged Advocate (500) New York Mar 7, 2010

    All jokes aside.. Would barrel aging a cheap lager make it any better?
     
  8. No you were told that not caring about resource of the goods you purchase shows the lack of a moral compass.
     
    Providence likes this.
  9. Completely agree. A civil conversation is fine, berating someone for their opinion is a big waste of time.
     
  10. LeRose

    LeRose Advocate (545) Massachusetts Nov 24, 2011

    True. Reminds me of Collins but with more substance to the theory. I actually think it could go either way, though. Craft could take over the world, certainly. Slowly as the BMC loyalists fade away and are replaced by the craft generations. Thinking about Toyota and Lexus and Scion, though. They have three huge market segments covered, and I wish I could remember the other examples...All the same sort of thing, usually done by acquisitions. Anyway, it is a model others can and are follow. Business is nothing if not copycat, especially low margin items like food and beverage where mergers and acquisitions are daily events. Will the big boys see the opportunity to snatch up the craft breweries to add that tier? Of course, some wouldn't sell, and some might fail anyway. I just think, and it is opinion and observation, that there are too many products and not enough consumers to support them all and the "rich" might get richer now they have a blueprint. And is home brewing the next disruptive innovation that is beyond craft?

    Could be too that there end up being real niche markets. Local markets, limited distribution, end up being where true craft thrives. I think in some ways the ones not looking to expand rapidly might have it right. Like New Glarus, or even Hill Farmstead in the extreme. National distribution is not easy by any stretch. They have to be strategically smart about expanding. But there are advantages the small outfits can't have like economy of scale that plays heavy even in things like procuring ingredients and packaging material. I dunno...flip side to that are the places leveraging locally grown.

    I guess we will be finding out as things unfold, but whatever goes down should be interesting.
     
  11. This has been going on for the a few decades now in the craft segment of the US brewing industry - AB's Goose Island purchase is just the latest and biggest deal. Probably made to seem "bigger" because of the growth of the active internet beer "community".

    AB bought into Redhook in the mid-'90's and did a similar distribution/minority ownership deal with Widmer a few years later (1997), and Widmer (then partially owned by AB, obviously) bought into Goose Island in 2006. Once Redhook and Widmer merged into what was initially named the Craft Brewers Alliance, AB's minority ownership totaling about 1/3 continued.

    Also, in the mid-90's Miller bought into both Celis and Shipyard, with very different outcomes. Shipyard bought back the Miller share a few years later, and Celis opted to sell out entirely, and Miller infamously shut down the company soon after.

    Also, in the 1990's, Stroh - the #4 brewery in the US - was a minority owner (and had an exec on the board) of Pete's Brewing Co., at the time the #2 "craft" brewer in the country. The company was later sold to one of the two major Corona importers in the US, Gambrinus. Gambrinus had earlier purchased the pioneering craft brewer, BridgePort (founded in 1984 as "Columbia River Brewing Co.") and the pre-craft era brewer, Spoetzl.

    Mendocino, which began as one of the earliest brewpubs in the US (and had some ties to the original US "microbrewery" New Albion) is owned by the owner of India's alcoholic beverage giant, UB Group,along with their east coast affiliate Saratoga Springs (aka Relata) Brewing Co., and Chico, CA's Butte Creek. (An even more interesting connection - UB Group's brewing subsidiary, United Breweries, is now partially owned by Heineken International).

    The Devil Mountain brand from California was purchased by alcoholic beverage giant Seagram, and was eventually brewed by Boston Beer Co. in Cincinnati as a joint venture between BBC and Seagrams. (The brand was also contract brewed at the former Latrobe (Rolling Rock) Brewing Co.). BBC also has done deals with Whitbread and Greene King in the UK.

    Besides the above mentioned merger of Redhook-Widmer (and now Kona) known as Craft Beer Alliance, there have been several notable mergers of early craft breweries - Hale's and Hart merged to form Pyramid, Pyramid and Magic Hat merged to form IBU, and IBU would soon after be purchased outright by NAB- which began as the importer/US owner of Labatt and owner of Genesee. NAB was recently purchased by Cerveceria Costa Rica, S.A

    Brooklyn Brewery purchased the NE contract label, Post Road. F. X. Matt purchased the New Amsterdam label and brewery when that pioneering company failed in the late '80's (but soon after sold it off). Southampton and Pabst (still under S&P ownership at the time) had a short-lived deal for distribution, and Southampton's Phil Markowski helped reformulate Pabst brands like Primo and McSorley's.

    Probably many more examples out there, but those are the ones off the top of my head.
     
    AxesandAnchors, steveh and LeRose like this.
  12. steveh

    steveh Advocate (705) Illinois Oct 8, 2003

    It certainly brought this thread to a screeching halt! :D
     
  13. steveh

    steveh Advocate (705) Illinois Oct 8, 2003

    So, do you suppose this is a personal crusade against brewers, or do you think the crusaders also avoid big businesses as a rule? Say; auto makers, clothing manufacturers, food producers, utility companies...

    Probably all self-sufficient zealots with their own farms and wind power, eh? Makes you wonder if they built their own computers to post on the internet. ;)
     
    evilc likes this.

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