News AB InBev's ZX Ventures Buys Minority Stake In RateBeer

Discussion in 'Beer News & Releases' started by Jason, Jun 3, 2017.

  1. Cfahooligan

    Cfahooligan Events Director (583) Mar 19, 2001 California
    Staff


    We have not been approached. It would take something like $100mil to come to the table and buy out our life's work. And no one is coming to the table with that kind of money. It isn't going to happen.
     
  2. MikeWard

    MikeWard Savant (995) Sep 14, 2011 Pennsylvania

    Wonder if ABI/Inbev will be paying close attention to how crappily their own beers are rated on Ratebeer? :rolling_eyes:
     
  3. JackHorzempa

    JackHorzempa Poo-Bah (2,790) Dec 15, 2005 Pennsylvania
    Supporter

    Do you have any insight on how much ABI (ZX Ventures) invested in Rate Beer and what percentage of ownership they have with this investment?

    It seems to be implied in your post that BA would not be willing to accept a minority investment. Am I understanding you properly in this regard?

    Cheers!
     
    mjwellman, HermitDan and drtth like this.
  4. Miles_in_beer_city

    Miles_in_beer_city Disciple (308) Jun 18, 2014 North Carolina
    Subscriber

    Sounds like the fox is buying shares in the hen house.
     
  5. drtth

    drtth Poo-Bah (2,959) Nov 25, 2007 Pennsylvania

    Thanks. Yeah, I actually did see that, but for me that doesn't necessarily mean the sale/purchase deal was finalized at that time. Here is why it seems ambiguous to me.

    During my professional life I have had more than one occasion to engage in consulting work. In at least one of those cases I spent just over a year working with a small company as a consultant. Somewhere in the neighborhood of a month or so after that consulting gig had ended I got a phone call from the CEO of that company offering me a permanent job. Had I decided to accept that offer the CEO could quite truthfully have said that we had been working together for several months and that I had been part of their expanded team for those months.

    Consequently I could imagine a deal in which there was a trial period in effect for one or both parties to test out the viability of a long term relationship before the decision to sell/buy was finalized.
     
    #45 drtth, Jun 3, 2017
    Last edited: Jun 3, 2017
  6. Sixpoint

    Sixpoint Meyvn (1,437) Jul 25, 2004 New York
    Supporter Subscriber Beer Trader

    Jack,

    Naturally, I do not have access to ABI's specific top-down strategic plan and anything I would say would be conjecture at best.

    But, if you read the tea leaves, you can definitely see a pattern forming with the type and speed of acquisitions that are taking place. No matter which era it was, it has always been about control.

    At one point in time, it was about controlling the means of distribution (i.e. the route to market).

    At another point in time, it was about controlling the logistical means of production and supply chain.

    Then it was about controlling the mass media.

    Now, there are efforts spread across all three, but also a nascent part, which is controlling the consumer-driven tech/data initiatives, and grassroots access to market.

    It is not unprecedented for a company to try to do this, but there needs to be fair disclosure for those viewing these sites as "objective" sources of consumer-driven data and reviews. This should be prominently displayed on the website page, and also in the "About Us" section to all visitors of the site.

    We still don't have an answer as to why this deal went down 9 months ago and we're first hearing about this now, from a press release issued late on a Friday afternoon in June.
     
    Ryty410, ovaltine, meefmoff and 20 others like this.
  7. JackHorzempa

    JackHorzempa Poo-Bah (2,790) Dec 15, 2005 Pennsylvania
    Supporter

    Shane,

    Thank you for sharing your thoughts here.

    I am not too familiar with the RateBeer website. A few BAs have posted their opinions that ABI investing in RateBeer is to acquire information (data). If RateBeer is similar to the BA website I would think this investment would be part of their Marketing & Sales effort (e.g., advertising). If I am surmising things properly here, I would expect that the RateBeer users will be seeing more 'messaging' in the future for beers like Goose Island, Elysian, Wicked Weed, the next craft brewery that ABI purchases,...

    I suppose they could also provide 'messaging' for ABI core beers (e.g., Bud/Bud Light) but I am uncertain whether this makes sense for a website like RateBeer.

    Cheers!
     
    Alexmc2 likes this.
  8. Sixpoint

    Sixpoint Meyvn (1,437) Jul 25, 2004 New York
    Supporter Subscriber Beer Trader

    Even if its just about acquiring the data, there still needs to be fair disclosure.

    Let's think of it this way: If Hilton or Marriott International bought booking.com, don't you think it would be necessary for booking.com to prominently display and disclose that their hotel-rating site is owned by massive hotel group?

    Or if cnet.com was owned by Apple or Microsoft, don't you think it would be important for the site to disclose that important piece of information?

    Its one thing if a company like that starts an actual site as an entrepreneurship, and creates the type of value and network from the ground up. But when you acquire an established consumer base and data system without disclosing the new ownership, the objectivity of the site is most definitely compromised.
     
