
Big Beer’s 5-Point Plan to Crush the Craft Beer Revolution - ohjeez
http://time.com/money/4073371/anheuser-busch-sabmiller-craft-beer/
======
tptacek
This is past silly. It makes absolutely no sense for "big beer" to try to
"crush" craft beer.

First, it's not possible: it's too easy to start new breweries, and too easy
to get local distribution to bars and the kinds of stores that already do a
good job of stocking craft beer. The capital costs to start a new craft
brewery are small. There are tens of new brewery starts in major metros every
year (we're flooded with them in Chicago). So AB InBev takes out Goose Island.
Who cares? For every Goose Island, there's a dozen Half Acres.

Second, it doesn't make economic sense. Macrobrews and tiny local craft brews
are not substitutable products. Macrobrews are defined not by quality but by
availability: they're produced in enough quantity and their logistics are
managed competently enough to be reliably available in the places where people
who buy macrobrews shop. The same is absolutely not the case for craft beer;
even the best-run largest-scale craft breweries are often on allocation
systems with retailers.

By the way, AB InBev's customers generally aren't trying to maximize IBUs,
don't give a shit which hop varietals got used, and would probably assume a
brett beer had somehow gone bad. Again: not substitutable products.

Meanwhile: on the off chance that a Three Floyds or Bruery "graduates" to real
nationwide distribution, in 6-pack/case format, Big Beer will simply buy them.
They can, in effect, use craft breweries as laboratory for product
development: the products that succeed in the market get acquired, and AB
InBev supplies its logistics and distribution to milk profits from the
acquisition. It's a very old, very effective business model (see, for
instance, Cisco).

Finally: I call BS on the idea that Big Beer somehow ruins acquired craft
breweries. Goose Island is if anything doing a more consistent and competent
job now than they were prior to the acquisition.

~~~
intopieces
>Macrobews are defined not by quality but by availability.

Not so. Macrobrews are extremely consisten, a quality which makes availability
a viable reason to drink it. Customers know exactly what they're getting every
time they open a Bud Light.

Your points focus on how craft beers are flourishing now, without looking at
the implications of the recent developments: mergers that take over
distribution, conglomerates that have the power to lobby for laws that are in
their favor.

~~~
plonh
Customers don't care what they are getting when they get a bud light, except
that it is a cheap buzz.

~~~
brandonmenc
They do care - otherwise they'd just buy 40s or plastic flasks of Popov.

Beer snobs just can't comprehend why anyone would prefer, say, Miller over
Bud, or that it's even possible to differentiate between the two.

From our side of the fence, all craft beer enthusiasts seem to care about is
disgustingly ever-higher levels of hops.

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lambdapie
Seems like a good and (EDIT: ethically) legitimate plan for the most part

#1. Create your own quasi-craft brands.

This seems reasonable. If the taste sucks, the brand won't do well. If it
doesn't, using a different brand is legitimate.

#2. Snatch up craft brews that’ll sell out.

Again, a fair strategy.

#3. Defend macro brews, bash craft snobs.

I'm not for attacking anyone, but certainly people have been attacking
drinkers of macro brews for ages. In the circles I move in, Bud drinkers are
openly stereotyped as ignorant and racist.

#4. Control distribution. #5. Merge and overwhelm the marketplace.

Vertical and horizontal integration for the sake of reducing competition is a
bad thing, luckily we have laws to prevent this.

~~~
eveningcoffee
> #1. Create your own quasi-craft brands.

I would go as far as call it false advertising. Especially when 10 brands are
created that actually contain the same product.

Even more, the mere fact that this merger is sought after shows that there is
actually need to divide both companies.

~~~
lambdapie
_> I would go as far as call it false advertising. Especially when 10 brands
are created that actually contain the same product. _

I disagree that branding the same product differently is false advertising. As
long as the product lives up to the claims made in each case, I don't see what
is false. I think you are trying to elevate what you think is important (being
made by a small company) to a category that is given special treatment when it
comes to advertising. It's like the equivalent of mandatory GMO labeling, but
with GMO replaced by being made by a big company.

For legitimate reasons to have the same product with different brands,
consider programming languages. If Haskell had a fancy web 2.0 website, some
people might go there and think "this is probably a stable, production ready
language with good documentation". Others might think "this language has
probably made too many compromises with the corporate world, and won't be a
principled and elegant language". If it was possible to market the language in
both ways to both people, wouldn't that be reasonable? Namely, to let the
corporate users know that it is production ready, and let the purists know
that it is not corporate bloatware?

 _> Even more, the mere fact that this merger is sought after shows that there
is actually need to divide both companies._

I don't understand this point, can you explain it?

