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News "How everything changed for a craft beer brewer after it sold itself to MillerCoors"

Discussion in 'Beer News & Releases' started by zid, Aug 15, 2017.

  1. zid

    zid Champion (837) Feb 15, 2010 New York
    Beer Trader

    Premo88, beertunes, wspscott and 6 others like this.
  2. drtth

    drtth Poo-Bah (3,196) Nov 25, 2007 Pennsylvania

    Very interesting article both for what it says was happening and for the things that seem not to have happened.

    Was also very useful to get a snapshot of the effects state laws can have. They almost look like more of a threat to success than the competition with other breweries, both small and large.y
  3. jesskidden

    jesskidden Meyvn (1,278) Aug 10, 2005 New Jersey

    :thinking_face: Ignoring that he's probably talking about a "½ barrel" when he says "keg" and 15.5 gallons = 124 pints, but how does he wind up with fewer of these less-than-16-oz "pints" with foam than without?

    Typo? Reporter error/misunderstanding?
  4. bbtkd

    bbtkd Meyvn (1,475) Sep 20, 2015 South Dakota
    Supporter Subscriber

    Based on this article, MolsonCoors doesn't seem to have the BBEI (Big Beer Evil Index) that I thought. With AB/InBev a baseline 666, I originally figured MolsonCoors was 400ish, but this article paints a craft-friendlier situation. This seems non-predatory compared to AB/InBev, like they really want to get into and help craft. I'm now thinking their BBEI is 257. What say the rest of you - does this smack of big beer evil?
  5. drtth

    drtth Poo-Bah (3,196) Nov 25, 2007 Pennsylvania

    Food for thought.

    There is a similar article written a few years after the ABInBev acquisition of GI. The accounts of changes given at that time are very similar to those described in this article. (Except for the bits about the impacts of state laws on their business model.)


    Here, for another example, is an Interview with a long time key employee at Goose Island.

    Haybeerman, HoppingMadMonk and bbtkd like this.
  6. RC51Mike

    RC51Mike Initiate (166) Dec 17, 2004 Rhode Island

    I'm far from an expert but, I think there are a number of reasons for foamy beer dispensed from kegs (pressure, regulator, temp, etc.) that result in bartenders pouring off all of it to fill a glass. Hence fewer pints per keg. Might have read something like that elsewhere.

    I've seen way too many bartenders pouring off perfectly good heads like it was poison in order to fill it to the brim. I thank cheap oafish macro drinkers for that phenomenon.
    HoppingMadMonk and Lucular like this.
  7. jesskidden

    jesskidden Meyvn (1,278) Aug 10, 2005 New Jersey

    Yeah, I had considered that - although most would phrase that not as "140 (pints) with foam" but rather use terminology like "spillage", "waste" or maybe even "...pints minus foam", etc.

    For example, taken from an AB draught beer calculator:
  8. JackHorzempa

    JackHorzempa Poo-Bah (3,016) Dec 15, 2005 Pennsylvania

    I took note of:

    “If I was opening a brewery right now, I don’t know if I would build a brewery that would brew 150,000 to 200,000 barrels or maybe put a 5,000- to 6,000-barrel brewery in Athens, then put one in Atlanta, then put one in Nashville, then one in Florida. Where the laws are friendly to sell beer out of your taproom, I might want to look at something like that. I think it’s a better strategy because everyone’s so caught up with local beer, so how do you become relevant in a state where you’re not local?”

    I think this pretty much summarizes the contemporary craft beer market: small, local breweries.

    Brolo75, Bitterbill and BottleCaps80 like this.
  9. EvenMoreJesus

    EvenMoreJesus Devotee (437) Jun 8, 2017 Pennsylvania

    "Most importantly, though, it gained increased access to MillerCoors’ distributors and, as a result, has more space and better positioning in grocery store and big beer store chains."

