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Battle between big beer and craft beer escalates

Discussion in 'Beer Talk' started by Doug6322, Mar 4, 2016.

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  1. Doug6322

    Doug6322 Initiate (0) Oct 30, 2013 Florida

    http://www.usatoday.com/story/money...n-big-beer-and-craft-beer-escalates/81071478/

    Just wanted to point out that those of you that bought BCBS this year have made the AB InBev CEO Carlos Brito happy.

    "AB InBev CEO Carlos Brito last week suggested that the company is far from done acquiring craft breweries. "The segment is growing, and it's profitable," he said during a conference call about the company's fourth-quarter earnings.

    While AB InBev saw a decline in profit for the year, its Goose Island craft beer brand grew 150%, Brito said. "It's showing that there are consumers out there that, yes, will consider a national craft," he said."
     
  2. ericwo

    ericwo Initiate (89) Aug 21, 2008 Pennsylvania
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  3. Leebo

    Leebo Initiate (0) Feb 7, 2013 Massachusetts

    The line gets increasingly blurred.
     
  4. KCUnited

    KCUnited Initiate (175) Nov 11, 2014 Illinois
    Trader

    Especially when you're all the way in the back.
     
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  5. MNAle

    MNAle Meyvn (1,110) Sep 6, 2011 Minnesota

    I've been pointing out for nearly as long as I've been participating here that the macro-owned "crafty" brands have been growing much faster than craft overall, but the prevailing view of many still seems to be that this is a "failed strategy" by the macro brewers. Clearly, it is not.
     
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  6. mikevanatta

    mikevanatta Initiate (0) Sep 29, 2014 Minnesota

    Me buying BCBS made me happy too.
     
  7. Groenebeor

    Groenebeor Initiate (0) Feb 14, 2009 California

    Until recently, didn't Blue Moon brand alone sell more than the total of craft beer combined?
     
  8. MNAle

    MNAle Meyvn (1,110) Sep 6, 2011 Minnesota

    I don't remember the exact numbers now, but it was something like that, IIRC. They were at least far and away the largest "craft" brand.
     
  9. DeweyCheatem-n-Howe

    DeweyCheatem-n-Howe Disciple (318) May 23, 2015 Massachusetts
    Trader

    I see complaints about A-B acting in a way that replicates what craft breweries do, and I wonder why it's so offensive? Craft has sprung up and flourished in large part because the big brewers left vacuums in the beer world - namely, beers that taste good, are varied in style, and carry love and creativity. If the big brewers are trying to do that now, don't we as consumers benefit?

    I mean, the people who hate on A-B for making nothing but watery macro lagers are the same people who hate on A-B for trying to make something else and get in on the craft beer phenomenon.
     
  10. Groenebeor

    Groenebeor Initiate (0) Feb 14, 2009 California

    That's missing the point.

    People hate on the big boys because they have the money, muscle, and lack of morals that made the previous situation happen in the first place.

    These companies still engage in anti-competitive behaviors that are appalling.

    Sure, some craft companies have tried to do the same thing. They usually don't last too long. The big boys really don't have to worry about retribution from a community like that, because that's not who makes them their money, yet, at least.
     
  11. DeweyCheatem-n-Howe

    DeweyCheatem-n-Howe Disciple (318) May 23, 2015 Massachusetts
    Trader

    That, though, is where my confusion lies. I read this article, and the "battle" between craft and macro seems to be in craft breweries purchasing (and growing) craft breweries and opening craft-beer-like establishments in highly craft-friendly cities. The anti-competitive behaviors are certainly appalling, but that seems to get less play - at least in this article - than the bigguns trying to be more crafty and buy more craft breweries.

    (On a side note... that has to be the most instances of the word 'craft' in a paragraph in history)
     
  12. Groenebeor

    Groenebeor Initiate (0) Feb 14, 2009 California

    They're upset because this is exactly what these same companies did after prohibition. I don't think it can have the same results again, however.

    If you're upset, just don't buy their beer. Not much else you can do.
     
    maxifunk777 likes this.
  13. ericwo

    ericwo Initiate (89) Aug 21, 2008 Pennsylvania
    Trader

    I think something Greg from Stone said sums this up perfectly:

    "Big Beer is able to capitalize on the purchased brand’s reputation, while many consumers are too distracted to pay attention or care."

    He hit it on the head, as is evidenced by the mad rush to gobble up all of the BCBS available.
     