    Ryty410, MrUse, WesMantooth and 18 others like this.
  9. JackHorzempa

    JackHorzempa Poo-Bah (2,790) Dec 15, 2005 Pennsylvania
    Supporter

    I agree 100% with your statement here (and the other statements you made).

    There is most definitely a conflict of interest situation here and proper disclosure should be made.

    I wonder if the RateBeer guy reads BA threads!?!:rolling_eyes:

    Cheers!
     
    ebin6 and Harrison8 like this.
  10. LuskusDelph

    LuskusDelph Aspirant (271) May 1, 2008 New Jersey

    It's only beer anyway.
     
  11. LuskusDelph

    LuskusDelph Aspirant (271) May 1, 2008 New Jersey

    Probably...though they likely know that RateBeerians (and other beer rating sites) are very un-objective about beer. If it's not a hop-bomb, and if the ABV is not over the top, it gets dissed.
    Besides, they will keep on making the kinds of beer that the vast majority of beer drinkers still favor.
     
  12. Reidrover

    Reidrover Poo-Bah (2,735) Jan 14, 2003 Oregon

    I frequent RB and to be honest i find this surprising. I think something like Untappd would have been a better fit for AB
     
    Sammy likes this.
  13. JackHorzempa

    JackHorzempa Poo-Bah (2,790) Dec 15, 2005 Pennsylvania
    Supporter

    Is there a lot of advertising on Untapped?

    Cheers!
     
  14. southdenverhoo

    southdenverhoo Disciple (334) Aug 13, 2004 Colorado

    I thought you were, um, just kiddin' until I clicked on the link. I don't visit there as often as I did back in the early 2000s but I always did look for erway reviews. I remember Oakes, and maybe Venom was there for awhile after he checked out of here. Also Jorys Patten on Belgians. But I almost never go over there anymore. Wonder how busy it even is?
     
  15. southdenverhoo

    southdenverhoo Disciple (334) Aug 13, 2004 Colorado

    That's the end of an era. Wow.
     
  16. Cfahooligan

    Cfahooligan Events Director (583) Mar 19, 2001 California
    Staff


    I don't know what they sold for. I guarantee it wasn't much. But give me a break nothing was implied except you reading too much into it. My post means we're not selling ever. No minority stakes no nothing. I made up an arbitrary number that's so patently absurd to make a lame joke. Perhaps I should have said eleventy billion dollars. We're not up for sale.
     
  17. JackHorzempa

    JackHorzempa Poo-Bah (2,790) Dec 15, 2005 Pennsylvania
    Supporter

    As a long term member of the BA community I truly hope that what you are stating is true here.

    I have read similar comments from folks like Tony McGee (and others) and when they stated those words I believed them... only to find out later those words were not true.

    Thank you for taking the time to reply to my query.

    Cheers!
     
  18. FBarber

    FBarber Poo-Bah (1,629) Mar 5, 2016 Illinois
    Supporter Subscriber Beer Trader

    So you're telling me there's a chance? :stuck_out_tongue:
     
  19. drtth

    drtth Poo-Bah (2,959) Nov 25, 2007 Pennsylvania

    An ambiguity (for me at least) resolved. As many believed from the write up in the OP, the deal was apparently done and closed in October. This article contains a lot of additional information both about the deal and ZX Ventures which is and has clearly been a wholly owned subsidiary of AB InBev and one which they created deliberately. It also appears from the article that ABInBev considers their main goal to be tackling the overall growth of Wine and Spirits that is seeb as being one of the major factors in the decline of overall beer consumption.

    @Sixpoint
     
    #59 drtth, Jun 3, 2017
    Last edited: Jun 3, 2017
  20. Gregwilsonstl

    Gregwilsonstl Initiate (29) Aug 11, 2015 Missouri
    Beer Trader

    Myspace sold for $580 Million in 2005. It sold again in 2011 for $35 Million, when only 40 million users went there daily. Who knows what ratebeer sold for, but there is a lot of value in a network of users. Twitter, Facebook, Instagram, Pinterest, blah, blah, blah......all these companies are worth more than anyone would have guessed. There's a lot of value in a network of people.

    I imagine ratebeer, beeradvocate, and untappd are all worth more than expected.

    Greg
     
    Ranbot and rgordon like this.
  21. Cfahooligan

    Cfahooligan Events Director (583) Mar 19, 2001 California
    Staff


    I am going to go out on a limb and say it wasn't as much as those. But who knows.
     
  22. Gregwilsonstl

    Gregwilsonstl Initiate (29) Aug 11, 2015 Missouri
    Beer Trader

    Im hardly saying it was that much. ratebeer has less users than the companies I mentioned (although myspace is a wildcard...it sold last year for $100 million'ish).