    This bit is DEFINITELY evil. What do you think @bbtkd?
    beertunes, Hayden34 and RC51Mike like this.
  10. Giantspace

    Giantspace Defender (632) Dec 22, 2011 Pennsylvania

    3.75oz lost to head. Another reason I no longer buy beer out. That "pint" is not 16oz to start and then add head and you are paying $6-8 for a 10oz beer. I use 19oz Nonics in my home and it's pretty easy to tell when a bar serves well under a pint and calls it a pint. A shaker pint is not a pint either.

    I really wish there would be law saying all beer glass must be marked with size. It would fuck all the bars though so it will never pass. I used to think about calling weights and measures when the beer was way off stated size.

  11. EvenMoreJesus

    EvenMoreJesus Devotee (437) Jun 8, 2017 Pennsylvania

    They definitely should be something like the line they have on most glassware in the UK and Germany that indicates volume. Fuck short pours.
    Redrover likes this.
  12. Haybeerman

    Haybeerman Poo-Bah (2,236) May 21, 2008 Colorado
    Supporter Subscriber Beer Trader

    That's the dichotomy of the whole thing. On one hand you have a brewer like Terrapin that can get more exposure for non-independent craft beer (excuse the new term) and reach more consumers with non-independent craft beer. On the other hand, there is only so much shelf space and a finite number of suppliers/brands that the distributor represents that it will likely limit distribution of the some of the independent craft suppliers/brands.
    rronin and EvenMoreJesus like this.

    DISKORD Initiate (49) Feb 28, 2017 South Carolina

    Is there anything you DON'T know about beer? Your knowledge is incredible. And you always have an article for anything to do with beer? Are you in the industry? You're like a beer historian/professor!
    Bitterbill likes this.
  14. bbtkd

    bbtkd Meyvn (1,475) Sep 20, 2015 South Dakota
    Supporter Subscriber

    The question is what MolsonCoors did to earn that space. Did they earn it purely on sales volume or did they pay for additional space to gain unfair advantage over their competitors?
  15. Haybeerman

    Haybeerman Poo-Bah (2,236) May 21, 2008 Colorado
    Supporter Subscriber Beer Trader

    Define "pay". Not legal to pay money for shelf space. Though dollar margin is lower, velocity of most of their brands is 5 to 50 times higher....that and the shelves holding power determine the amount of shelf space. Facts are unfriendly to her conspiracy theorists (sorry, someone had to say it).
    EvenMoreJesus and bbtkd like this.
  16. Bitterbill

    Bitterbill Poo-Bah (5,176) Sep 14, 2002 Wyoming
    Supporter Beer Trader

    He's like the grandest of grand poobahs. Happy to say that I have "known" S since the late 90s on alt.beer. :slight_smile:
    Ranbot, hopsputin, vurt and 2 others like this.
  17. JackHorzempa

    JackHorzempa Poo-Bah (3,016) Dec 15, 2005 Pennsylvania

    The original "alt" group!?!:wink:

    fehrminator and Bitterbill like this.
  18. Bitterbill

    Bitterbill Poo-Bah (5,176) Sep 14, 2002 Wyoming
    Supporter Beer Trader

    Yep. On my 4G computer with dial-up. Thing cost me mucho dollars. Lol.
    dcotom and JackHorzempa like this.
  19. drtth

    drtth Poo-Bah (3,196) Nov 25, 2007 Pennsylvania

    4G or 4M? Or is 4G some sort of brand name?
    Bitterbill likes this.
  20. Bitterbill

    Bitterbill Poo-Bah (5,176) Sep 14, 2002 Wyoming
    Supporter Beer Trader

    4 gig hard drive.
    JackHorzempa and drtth like this.
  21. GrumpyGas

    GrumpyGas Champion (874) Apr 7, 2009 Illinois

    He is not necessarily counting the number of pints that are in a keg, but rather counting the number of pints that can be sold from a keg. Because he never sold out of the taproom before the new laws, he was never concerned with what he could make from pint sales. Now he is taking pour loss into account to compare how a brewer could now be flush with cash he never had access to until now.
    That's how I read it anyway.
  22. djtothemoney

    djtothemoney Aspirant (207) Nov 30, 2015 Ohio
    Beer Trader

    What I would like most is if I could get something in Ohio from Terrapin instead of Hopsecutioner and Hi-5.
  23. Haybeerman

