Colorado Craft Beer Sign

Here Comes the AB InBev Dog and Pony Show

Throughout the last month, AB InBev’s team of craft brewery reps for High End (their craft beer division) have been traveling around drumming up support in the Denver craft beer community. By reps, I mean the one-time-owners of three craft breweries, 10 Barrel, Golden Road and Breckenridge Brewing. These breweries were bought by AB InBev in its ongoing quest for world beer domination.

They were recently interviewed for an article in Westward and one thing is clear, they are pissed off about how they are being perceived and aren’t afraid to talk about it.

Westward’s article says, “Usry, Wales and Gill are tired of hearing about that shit. And they’re angry — angry at liquor stores, guilds, distributors, consumers, the media, other breweries and anyone else who thinks that they sold out, that they make bad beer or that they still don’t belong in the craft community.”

The benefits of selling to AB InBev are clear. The three craft breweries say that after joining the macro-brewery they have access to more resources, more equipment, and more distribution channels. Furthermore, a lot of their day-to-day headaches have been relieved. But from this article, they came off as whiny more than defiant. They are talking about the huge benefits of joining up with a beer giant and in the same breath complaining that they aren’t welcome in the craft beer community.

Three things stuck out when reading this article…

1. They feel that craft breweries are using them as “a punching bag to make themselves seem less petty.”

This was a quote that referenced how breweries are usually kicked out of craft brewers guilds once they are no longer technically a craft brewery. This is due to pesky rules in guilds about not being owned (more than 25%) by a non-craft brewer. In Breckenridge’s situation, they helped create the Colorado Brewers Guild and still hold a seat on the board. This pissed off 14 Colorado craft breweries enough that earlier this summer they broke off from the Colorado Brewers Guild and formed their own group called, Craft Beer Colorado.

But why should a macro beer have a voice in a guild designed to help the little guys get their beers out among the masses of beers? One of the reasons why guilds are set up is so that craft breweries have a legislative voice. When you are a multi-billion dollar company like AB InBev, you already have a voice, whether you pay top dollar for those voices in terms of lobbyists or it’s the fact that you will soon control 1/3 of the world’s beer once the SAB Miller/AB InBev merger goes through.

2. “Some breweries have used the AB InBev purchases — and the possibility that AB distributors will force out other craft brewers — as a way to get ‘free publicity’ and to work the consensus among craft-beer drinkers “in favor of themselves,”

This one hit close to home because we have written a lot of blogs on this topic. This is not about free publicity for us. We truly want craft beer drinkers to understand what is happening in the industry and allow them to make informed choices as to which breweries they support. None of it is personal against the brewers or employees in these bought-out breweries. The beer is still delicious and the workers are still working hard to produce a great product.

But the fact remains, their parent company is actively trying to make it harder for consumers to have a variety of choice when they go to grab a beer at their favorite bar. Every single craft brewery that AB InBev buys becomes their ammunition in this fight. Now, when their distributors go to bars and offer up their beers they can say they have 8 legit craft breweries in their stable, and those kegs will cost less to buy than other craft beers (the boon to being a billion dollar company is that you can charge less for your product).

3. “Basically, what happened is that they took their ball and went home. Whatever happened to competition?”

This quote really shows how out of touch these three are. Whatever happened to competition? Using their own analogy, that’s akin to wondering why a freshman basketball player would feel that it’s not fair competition to go up against LeBron James in a game. When it’s not a fair playing field, then yes, they will take their ball home (or move to a different court, as Craft Beer Colorado did). Once a brewery sells to AB InBev they need to realize that their parent company has different goals than many other craft breweries. It’s true that we all want to get our product out on the market for consumers and sell more beer. But AB InBev’s goals involve actively trying to squash the competition though both legal and illegal means (which we have talked about in previous blogs…). Who wants to play with cheaters?

In the end, no one is going to stop AB InBev or MillerCoors’ march into craft beer territory. We can only keep making great beer and also make sure people know about what’s going on behind the scenes and why knowing who owns your favorite beer matters.