    My point is There's a lot of value in a network of people.

    I imagine ratebeer, beeradvocate, and untappd are all worth more than expected.
     
  23. rgordon

    rgordon Defender (685) Apr 26, 2012 North Carolina

    I'd sell my story "Dive Bars" for a fair price.
     
    ebin6 likes this.
  24. bbtkd

    bbtkd Meyvn (1,104) Sep 20, 2015 South Dakota
    Supporter Subscriber

    If this isn't their purpose in making this investment, then AB/InBev stockholders should question why they wasted money there. Of course this is at least one main reason for their investment. Glad I never signed up for their site.
     
  25. Gregwilsonstl

    Gregwilsonstl Initiate (29) Aug 11, 2015 Missouri
    Beer Trader

    Email addresses are easy to get. If I were in the business of buying breweries (like AB is) I would want ratebeer, untappd, or beeradvocate so I would have the data necessary to identify target acquisitions earlier, and thus less expensively. I wouldnt care about all the other stuff people are guessing at....e.g. ads, email address, data manipulation, etc. Let's say their interest is somewhere between 100k and $5M........all they need to do is use the data to save that amount one time for it to pay for itself.

    or, I would spend some money, improve the site, spend marketing money to acquire more users, and then sell to someone else for more money. This is what venture capitalists do.

    Greg
     
  26. nesarebad

    nesarebad Devotee (471) Feb 4, 2012 Pennsylvania
    Beer Trader

    I also think that this is another opportunity for Big Beer to muddy the waters of what is craft beer. It would therefore lead, hopefully, to a consumer base that just really doesn't care who owns who and what. Already see a lot of people take that route on Lagunitis, Ballast Point, Founders, and Goose Island.
     
    gothedistance and CNoj012 like this.
  27. rgordon

    rgordon Defender (685) Apr 26, 2012 North Carolina

    It is true that more good beer is available in America now than ever before. To me, this single notion proves that brewing in the USA is OK. Where we spend our dollars matters. I will likely always support Sierra Nevada, but who knows? This brewing juggernaut is down the road far enough to truly be unstoppable...In all honesty, our collective and shared concerns likely have little to do with beer at all.
     
    drtth likes this.
  28. bbtkd

    bbtkd Meyvn (1,104) Sep 20, 2015 South Dakota
    Supporter Subscriber

    Yup, Emails are easy to get but they'd be getting Email addresses and other info about craft beer drinkers, and the kinds of beers they prefer. This could be used for marketing to craft beer drinkers, either generally, or a targeted Email campaign telling them about AB/InBev beers they are likely to prefer.
     
    Sammy likes this.
  29. Hoppedelic

    Hoppedelic Initiate (98) Dec 6, 2010 California
    Beer Trader

    He probably got enough for him and his family to live happily ever after. He decided it was worth it to partner with a company that is dedicated to the destruction of craft beer.
     
    #69 Hoppedelic, Jun 4, 2017
    Last edited: Jun 4, 2017
    SJDinAudubon and red94tt like this.
  30. KindaFondaGoozah

    KindaFondaGoozah Aspirant (288) Jan 1, 2013 Wisconsin

    What's the cost of making one man independently wealthy in America these days? What's 49% of that, keeping his passion for the business in the equation?

    What's their benefit? Gaining the eyeballs of those they had lost long ago, potentially viewing ads for the "craft" portion of their portfolio.

    Buying a single soul is relatively cheap in the long run.
     
  31. poisoneddwarf

    poisoneddwarf Devotee (407) Mar 26, 2010 Idaho

    Hello all, I'm poisoneddwarf and I am a Ratebeer user (former?). Actually, I joined Beer Advocate back in 2010, not long after I joined Ratebeer, just to see which site I preferred. Although I chose Ratebeer back then, I hope you'll let me into your community. I don't typically associate with anything that has any ties to ABI, so this really bothers me. I had many good years on that site, and I hate for them to end. But I hate that company with a passion. So it's possible I'll be coming here to rate and review from now on. Don't know if I'll be transferring all my reviews over here yet or if I'm completely abandoning Ratebeer or not. I'm still willing to see how things shake out over there, but like others have said, it leaves a bad taste in my mouth contributing to a site with ties to ABI, so I'm not optimistic.
     
  32. Hoppedelic

    Hoppedelic Initiate (98) Dec 6, 2010 California
    Beer Trader

    A few million and you're wealthy, hit 25 mil you're rich.
     
  33. drtth

    drtth Poo-Bah (2,959) Nov 25, 2007 Pennsylvania

    A couple of suggestions for additional strategic Tea leaves to consider.

    Look at the website for ZX Ventures and assume that its stated purpose and the reasons given for its creation are the complete truth, even if they may not include all of the truth. (Given the type of people they want to attract as employees, how many would stay on after discovering they had been lied to?) Now ask yourself why would a large company such as ABInBev create such a small unit that basically functions without external control? (I.e., Why would Lockheed have created their Skunkworks unit which has now existed for roughly 70 years?)

