"A Craft Chemist Making Over Big Beer"

Discussion in 'Beer News' started by TheBeerAlmanac, Jan 29, 2013.

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  1. jtmartino

    jtmartino Initiate (0) Dec 11, 2010 California

    I really want to like this, but I can't. I can't because I know ABInbev has the money, skill, and equipment to make some excellent craft beer. But they won't, because it's not nearly as profitable as making American adjunct lagers.

    It has nothing to do with abilities. It has everything to do with profit. High-end craft beer is really not that profitable, and a vast majority of beer drinkers in the US still don't drink craft beer. It is absolutely not in their best interests to devote money and resources to an industry that still can't compete with the macro beer scene.

    But, as beer-drinking culture changes, so will the big players. And make no mistake - they will either buy or force their way into the craft market, and their beer will be excellent. See Goose Island.
     
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  2. leedorham

    leedorham Initiate (0) Apr 27, 2006 Washington

    As I said above, ABInbev is a large corporation with responsibilities to stakeholders. They are actually at a disadvantage when it comes to making craft beer because the brewers can't just make whatever they want. Also, the claim that the best brewers in the world work for the big boys is a complete and total fallacy.

    High end craft beer is very profitable. Much more profitable gallon for gallon than low end beer. Not sure where you got that info.

    I hear Hoegaarden is drinking real well these days.
     
  3. jtmartino

    jtmartino Initiate (0) Dec 11, 2010 California

    You are seriously misinformed. Go read the financial reports of ABInBev and Boston Beer Company and then get back to me - they are both available online as both companies are publicly traded. Most financial websites also list everything you need to know to change your mind.

    Economies of scale, for one thing. But also bulk materials cost is much less for American Adjunct Lager. All things being equal, the ingredients in a gallon of Budweiser are much cheaper than a gallon of Sierra Nevada Pale Ale.
     
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  4. jesskidden

    jesskidden Grand Pooh-Bah (3,071) Aug 10, 2005 New Jersey
    Pooh-Bah Society Trader

    ABInBev sold 98,000,000 barrels of beer in the US last year, Goose Island brewed about 150,000 bbl. - about 1/8 of 1%.

    Ah, but AB doesn't need the Goose Island brewery to brew 312, they do it themselves :wink:

    [​IMG]
    ...granted, they do it in part to free up capacity at GI for other beers...
     
  5. BierGartenok

    BierGartenok Initiate (0) Apr 4, 2009 Oklahoma

    I like how 10 bbls is an "Experimental" batch lol
     
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  6. leedorham

    leedorham Initiate (0) Apr 27, 2006 Washington

    You're talking about something entirely different than gallon for gallon profitability. Also, snpa isn't really "high end."
     
  7. Stevedore

    Stevedore Grand Pooh-Bah (5,072) Nov 16, 2012 Oregon
    Pooh-Bah Society Trader

    Never forget the bottom line.

    $
     
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  8. jtmartino

    jtmartino Initiate (0) Dec 11, 2010 California

    Go look at the financial results. Take profit in 2012 (or even 2011) and divide it by gallons of beer produced. Compare AB with any craft brewery. Then get back to me.

    If you have a better metric for determining profitability that favors craft beer, I'd love to hear it. You can find plenty of figures online if you want to provide numbers.
     
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  9. mocktm

    mocktm Initiate (0) Jan 3, 2011 Virginia

    I couldn't help but laugh reading the article. Lets get someone who knows little to nothing about beer to be the head brewer at our experimental pilot brewery...Brilliant!!
     
  10. TheBeerAlmanac

    TheBeerAlmanac Initiate (0) Mar 3, 2011 Kentucky

    There has to be a threshold where brewing evolves from a strict balance sheet into an art. You still need to make money, but the primary directive shifts, and in shifting you focus on the craft, which hones the skill of production, which brings a better product to the table, which garners a larger margin of profit no matter what scale, albeit through sweat equity. Call it romantic or idealist or whatever, but maybe the DFHs and Picassos and Stephen Kings figured that out.
     
  11. sherm1016

    sherm1016 Pundit (843) Aug 10, 2009 Wisconsin

    FWIW, Dan Carey, Brew Master and Co-Owner of New Glarus Brewing was also a Production Supervisor A-B at one point in his career.

