The common consensus from beer drinkers is that the merging of small craft breweries with major corporations like AB InBev and Miller Coors puts shame to the quality and creativity of iconic beers born during the craft beer revolution.
Fans of craft breweries like Dogfish, Goose Island, and Revolution have taken to the blogosphere and have displayed their "hate tourism" because craft businesses are teaming up with breweries known for making the most sessionable beers in the industry. Because of this trend of activity, customers have started to ask themselves the question of whether they will still be loyal fans of their local “craft” breweries should they choose to align themselves with one of the major players. Craft drinkers fear that this distracts from the authenticity brewers innovations and brewing history and that it will in turn also weaken the recipes.
To face this issue head on, we must outline the main questions that breweries, distributors, and retailers are going to face for answers the questions about the upsides and downsides of participating in the mass production vs. craft beer revolution.
1. Are the Brewers still fully in control?
The answer to this question is yes. Even though smaller craft breweries have been bought out by the big guys, according to a recent article by Thrillist contributor Dave Infante, several brewers have admitted that the recipes for their beers have not been impacted after the switch. Ballast Point founder Jack White says, "It will be the same people making the same beer, with the same culture and approach," following the brewery's $1 billion sale to Constellation, a New York holding company.
2. Is beer becoming “watered down”?
Some complaints have been raised about the beer tasting watered down after moving to the larger production facilities, and consumers have begun to question the true quality of their beer after it comes off the tap.
Beer makers have confirmed that although the price has been dropped for the beer, the bottles, cans, and kegs are still being made the same way. Felipe Szpigel of Stella Artois says, "When I hear people say that—'You'll water down their beers!'—I think, 'Why would we do that?'"
Additionally, the president of Goose Island, Ken Stout has said "'Our quality assurance and quality control practices and instrumentation have improved exponentially since we were acquired in 2011.' 'The consistency and stability of our beers, across the portfolio, have never been better.'"
3. What does "selling out" really allow a brewery to do?
Since the sale of Goose Island to AB back 2011, new opportunities have opened up for the Brewery allowing a taproom to grow while continuing to make production most efficient and cost effective.
AB InBev brews beer at 12 massive facilities across the country making serious investments in the craft space at the Fort Collins, Baldwinsville, Merrimack, NH and Williamsburg VA locations. This reduces the manual labor required for handling the craft beers compared to the way the craft beer was produced at its original craft destination.
This further makes the beer more consistent, and it cuts down cost while ensuring drinkers are regularly purchasing quality brews.
By teaming up with AB in 2011, Goose Island was able to become more experiential with their recipe by relocating the production of 312 from its Chicago zip code off-site to Baldwinsville where 312 can be brewed more efficiently in massive thousand barrel batches alongside the IPA and Honkers Ale. The movement of the beer production has made room for more fun to take place at the Chicago brewery as the breweries continue to play with their wine and whisky-barrel-aging processes in lines like the Bourbon County Stout and the Sour Sisters, Sofie and Matilda.
When you don’t have to spend too much time organizing the supplies, keg prices are cut in half and beers can expand into new markets at a faster rate.
After Lagunitas had merged with Heineken, the beer was opened up to the European market to be sold in France, Denmark and the Netherlands. The director of communications at Lagunitas, Karen Hamilton, says, “’We are sharing our 23 years of knowledge of building a small brand with Heineken, and they can apply some of those things to their small brands… In return, they are giving us access to the world." It's a statement that could easily be seen as either positive or ominous, depending on your viewpoint.’”
“Selling out” has also led to increased access to hop varieties and availabilities. Perhaps one of the biggest contributions “Uncle InBev” had made to the craft breweries is access to the Elk Mountain hop farm that expands 1,700 acres in northern Idaho. Elk Mountain is America’s largest contiguous hop farm growing Cascade, Amarillo, Mt. Hood and Saaz hops. The farm has been able to offer breweries a steady stream of revenue by providing consistent access to the farm when they begin their harvest in September. For example, when Elysian brewery sold to InBev they were able to make their Space Dust beer even more out of this world with the addition of Elk Mountain hops
4. What does this mean for distributors and retailers?
If you are not familiar with the three-tier system for beer distribution arranged after the U.S. prohibition, it’s pretty easy to explain. Tier one: producer, tier two: distributor, tier three: retailer. Some states have made the decision to have the state government in control of distribution rather giving private equities the power to enforce distribution.
Large breweries have control over the regional distributors and local retail accounts, therefore, they have the ultimate power to “pay for play” and dominate the shelf space. Retailers are the first to notify the distributors when one beer category is selling more than another, and they have the ability to reach out to the big players to ask for more from distributors. If the distributor is “blue” meaning the majority of their business comes from selling MillerCoors products, the distributor has the power to stock store shelves with their “craft” acquired beers like Saint Archer and Hop Valley. Make sense?
This makes the retailer happy and makes for more pleased beer drinkers because “craft beers” are showing up on the shelves of the places they shop most frequently.
5. Are drinkers happy?
The war between the masses is going to be a continued debate, and the industry will be excremental ly different in five years. According to Thrillist, “As the market gets tighter, breweries will fail." There will be fewer independent brewers large enough to compete for the mainstream supermarket shelf space.”
When craft beers are not represented on the shelves, their key goal will be to establish an authentic voice through the marketing of their taprooms. Taprooms are where the real magic happens and breweries that I have visited in Chicago are selling the experience of the craft beer scene through marketing, product design, creative menus, social media influencers, and events.
So although acquired just means “less premium” as long as the quality is still the same, we’ll keep buying the beer and the cheaper it is, the better! Once the threat to the quality of the beer is tested, consumers will start to question who is actually making the beer. But for now, my Sculpin tastes just fine the way it is!
Corporations are Swallowing Up Craft Brewers. What’s That Mean for Beer Lovers?
What “Selling Out” Allows a Craft Brewery To Do
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