  14. jesskidden

    jesskidden Meyvn (1,412) Aug 10, 2005 New Jersey

    Nope. Blue Moon today sells in the range of 2 million barrels a year - "craft" beer topped that figure back in 1989.
    [​IMG]

    Niether Anheuser-Busch or the two brewers that make up MillerCoors did much buying of competitors. AB bought the American Brewing Co. of Miami in the late 1950s, but the Fed made them sell both the brand (Regal) and the brewery. After that, they went on a tear building brand-new, efficient breweries. They picked up Schlitz's most modern brewery in NY state in the late 1970s right before they sold out to Stroh.

    Coors bought no one - until they ran out of capacity and bought an excess brewery, also built by Schlitz, in Memphis when Stroh started on it's long road to collapse.

    Miller picked up Meister Brau and Gettleman brands (does anyone think those brands helped them rise to #2?) and bought the Ft. Worth and now-closed Azuza breweries (from Carling and Lucky Lager) but it was Philip Morris' purchase of Miller that is the primary reason for that company's success.

    The brewers which tried to compete by buying dying brands and obsolete breweries all disappeared - Stroh, Heileman, Falstaff, Carling-National, International, Associated... and Pabst's survives only because they contract-brew at the efficient but excess capacity MC breweries.
     
    #14 jesskidden, Mar 4, 2016
    Last edited: Mar 4, 2016
  15. Groenebeor

    Groenebeor Initiate (0) Feb 14, 2009 California

    Weird, wonder why I heard that a few years back. Thanks for the info.
     
  16. DeweyCheatem-n-Howe

    DeweyCheatem-n-Howe Disciple (318) May 23, 2015 Massachusetts
    Trader

    True, but that's not sustainable unless they keep the purchased brand's quality. The infected (or not?) BCBCS and Barleywine could portend something with GI in the future, and if A-B doesn't get that stuff under control, the appeal of the purchased brand will be gone.
     
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  17. drtth

    drtth Poo-Bah (3,753) Nov 25, 2007 Pennsylvania

    Well its kind of like the idea that Bock beer is what you get in the spring when the tanks are cleaned. :-)

    Something a lot of folks repeat as if they knew what they were talking about, but without checking on the facts.
     
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  18. drtth

    drtth Poo-Bah (3,753) Nov 25, 2007 Pennsylvania

    Exactly. It takes a pretty stupid person (or a big tax loophole) to buy something that is making a profit and then deliberately lower its quality to the point that it starts losing money for the new owner. Somehow I don't see Brito as being stupid or ABInBev needing a tax write off. (Especially given the resources they've put into upgrading GI brewing capacity.)
     
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  19. IceAce

    IceAce Savant (905) Jan 8, 2004 California


    True, but Brewers pushing the envelope are going to run into issues on occasion. Goose Island had some bad Matilda five years ago when John Hall was still the owner.

    Heck, even The Bruery and Fantome have had occasional issues over the years.

    When wild yeast enters the equation, all bets are off.
     
  20. Purp1eOne

    Purp1eOne Devotee (454) Oct 23, 2010 Illinois

    If it tastes good I drink it.....
     
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  21. drtth

    drtth Poo-Bah (3,753) Nov 25, 2007 Pennsylvania

    The following year GI also had a problem with some batches of Sofie and did a recall.
     
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  22. MNAle

    MNAle Meyvn (1,110) Sep 6, 2011 Minnesota

    More like foggy memories than urban legends... Blue Moon was the fastest growing "craft" brand in 2012 or 2013 (maybe someone wants to look it up... I don't). Regardless, the idea that the "crafty" strategy by macro brewers is "a failure" is false.
     
  23. SLewis

    SLewis Aspirant (246) Jun 17, 2014 North Carolina

    AB-Inbev isn't evil. They make beer, I like beer. You might not like their business practices, but there will always be independent breweries you can support at the same time.
     
  24. JayWhitson

    JayWhitson Crusader (777) Feb 25, 2015 Montana
    Society Trader

    amen
     
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  25. Groenebeor

    Groenebeor Initiate (0) Feb 14, 2009 California

    I swear it was in some major beer documentary a number of years ago, too.
     
  26. drtth

    drtth Poo-Bah (3,753) Nov 25, 2007 Pennsylvania

    :slight_smile:

    That doesn't prevent it from having been based on reptition without fact checking. Lots of examples of that happening in documentaries and research papers, etc.
     
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  27. Groenebeor

    Groenebeor Initiate (0) Feb 14, 2009 California

    Indeed, I get so annoyed with people who think those "documentaries" on netflix are scientific fact and quote them like religion.
     
  28. WhatANicePub

    WhatANicePub Initiate (137) Jul 1, 2009 United Kingdom (Scotland)

    There isn’t a “battle” between “big beer” and “craft beer”. The idea that there is, is the marketing strategy chosen by certain industrial breweries, in order to differentiate themselves in the market from rather larger industrial breweries.
     
