ABI Acquisition vs. PE Firm

You know capitalism is not bad, right? Just as communism is not bad.

Capitalism WITH IMPROPER OVERSIGHT is bad.

That said, I'm sure you realize that not everything that ABI does is bad for craft beer, just as not everything that independent craft breweries do is good for it.

Long term impact is this: ABI's foray into craft beer will keep craft prices in check (a good thing), but will also force the hand of many distributors to favor ABI's products over independent ones (a bad thing. Sort of.). Here's the rub with this bit, if ABI's The High End breweries produce every style and permutation of every style that anyone could possibly want AND do that at a decent price with excellent availability, quality, and freshness, how is this bad for the craft beer consumer?

I simply can't see how ABI's involvement in craft beer is going to hamper the growth of small craft breweries. If most of their money is made by on-premises sales, the fact that it has become more difficult to get their beer onto shelves or on tap in local bars isn't going to affect their profit margins. To my knowledge there are no laws that put a cap on how much beer that you can sell out of your doors.

In the VERY long game, yes, if ABI buys enough craft breweries it will be difficult for independent craft breweries to put their beers on shelves or on tap. That is a LONG way off, so the breweries in questions should be preparing for that eventuality. As it stands, for the foreseeable future, The High End doesn't make enough beer to take up all the taps and shelves everywhere. Will that change? Maybe, but for now, people want variety, and since ABI can't provide that, it is up to independent craft breweries to do so.

TL/DNR: Independent craft breweries need to up their game and stop complaining because their adversary is more prepared than they are for competition.

 

The sky is still where it has always been.

 

Thanks.

Remember though, supporting something is not the same as causing it to happen. One brewer won't have much of an overall impact on a distributors' organization, regardless of who owns them. It take several voices all on the same page.

Personally, I'd say that concern with ABI in the situation in Texas is not the going to deal with the real problem. I'd say look to the Texas legislature as the root cause of the problem. Especially since they are notorious for occasional alcohol legislation that makes no sense when it comes to dealing with reality. E.g., Until just a few years ago Texas law required that any beer sold in Texas that was over 5% ABV had to have the word Ale on it's label, regardless of whether it was a lager or an ale. Some brewers even added the words "Ale in Texas" to their labels so they could distribute into that state but also not misrepresent their beer when using that same label in other states.

 

In Capitalism man exploits man. In Communism it is the opposite.

 

Again, I'll retort to this by saying, "Unless you are an owner or an employee of an independent craft brewery, who cares?"

I don't care if my beer is made by local, independent breweries or by a multinational conglomerate, so long as it is of excellent quality, readily available, and sold at a fair price.

 

I suppose collectively we will all know more next year, the year after that, and so on.

In a free market economy the businesses that best serve the needs of their customers survive. Each individual brewery would benefit to think upon and execute a business plan that best serves their customers.

Cheers!

Cheers!

 

Agreed.

I would also add to that, "recognizes trends so as to serve the unrealized needs of their consumers"

 

I would suggest that the small, local breweries are at an advantage here since via their tasting rooms they get to talk to their customers every day.

A hypothetical conversation:

Customer: Hey, I have been reading and hearing about this new beer style called a New England style IPA. Have you ever heard of that new beer style?
Brewery owner: Yes, I have. Those beers have a very hazy appearance to them. I am a little concerned that this appearance may not be pleasing to my customers. Would a super hazy beer be a turn off to you?
Customer: Nah, for me it is all about taste. If you could make a tasty New England style IPA I would drink it. I would even say "Here is mud in your eye" to you when I drink it. But it better be tasty!!

Cheers!

 

Or, better yet:

Customer: Do you guys have beer to go? I brought a growler with me. Do you fill those?

Brewery Owner: Of course we do. We also have 4-packs of 16 oz. cans for sale as well. Those seem to be REALLY popular.

Customer: Holy shit! I didn't know that you guys canned your beer.

Brewery Owner: We just recently started. Like I said, people seem to love to be able to take home fresh beer and not have to drink it all right away.

Customer: Well that's just plain ole awesome.

 

Actually, such laws are common.

 

Example?

 

In Minnesota, a brew pub's total retail sales at on- or off-sale may not exceed 3,500 barrels per year, provided that off-sales may not total more than 750 barrels.

 

One of the most reputable Virginia breweries is Devil's Backbone. They are perceived here as local, and are sold at locovore focused farm to table restaurants.

Yet they are now part of ABI. So yes, ABI, can exploit the local beer movement.

 

First BBC got into trouble. But I found Sam mediocre, and I didn't like Jim Koch. So I was silent. Then all the national distro craft got into trouble. But they has grown too big too fast, and used the word craft in ways I didn't approve, so I remained silent. Then they came for the breweries I valued . ...

 

As long as that stays the same then ABI can take advantage here.

Everything I have read about Wicked Weed is contrary to what you state here.

Cheers!

P.S. And when you consider the AB branded beers (e.g., Bud, Bud Light,...) which is the larger part of their business these beers will never be appreciated by the drink local folks.

 

The reaction to the Wicked Weed buyout has been different from that DBB. I presume because DBB, though it appealed to locovores, did not appeal so much to craft beer people who follow these things.

 

Your argument is that slippery slope is a flawed technique, but so is your argument of past behavior ensuring future outcomes.

Neither is proof of anything, so both of you are "guessing," and disagreeing, and simply predicting different outcomes. You each have reasons to believe what you believe (and I think you are both using historic data in predictions, and choosing your data points vs pure slippery slopes) and maybe one can convince the other which is more valuable.

Either one or none of you are going to be right is all that I am pretty sure of .

@Roadkizzle

 

Sorry hope I didn't give the impression I was guaranteeing something. But when it comes to this I gotta ask what data are you or anyone looking at that shows that the slippery slope prediction is likely, since the actual sales and growth data show the opposite? I have no idea who is gonna be right in this argument, but I do know which opinion has zero data to back it up, and it isn't mine. The slippery slope has not been. It's been a ramp with good traction so far, as data and observations attest. Perhaps I am overlooking something though, so feel free to show me the data and observations in support of the destruction of craft beer by Big Beer. I suggest this attitude is based on nothing, zip, zero except an acquired fear and hatred of Big Beer by craft beer lovers. I trace this back to the propaganda movie Beer Wars, but there have been people saying the sky is falling while the opposite has been happening for many years.

 

Not arguing for or against either thought in this case. I do disagree that your "facts" are any more valid than other "facts" when predicting the future. In fact (ha!), the definition of craft is a "fact" to be debated (and has been; often; here; you know), so how can you know if it is failing?

I'll play devil's advocate in this case (seriously). What is the trend/historic data on when a monopolistic entity feels truly threatened by competitors? I'd be willing to argue 15 years isn't a valid timeframe for data in this respect. The growth in the past 3-4 years has been crazy and even different from the previous 11-12, no? And can't be sustained in perpetuity (lest you ascribe to a slippery slope in only one direction).

Just saying you seem to be claiming that the data you use is the one and only true data that exists and that everyone else is not using data. I simply challenge that everyone who believes counter to you is not necessarily devoid of data - just that each of you put different values on the data, and that shapes what you predict for the future.


Side note: I will say, my actual views have shifted over the past couple of years listening (reading) and discussing this topic on this site. As has the environment that brings about these discussions.

 

No different, both have the main goal of making as much money as possible and will do what ever it takes. If the laws not on your side, just change it!