Big Beer’s 5-Point Plan to Crush the Craft Beer Revolution(time.com)
time.com
Big Beer’s 5-Point Plan to Crush the Craft Beer Revolution
http://time.com/money/4073371/anheuser-busch-sabmiller-craft-beer/
14 comments
> It makes absolutely no sense for "big beer" to try to "crush" craft beer
And yet, AB-InBev and SABMiller lobby against laws which make it easier for craft beer to be sold. They fight against self-distribution and for small distributors and for the dissolution of the 3-tier system, so that they can run the One Tied House to Rule Them All. They're happy to buy craft breweries with established names and products, but loathe to compete with them on fair terms.
> 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.
1) Any time a brewery gets further from the drinkers its hop-forward beers suffer. Goose IPA being made in New York adds like a week to the time it takes to hit shelves, and for most hop-forward beers, that's a notable amount of time. (Goose, pre-buyout had very few hop-forward beers, and has more now. The focus of the brewery has changed. Many breweries will not scale, because they can't ship fresh enough beer to compete with the local breweries. Even Three Floyds, distributing across state lines can't compete with Revolution, Half Acre, Pipeworks, or Spiteful on freshness)
2) Look at this year's bourbon county release where consumers will be paying drastically more money for less beer, with their money paying for increased marketing and advertising.
3) Goose's other world-class beers are all but forgotten. While Bourbon County has risen to become a status symbol, written about in "What to buy for the man who has everything" articles, the Sisters, Juliet, Lolita, etc., are essentially gone. When they do show up, it's at much higher price points.
Goose Island has lowered the quality of its top-line while increasing the availability of its less interesting flagship fare.
Your assessment of AB-InBev customers doesn't hold going forward. AB-InBev wants as many customers as they can get, hence their purchase of Goose and so many more. They'd be happy to sell beer to anyone, and they're also happy to sell beer to people who don't realize they're buying from AB-InBev, hence the proliferation of brands.
And yet, AB-InBev and SABMiller lobby against laws which make it easier for craft beer to be sold. They fight against self-distribution and for small distributors and for the dissolution of the 3-tier system, so that they can run the One Tied House to Rule Them All. They're happy to buy craft breweries with established names and products, but loathe to compete with them on fair terms.
> 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.
1) Any time a brewery gets further from the drinkers its hop-forward beers suffer. Goose IPA being made in New York adds like a week to the time it takes to hit shelves, and for most hop-forward beers, that's a notable amount of time. (Goose, pre-buyout had very few hop-forward beers, and has more now. The focus of the brewery has changed. Many breweries will not scale, because they can't ship fresh enough beer to compete with the local breweries. Even Three Floyds, distributing across state lines can't compete with Revolution, Half Acre, Pipeworks, or Spiteful on freshness)
2) Look at this year's bourbon county release where consumers will be paying drastically more money for less beer, with their money paying for increased marketing and advertising.
3) Goose's other world-class beers are all but forgotten. While Bourbon County has risen to become a status symbol, written about in "What to buy for the man who has everything" articles, the Sisters, Juliet, Lolita, etc., are essentially gone. When they do show up, it's at much higher price points.
Goose Island has lowered the quality of its top-line while increasing the availability of its less interesting flagship fare.
Your assessment of AB-InBev customers doesn't hold going forward. AB-InBev wants as many customers as they can get, hence their purchase of Goose and so many more. They'd be happy to sell beer to anyone, and they're also happy to sell beer to people who don't realize they're buying from AB-InBev, hence the proliferation of brands.
It makes perfect economic economic sense. Craft beer is growing[1], and beer companies want to keep that piece of the pie. They're producing their own craft beer, buying smaller brewers, and disparaging the competition.
[1] 8% in 2013 to 11% in 2014 http://www.bizjournals.com/albany/news/2015/03/18/craft-beer...
[1] 8% in 2013 to 11% in 2014 http://www.bizjournals.com/albany/news/2015/03/18/craft-beer...
"Craft" isn't a kind of beer, so there isn't 11% of the market to go after. About the closest you'd come to that is super-hoppy IPAs. If the narrative I'm supposed to be worried about is that AB InBev blankets the market with a good super-hoppy IPA, I guess I'm fine with that.
