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Home Brew Forums > Home Brewing Beer > General Beer Discussion > Who's Afraid of BMC?: Garrett Oliver (of Brooklyn Brewery) speaks out.




View Poll Results: Can the Craft Brewers survive their own success?
Yes - even with merging, they'll maintain the diversity and quality of beer. 35 46.05%
No - rather than huck the Ring into Mt. Doom, they'll keep it - and we know where that leads. 2 2.63%
Maybe - it depends on whether their ideals overcome their desire for platinum toilet-seats 21 27.63%
How should I know? Who am I, Ralph Nader? 18 23.68%
Voters: 76. You may not vote on this poll

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Old 10-20-2007, 10:17 PM   #1
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Default Who's Afraid of BMC?: Garrett Oliver (of Brooklyn Brewery) speaks out.

Preamble: I haven't posted on a beer-related topic in weeks, so I'm getting back into the water by combining my love of economics and my (more satisfying) love of beer.


I'm sure those of us with enough time to do so took at least a passing interest in the proposed merger of some of the Dark Lords. (Miller and Coors). Garrett Oliver, of Brooklyn Brewery, wrote this editorial in the NY Times:

Don't Fear Big Beer

Essentially, he's saying don't worry about the merger, b/c the "craft brewers" - he's trying to get away from the handle of "micro-brewers - are gaining market share and generally kicking ass.

He also adds a warning to his fellow crafties: Learn from BMC. Don't become like them, purveyors of bland, mass-market beers. Don't - as Google once put it Pollyannishly - Be Evil.

I think that's great. I also think they can afford to think like that while their market share is growing. That may (will) change, though, when the market is once again re-saturated by hordes of devoted, eccentric braumeisters, who are suddenly competing for a scarce pool of beer afficionados. Then, they start again with the mergers, and the acquisitions, and the adding rice to drinks other than sake, and the general ****tiness... ^

So here's my question: How long can they sustain this model? Would it be possible, when the inevitable mergers start, to maintain the quality of the beer? Or will they fall victim to the same thing that corrupted BMC in the first place: the realization that by diluting their product, they could literally wipe their asses with $100 bills.

^ It occurs to me that after this merger happens, BMC will get shortened to BM. Now we can snicker when we say "I really don't want to drink a BM." ^^

^^ And now, I've just reminded myself of that scene in the second Austin Powers movie. Brb guys, gonna go hork up my last 3 beers.



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Old 10-21-2007, 05:07 AM   #2
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"The mergers" you speak of may and probably will happen. However, ther will always be the small guys providing incredible beer. Some of the original micros like Sam Adams, and Deschutes have already lost their souls (and their flavor), but there are a hundred new guys with incredible beer to take their place. No, great craft brew, as well as great small winerys are here to stay. It will probably be pretty tough to stay on top for long though.



BTW, I've been wonderig, what exactly does the acronim BMC stand for anyway?



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Old 10-21-2007, 05:13 AM   #3
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Bud - Miller - Coors = BMC

The axis of evil.

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Old 10-21-2007, 05:30 AM   #4
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So, since I occaisionally drink a pabst, I'm ok?

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Old 10-21-2007, 06:17 AM   #5
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If the (B)MC merger actually happens we will no longer be able to use the acronym of our forefathers but shall have to resort to the cold hearted truth that we shall only have B(owel) M(ovements) in our future .

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Old 10-21-2007, 01:47 PM   #6
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Okay first off, Miller and Coors are NOT merging. They are forming a joint venture to obtain greater production efficiency, not forming a new company. Secondly, Oliver is dead on the money; Bud's market share has remained constant for the past several years while the market has gotten bigger and bigger. This tells me they are not bringing in new beer drinkers outside their core market. At the same time more and more craft brewers are popping up and gaining market share. BMC isn't any more of a threat to craft brewers than Walmart is to William Sonoma.

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Old 10-21-2007, 02:29 PM   #7
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Mergers will happen, beers will be blanded to 'broaden' the appeal, costs will be cut, repeat. New brewers will take over the high-end. Any industry where the entry cost is low goes through the same cycles, over and over.

There are exceptions. Widmer Brothers have avoided the cycle, possibly because they have retained control and they keep in touch with the homebrewing community.

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Old 10-22-2007, 02:43 PM   #8
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Quote:
Originally Posted by TheJadedDog
BMC isn't any more of a threat to craft brewers than Walmart is to William Sonoma.
I would not agree with this analogy. BMC has been buying up craft breweries and putting them into their distribution chain. They are then able to use these brands to take up shelf space in your neighborhood grocery chain and stifle competition. Good examples of this are Redhook and Widemer. They try to have products in all the price categories to maximize this effect. Why should the local grocery store start carrying Avery products from a third or fourth distributor, when they can fill the same slot with a product from BMC that is already in their stores. One less vendor and more marketing clout to move the product. Not too mention the effect the BMC's have on supplies and how they can use their size to apply price pressure to smaller breweries. I have a feeling that the craft market may look much different in 4 or 5 years than it does now, just because of the rising prices in core ingredients. Many small breweries are going to either disappear or become acquisitions.

The above analogy may hold true if you are looking at Walmart versus your local independent beer store, but does not hold up in the larger market place.
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Old 10-22-2007, 04:00 PM   #9
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Quote:
Originally Posted by jdoiv
I have a feeling that the craft market may look much different in 4 or 5 years than it does now, just because of the rising prices in core ingredients.

I disagree.

I think you will find that the people drinking the craft beers do not mind the extra cost of the beer. The same was brought up earlier with regards to cheese and coffee. There is a huge culture of "foodies" right now that appreciate quality products and will continue to go to the Brew Pubs that have great food and serve even better beer. I mean, look at what people pay for a bottle of wine, 10 to 20 for a modest bottle. A moderately high end bottle of beer(boomer size) will cost you 12 bucks. I see corking fees for beer in the near future.

Some said that Sam Adams has lost its soul. Again, i have to disagree with that. You will notice SA beers may differ from batch to batch, this is due to the hand crafting. Their process may be highly mechanized due to demand of their product but there is alot of human involvement in their beers. What about their Brew contest? Promoting homebrewing! I think that is pretty cool. I know, I know, they do it to sell the winning beer. But they are doing it, they are spreading knowledge of home brewing.

Have you had a BMC that tasted different from the last one ever? other than the time you hide the 12 pack in the garage cuz you were underage and it was 20 degrees out and it frooze?
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Old 10-22-2007, 04:23 PM   #10
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I think that there is a lot to fear from BMC but I really don't think it has happened. BMC could crush the competition and I have read articles where it seems like they want to or have tried to intimidate the seller but when I go beer shopping I see more beer on the shelf than I can believe. No the 7/11 only carries BMC but the supermarket carries beer from all over the world. And local markets are represented as well its not just a few larger craft beers. In fact the local Nugget (high end grocery store but a local chain) has its own beer. There is Nugget Market Beer I have not tried it. Beer is huge right now. Sure BMC can offer a huge brick of beer at a price that no local craft company could match but quality beer is still thriving. Infact Nugget got in a new beer I have not tried and I cannot wait to get my hands on it the Haufbrauhause beer from Munich.

In the last 15 years this market has blossomed. BMC may not make it easy but it seems to show the signs of a very positive market.



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