Art of Beer – Addendum: What’s All the Brew Ha Ha Over Beer Companies Buying Each Other Out??!!

The picture above is what a lot of Americans think that any activity related to beer is all about. Getting rowdy with your frat brothers at parties and smelling like stale beer. Sitting around watching sports and seeing who can belch the loudest and  longest, or seeing who pukes first from the results of a beer chugging game is one of the first pictures that comes to mind whenever the word “beer” is spoken aloud.

And to be fair, since the repeal of prohibition right up until the last decade or so that would not be an inaccurate depiction of most beer related activities in the U.S. Thanks mostly to marketing campaigns of a lot of the major brewing companies in America (Anheuser-Busch, Coors, Miller Brewing, Pabst, etc.) the light American Lager has become associated not only with those activities but others as well, most of which are usually pandering to the lesser qualities of mankind. These include lust, competitiveness, laziness, and a lack of propriety.

And that is the exact opposite of how a majority of the rest of the world views beer. For many other countries it is a beverage that can have as much prestige as some of the finest wines and liquors available. Especially if it is carefully and skillfully CRAFTED!

In America, thanks to industrialization, beer has had done to it what many other products have had done. Make the most economically feasible product, mass produce it and use advertising to shove it down the consumers throat. And since so few companies survived the dark years of prohibition only those that were mass producing other products were capable of coming back from the brink to begin producing beer again. And in the American business model the more you can make for a cheaper price the better your profits are.

But a little secret was revealed to many of us over the years. Some of us have had the opportunities to visit Europe or Asia or the Middle East and taste beers and other styles or the same style but in it’s original form. We were awakened to the fact that what we have had limited to by the corporate conglomerates was in fact crap! And when we came back to America from other countries and went to try out old reliable American staples we realized the truth… “My God!! This is shitty beer!!”

Luckily, in the late seventies, then President Jimmy Carter signed a bill making it legal for home brewing to begin again. Whatever else you may have thought of him as a president, this was one act that everyone can agree on was a good one.

With that act, the home brewing craze and the craft beer movement began. And for about 20 years that is exactly what it was, a fad or a craze that someone wanted to try. But eventually enough people not only stuck with it, but became very good at it and tried to do what many other American Entrepreneurs had done before them and turn a beloved hobby into a business they could make a living at. Some of these entrepreneurs are still at it today, Anchor Brewing, Sierra Nevada, Samuel Adams, and many others who have seen the rise of a revolution in taste as well as quality in process.

These companies which started out small have grown into larger companies by maintaining quality products and consistently trying to expand their skills in different styles of beer. Something the larger brewers have forgotten how to do.

With this industrious rise in Craft Brewing, there resulted the inevitable loss of market share to the big brewer’s. And how did the big brewers react? Did they rethink their brewing techniques and think about investing in higher quality products using better ingredients? Did they think about expanding the styles of beers that they brewed and trying to draw back some of the market share they lost through honest competition? I’m sure they thought about it.

But that isn’t what they did. Instead they came up with a two step approach:

Step 1 – Buy out the competition. Buy out successful craft brewers, learn how to produce their products for less money, and reproduce their beer labels under your brand. This method has been the Grim Reaper of many venues of American industry. The problem with this is that is doesn’t work well. Quite often quality suffers and the customers you hoped to win back can tell and find a new brewer to follow.

This has not helped the big brewers gain any more craft beer fans, but it has helped them to gain in other ways. Recently the founder of Sam Adams Brewing publicly stated that over 90% of the beer made in the world is owned by two companies both European Conglomerates who own not only most of the breweries on every continent but also a lot of the distribution companies. AB-InBev and Heineken N.V. own companies in Europe, Asia, Africa, Australia, North and South America. Leaving only Antarctica as unclaimed territory.

Step 2 – Strangle their supply chain. If they won’t sell out to you then make it difficult or impossible for them to get the ingredients to make beer and even harder to get their beers to market.

These two conglomerates have repeatedly tried buying out hops and grain markets in efforts to stifle the supplies for others to make beers. And when that didn’t work they put a stranglehold on the distribution by buying out a lot of the distributing companies, or giving monetary incentives for their products to get top billing. These companies have been reading the robber-baron’s handbook and instead of creating new games just gave a wink-wink nudge-nudge to the concerned lawmakers who failed to stop them.

So to answer the question in the article title – the “Brew Ha Ha” over the beer companies buying the others out has nothing to do with the beers they originally made. And really not even with the beers being made buy those that have sold out to them. No matter what happens there will still be folks who like all of those beers and will want to purchase and consume them. We are after all creatures of habit.

The problem is that if the trend keeps going as it is, eventually new craft breweries will no longer be built. The ability to choose from over 5000 breweries and tens of thousands of different beers will disappear. Craft beer is going to be changing, whether we like it or not. Craft breweries will have get even more inventive with their “Think outside the box” strategy to continue to exist.

The good news is this:

  1. Thinking outside the box is what craft brewers do best.
  2. The Genie is already out of the bottle. Home brewing is alive and well and will continue to be so. Larger Craft production breweries may not continue any growth, but the little guys who just want to brew and share with the locals will always find a way to do so.

Papabear

 

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