Poll: Would you sell out?

If I had a nickel for every time I've heard that.........most people want to believe that utopian nonsense. Principles only exist for so long before a certain number of 0's changes their tune. Money may not be everything in life, but having plenty of it sure makes living easier. If you are saying you'd rather be poor and have your principles than financially set for what might be the rest of your life, I've got ocean front property in Kansas to sell.

 

You would actually be surprised at the passion at far end of the disribution curve. I've seen some programmers keep sleeping bags under the desks --- and use them. How many brewers sleep all night nested up alongside a fermentation tank? Not to mention the game coders who are considered extreme even by the hard core!

 

And yet again, anyone who suggests that not everyone would choose to sell their life's work to a multi national conglomerate is speaking "nonsense".

I would counter that you are allowing a number of unexamined cultural assumptions to color your view of what all humans would do. There is nothing "utopian" about saying that once you already have a yacht you don't necessarily need to have all the decisions in your life revolve around the acquisition of a second.

And as to your last line, you are clearly so blinded and ignorant about the topic you are discussing that you couldn't even be bothered to read my actual post. You are the poster child for exactly the point of view I'm arguing against in this thread. Congratulations.

 

I have to be honest with myself.

I voted yes with an understanding that things won't be the same anymore, and I would be okay with that. Unlike some brewery owners/brewers posting in other threads acting like nothing has changed. I may lose some friends. As the saying goes, you cant have your cake, and eat it too. You have to be okay with the fact that you are considered a douche bag by a vast majority of your former friends

 

Ooohhhh, I clearly triggered you. Calling someone ignorant on the internet. Well done, *********.

P.S. I did read your post, it was absolute utopian nonsense.

 

Just curious, how many buyouts are for "well above market value?" Presumably AB InBev takes the expected future earnings of the company into account when it comes up with its valuation of $X. So, if you give up the company, you're giving up a future stream of money fairly greater than $X, but equal to $X in now money.

Now, ABI is also pricing in its efficiencies and extra sales that the brewer doesn't have, so it's likely that you actually only could realize a percentage of the "now" $X. If this percentage is high, it becomes harder to not sell (financially speaking). And of course, you are escaping the risk that the assumptions that led to $X are untrue (though on both the positive and negative sides).

My point? The boon to the seller financially is not $X or nothing. It's $X vs some unknown percentage of $X - from 0 to over 100% (but most likely a much smaller range less than but nearer 100%), with an aspect of a bird in the hand vs two in the bush. It seems most like a bird in the hand - which is understandable.

 

Another thing the big guys have that the smaller breweries don't necessarily have are the distribution channels, that can cost a lot of money to get initially. It's big battle here in Texas, and one thing that I believe tips the scale for smaller breweries as recently as Revolver and Karbach to "sell out."

 

I'd say your PA difficulties were associated with the rural nature you describe and what the beer consumers there are drinking, etc. Someone once, in the context of politics, once described PA as being Pittsburgh and Philadelphia with Alabama in the middle.

But back to what I tried to say earlier. Sure the fate of the Big Kids is a national consideration for them and they are quite aware of what goes on in each state. But when it comes to alcohol laws the United States is basically 52 different legal entities with laws of their own that may very widely from each other. So in many cases the Big Kids are not allowed to have any direct control over the actions of the independent distributors. They may make make requests, encourage certain behaviors, provide certain incentives, etc. but they do not control those distributors. It is not unheard of for an AB or a MillerCoors affliated distributor to also have contracts with multiple craft brewers and to also distribute their beers as well. Indeed some AB reward initiatives to try discourage that behavior were mostly big flops since many of the distributors of AB beers saw more profit in continuing to represent craft brewers than in restricting their line up to only AB brands and then collecting on whatever had been offered under the incentive program.

This is why I suggeted that the actions of the special interest groups representing distributors in either PA and in TX are more likely to be those distributors lobbying in their own self interest. Similarly, for several years bar owners successfully lobbied against any change in our case law that would have allowed certain beer retailers to sell beer by the bottle and six pack rather than by the case only. They wanted to be sure that only bars could do that. They kept winning that battle until fairly recently.

 

@cjgiant
I know when Ballast Point was looking into an IPO, they released a large SEC pdf file with quite a bit of financial information. I want to say BP got decades of profit up front. The one thing Big Beer sells is the uncertainty and highly competitive nature that the future holds. "Why struggle when you have sell out? We can make it hell for you to sell in certain markets. So why not just give up?"

BP was seeing double digit growth year after year. I wonder if that has stopped or slowed. Valuations are highly inflated but what isn't anymore.

 

Sure, but that goes into the evaluation, and ABI is only going to pay you pennies on the dime for its efficiencies that's where it is making money on the deal. It just needs to offer more than anyone else would who could give the brewery tha distribution. Of course, understanding and countering that, you could threaten to not sell until you squeeze them out of some of that efficiency. Then again, if there's enough 0s, you might jump right away - lest the deal fall through.

 

Very true.

 

I think you are agreeing with me, sorta. But isn't the scenario you painted odd: accept our money or we may make you regret it?

Not saying it works this way, just the simple scenario you used evoked this thought.

 

@Oktoberfiesta

I'm also not sure I understand how a company almost entirely involved in importing Mexican beers into the US could make any threat to a successful US brewer that would evoke enough fear to sell their business. I can understand being attracted by a large pile of cash. But fear of not accepting such an offer just doesn't add up. I'm confused.

 

I can't even begin to tell you how utterly sure I was that you were a "*********" sort of person. Sad.

Keep fighting the good fight tough guy.

 

Bwahahahahahahaha.....ROTFL!

 

Numerous potential "NO" votes, not yet cast waiting for poll question to be changed to
"WOULD OR DID YOU SELL OUT?"

Multiple generations of:

• Yuengling
• Schell/Marti
• Straub
• Matt
• Molson*
• Coors*

* "Well, yeah, we merged but didn't "sell out"-
family members are still among the company officials. "

 

So looking at the poll results and it's now over 3:1 in favor/sympathy of selling out. I read that breweries which sell out don't really mind the fanbase backlash because as many people might boycott them and trash them online, it's more than made up for by the number of customers they gain who don't give a crap about ownership or monopolies, and even among a website full of ardent beer snobs (I say affectionately), this certainly seems to be the case.

 

Of course I would sell out for a large sum. However, if the passion was still there I would probably use a portion of that large sum and start up a new scaled down brewery and do whatever I want with no huge concern with profit margins.

 

Jeez it's just a simple question.....
So not just yes...HELL yes...show me the money.

 

It'd be very difficult to turn down $500+ million dollars. I'd venture to say most sane people would take that money.

HOWEVER, there are a lot of factors here. The biggest one being how successful is my business already?

Am I already making really great money and able to expand on my own without the need for a buyout? Do I no longer want to be my own boss? A lot of these guys who sell their brewery will say" We're still in charge" but the reality is, you aren't. You are no longer your own boss.

If I did sell out, I would (after the contract ran out) invest some of that money in to other small craft brewery's or even start a new one myself again. Maybe create a craft distribution network to fight against ABInbev with other small brewery's.