I'm not a fan of Anheuser-Busch.
That's how Matt started off his piece about Anheuser-Busch's recent acquisition of Blue Point, and I don't blame him. It might as well be a boilerplate for any post even peripherally related to Anheuser-Busch; after all, no one wants to be the guy that comes out and supports the macros.
Matt's not wrong to say that Anheuser-Busch's acquisition of Blue Point won't necessarily be a bad thing for Blue Point fans. We've seen that macros can take ownership of a smaller brewery without hurting the quality of the product. Increased distribution means more people get to try the beer, and extra money never harmed a brewery. If what you're worried about is "Can I find this beer and will I like it?", worry not. There is reason for optimism, indeed.
Nonetheless, I hate this. I've always tended to have an instinctive, kneejerk opposition to a big company buying out a small one. As it happens, even Blue Point used to make April Fool's jokes about what might happen if they were bought out.
Screenshot courtesy of charlottebeer.com
No corporate ties! Ever! Jokes aside, I'm not worried that Anheuser-Busch will convert Blue Point into a Bud Lite factory overnight. What I hate is that Anheuser-Busch and other macro companies are getting more and more involved in craft beer.
I can't give you a specific short-term reason why that concerns me. I can't tell you that Blue Point was wrong to sell, even. I mean, there they are, struggling to meet demand, and along comes Anheuser-Busch with a pile of cash saying, "Here, use this. You still run things, you call the shots, we just want to help you do that."
It'd be hard to say no. From Blue Point's perspective, what's the harm? People get into brewing because they enjoy making beer and think they can make beer that people will want. That doesn't change right away just because you've got new corporate ownership. Read Blue Point's history and you'll find that they've worked hard at raising sufficient funds. To get the brewery open, both owners worked full-time on the side, maxed out credit cards, and convinced a landlord to give them a year rent-free. Ask any small brewery owner and they'll tell you that no microbrewery is ever far from failing -- a couple unfortunate events, and everything you worked for is gone. With that in mind, here comes Anheuser with a security blanket, the money you need to expand, and few demands for control over your day-to-day operations. How do you turn that offer down? More to the point, why would I wish they had?
Let's imagine that craft brewers are kids making sandcastles. Everyone wants to make the best sandcastle, right? It's a game, but it's a game where the best builders learn from each other. You learn how to make an awesome turret, I ask you how it's done, we share some knowledge. Maybe we make a sandcastle together now and then. The better we get, the more people want to come see our sandcastles, and soon we've each got a crowd of admirers.
Problem is, there's a guy a little ways down the beach that isn't too pleased with this. See, his castles aren't as interesting, but he's got a lot more of them, and it used to be that all our spectators would go to see his castles instead. So he decides he's going to play a different game. While we're competing to build the best sandcastle, he simply decides to buy the beach.
To dispense with the excessively transparent metaphor, my point is this: I'm not worried about Anheuser-Busch buying one brewery. I'm worried that they intend to buy a lot more. Do I know for a fact that Anheuser-Busch intends to shove their way into the craft scene by any means necessary? No. But look at what they've done lately. Buying Goose Island and Blue Point, two of the larger craft breweries in the country. Releasing their own lines of "crafty" beers, often making sure that unsavvy consumers won't be able to tell that they're buying an Anheuser-Busch product. Attempting to use their financial means to influence laws surrounding beer and cider distribution. Infringing on other breweries' trademarks, because what craft brewery can afford to fight Anheuser-Busch in court? It all paints a picture, and it's not a picture of a company whose focus is ensuring that consumers have access to the best beer possible.
What I really hate about the situation is coverage like this. Here's a quote from a source in Long Island, praising Blue Point for their success:
As hometown fans, we have stood by Blue Point as they slugged it out in the minor leagues for the past 15 years. They have now been called up to the majors. Play ball, Blue Point. We are still big fans. We look forward to sipping and chronicling your every play as you continue to grow along with the shifting teams of the Long Island beer scene.
Okay, fine. You're happy that a local brewery you like will have money to finance expansion. But really, do we want to talk about getting bought out as getting "called up to the majors"? Is this the goal for breweries now -- to make it just big enough that someone bigger will swoop in with an influx of cash and take ownership of the business you built? I get the motivation for Blue Point, but let's not act like this is some unmitigated success story. Blue Point did reasonably well for themselves, ended up as a medium-sized fish in the craft beer world, and attracted the attention of a corporation that was able to offer them a buyout. This isn't exactly the classic American dream.