~~~
eveningcoffee
* It's like the equivalent of mandatory GMO labeling, but with GMO replaced by being made by a big company.*

Exactly. You get the point. This should be used to reduce the impression of
false diversity.

Edit:

Lets expand this example even further. Lets say that there is company X with
one baby formula and company Y with another baby formula. Company X has
created 9 different brands to sell its baby formula but company Y has only
one.

For a customer of baby formulas it would create an impression that there is
wide diversity of baby formulas when in fact there are only two.

~~~
srtjstjsj
What is wrong with false impression of diversity, and why is the manufacturer
responsible for it? Do you think it discourages a consumer from creating more
diversity?

~~~
eveningcoffee
> What is wrong with false impression of diversity,

You are asking what is wrong with lying. How should I answer to this?

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superskierpat
The main reason I drink craft beers almost exclusively is that I could never
drink the more commercial stuff, way too fizzy for me, and there arent many
macro black beers (and I've never found a commercial scotch ale)

Helping local business and the festival scene is a big plus too. (The
festival's are where the major beer vendors really seem out of place, they are
loud, abnoxious and they give bigger glasses, thus helping those who are only
there to drink get drunk faster)

So I guess that make's me a beer snob, but whatever, I'm in Quebec, we won
most of the prizes in last year's world beer festival (along with brazil,
which is damn good), so I'm in the right place to be a beer snob.

~~~
vinbreau
Younger me hated beer. I thought it tasted awful but drank it as that was what
kids did in the country. I gave up drinking after college because I just
couldn't stand the taste of beer, the smell even made me nauseous. Fast
forward to my late 30's, moved to Austin and on a whim one night tried a
locally brewed stout. It was amazing. I realized I liked beer but just hated
the mainstream stuff, what my father calls 'green beer'. So yeah, I guess now
I am a beer snob. I look forward to pay day when I can visit the largest store
in the area and become overwhelmed with the varieties available to me. I like
saisons, farm ales, porters and stouts. Nothing produced by the larger
breweries even comes close to a Tank 7.

~~~
superskierpat
I dont know how it is in other countries, but here in Quebec we basically have
a few different kind of macro/micro beers: 1\. Big beer like molson, coors or
imported stuff 2\. Quebec macros like Boreale that are similar to the big
stuff in taste but less omnipresent 3\. Companies that make beers like micro
but have more of a macro scale of distribution: Unibroue, alchimiste, st-
ambroise 4\. Microbreweries whose beer can be bought in specialised stores,
specialised restaurants and (recently!) supermarkets. 5\. Local microbreweries
with little to no distribution

As I grew up I steadily shifted from # 1 to only drinking # 4 and # 5 (with
the occasional # 3 or # 2, but only if there is nothing else). So I doubt that
we will be seeing our favorite beers go away, the market if just too
diversified!

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milge
Good luck. I've seen so many craft beers popping up around here in the
Northeast over the past couple of years. I've met so many people that would
never touch a domestic. Personally, I'll have a craft beer, but I'm not a beer
snob about it.

In Philly, there's been a surge of popup beer gardens over the past few years
that usually serve craft beers. I'm not sure about other cities, but I do know
craft beers are exploding here.

[http://www.visitphilly.com/articles/philadelphia/top-10-reas...](http://www.visitphilly.com/articles/philadelphia/top-10-reasons-
philly-loves-pop-up-beer-gardens/)

~~~
cpfohl
Let's use the right terms: Domestics are brewed here, meaning must craft beers
available in your country of origin are domestic. Technically Anheuser is a
Belgian company... So I'd say bud is an import...

~~~
tptacek
American Budweiser has never been brewed in Belgium, and didn't begin as
Belgian company. I assume you're trying to be funny here; Bud is the
archetypical domestic.

~~~
cpfohl
Yes, this is tongue in cheek. I never liked the domestic terminology, though.
Craft beers are domestic. They're also owned by people in their country of
origin. The joke about bud is that it's primarily owned by foreign
corporations.

Country of origin tells you nothing about a beer.

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wmil
The article is missing the most obvious way. Lobby for tighter health and
safety inspections and documentation.

Compliance costs usually scale in a way that's favorable for large
manufacturers.

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DIVx0
A big part of the 'craft beer revolution' for me is supporting local
businesses as many of my favorite brews are local to my sate or region. Also
since macros have such a choke hold on distribution many of the best local
crafts can only be had at taprooms or brew pubs which also plays nicely into
'supporting local' and they're fantastic social centers.

I don't think macros could ever really touch those aspects of the scene.

~~~
_delirium
At least where I live, I've been noticing the craft-beer scene gravitating a
bit more towards "beer bars", bigger places with a lot of beers on tap,
anywhere from 20 to 100+ depending on the size of the place. I could imagine
the quasi-craft beers from the big companies doing ok in that setting,
depending in part on who runs the place and how they label their beer lists.