    People can despise A-B and M-C all they want for this reason or that, but they have done a lot to educate and launch the careers of many, many successful craft brewers.

    Rebecca sounds like she is very talented. Hopefully her skills will aid the craft movement at some point (if they haven't already...).
     
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  12. Norica

    Norica Zealot (636) Feb 2, 2006 Massachusetts
    Trader

    http://www.worldbeercup.org/wp-content/uploads/2012/05/WBC12-Winners-List1.pdf

    I'd say Hoegaarden has slipped considerably, I mean it only beat out 48 others in the style.

     
  13. reverseapachemaster

    reverseapachemaster Zealot (722) Sep 21, 2012 Texas

    Some of the comments here are not entirely true. AB InBev has a deep portfolio and there are many of the smaller labels, particularly from InBev's side, that are as good or better than a lot of US craft brewers. Of course, that doesn't stick up for their brand light lager products.

    AB alone has tremendous brewing expertise and knowledge. It is not at all easy to brew beers that light that flawlessly on that large of a scale across multiple breweries. You may not like the product but that doesn't mean there isn't a lot of work put into the beers. Furthermore, AB (along with MillerCoors) has tremendous resources for brewing. They have one of the largest, if not the largest, library of brewing materials. They also have a substantial yeast bank that is probably outdone by Weihenstephan but still very extensive. If they wanted to, they could make a beer that would make you think your favorite beer of all time was a complete drain pour and they could make it on a large scale that it wouldn't cost you $20-40 per bottle.
     
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  14. hopfenunmaltz

    hopfenunmaltz Pooh-Bah (2,611) Jun 8, 2005 Michigan
    Pooh-Bah Society

    Sierra Nevada has a 10 bbl. pilot brewery.
     
  15. coreyfmcdonald

    coreyfmcdonald Initiate (0) Nov 13, 2008 Georgia

    Having worked in Operations and Supply Chain for a publicly traded company, I'll tell you that this information does not matter at all. AB has to hit their metrics just like any other publicly traded company. Many of these metrics will be year over year improvements. They will find ways to lower production and materials costs, overhead, and inventory to make Goose Island more attractive as they pump up production. If they are smart, they will do their research to figure out where consumers won't mind they make their cuts. This is where many companies get it wrong.
     
  16. jacksback

    jacksback Initiate (0) Jul 20, 2011 Massachusetts

    Such as? Easy to say that... well, without actually saying anything.

    I'd also like to see some profitability numbers (actual numbers) on the "higher end" craft beers, as I doubt they are very profitable. Ingredient cost, time in barrels (if applicable), specialty bottles, and so on. But I've got no numbers offhand either...

    To the OP- sure, AB-Inbev, and Budweiser specifically, has a good deal of brewing talent. But they aren't about talent, or brewing great beers- all about the bottom line. Whole different business outlook than even the largest of craft breweries.
     
  17. jacksback

    jacksback Initiate (0) Jul 20, 2011 Massachusetts

    Yeah, but as the fans have stated, there's absolutely NO danger of GI beers falling off. AT ALL.

    Heh.
     
  18. coreyfmcdonald

    coreyfmcdonald Initiate (0) Nov 13, 2008 Georgia

    Ha, yes - this would be the first time a huge corporation went back on their word. Ever.

    "You don't need to change the malt bill or the time in barrels for BCBS, but you need to raise the gross margin by 10%."
     
  19. rlcoffey

    rlcoffey Initiate (0) Apr 20, 2004 Kentucky

    One of the problems Bud et al have is that their brands have to make a very big splash to survive.

    Of the top 15 new beer brands of 2008, 8 had been discontinued by the end of 2011. Three of the 7 that survived were the 3 craft brands in the list. And 1 of the survivors, Bud American Ale, the #3 new brand of 2008, is dead/dying. I have no idea on its current state, did it make it to 2013?

    And the #3 new brand of 2011 was cancelled before the end of 2011.

    Two of the 2008 cancelled brands were Michelob Dunkel Weiss and Michelob Pale Ale. They just didnt do enough sales to justify staying around. They had sales numbers that even larger craft breweries would kill to have, but to A-B or M/C, those kind of numbers dont justify continuing on.
     
  20. leedorham

    leedorham Initiate (0) Apr 27, 2006 Washington

    What are you finding online for privately held companies? Do you have access to The Bruery's balance sheet?
     
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