On the other hand, it is well documented that big beers actively suppress the sales of upstarts by requiring package-deal shelving. It goes like:
Hey, store operator. It's clear that staple beers like Coors and Bud Lite are 50+% of your beer sales and a significant portion of your whole store's margin. So, we declaring that we won't ship you any Bud Lite unless you also stock 3 of our new, wacky, nobody-thinks-its-gonna-sell variants like "Bud Lite n Salsa". The only purpose of even making BLnS is to make it harder for you to have shelf space left over for upstart smaller brews. Have a nice day.
Hey, store operator. It's clear that staple beers like Coors and Bud Lite are 50+% of your beer sales and a significant portion of your whole store's margin. So, we declaring that we won't ship you any Bud Lite unless you also stock 3 of our new, wacky, nobody-thinks-its-gonna-sell variants like "Bud Lite n Salsa". The only purpose of even making BLnS is to make it harder for you to have shelf space left over for upstart smaller brews. Have a nice day.
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.
If their plan to buy up the distributors succeeds, you should assume the breweries will wind up ruined.
Specifically: if a company doesn't have to compete because it has monopoly power, it stops making much sense for them to spend extra money on competent employees and expensive raw materials for no economic gain.
Once they stop having to compete, expect quality to drop. That's obviously not limited to beer. But it happens time and time again.
If their plan to buy up the distributors succeeds, you should assume the breweries will wind up ruined.
Specifically: if a company doesn't have to compete because it has monopoly power, it stops making much sense for them to spend extra money on competent employees and expensive raw materials for no economic gain.
Once they stop having to compete, expect quality to drop. That's obviously not limited to beer. But it happens time and time again.
Big companies already have overwhelming control of beer distribution; craft breweries thrive in spite of that.
>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.
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.
Customers don't care what they are getting when they get a bud light, except that it is a cheap buzz.
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.
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.
You might be surprised. Many loyal drinkers of a particular macro beer can pick out if their favorite beer is out of date or swapped for a supposedly identical beer.
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.
Compliance costs usually scale in a way that's favorable for large manufacturers.
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.
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.
"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.
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.
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.
Aren't the majority of "craft beer" brands are actually owned by the big breweries these days?
Does anyone seriously consider Blue Moon to be craft beer? Past silly is right.
Why wouldn't they? It has all the hallmarks of one. Most people don't research their beer origins.
5 points you didn't know were planned to crush ...
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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.
#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.
Every one knows Duff drinkers are good upstanding Americans, it's Fudd drinkers who are rednecks and hillbillies.
> #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.
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.
>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?
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?
* 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.
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.
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?
> What is wrong with false impression of diversity,
You are asking what is wrong with lying. How should I answer to this?
You are asking what is wrong with lying. How should I answer to this?
First point. I give you an example. Say company X is known for product Y and they have competitor Z with product W.
Lets imagine that there are group of customers of Z who buy product W only because they oppose to the company X.
When now company X creates a product A and tries to make impression that product A is from company B and not from company X, then they are making false claims to reduce the market share of company Z by making group of customers of Z to believe that product A is not from company X and is a fair alternative to the product W.
Second point. I am just supporting more actual competition on the market.
Lets imagine that there are group of customers of Z who buy product W only because they oppose to the company X.
When now company X creates a product A and tries to make impression that product A is from company B and not from company X, then they are making false claims to reduce the market share of company Z by making group of customers of Z to believe that product A is not from company X and is a fair alternative to the product W.
Second point. I am just supporting more actual competition on the market.
Which 10 beer brands would those be?
Regarding your last point: in my state (Michigan), the laws surrounding distribution are designed to protect incumbents.
Though we have managed to produce quite a few world-class breweries. I'm fortunate to have Founders just a short walk away from my office.
Though we have managed to produce quite a few world-class breweries. I'm fortunate to have Founders just a short walk away from my office.
Indeed. And this ties to his first point which is that the playing field is far from level so it's not as if those crafty beers are competing on flavor. In many cases that's all one can get, or at least they've set the true craft beers up to fail - e.g. there's a lot of money involved in where on a shelf a particular beer winds up and that affects purchasing.
There are many people out there who have heard about the craft beer revolution, don't know any better and will grab the first thing they see. Sure, if they like the product that's AOK. But the effect is that would have been money going to one of the smaller breweries. What do we think will happen once those breweries are extinguished?
There are many people out there who have heard about the craft beer revolution, don't know any better and will grab the first thing they see. Sure, if they like the product that's AOK. But the effect is that would have been money going to one of the smaller breweries. What do we think will happen once those breweries are extinguished?
