Why consolidation is bad for Craft Beer and why you should actively sabotage brands that have sold out.
It undermines the craft movement
Craft beer, in the mind of the consumer, is made by small, independent brewers in small batches. And no, this is not my opinion, this is the opinion of 1,000 craft beer drinkers who told Nielsen exactly the exact same thing (Craft Brewers Insight Poll July 2015). As more breweries succumb to acquisition it becomes harder for craft drinkers to determine which “craft brands” are truly small and independent. Many say the craft movement is about flavor rather than the producer. I say flavor goes beyond the palate. The craft movement is about the flavor of the beer, the flavor of the town it comes from, and the flavor of the people making it.
Through my trolling of the Facebook feeds belonging to recently acquired breweries (yes, I’m guilty of schadenfreude and I’m not even ashamed to admit it) I have seen comments that follow this basic logic, “Megabrewer subsidiary X made great beer before they sold out and I’m now just excited to have more of it available because of this new strategic partnership”.
First off, allow me a moment to change my underwear because I peed a little while laughing hysterically at the phrase ‘strategic partnership.’ The argument that the world is a better place because a recently acquired regional brewer can now ship their liquid farther and wider with more availability is not valid. I don’t doubt that these former craft brewers had amazing beer to offer craft drinkers, but so what. There are thousands of amazing beers coming out of the craft movement and the warm fuzzy you get from drinking them is more than the sensation on your tongue and the alcohol streaming through your blood. It’s a feeling of upholding some kind of social contract; supporting groups of people who care about each other and care about providing you with something to make your day. That warm fuzzy doesn’t come from supporting a group of people whose aim is to maximize share price and shareholder dividends.
All these sellouts make it that much harder for the craft movement to continue on the clear path of building a better community. Are the big pay-days craft brewers are cashing in on the ‘American dream’ as some will claim? If the American dream is to cash-in while turning your back on the very movement that allowed your success, then yes.
It distorts the marketplace
Here’s an interesting and at times, shitty feature of the beer distribution marketplace: if you want to get your beer to customers, you generally have two choices. Up until recently, those two (occasionally three) choices were all independent beer distributors. We are now in an era where one of the major brewers (think shit beer marketed with scantily clad women) is buying up these distributors in major markets.
The new reality is a market with one independently owned distributor, one brewery owned distributor and one distributor so much smaller that there is an immediate handicap for brewers by the size of their market presence. The brewery owned distributor is now vertically integrated with acquisitions in a way that allows it to put downward pressure on pricing that could quickly put small brewers out of the distribution business or out of business in general. This brewery owned distributor now has enough faux craft brands that they don’t need to sell any true craft product and as a result, craft brewers are down to either one good choice or two bad ones. This is the kind of ammunition that we as craft brewers need to stop giving the competitors who have been on the losing end of the market shift to craft, aka big brewery conglomerates.
It’s selfish and creates instability
I think I have portrayed why I think these sellouts are selfish. Don’t get me wrong, I’m selfish too, just ask anyone who knows me, but there is a limit. I feel an obligation to consider my actions when the costs to society may be higher than the benefit to me. For example, I hate recycling. I don’t have the luxury of curbside recycling. I have to amass all the stupid cartons and containers in my garage in sorted bins and once every two or three weeks haul the stinky heap to the transfer station. I often imagine how glorious it would be to toss all that shit in the garbage can and never care about it again. But I can’t. I refuse to put my luxury and comfort over something that will be a genuine cost to society, so I grin and bear it.
But what happens when I look around and see that a bunch of jerks are just tossing their recyclables in the garbage? Well, I start to wonder what the point is. What difference does it make if no one else gives a shit? In the case of selling out I wonder, when does it end? Will the only breweries left be the giant crafts, the megabrewer subsidiaries and brewpubs? Should I get while the getting is good or lose it all? The answer for me is spoken best by David Sarnoff when he said “We cannot banish dangers but we can banish fears. We must not demean life by standing in awe of death”.
I doubt that I am the only brewery operator who considers this issue and the more that fall to acquisition the greater the sense of insecurity is likely to be.
I hate that the industry is going down this path. It does scare me. I don’t mind mergers and acquisitions, I just think we owe it to each other as brewery operators to consider what we leave in our wake when we choose to sow the seeds that could end the craft movement. We owe it to our consumers to keep the promise that we made when we began selling them beer; that we know you, you know us and together we’ll share a good beer that improves the lives of many.
Keep fighting the good fight. We’d love to have Iron Horse in Northern Nevada, but not if the cost meant some “strategic partnership”.
Your strong moral compass has not gone unnoticed.
You nailed it on the head. It will always be the objective of the mega breweries to co-opt the craft brewery industry in order to direct it to their own nefarious purposes.
Hopefully brewery owners will remember two basic principles. First, craft breweries are less sensitive to price points, so as long as they are producing a unique and high quality product, they should not feel like they have to come close to matching the price points that these brewery-owned distributors are imposing on them. Better to have higher margins and less volume than to have higher volume and less margins.
Second, craft brewers need to educate their markets that they occupy what IS and IS NOT a real craft brewery. A great idea would be to establish a standard that the craft brewery institutes that shows who are craft breweries and who are actually simply fakes owned by a conglomerate. That may take a lot of coordination and cooperation and perhaps it’s already in progress. Nevertheless the public at large needs to know the fake from the real.
Keep up the good work and fight the good fight. I know you will succeed.
With humans like you on our side the good fight is a little easier.
You keep making these lovely, sensible statements, and we will keep passing them around to our favorite local craft breweries and pubs. As long as they know they are not alone in their plight there is hope to keep the megas at bay.
We’ve never been called lovely before. You’re making us feel a little giddy.
I couldn’t agree more. As a home brewer and craft beer lover, to me good beer is about the interaction between man and nature; the brewer, the ingredients, and our little friends that turn sugar into alcohol. It is dynamic and visceral and spiritual, and bunch more adjectives that I can’t think of right now. And truly great beer is also very regional. It is about the people who made it, and how they made it and what they made it with. But it is also about the people they made it for. I count myself truly fortunate to live in Ellensburg, the home of one of the greatest of all the craft breweries. And knowing that you feel the same about Craft Beer sets me at ease knowing that IHB will always be a true Craft Brewery.