“Words do not adequately describe how much I hate this company.”
– Matt Welch (quote listed on picture from original post)
Written by Matt Welch for reason.com
When the domestic beer industry consolidated into a duopoly of Anheuser-Busch InBev vs. MillerCoors in 2008, I was happy. Not because I like duopolies (or their mono cousins), but because I don’t. As a general rule, the faster that industries try to consolidate away the competition, the faster they become uncompetitive, and leak away market share. Companies with a captive consumer base tend to treat them like, well, captives. As the Wall Street Journal’s William L. Bulkeley put it in a smart 2006 piece about the suddenly troubled photo-processing duopoly of Eastman Kodak and Fuji Photo Film,
Photography and publishing companies shouldn’t be surprised when digital technology upends their industries. After all, their business success relied on forcing customers to buy things they didn’t want.
Lo and behold, American customers are busy this year not wanting all those Coors Lights and Bud Longnecks:
The $100 billion U.S. brewing industry is staggering into its crucial selling season from its weakest position in years. Sales for 11 of the biggest brands fell in the four weeks ended May 16, according to SymphonyIRI, and only four of the top 30 — Keystone Light, Modelo Especial, Yuengling and Pabst Blue Ribbon — posted gains. Meanwhile, despite massive measured-media support, category titans Bud Light, Coors Light and Miller Lite all declined.
Anheuser-Busch’s Bud Light, the largest U.S. brand, is down 5.3% year to date, and the drop is in comparison to 2009, the first negative year in the brand’s 28-year history. It’s no less grim at No. 2 U.S. brewer MillerCoors, where the company’s leading lights, Coors Light and Miller Lite, are down 0.5% and 7.5%, respectively.
The article is from Advertising Age (link via Conor Friedersdorf’s Twitter feed), and thus obsessed with the top-down blues of ad-spending legacy beermakers. But there’s a much cheerier story on the frothier (and more delicious) end of beer’s Long Tail:
More than ever before, the craft brewing industry has a lot to celebrate. Even though overall U.S. beer sales were down 2.2 percent in 2009, craft beer sales grew 7.2 percent by volume and 10.3 percent by dollars in the same year. And in 2008, craft beer grew 5.9 percent by volume and 10.1 percent by dollars.
Stuff like this is why knee-jerk anti-trusters almost always leave me cold. In an almost-literal sense, they anti-trust American consumers to turn down bland crap from entitled behemoths, and instead create marvelous, idiosyncratic workarounds to industry mediocrity and idiotic government restrictions.
The craft brew revolution is a wonderful Americanâ€“and libertarianâ€“story. As Greg Beato explained in a terrific March 2009 column , post-Prohibition laws made home-brewing a crime for four decades, crushing a storied American tradition practiced by, among others, George Washington and Thomas Jefferson. But then came deregulation:
In 1978, however, a supplier of beer-making equipment in Rochester, New York, asked his congressman, Barber Conable (Râ€“N.Y.), to sponsor a bill that would extend the home winemakers’ exemption to DIY beer makers. […]
Conable […] insist[ed] that independent Americans shouldn’t have to “rely on the beer barons” for their daily libations. According to an Associated Press article written at the time, the bill “sailed through the House on a voice vote with no audible objection.”
Under the guidance of Sen. Alan Cranston (Dâ€“Calif.), it fared much the same in the Senate. Then [Jimmy] Carter signed it into law, and just like that, after 43 years of government inertia, indifference, and undue concern about the ways home brewers might abuse the privilege of mixing hops and malt extract in their unsupervised kitchens, home brewing was suddenly legal again.
This federal freedom, followed by deregulations at the state level, breathed life into an already growing microbrew subculture in the Pacific Northwest, and now you can finally find a rich variety of beers all over America.
I don’t doubt that the watery beer duopoly will continue to lumber along, and warp various restrictive regulations in an attempt to preserve market share, but the future does not belong to them. You want to inflict damage on the Evil Beer Corporates? Instead of blocking their consolidation, dismantle the dumb laws that lock in their size advantage, then stand back and enjoy their slow, inevitable decline.