 

 


The Purge: More Ballast Point Execs Flee

The West Coaster recently broke the news that Yuseff Cherney, Ballast Point’s COO/Head Brewer/Co-founding Distiller has left the Billion Dollar Brewery. This exit is on the heels of exits of Ballast’s President and CEO, Jim Buechler, its CCO, Earl Kight and general counsel, Julie Buechler. Stepping in to the CEO roll will be Constellation big-wig (and former President), Marty Birkel.

Nothing has been said about the reasons why this group of Ballast Point execs are leaving other than personalposts on FB pages. Though it does make you wonder what the plan is for Constellation Brand’s Ballast Point. When they bought Ballast last year for the headline-making sum of $1 Billion, they insisted that things wouldn’t change. They said that the same people who had been leading and making decisions for Ballast Point would continue to do so. Well, Constellation’s spokesperson, Michael McGrew pretty much said the same thing again this past week.

“Consistent with our approach when the acquisition was announced last December, we will continue to operate in the same manner, with the leadership team at Ballast Point continuing to run the day-to-day operations and making decisions the team feels are in the best interests of the company and our consumers,” McGrew wrote.

But is this just lip-service at this point? How many of the original people who helped build up Ballast Point to the valuable brand it is today will still be around in another 6 months? Another year?

Maybe they are leaving because they have better opportunities. Maybe they are leaving because they don’t like the direction the company is going (with the rapid expansion to get distribution to all 50 states). However, it does look fishy to have so many top Ballast people leaving, all in the same week.

Either way, to us, this an unsurprising development in the craft beer buy-out game. Ballast Point said this wouldn’t happen last year in a U-T San Diego article.

“White pledged. Constellation, he said, has guaranteed that this brewery will remain true to its roots. There will be no coast-to-coast ad campaigns similar to the ones touting Corona. No changes in the brewing team, no shift in management. ‘As important as that was for us, it was key for them,’ White said of Constellation. ‘That’s what they are investing in, they want to make sure it’s me and my team doing what we do best. It will be the same people making the same beer, with the same culture and approach.’”

Sure, Sure.

Anna Brigham

7/29/16

Picture of glass of beer from Revolver Brewing, which was recently purchased by MillerCoors

What’s Behind MillerCoors Craft Beer Bender?

What’s Behind MillerCoors’ Craft Beer Bender?

MillerCoors announced this past week that it has gained a majority stake in yet another craft beer brewery, Revolver Brewing. This Texas based brewery is best known for their Blood and Honey ale, a wheat ale with honey and orange zest. This makes it three in the last couple weeks after they bought majority interests in both Terrapin Beer Co. and Hop Valley Brewing Co. at the end of July. That’s a lot of brewery buying in a short amount of time.

Let’s take a look at what is currently happening with MillerCoors. Everyone has been talking about the upcoming merger between the two beer behemoths, AB InBev and SABMiller. SABMiller is part owner of MillerCoors in a joint venture with Molson Coors. In order for U.S. anti-trust regulators to approve the merger, SABMiller is required to divest their interest in MillerCoors which will then become fully owned by Molson Coors.

But Why Now?

With all of these changes on the horizon, why is MillerCoors choosing now to go on a craft brewery buying spree? The company which MillerCoors invests in craft beer under is their Tenth & Blake brand. This high end division owns other craft breweries like Leinenkugel, Blue Moon, Saint Archer and the most recent three breweries already mentioned here.

Craft beer insiders can lament all they want about another independent, craft brewery biting the dust, but it doesn’t look like MillerCoors is going to stop anytime soon. It seems as though they are following in the footsteps of AB InBev. Budweiser’s parent company has greatly expanded their craft beer portfolio over the last couple of years in a “if you can’t beat ’em, buy ’em” strategy.