    Haybeerman Poo-Bah (2,236) May 21, 2008 Colorado
    Supporter Subscriber Beer Trader

    Since Molson Coors is headquartered here in Denver, I'm kinda hoping they come to their home town first :stuck_out_tongue:
  24. Roadkizzle

    Roadkizzle Initiate (198) Nov 6, 2007 Texas
    Beer Trader

    I will say that just because something is not legal doesn't mean that people don't do it. People (and companies) do illegal things all the time if they think they can get away with it and/or if the benefits outweigh the penalties.

    In this case it has been very difficult to actually get proof of wrongdoings because both the recipient and perpetuator benefit from the wrongdoings. It would be up to a third party to figure out what was happening and bring it to authorities attention. That can be difficult especially to get hard proof of wrongdoings, especially if the benefits are not in straight cash but other presents or incentives.

    Then IF the illegal act is caught what are the penalties? Would the brewery corporation have to pay a few hundred thousand dollars in fines? But what if they gain millions of dollars from ensuring their products get preferential treatment?
    Oktoberfiesta and Haybeerman like this.
  25. Haybeerman

    Haybeerman Poo-Bah (2,236) May 21, 2008 Colorado
    Supporter Subscriber Beer Trader

    There will always be laws that are broken - its more an exception than a general practice (see some examples below). I know this will come as a shock, but craft brewers and craft distributors break laws too (don't have to be big to do something stupid).

    Allagash and Craft Brewers Guild pay to play fined $2.6MM and license suspention:

    AB fined $400K for retailer subsidies in CA:

    AB InBev does have a leg up on a global scale having also been fined $6MM for bribing government officials in India
    EvenMoreJesus and drtth like this.
  26. NeroFiddled

    NeroFiddled Poo-Bah (8,876) Jul 8, 2002 Pennsylvania
    Beer Trader

    So I looked at this before, and specifically @jesskidden 's math and it was clearly just a mis-speak on the part of Brian Buckowski (he obviously meant 140 pints with foaming losses - not foam in the glass) so I just let it go.

    But just now it's dawned on me, he's not even talking about proper pints, he's talking about American "pints", those that deliver about 12 to 13 ounces per serving, and that sucks. When will we actually get the true pints that we're offered and sold?

    Ha ha, I know the answer - that'll happen when we finally get a law enacted and then the price goes up even higher to cover the losses of the clueless bartenders.
    #26 NeroFiddled, Aug 17, 2017
    Last edited: Aug 17, 2017
    VABA and FatBoyGotSwagger like this.
  27. DonicBoom

    DonicBoom Initiate (132) Mar 26, 2015 Virginia

    You're right that it can be difficult. On the other hand, proving a negative is usually impossible.
  28. Jonc

    Jonc Initiate (150) Feb 12, 2007 Missouri
    Subscriber Beer Trader

    Talk with your money?
  29. southdenverhoo

    southdenverhoo Disciple (349) Aug 13, 2004 Colorado

    this was a marketing tool to get bottle accounts to put draft beer on, I suspect. I've seen similar charts from distributors. 124 is sort of a "platonic Ideal."

    I think most people in on-premise situations feel pretty comfortable getting 110 pints, with 1" head, out of a half barrel keg, and that's with an excellently balanced system. i.e., losing around 10%. It can be under 100 on even slightly out-of balance, long draw system.
  30. Miles_in_beer_city

    Miles_in_beer_city Disciple (310) Jun 18, 2014 North Carolina

    Which pushes a smaller brewery's product off the shelf. The same is true when vying for tap lines in bars, taprooms, and restaurants.