    Further, consider at least one big advantage in the marketplace that small businesses, e.g., Sixpoint Brewing, may have over large businesses, e.g., ABInBev. It is often called "nimbleness" or "flexibility." As a specific example, think about how long and how many resources and much work it took you and your crew at Sixpoint to reformulate Bengali Tiger and get it's improved version, Bengali, into the marketplace. If ABInBev had had a beer as popular with their existing customer base, how long and how many resources would it have taken them to make the same type of transition. (I.e., a speed boat at full speed can make a full right turn much more quickly and with greater nimbleness, than can a fully loaded large oil tanker at full speed.)
     
  34. Sammy

    Sammy Poo-Bah (11,564) Dec 1, 2003 Ontario (Canada)

    busy in Europe - they love it there
     
  35. Sixpoint

    Sixpoint Meyvn (1,437) Jul 25, 2004 New York
    Supporter Subscriber Beer Trader

    Thanks for the additional tea leaves - your insight is always appreciated. I have some for you as well, just playing devil's advocate:

    "Look at the website for ZX Ventures and assume that its stated purpose and the reasons given for its creation are the complete truth, even if they may not include all of the truth."

    Very hard to come to truthful conclusions when the assumptions are already incorrect. :-)

    "(Given the type of people they want to attract as employees, how many would stay on after discovering they had been lied to?)"

    There are always people who will work for a company simply for the large, steady paycheck. Especially if they are up to their eyeballs in debt, like most college graduates these days.

    "Now ask yourself why would a large company such as ABInBev create such a small unit that basically functions without external control?"

    This "small unit" is better capitalized than 99% of all breweries in this country. No need to control it externally because the profits and intellectual property are controlled, under ironclad contract.
     
  36. Bitterbill

    Bitterbill Poo-Bah (4,933) Sep 14, 2002 Wyoming
    Supporter Subscriber Beer Trader

    Reviews>ratings.
     
    TheDoctor likes this.
  37. drtth

    drtth Poo-Bah (2,959) Nov 25, 2007 Pennsylvania

    Lots to think about here, but let me deal with the Devil's Advocate list.

    Yes, we should always be engaged in a continuous re-thinking of our assumptions. But part of what we want to suspend in this case is the assumption of incorrectness at ZK. Consider the possibility that those assumptions and stated goals are in fact correct. Where does that assumption lead?

    Yes there are always people who are only motivated by money and a steady paycheck, but if we assume that is the case for ZK, should we not assume also that is the case for Sixpoint Brewing? Do you, in all honesty, recruit and then offer a job, any job, to an unqualified recent college graduate with no relevant experience who is only interested in the money. (My assumption here is that your currently open Internship position carries with it no guarantee of promotion and continued employment regardless of performance.) In neither Corporate situation are the job descriptions written for people who's only qualification is they want to have a steady paycheck and/or whose only motivation is to earn a steady dollar. Similarly, based on job desciptions on their web site would the Lockheed Skunkworks be looking to hire inexperienced engineers, especially when they have a queue full of applicants with demonstrated experience.

    The ownership of intellectual property and the disposal of net profit isn't particularly relevant one way or the other. The same is true for the Lockheed Skunk works and for many people working in both corporations and Universities. The fact that a University or any other organization may own a patent and profits derived from an intellectual product doesn't deter people from working there because of their passion for what they do. For example, 3M owns the intellectual property and income derived from both Masking Tape (R) and Post-it-Notes (R) but that didn't change people's willingness to make a creative contribution. (In fact it to the developer of the Post -its almost two years to convince management that they had a potentially viable product.)
     
  38. drtth

    drtth Poo-Bah (2,959) Nov 25, 2007 Pennsylvania

    :-)

    Which is exactly why I continue to be an active user of this site.

    But an interesting thing about ratings only is that when combined with other sources of information they can be skillfully massaged by trained statisticians to yield useful information for making marketing decisions.
     
  39. Harrison8

    Harrison8 Meyvn (1,425) Dec 6, 2015 Missouri
    Beer Trader

    Not much advertising surprisingly, but there is room for expansion.

    UnTappd gives me a place recommendation after every other check-in (although, I stopped using it, because I found the app tacky). They could place an ad as your upload is occurring, as occurs with most free highly-rated app games, or place an ad on the feed screen similar to Facebook.
     
    JackHorzempa likes this.
  40. Bitterbill

    Bitterbill Poo-Bah (4,933) Sep 14, 2002 Wyoming
    Supporter Subscriber Beer Trader

    Seems like they didn't want to take on the extra workload that Untappd would present them. But who knows, maybe they approached Untappd and got a hell no from them. :wink:
     
    drtth likes this.
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