I agree that controlling the supply chain/shelf space is generally bad (see #4 in my original point, like most economists I'm at best very wary of vertical integration). In spite of my original post, your post has inspired me to buy some true craft beers. Any recommendations? I prefer Lagers, Pilsners and wheat beers. (EDIT: for New York area)
Most of the best craft brews are fairly local in distribution so it depends on where you live. (I'm more of an IPA and stout drinker anyway so my recommendations on lighter beers aren't going to be all that informed.)
I agree that the original piece seems overblown. In my experience, even the "craft brands" of the big brewers cater to pretty mass market tastes and aren't really that interesting.
I agree that the original piece seems overblown. In my experience, even the "craft brands" of the big brewers cater to pretty mass market tastes and aren't really that interesting.
Completely missed that there were responses, but in case you all see this ghaff is right that distribution is so spotty for most craft breweries that it's better to find some local folks.
Along w/ your last sentence I'd also say that most craft brewers' flagships can be pretty plain jane as well for the same reason.
Along w/ your last sentence I'd also say that most craft brewers' flagships can be pretty plain jane as well for the same reason.
While I'm not a big fan of big-beer and somewhat a fan of micro-brews, I think you are absolutely right. This is not a bad strategy.
ginko(1)
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...
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...
Their plan is to buy craft beers as they start getting popular. The idea is not to kill the idea of craft beer, but to use craft breweries as outsourced R&D. They're going to muscle into whatever markets they can. So you might find your beer gardens suddenly getting "sponsored" by Budweiser.
The situation reminds me a lot of the current tech climate, where the startup ecosystem serves as outsourced R&D to the big tech companies. Google / Microsoft don't want to kill startups, they want to put them in their place.
The situation reminds me a lot of the current tech climate, where the startup ecosystem serves as outsourced R&D to the big tech companies. Google / Microsoft don't want to kill startups, they want to put them in their place.
That's a good thing: it creates exit opportunities for new craft breweries, while also offering serious distribution for good beers that would otherwise be stuck in small geographic regions.
I agree. The scaling of entire industries never looks pretty, but the end result is a better world.
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...
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.
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.
Country of origin tells you nothing about a beer.
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If we're speaking in technicalities, wouldn't Anheuser be Brazilian (InBev)?
The majors can't stop what's happening, short of a new prohibition to kill all the independents like they did last time.
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.
I don't think macros could ever really touch those aspects of the scene.
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.
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.
yes! the fantastic craftsman 1903 prohibition style lager (brewed in pasadena) is for me a signal of a good local bar/pub in LA.
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.
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.
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.
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!
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!
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.
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.
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). 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/).
#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). 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/).
For #1, it depends on the audience a lot, I think. I don't think they're even going for the quasi-craft segment in the case of the specific beers you list, but for the summer-on-the-beach crowd (and they're pretty successful in that setting). The intended competitors of Blue Moon aren't craft beers; it's squarely aimed at InBev's Hoegaarden brand, introduced because MillerCoors needed something to compete with InBev in that category.
Also, I'm starting to see semi-big labels come out with fairly decent original crafty beers such as Sierra Nevada's Narwhal and New Belgium's La Folie. These are definitely not repackaged ShockTop and they are doing a fair job of competing with smaller brews for tap space at beer snob bars.
Regarding #1 - I drink a lot of craft beers. And I also like Blue Moon and couldn't care less what others think. And I have no problem with the big brewers branching out beyond their standard, bland brands and calling it whatever they want. After all these guys have a lot of brewing expertise in house and I think it would be great if they let small teams try out new ideas. As a Colorado guy, I think it would be great to see Coors try out a nice Stout!
About #6:
Discovery Channel used to have a show named Brewmasters, which followed Dog Fish Head through a large part of their process, showed what happened when things went bad, etc. However the show was canceled midseason because of pressure from an unnamed "big beer" manufacturer; at the time Budweiser was a major sponsor of Discovery Channel. A shame really, I very much enjoyed that show.
Discovery Channel used to have a show named Brewmasters, which followed Dog Fish Head through a large part of their process, showed what happened when things went bad, etc. However the show was canceled midseason because of pressure from an unnamed "big beer" manufacturer; at the time Budweiser was a major sponsor of Discovery Channel. A shame really, I very much enjoyed that show.
> "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.
- Does it tastes good?
- Yes.
- So it doesn't matter the origin.
Here, solved that problem for you.
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.
Scent affects taste, and scents are easily detected when ones nose is turned up. So much of alcohol preference is in social posturing, not flavor.
Tell that to the local, organic, GMO-free food people :-)
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.