Happy HolidaySs Giveaway - Winners Re-Re-Re-Drawn - 24 hours to Claim!

Get your HBT Growlers, Shirts and Membership before the Rush!


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

Reply
 
LinkBack Thread Tools
Old 10-22-2007, 05:42 PM   #11
Dude
Will work for beer
HBT_LIFETIMESUPPORTER.png
Feedback Score: 0 reviews
 
Dude's Avatar
Recipes 
 
Join Date: Jan 2005
Location: Knob Noster, Missouri
Posts: 8,843
Liked 55 Times on 45 Posts
Likes Given: 6

Default

Quote:
Originally Posted by jdoiv
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.
Everything you posted here is 100% dead on, IMHO.

It is inevitable the smaller breweries just aren't going to be able to survive. Fuel costs, ingredients, etc., they have a longer row to how to be/stay successful, where BMC'ers can cheat by using cheaper ingredients. Most BMC breweries dont even do cereal mashes anymore--they partial mash and supplement with rice and corn syrups.

I agree we'll now begin to see a downward trend of craft breweries. And that sucks.
__________________
On Tap: Lake Walk Pale Ale -- Eternity (Raspberry Stout) -- Nutrocker -- Donnybrook Dark
Primary: Lake Walk Pale Ale
Secondary: Summit IPA
Up Next: Smoked Porter -- Pub Ale -- Watermelon Wheat
Planning:
Gone But Not Forgotten:

www.IronOrrBrewery.com
Dude is offline
 
Reply With Quote Quick reply to this message
Old 10-22-2007, 05:50 PM   #12
Fish
Feedback Score: 0 reviews
Recipes 
 
Join Date: Jan 2007
Posts: 312
Default

I am not sure I see the connection. I will pay a dollar more for better beer. Beer might be more expensive but I will still buy beer. I don't really consider BMC beer its not something I buy so I its not an option.

__________________
Primary : Aqpflpevzrwein (scrabble edition)
Primary : pumpkin beer
Primary : Prickly Pear wine
Primary : Fruit Cider
Secondary :empty

Bottled: Wheat
On Deck: Mead
Fish is offline
 
Reply With Quote Quick reply to this message
Old 10-22-2007, 06:11 PM   #13
BierMuncher
...My Junk is Ugly...
HBT_MODERATOR.png
Feedback Score: 0 reviews
 
BierMuncher's Avatar
Recipes 
 
Join Date: Jan 2007
Location: St. Louis, MO
Posts: 12,230
Liked 613 Times on 355 Posts
Likes Given: 231

Default

BMC's are running a bit scared. A good friends brother is Director of Brand Management for Budweiser at AB and they recongnize that more and more people are looking up and down the left side of the beer aisle for their beer get togethers than the right (BMC) side.

To site a couple of recent changes in BMC practice that illustrate their concern:

Changing Michelob to an "all malt" beverage and touting it as such.
Recent Budweiser ads focus on "The Great American Lager" (as in Lagers are better than Ales Maybe?)

And if you've been to Sam's recently...you may have seen this:

michelob_crafts.jpg

For AB to put out a Porter, a Bavarian Hefe, a Pale Ale and a Marzen out there...means someone is making a dent.

BierMuncher is offline
 
Reply With Quote Quick reply to this message
Old 10-22-2007, 06:16 PM   #14
olllllo
[]-O-[]
HBT_LIFETIMESUPPORTER.png
Feedback Score: 0 reviews
 
olllllo's Avatar
Recipes 
 
Join Date: Apr 2006
Location: Phoenix, Arizona
Posts: 13,514
Liked 126 Times on 106 Posts
Likes Given: 13

Default

I think Ray McNeill said it best (and I'm paraphrasing) that craft breweries success is not competing with BMC or with each other, but instead it should be competing with eurpean lagers such as Heineken and Stella.

These are beers that marketed to people that believe that want (or feel they deserve) something better than BMC, but really aren't getting very much in return. These are your craft beer converts. This segment represents something like a 20% marketshare.

That said, what jdoiv and Dude have said about the distribution machine is going to be very daunting for craft beer. The retail market has a finite amount of shelf space, bars have a finite amount of taps/bottle space. I was in a bar the other day when the Bud distributer (Crown) talked the bar manager into replacing a local micro with a Bud seasonal (I forget which) by offering a bunch of signage, etc. BMC is more than happy to eat up a tapper at bar with one of their own than cede it to an outside distributer/brewery. Sometimes it's the carrot and other times it's the stick.

The analogy is in the greeting card market. 75% of the cards you see are Hallmark or (tiny divisions of Hallmark). They provide the shelving, have thier own stores, etc. The same goes for soda/pop. Who do you think pays for end cap displays and coolers? In order to add a new greeting card line or soda, you'd have to find a place to put it in your store. Pepsi/Hallmark would never allow the store to use thier cooler or display for another brand.