    Everything you see in a grocery store from canned goods, cereal, bread, there is a behind the scenes war for shelf space. Beer is no different.
  31. drtth

    drtth Poo-Bah (3,196) Nov 25, 2007 Pennsylvania

    Modest correction, in the craft example, only the Distributor fined. Neither Allagash, nor any other brewer fined.
    donspublic likes this.
  32. Premo88

    Premo88 Meyvn (1,442) Jun 6, 2010 Texas

    Hahahahahaha ... I thought about the same when Revolver sold out to MillerCoors a couple years ago, probably because I was really in love with Blood & Honey at the time. :wink::stuck_out_tongue:

    Lots going on in this story as others are pointing out. The thing that hits home for me in a good way is taprooms (and taproom laws) ... thank the beer gods we got our taprooms here in Texas! My busy season at work is beginning, but I'm determined to find a way to visit a couple three taprooms over the busy stretch.
    VABA and bbtkd like this.
  33. Haybeerman

    Haybeerman Poo-Bah (2,236) May 21, 2008 Colorado
    Supporter Subscriber Beer Trader

    Right, I'm sure they had no idea, though benefited, from what was being done with their brands. :rolling_eyes:
  34. Haybeerman

    Haybeerman Poo-Bah (2,236) May 21, 2008 Colorado
    Supporter Subscriber Beer Trader

  35. drtth

    drtth Poo-Bah (3,196) Nov 25, 2007 Pennsylvania

    Hard to know at this distance. Some may.

    But Allagash has been around long enough and is widely enough distributed and sold that they might have been used by the distributor as part of their leverage packages rather than a player who benefited knowingly. Plus when I met him Rob Todd didn't strike me as the type who would knowingly seek out such favoritism.
    Haybeerman likes this.
  36. Haybeerman

    Haybeerman Poo-Bah (2,236) May 21, 2008 Colorado
    Supporter Subscriber Beer Trader

    That is good and refreshing to hear. I believe most are like Rob Todd.
    drtth likes this.
  37. drtth

    drtth Poo-Bah (3,196) Nov 25, 2007 Pennsylvania

    #37 drtth, Aug 19, 2017
    Last edited: Aug 19, 2017
  38. drtth

    drtth Poo-Bah (3,196) Nov 25, 2007 Pennsylvania

    Which is why I offered my correction to the way you introduced the link--no breweries were fined. The real law breaker was the craft beer distributor. (Which is what I took to be your main point, having made that point myself in earlier threads, i.e. That much of the problem originates at the distributor level. )
    Haybeerman likes this.
  39. Haybeerman

    Haybeerman Poo-Bah (2,236) May 21, 2008 Colorado
    Supporter Subscriber Beer Trader

    More common to just see craft brewers cited versus fined; ALE in North Carolina as an example. They are more interested in compliance to get craft brewers following regulations. They don't want to hurt the industry. While it may seem unfair to some, I like that approach. Some may cry "foul", but I think the big brewers should know better and own driving compliance in their (much larger) organizations.
  40. drtth

    drtth Poo-Bah (3,196) Nov 25, 2007 Pennsylvania

    Yeah, but notice how easily distorted things can be come when the reports make a mistake. :slight_smile:

    I'd say that for the big brewers the problem is a bit more complex than for the small in that most all of their business is done through independently owned distributorships and it's a bit hard to establish any direct control over someone else's business and their business decisions. Small brewers who self distribute are more easily targeted if necessary. But once a contract is signed, very few, if any, breweries have a lot of control over the actions of the distributorship. The major exception I can think of is Russian River, whose products are in such high continuous demand that they can either directly pull (in areas where they self-distribute) or get their distributors to pull accounts back from retailers who don't go along with the request that certain of the RR beers be refrigerated at all times.
    #40 drtth, Aug 19, 2017
    Last edited: Aug 19, 2017
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