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The Real Problem With Anheuser-Busch InBev Takeovers

Michael Donato, January 26, 2015 -   

We’re very early in this progression, but a pattern has emerged: Anheuser-Busch InBev, or another large corporate company, purchases a craft brewery. That is followed by a vocal outcry by various segments of the craft beer community. There are various complains, some valid, some not, and then there are always a few posts pointing out how it’s probably not a big deal. 

This is not one of those posts.

One of the common complaints is that AB InBev will run a craft brewery like they run their own breweries and quality will suffer. So far we’ve seen none of that; breweries like Goose Island seem to be churning out the same quality beer they did and perhaps with an influx of cash that allows them to upgrade equipment and distribute more beer to a wider distribution area. All those beer drinkers getting Bourbon County Brand Stout that previously didn’t have access to it are going to have a hard time caring who actually owns the brewery. 

That’s great if it stays that way; After all the goal is for everyone to have access to a lot of good beer and that certainly qualifies.

What's more worrisome is that this could be the beginning of a long plan for these giant beer conglomerates to again dominate the beer market, and it’s one that can work. It’s not targeted at the beer geek though, it’s targeting the segment of the population that likes beer but doesn’t really follow the industry. This is a person who will pick something interesting off a shelf, but isn’t necessarily hunting for Heady Topper. This is also the market for craft beer that’s growing the quickest, that takes craft beer from a niche interest to a legitimate subsection of the industry. Everyday drinkers are starting to abandon Bud Light for something a little more interesting. Most of those people won’t become beer geeks cellaring beer and hunting for the next big IPA. They just want something more flavorful to drink with dinner, at a BBQ, or while relaxing on a Sunday afternoon. 

We’ve heard stories before about AB InBev flexing their muscles to monopolize taps or shelf space. What if they decided that in order to get BCBS you had to clear your shelves or taps of other barrel-aged stouts? What if they offer to buy them from you?

That might just be the goal. As they acquire more and more breweries and build a portfolio of quality craft beer they can put pressure on distributors and wholesalers to prioritize their craft beer over others. They can make deals to guarantee taps, put displays and advertising in windows and push for the prime shelf space. They can sell in bulk and make their product cheaper. Those casual drinkers will never notice.

It’s no surprise that BCBS’s release has become a bona fide event, and that it happens on Black Friday. What if there was one less Budweiser commercial at this year’s Super Bowl, and one for Bourbon County Brand Stout? Marketing is a big part of what they do. What if they start building anticipation towards Black Friday and this year’s release? Maybe it won’t happen for a beer like that with a high overhead. BCBS, thanks to the need to age them in bourbon barrels that are much smaller than a typical beer tank, is more expensive to brew and age, but they could similarly promote another craft beer they’ve purchased.

The casual beer drinker is going to recognize that beer, and that brand. That’s how advertising works. They know they like IPAs, see Goose Island IPA or Elysian Space Dust on the shelf, and buy it. They’ll never realize they could have had the option of Lagunitas IPA, or Ballast Point Sculpin, or Carton 077XX. They’ll remember hearing about Blue Point Toasted Lager, and it’ll draw them to purchase it. None of these are bad beers, in fact they’re quite enjoyable, but I don’t want my variety and options limited by a huge corporate conglomerate. 

AB InBev isn’t trying to turn Goose Island into Budweiser. They’re trying to control the selection of craft beer that’s available to you. and they now control four craft breweries from different parts of the country. They know we’re not all going to go back to Budweiser and Bud Light so when we turn to make a different choice they’re right there again.

It’s a bit of a Morton’s Fork that way, in that they’re angling to get your money no matter what you choose to drink. We can see an example of this at the ballpark last season, as Goose Island accounted for 8.8% of all check-ins and claimed the most checked-in title in five parks. There was a dedicated push to get dedicated Goose Islands stands into the ballparks, because Anehuser-Busch is a huge sponsor of MLB and has the clout to push things like that. 

As they acquire more breweries and have the volume to position more craft beer as the only choice this will become more of a problem. They won’t even always have to be forceful about it; They have their hand in the distribution channels already which means it’s that much easier, and perhaps cheaper, for retail locations to get more and more of their supply from the AB InBev approved distributors.

Not everyone that owns a place where beer is sold is a beer geek; some are just looking to provide what they think people want. The easier it is for them to get a selection of beer and turn a profit the better. Then it becomes an issue of space. How much will be left for the craft beer that didn’t make the deal with the devil? 

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