Maybe MillerCoors is making its move to compete with AB InBev in the craft beer world. Once they are owned fully by Molson Coors, the new company will in effect be the biggest competition to the yet-to-be-renamed AB InBev/SABMiller company. Maybe they are gearing up for that competition. On the other hand, maybe they are just seeing same benefits that AB InBev saw in buying up craft breweries. MillerCoors doesn’t get the same hate as AB InBev does because they haven’t been caught with their pants down in the same way. AB InBev gets shade for things like anti-competitive practices in the beer community or making fun of craft beer in Super Bowl commercials at the same time they are buying into craft beer. But are they really that different?

Only time will tell, but our guess is that MillerCoors will continue on this craft beer buying bender.  AB InBev bought interests in 15 craft breweries over the last few years and MillerCoors could follow in those footsteps.

What do you think is behind MillerCoors craft beer buying spree?

Anna Brigham

8/17/16


10 Craft Breweries That Are No Longer Considered “Craft”

Craft beer vs. Big beer has been all over the news recently, on both a national and local level. Whether it’s the AB InBev/SABMiller merger set to go through October 10th, MillerCoors buying up two craft breweries this month or Ballast Points founders fleeing a couple of weeks ago (Jack White’s exit became public the evening that we posted our blog so he wasn’t included in our original headcount), big beer is big news. The ins and outs of these buy-outs are confusing to say the least and one might wonder why the average craft beer consumer should even care who owns the brands of beer that they love.

This confusion and lack of transparency is the very reason why we think it’s important that people understand who ultimately benefits from their beer dollars. That’s because other than the Ballast Point billion dollar buyout, the news isn’t considered news beyond the craft beer community and most people don’t know who buys who and which of their favorite breweries are now under the control of big beer. The breweries who have been bought out aren’t sharing the info on their webpages themselves (you can check for yourself on any of the links below), so it is up to the consumer to be educated.

One point to mention is that all big beer is not the same. AB InBev has actively sought out ways to suppress the craft beer community in order to raise their own stable of craft breweries which they have procured over the years. MillerCoors is stepping out in a big way and although, they don’t have the shady track record that AB InBev does, a close eye is being kept to see just how their actions follow their words. So far, other owners like Constellation Brands and Heineken have stayed out of the negative limelight, though the complete overhaul of Ballast Point’s executive team did get some tongues wagging.

With MillerCoors buying up their second craft brewery in the span of a month, it raises the question, which craft beers are no longer considered “craft” (less than 25% ownership by non-craft brewers) according to the Brewers Association?” Let’s be clear, we are not saying that people should stop drinking beers made by this list of breweries. Lagunitas just put out a stellar pale ale called 12th of Never, so the issue isn’t with the quality side at all. Most of these beers still hold true to their roots and are just as good as they always have been. We are just putting the information out there so people can make informed decisions about who they want to support. Here’s a recent list of craft beers that are no longer technically “craft” and the year they sold to Big Beer.

1. Elysian Brewing Co. – AB InBev – 2015

2. Golden Road Brewing Co. – AB InBev – 2015

3. Saint Archer Brewing – MillerCoors – 2015

4. Ballast Point – Constellation Brands – 2015

5. Lagunitas – Heineken – 2015 (50% stake)

6. Breckenridge Brewery – AB InBev – 2015

7. Four Peaks Brewing Co. – AB InBev – 2015

8. Devil’s Backbone Brewing – AB InBev – 2016

9. Hop Valley Brewing – MillerCoors – 2016

10. Terrapin Beer Co. – MillerCoors – 2016

One thing is for certain, the hard working people who are employed by these breweries understandably bristle at the idea that they aren’t a craft brewery anymore. This raises the question; is the term, “craft beer,” relevant anymore at all? Depending on who you talk to, the term can mean anything from Blue Moon and Shock Top all the way to the much revered Heady Topper from The Alchemist. Maybe it has to be one way or the other. Either we keep drawing the line at what makes a brewery a craft brewery or we give up on the word “craft” and find another way to differentiate between the big dogs and the little. What do you think? What makes craft beer craft…How it tastes or who owns it?

Anna Brigham

8/10/16