    Coronaeus likes this.
  29. Gaddabble

    Gaddabble Devotee (453) Mar 8, 2014 Ohio
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    Who is that and why do I care? Is he in the Yankees farm system or something, because then I would be pissed!
     
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  30. lordofthemark

    lordofthemark Aspirant (225) Jan 28, 2015 Virginia

    AB has significant excess capacity. By brewing GI flagship in their legacy AB breweries, they can brew them cheaply (compared to craft breweries that have to cover the cost of new capacity ). So the can give goid deals to bars, capture tap lines, and grow. Their are two limits to this strategy. A. There is only so much growth they can get from grabbing tap lines. B. Eventually they will succeed in filling their capacity (assuming they can stop the loss in sales in Bud and Bud Lite, successfully onshore imports, etc)
     
  31. IceAce

    IceAce Savant (905) Jan 8, 2004 California

    You are correct.

    Wild yeast can be a real bitch.
     
  32. HoppyBastard

    HoppyBastard Zealot (577) Sep 6, 2013 Nebraska

    Look, I'm going to settle the argument once and for all. If a company makes good beer I will buy it. Micro/Macro, the number of barrels produced, the advertising campaign, eliminating waste or reducing a carbon footprint? Truly, I don't care! If you make the best beer I will buy it. Nuff said? Obey beer!
     
  33. teromous

    teromous Poo-Bah (1,885) Mar 21, 2010 Virginia
    Trader

    Just an old reminder:

     
  34. drtth

    drtth Poo-Bah (3,753) Nov 25, 2007 Pennsylvania

    I read that article soon after it was first published, but then, after learning a few things, I took a closer look at that article and realized that the author was out to grind an axe, not to analyze business decisions by Brito and the ABInBev management.

    For example, I learned that insisting on whole grain rice was a very old management advertising or PR thing at AB which was costing them money and was not adding value to the product. Basically, so long as the quality of the rice is the same (which it is according to inside accounts) allowing broken grains in the rice eliminates an unnecessary cost and doesn't have an effect on the brewing or flavor of the beers (including on those craft beers and/or homebrewed beers that use such rice, broken grains and all).

    Similarly, if your business is beer what's the point of having assets such as Busch Gardens and/or Seaworld when there are other assets that more central to your operations and that more directly contribute to the success of your business. Maintaining your focus on your primary products is not inherently a bad idea.

    So I'd say that "reminder" tells us more about the author's biases than it does about Brito and/or his management team.
     
    #34 drtth, Mar 5, 2016
    Last edited: Mar 5, 2016
  35. tillmac62

    tillmac62 Poo-Bah (1,501) Oct 2, 2013 South Carolina
    Trader

    I do believe that there is a war, of sorts. Craft sales are eating into macro sales. There are only so many dollars spent for beer and any dollar a given company doesn't get is going to its competition. The macros want those dollars, so they devise strategies to get them...in house "craft" such as Blue Moon, mergers and acquisitions, capturing retail market space and "enticing" distributors to "focus" on their brands (translation drop the craft independents). The macros are fighting back and they are the 800 pound gorilla.
     
  36. jvgoor3786

    jvgoor3786 Poo-Bah (1,541) May 28, 2015 Arkansas
    Society Trader

    I bet the over 150,000 people employed by AB are glad they're successful and growing too. I doubt most of them are evil.
     
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  37. jesskidden

    jesskidden Meyvn (1,412) Aug 10, 2005 New Jersey

    That appears to be the worldwide employment figure of AB-InBev. Their wholly-owned US subsidiary, Anheuser-Busch, employeed 12,668 people according to their own statistics in 2012.

    That compares to the 115,000 jobs the Brewers Association credits to US "craft brewers" which have only 11% of the US beer market, compared to AB's 46.4%.
     
  38. MNAle

    MNAle Meyvn (1,110) Sep 6, 2011 Minnesota

    :grinning::grinning::grinning::grinning: Good luck with that!
     
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  39. Doug6322

    Doug6322 Initiate (0) Oct 30, 2013 Florida

    I will bet those same people did not get a raise when they were told they will brew three times as much BCBS last year as the year before.....and wasn't there an infection problem tis year?. Isn't the point of this entire site/forum to help keep everyone informed of what's going on in the beer community and encourage "support local"? I would not expect to see a bud light ad here. But yet so many people here have no problem helping AB by going above and beyond to support anything BCBS. I for one choose not to and I will side with Greg Koch (watch the video from the article and you wont want to buy another AB product again)
     
  40. MNAle

    MNAle Meyvn (1,110) Sep 6, 2011 Minnesota

    No, it iisn't.
     
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