However I think what the big companies are more worried about is mass-market
settings, like restaurants, "normal" bars, and six packs in the local liquor
store / supermarket. Craft beer has been making some inroads there, vs. being
restricted to only people willing to explicitly seek out craft beer. Those
account for higher volume, and threaten the big companies' market share, so
they'd like to develop some alternatives for those settings to counter it. I
think the small-volume local brewer who's only found in one shop doesn'd
really threaten them. But they're very worried about the amount of sales
national players like Lagunitas, Sierra Nevada, New Belgium, etc. are getting.
Plus higher-volume regional companies like Goose Island (Chicago, bought by
InBev), St. Arnold (Houston), Sweetwater (Atlanta), Brooklyn (NYC), Green
Flash (San Diego), etc.

------
parennoob
Some risks to this plan, based on my own (admittedly anecdotal) experience
moving in hipster circles.

#1. Create your own quasi-craft brands.

Definitely the worst. I actually don't mind getting an 8-pack of Coors from
time to time for parties but I will not touch Blue Moon or Shock Top now
because it always sparks off that awful "You know this is fake craft beer
right?" conversation.

#2. Snatch up craft brews that’ll sell out.

Not bad, especially if you can keep them mostly the same and avoid plastering
your name anywhere on the bottle. Runs the same risks as #1 otherwise.

#3. Defend macro brews, bash craft snobs. Mostly neutral or high risk. First
of all people who are into craft beer don't give a shit about Anheuser-Busch
ads during the super bowl. Secondly craft beer has nothing to do with
pumpkins.

#4. Control distribution.

This could actually work in the short term, but has high risk of antitrust
action.

#5. Merge and overwhelm the marketplace.

I don't know enough about the market to say whether this would work – but I
suspect they will blow a lot of money on advertising and not attract enough
people.

\---

I would like to suggest #6 to these companies:

#6. Draw consumers into your beer

Make a documentary about how it is made. Say the stuff that goes into it
([https://en.wikipedia.org/wiki/Budweiser#The_beer](https://en.wikipedia.org/wiki/Budweiser#The_beer)).
A Bud Light can be pretty refreshing during summer. Basically try and do
something akin to what PBR did ([http://worksdesigngroup.com/pbr-brand-
repositioning/](http://worksdesigngroup.com/pbr-brand-repositioning/)).

~~~
venomsnake
> "You know this is fake craft beer right?" conversation.

\- Does it tastes good?

\- Yes.

\- So it doesn't matter the origin.

Here, solved that problem for you.

~~~
SFLemonade
I think the origin really does matter to some people. For example, why have
farmers markets made such a strong return in the U.S.? Savvy consumers want to
support local business and buy products that they know were made ethically and
without nasty chemicals, additives, GMOs, etc.

------
jonathansizz
In my small town in South Carolina, we're just about to get our third new
independent brewery in 3 years. The oldest of the three is already talking
about moving to larger premises, and both those currently in business are
canning their beer with sales already in hundreds of retailers across the
region, in addition to selling beer on site.

All of them brew at least one light American pilsner to appeal to newcomers
and also offer a decent food menu and regular special events. I don't think
these kinds of places are going away any time soon. They offer an ambience and
clientele that's distinct from a regular restaurant or bar, and I've found
myself visiting them more frequently as they continually experiment and
improve their beers.

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ernmando
On the point of craft breweries selling out -- that will lead to more craft
breweries popping up.

Having big exits makes it easier for new breweries to get investors.

Having Google, Facebook, and others buying tech startups doesn't kill the
startup ecosystem, it's the fuel.

------
ingenieros
"AB InBev and SABMiller spend a total of $500 billion annually on sports
sponsorships" That can't possibly be right! I read in an earlier article that
their revenue last year was "only" 26 billion or so.

~~~
PhantomGremlin
I questioned that same thing. The claim is made in the linked "Marketplace
report". Perhaps they meant to say $500 million? If so, what's three orders of
magnitude difference between friends? Just a rounding error? Why are business
reporters so utterly innumerate?

The most disappointing thing to me is that Time magazine goes back to 1923.
Henry Luce would have never stood for such gross mis-reporting. But I guess
there's no money any more to pay competent people.

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dogma1138
Aren't the majority of "craft beer" brands are actually owned by the big
breweries these days?

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whistlerbrk
Does anyone seriously consider Blue Moon to be craft beer? Past silly is
right.

~~~
intopieces
Why wouldn't they? It has all the hallmarks of one. Most people don't research
their beer origins.

------
conceit
_5 points you didn 't know were planned to crush ..._