__________________
Rabbit And Coyote Schwag
Rob - Phoenix Ambassador to Milwaukee
Where did your avatar go?
Ginger Beer for Moscow Mules Bacon Vodka
Twitter
olllllo is offline
 
Reply With Quote Quick reply to this message
Old 10-22-2007, 06:18 PM   #15
Dude
Will work for beer
HBT_LIFETIMESUPPORTER.png
Feedback Score: 0 reviews
 
Dude's Avatar
Recipes 
 
Join Date: Jan 2005
Location: Knob Noster, Missouri
Posts: 8,843
Liked 55 Times on 45 Posts
Likes Given: 6

Default

Quote:
Originally Posted by Fish
I am not sure I see the connection. I will pay a dollar more for better beer. Beer might be more expensive but I will still buy beer. I don't really consider BMC beer its not something I buy so I its not an option.
I'll attempt to connect the dots.

Would you rather buy a 4 pack of DFH 90 for 10 bucks, or a sixxer of Stone IPA for 8?

DFH is only one brewery pricing itself out of the market. Soon you'll see this happen to more craft breweries. Most people just aren't going to pay to the extreme for a top of the line brew. You'll see people compromising some flavor for a cheaper price. Soon that comparison will come down to the faux craft brews that BMC is doing now. They can do it cheaper-and they know they can still compete for the market share.
__________________
On Tap: Lake Walk Pale Ale -- Eternity (Raspberry Stout) -- Nutrocker -- Donnybrook Dark
Primary: Lake Walk Pale Ale
Secondary: Summit IPA
Up Next: Smoked Porter -- Pub Ale -- Watermelon Wheat
Planning:
Gone But Not Forgotten:

www.IronOrrBrewery.com
Dude is offline
 
Reply With Quote Quick reply to this message
Old 10-22-2007, 06:45 PM   #16
Fish
Feedback Score: 0 reviews
Recipes 
 
Join Date: Jan 2007
Posts: 312
Default

Quote:
Originally Posted by Dude
I'll attempt to connect the dots.

Would you rather buy a 4 pack of DFH 90 for 10 bucks, or a sixxer of Stone IPA for 8?

DFH is only one brewery pricing itself out of the market. Soon you'll see this happen to more craft breweries. Most people just aren't going to pay to the extreme for a top of the line brew. You'll see people compromising some flavor for a cheaper price. Soon that comparison will come down to the faux craft brews that BMC is doing now. They can do it cheaper-and they know they can still compete for the market share.

If companies price themselves out of the market well thats their loss. And I think thats their choice and many companies in all fields do price themselves out of the market, it is reality but I don't see how one company overpricing constitutes a trend that signals the downfall of craft beers.
No I don't buy the most expensive beers on the self but my selection of premium beers in the middle bracket is huge. I rarely buy anything that is in the most expensive category. It doesn't mean I am going to start buying a 32 pack of Coors for $11. I just don't want it. My neighbor does - he goes through 2-3 bricks of bud a weekend. And we have the variety that we need so we both get our needs met. Will I pay 9 instead of 8 for a 6? Yes I will - if beer prices rise I will follow. If wine prices go up I will still buy wine and I won't be buying the Almaden gallons in a cardboard box.

I think its a huge leap to say that prices are rising and soon all we will be left with are the 3 big breweries. If this was all market economics I am sure no one would pay more for a 6.But people like the craft beers and we are willing to pay more for beer we like otherwise this whole micro-brew trend would never have started. Financially it makes no sense but it comes down to personal preferences not financial preferences.
__________________
Primary : Aqpflpevzrwein (scrabble edition)
Primary : pumpkin beer
Primary : Prickly Pear wine
Primary : Fruit Cider
Secondary :empty

Bottled: Wheat
On Deck: Mead
Fish is offline
 
Reply With Quote Quick reply to this message
Old 10-22-2007, 08:45 PM   #17
jdoiv
Feedback Score: 0 reviews
 
jdoiv's Avatar
Recipes 
 
Join Date: Mar 2007
Location: Nashville, TN
Posts: 1,149
Default

Quote:
Originally Posted by Fish
If companies price themselves out of the market well thats their loss. And I think thats their choice and many companies in all fields do price themselves out of the market, it is reality but I don't see how one company overpricing constitutes a trend that signals the downfall of craft beers.
No I don't buy the most expensive beers on the self but my selection of premium beers in the middle bracket is huge. I rarely buy anything that is in the most expensive category. It doesn't mean I am going to start buying a 32 pack of Coors for $11. I just don't want it. My neighbor does - he goes through 2-3 bricks of bud a weekend. And we have the variety that we need so we both get our needs met. Will I pay 9 instead of 8 for a 6? Yes I will - if beer prices rise I will follow. If wine prices go up I will still buy wine and I won't be buying the Almaden gallons in a cardboard box.

