Inbev's new distro incentives

I'll save you some time...3GCapital.

 

Ya..an investment company with a 22% stake in AB-InBev.

 

It their spears block out the sun then we will fight in the shade

 

Where I come from 22% is a connection.

 

Yea, I know next to nothing about how the distribution system works and I'm seeing posts about how it varies state to state. So I should, and will read up on it. The only trucks I ever see delivering the craft beer I drink say 'Budweiser' on them. So should I love them for bringing me good beer, or hate them for dictating the terms? I'm not a fan of most of their products. But I don't know that I'd being enjoying Founders, Bell's, SN, etc... if not for them.

 

ABI can pull all the levers they want. The consumer will still rule the market. This type of stuff will delay their slide as craft gets somewhat harder to find or is limited, but in the long run distributors will carry what the consumer wants.

 

You know it.

Your a retailer selling cheap beer, want to take on Walmart? I can buy cheap beer there, I don't need you.

Craft beer guys will still sell great beer.

 

So why not just brew the type of beer that you are trying to stop? I'm pretty sure if you can brew Bud exactly the same everywhere every time then quality IPA, stout , porters etc can be made at a great price. Sell me some Dog town pale ale, Nugget nectar or VAS similar quality/taste beers and sell them at a great price and I'm in. Start the bashing but good beer is good beer. Based on my household buying 90-100 cases of beer a year saving even $3-4 a case is a lot of money if the beer is top quality.

There seems to be better ways to gain share in my view but I don't run a beer company so I don't know all the ins/outs. InBev feels like a company that has done business one way and wont change with the times. If they do change and move on to buying more good micros and brewing top quality IPA etc they have potential to be bigger than they are today or have ever been.

Enjoy

 

I just presumed this because every time my fav shops are waiting for a special release, we have to wait for clare rose to show-up. quantities of special releases seem to also depend upon how much bud the store manages to sell.

 

I know. I just meant in terms of big beer distribution practices. Wonder what constellation has in store for BP

 

Keep buying your BCBS...you're money is going to this type of 3-tier manipulation.

 

An unregulated free market corporatocracy is a beast which cannot be tamed.

 

According to the Brewbound article Constellation Brands to Borrow $400 Million for Ballast Point Transaction:

 

In some respect I am surprised we have not seen more buyouts. With money so cheap now and interest rates due to go up now is the time to buy.

 

It's nice to see all the Internet alcoholic beverage lawyers... I'm sure you know more about liquor laws than the lawyers at the biggest brewery on the planet

What I'm really curious about is, how well will this actually work? If a distributor also has a large craft portfolio, I suspect they would pull more cash from the sales of those products then they would by a bigger check, it also allows them to have a more diverse book of business.

I suspect that this will be a minor blip, the only distributors who would drop anybody are ones right on the edge of an incentive. If you would drop 20 brands, why bother?

 

Given "craft's" even larger market share today, probably even less successfully than the late '90s "100% Share of Mind" program under the Busch regime (mentioned in the OP, noted below), which pretty much just fizzled out - although it apparently did negatively affect some smaller, local breweries in some states. Two that were mentioned in the press at the time that were dropped by several AB houses were St. Stan's (Modesto, CA) and FMI (Flying Monkey) in Kansas.

OTOH, AB does have many more ex-craft brands to offer their distributors than they did back then, when it was pretty much just Widmer and Redhook. So, it might be appealing to some wholesalers with a relatively small "craft" portfolio in states with a less active craft market.

 

Except that he's completely correct.

 

Sheesh, I've worked in bottle shops. There's no preferential treatment to distributors. Customer demands rule, because that's where the income comes from, not distributors.

 

Respectfully, you're coming from a very insular, very small world. I've seen the opposite firsthand countless times. You wouldn't believe how little "the customer wants X" factors in for bars that are going to crush it either way.

 

Distributor here - this won't have a huge impact. If there is a wholesaler that is close to that 98% number, it means they weren't really picking up craft brands anyway. And if there is a wholesaler that isn't close to it, well, the loss in GP doesn't justify hitting that incentive. Stop looking for boogie men in the 'manipulation' of the third tier. AB does not have control over 93% of the distribution in the country. The independent wholesalers are actually becoming more and more independent; AB doesn't have the relationships at the distribution level to really make an impact, and they don't have a stick big enough to bully anyone. This isn't 20 years ago. Many of these owners see where the business is going and are adjusting accordingly.

This is reminiscent of the announcement 3 years ago when AB stood up at a meeting and said, "We expect everyone in this room to be 100% exclusive." And that has definitely killed craft access to mark...oh, what's that? AB distributors left that meeting saying "Screw you!" and starting picking up brands left and right? Which really expanded craft's reach and impact? If history is our guide this will freak a bunch of people out who aren't associated with the industry, but will nave a negligible impact in total.