Think about what this portends for the future. John Hall was the founder of Goose Island; now, he sits on Anheuser-Busch's craft beer board. Anheuser-Busch uses him as an emissary, someone who can go to smaller brewers and tell them that it's not so bad to take a buyout. It's hard for craft brewers to make it on their own, right? Take some help. "It's just the nature of the business." Passion for beer might be enough to get you into the industry, but brewing isn't known for its high pay scale. Anheuser-Busch is offering you $24 million to keep doing what you're doing. Where's the harm? It's the way the market works, everyone knows that.
So Blue Point sells, and they won't be the last. Some breweries will never sell -- for example, it's hard to imagine Lagunitas doing so, in part because I'm pretty sure Tony would rather bulldoze his brewery than allow that to happen. Still, if I were a brewery owner, it'd be hard not to notice that $24 million payday that Blue Point just got and wonder what I could do with the same amount of cash. If Anheuser ends up with five or ten or twenty or fifty craft breweries, what's the harm?
The truth is that none of us really knows. Maybe Anheuser-Busch is just looking to have a financial stake in a growing market, and as long as we can stomach handing them a few pennies every time we buy a six-pack, everything will stay the same. Personally, I think they're expecting more than that -- $24 million is a lot to spend if all you expect back is a marginal return. Maybe breweries getting to a certain size and selling to a larger company will become a trend. Will that end up affecting the quality of the product? Not for a while, at least -- if Anheuser-Busch wants to appeal to other potential sellers, they have every incentive to demonstrate that their ownership of Goose Island and Blue Point is nothing but a positive for those breweries.
But what about a decade from now? Anheuser-Busch is starting to buy up craft breweries, and the other macros are surely taking notice. I think we'll see something of a scramble as large beer companies compete to buy out smaller ones. Duvel got Boulevard and Ommegang, and Anheuser-Busch now has two of their own. Do you really think MillerCoors isn't asking around? How much of the craft beer market would these companies need to own before consumers started seeing effects?
You might argue that the effects, if any, will be positive. More money pouring in means more beer, wider distribution, more resources for brewers. At the end of the day, though, Anheuser-Busch isn't doing this to be a good Samaritan. They're spending this $24 million because they think they'll earn it back and more. Given that Blue Point won't be that profitable for quite a while, I have to think there's more to it than a simple investment opportunity. Anheuser-Busch's traditional market is shrinking, and they're looking for ways to keep control of the game. How much this will affect the average beer drinker is hard to say. I just can't help but think that their motives aren't aligned with ours. Maybe that financial backing means we start seeing large ad campaigns for craft beer--boosting sales with marketing dollars rather than quality products. Perhaps Anheuser-Busch uses their clout to give Blue Point and Goose Island beers an edge in the competition for tap handles or store shelves, and smaller, less well-endowed breweries get shut out.
While we wait to see how exactly these buyouts will affect the industry, I'd rather give my beer dollars to breweries whose focus is indisputably on their product. When ownership of craft breweries belongs to corporations who by their nature are profit-focused, when ownership no longer belongs to people who joined the scene because they thought they could offer a unique product, what happens? For the first time, Blue Point now has a responsibility to public shareholders to maximize profits. At some point, that will inevitably lead them to make decisions that an independently-run brewery would not.
Anheuser-Busch is good at what they do, and their financial resources are surely of great use to the breweries they buy out. I just don't know what they plan to do next, or how many breweries will sell. I'd rather support breweries where I know both brewers and ownership believe that the best and only way to succeed is to focus on the quality of the beer, not their shareholders or their bottom line. Maybe you agree with me, maybe you think I'm naive to expect brewing to have a morality absent from most fields, or maybe you think I'm just paranoid that every raindrop means the sky is falling. Regardless, it's worth paying attention to who gets bought out, and watching those breweries for signs that corporate ownership isn't the best thing for them or their customers.
Blue Point might have been called up to the majors, but if that's the case, count me as one fan who won't be attending their games.
Thanks to user fuzzcat on Flickr for the header image.
You can find Alex on Twitter @AlexanderFossi.