Written by Chalie Papazian for The Examiner
Let me start right in the beginning: I care about who makes the beer I drink. I’m picky because I have the choice to do so, and… so I do. Does it matter to beer drinkers? I asked that question in a 2008 Examiner poll and again in a 2010 Examiner poll. Much has changed in the world of beer since 2008 and even in two short years since 2010.
It’s time to ask the question once again: Does it matter who makes the beer you buy? Go to the poll site and choose which of the following most describes your feelings:
- YES it does matter – I support local by buying local as much as possible
- YES it does matter, mostly– I support local but I will buy imports or national/regionally distributed craft brands. I usually avoid buying brands made by large brewing corporations
- NO it doesn’t matter too much – I will buy and drink beer from breweries of any size. It doesn’t matter who owns the brewery
Share this poll link with friends. Poll will close December 12, 11:59 p.m.
The big picture
The 5 largest brewing companies have grown bigger as they continue to spend their money buying up smaller companies, closing breweries and adding those brands to their main streams of beer production. What’s relevant in the U.S.A.?
The Brazilian/Belgian brewing company Inbev merged with Anheuser-Busch to create Anheuser-Busch Inbev in 2008. They own mainstream and international brands such as Bud, Stella Artois, Becks, Leffe, Corona, Modello, St. Pauli, Hoegaarden, Belle-Vue, Jupiler, Diebels, Lowenbrau, Spaten, Brazilian Brahma/Antarctica and of course Budweiser, as well as former craft brand products such as Goose Island. They are also involved in influential partial ownership of Widmer, Kona and Red Hook brands (they brew under the banner of Craft Brew Alliance) as well as others.
South African Brewery bought U.S. based Miller Brewing Company and renamed themselves SABMiller and then joint ventured with MolsonCoors and renamed their U.S. operations “MillerCoors,” but it is all part of the same International company steered from their London headquarters.
Heineken, Carlsberg and Diageo (owner of the Guinness and other brands) strive to keep up internationally.
What’s changed in the last 4 years?
For one thing craft beer has solidified its position of offering choice, flavor and value to the American beer drinker. Something that the large brewing companies have mostly ignored for 30-plus years. The craft brewery market was largely dismissed as a fad and not worth an investment in time or resources – until recently. Now the American craft brewers brew a solid 6% of the beer enjoyed in the USA. In recent years their growth has cruised at a sustainable 12-13%. While 6% is a small fraction of the beer market, the trend points to continued, yet small erosion of mainstream lager’s popularity. Top executives at the major corporations now imagine that they can take advantage of beer drinkers’ enjoyment of the craft beer brewed by small and independent brewers. They have begun to leverage the extended product brands that they control and position them alongside craft beer. That’s fair enough, but what is deceiving is that they are prideless in claiming or informing the consumer about who makes those products. You’ll find brands such as Shock Top and Goose Island brewed by Anheuser-Busch Inbev and Blue Moon, Henry Weinhard and Leinenkugel brewed by SABMiller-MolsonCoors on the shelves with no information on the packaging indicating that they are wholly owned brands of these large corporations. Does it matter? It must or they wouldn’t mind putting their company name on these brands. It’s a tactic they think improves sales of these beers. The question is whether consumers in this day and age care?
At what price?
No, I’m not going to get into pricing, but the system and current state of beer distribution and beer retail sales to the consumer has a huge hidden cost to the beer drinker.
There’s a lot of drama, stress, wheeling and dealing between the brewery and the purchase of your favorite beer. When an independent beer distributor is free to make their own decisions based on what the beer drinker really wants, craft beer from small and independent craft brewers has grown and thrived. It’s made not only the beer drinker happy, but also distributors, stores, pubs and restaurants very happy campers. Everyone wins except the big two companies that are said to control 80% of the U.S. beer market.
When big is huge, there is a hidden influence that the beer drinker rarely realizes. With major light lager brands still 80% of what Americans drink , big brewers push their distributors to prioritize all the products (and different size packages) that big brewers make, some not even proven to be what the consumer wants; getting them on the distribution trucks, getting at the eye level position on market shelves, getting premium placement at beer pubs and bars. At what price? It doesn’t leave as much space for small and independent brewers. It’s called squeezing.
When big brewers speak to their distributers and retail customers they are clear on their position – and it isn’t pretty for the American craft beer enthusiast who chooses beers made from small and independent brewers.
Anheuser-Busch Inbev calls their core beer distributors “anchor distributors.” The other companies don’t have a tag/name (yet), but the principles remain the same and that principle is clearly stated by Anheuser-Busch Inbev top executives:
- In late 2011 ABI [top management] said they were “offended” by distributors taking on [brands that competed with Anheuser-Busch Inbev brands]
- In early November 2012 in a presentation to beer distributors during the Anheuser-Busch Sales and Marketing Communications meeting in Chicago, top executives made it clear: “[Anheuser-Busch Inbev is] committed to giving you the brands and the tools you need to succeed… we do believe that at some point… having a non-AB portfolio [brands/products] becomes a distraction.”
The fuss over beer distribution
Consolidation and fewer beer distributors has its advantages for big brewers. Fewer beer distributors mean fewer independent distributors. Fewer independent distributors means the remaining distributors become hugely dependent on the stream of products from the large brewing corporations; for the remaining large beer distributors it becomes vital that they maintain their product flow of big brewers’ products in order to sustain their ballooning distribution company.
Anheuser-Busch Inbev has said that their independent beer distributors are important to them. But they slipped up because if these beer distributors are independent they aren’t “theirs.” Meanwhile it is clear that they are very involved and show preferences and offer influential consideration in the drama and negotiations that unfold when one beer distributor buys out another.
Controlling beer distribution has always been vital to the success of large companies. Having access to market, i.e., having beer distributors willing and passionate about craft beer from small and independent brewers is also vital to the growth and success of your local brewery. In this day and age of more transparency and access to information, beer drinkers at least are able to make educated choices – if they choose to do so. Small and independent brewers are only asking to be given a fair shake; a fair shot at giving beer drinkers a choice. The threat of being fundamentally squeezed out of the market place is not a mysterious magic trick – it is beginning to seem all too real for small and independent brewers.
So what’s your choice. Vote in the Does it matter who makes the beer you buy? 2012 Poll. Poll closes December 12, at 11:59 p.m. Mountain Time (US)