Exactly what is InBev trying to do?

Sounds like you nailed it...

 

1. Buy up every brewery you can.
2. Dominate the market.
3. ????
4. Profit!

 

Increase share price.

 

Make BCBS available year round!

 

They are trying to maximize stakeholder value within the limits of the law.

 

Same thing as Stone, the Bruery, and every other functioning brewery in the country - maximize return to equity holders.

 

This is emphatically not true. Not everyone runs their business like this. There are other motivations out there besides blind pursuit of short-term profits, believe it or not.

 

Nope. Not every other functioning brewery in the country. Lots of different businesses with different ownership, different structures, and different agendas.

For example, say I open a brewery and am successful. I stay the sole owner, or maybe I have a few other stakeholders, but am still the controlling force. Maybe I'm pulling a couple hundred G's after a few years and I'm content. I'm not going to expand, I'm not going to sell, and I'm not going to buy another brewery. Someday maybe I'll retire and sell the brewery to the employees, or turn it over to one of my kids. This happens all the time with all kinds of businesses.

Going public changes everything.

 

They are just engaging in what is known as "capitalism". Enjoy!

 

For another perspective on this....look up the movie "Beer Wars" (on Hulu).

The execs and AB family members will tell you exactly what they are (and have always been) trying to do: Crush the competition and gain market share. Shareholders expect growth.....expansion.....profits. Nothing wrong with that. We as BA's may be biased as we view this as a threat to our readily available craft options. But....every one of you that owns a stock or mutual fund expects....nay....DEMANDS that your companies produce profits. Huge profits. Growth. Dividends. If you do not get these returns.....you dump the stock or vote out those in charge. Capitalism is not bad. But it does cause a few toes to get stepped on. That is the price we pay for not being communists. That said.....when the politicos get involved and legislation rules the playing field and not the markets....well......then that is not pure market activity controlling things. Thus one of the big points of that movie and many that argue here. All IMHO....

 

Right now, Inbev is just diversifying their portfolio a bit, also known as "hedging their bets" in the macro vs craft 'war'.

If craft beer continues to grow and the bubble doesn't burst again, then by purchasing a couple of craft brands now, Inbev is able to establish their own players in the growing market. Rather cheaply, too.

As craft continues to grow, you're going to see them start buying more brands.

If craft really takes off, then you can bet that Inbev will be sitting there with an appropriate percentage of the craft industry in their pockets. It may cost them more down the road, but they won't be left behind.

Basically, a smart company will scale efficiently and smartly with the market.

Inbev could buy out half the market right now if they wanted to, but that would be very risky. If the craft bubble bursts again, Inbev doesn't want to be holding that much of it.

Inbev is a force that is never going to go away in this industry.

 

InBev is a multinational company. Making money is the first and foremost goal of any company, but once you grow to those proportions, you have lots of other things to worry about, such as overall market share. The purchasing of craft breweries has nothing to do with ideological concerns, but is a money making scheme like any other. Their market researchers have picked up on the craft beer boom very well, and they just want their cut. Goose Island was a willing "prey", as they're very popular, but were still reasonably small, especially with their barrel-aging being so expensive.

 

Surely you don't think this is true if the company principals have beards and/or tatoos, right? RIGHT?

 

Wait, surely this is... BEER FOR PUNKS?!

 

Bend you over

 

What? So there's no one in the world who owns his own business and runs it just so he can make an acceptable living, but not so that he's maximizing his outcome? Have you like, ever met a small business owner? Hell, I work for a company that can be described that way.

 

Take over the world. Potentially exterminate craft beer enthusiasts after world domination is achieved.