I think its a huge leap to say that prices are rising and soon all we will be left with are the 3 big breweries. If this was all market economics I am sure no one would pay more for a 6.But people like the craft beers and we are willing to pay more for beer we like otherwise this whole micro-brew trend would never have started. Financially it makes no sense but it comes down to personal preferences not financial preferences.

I don't think it will be the breweries pricing themselves out of the market as much as the market pricing them out. The higher costs of ingredients, manufacturing, storing, distributing and marketing of the product is going to do it for them. Not all of them are going to get hurt. Some may thrive and survive. But some are definitely going to get hurt. I do think companies like DFH will be the ones that are stifled. And maybe that's ok. Not everyone is going to buy a super hoppy beer. Those that do, may just find it a little harder to find at the local store. BMC is a marketing machine and realizes it is losing market share. Price increases on ingredients is going to help it put the squeeze on the market. Some will survive, some may just have to retreat and some will fold. But I do think the next 3 to 4 years will be harder on the craft brew business than the last 3 to 4.

I have a very good friend that is in the business and I used to be in the business, and as someone pointed out, the warfare is in the local bars and markets. When BMC can come into a small grocer/bar and give them lots of incentives to carry a product/put a tap handle on, etc, that is a cheaper cost but can sell at the same price as a craft beer, they are going to add it.

I don't think it is the end for craft breweries, but I think you are going to see things recede a little and many breweries are going to go back to being more regional.
__________________
Drinking on the keg: BPA, Brown Ale, Dry Mead, Wee Heavy aged on Oak, CAP
Drinking in the Bottle:
Conditioning:
Fermenting:
Planning:
jdoiv is offline
 
Reply With Quote Quick reply to this message
Old 10-22-2007, 09:17 PM   #18
Fish
Feedback Score: 0 reviews
Recipes 
 
Join Date: Jan 2007
Posts: 312
Default

Quote:
Originally Posted by jdoiv
I have a very good friend that is in the business and I used to be in the business, and as someone pointed out, the warfare is in the local bars and markets. When BMC can come into a small grocer/bar and give them lots of incentives to carry a product/put a tap handle on, etc, that is a cheaper cost but can sell at the same price as a craft beer, they are going to add it.

See that makes sense but I just don't see it. I cannot remember the last time I went into a bar and all they had was BMC. Even the local tiny corner store here carries about a dozen beers. And yes BMC dominates but its not the only choice, the only places I have been that only carry BMC are the 7/11's. It could change but it seems to me there is too much interest in good beer. The only time I remember ordering a Bud was 3 years ago at Sea World. Thats all they had and then it was only because it was the new novelty energy beer they tried to market. I just don't like getting drunk I like drinking. I like beer but I won't drink it if I don't like it.
__________________
Primary : Aqpflpevzrwein (scrabble edition)
Primary : pumpkin beer
Primary : Prickly Pear wine
Primary : Fruit Cider
Secondary :empty

Bottled: Wheat
On Deck: Mead
Fish is offline
 
Reply With Quote Quick reply to this message
Old 10-22-2007, 10:07 PM   #19
WOP31
Feedback Score: 0 reviews
 
WOP31's Avatar
Recipes 
 
Join Date: Feb 2007
Posts: 1,332
Liked 8 Times on 4 Posts

Default

Quote:
Originally Posted by Sea
So, since I occaisionally drink a pabst, I'm ok?
Sorry dude, I am a Pabst drinker myself sometimes, but not even we are safe:

Quote:
Pabst Brewing Company is an American company founded in 1844 by Jacob Best. Best known for Pabst Blue Ribbon beer, it is historically associated with Milwaukee, Wisconsin, where it was founded, although its corporate headquarters are currently in Woodridge, Illinois. Pabst retains a datacenter in San Antonio, Texas, the previous location of its headquarters. In 1999, the Pabst Brewing Company began transferring its production to Miller Brewing Company on a contract basis. In 2001, it closed its last brewery in Allentown, Pennsylvania.
And check out the top of This Page "Pabst Blue Ribbon, Brewed by SABMiller"

Sorry to rain on the parade.

As for Craft beer after the merger of Coors and Millers US operations, I think that they will still survive and prosper, the demand for craft beer is on the rise and that is evident in BM's post, just look how the big guys are trying to catch up, and gain a foothold in the craft beer industry.

I think its good, it is getting people who will only drink beer made by BMC to try something diferent, which in turn may open their eyes to the micros on the shelf next to them, and they will be like "Hey that BMC wheat beer was alright i wonder how this local one is?" Boom, they just converted one of their customers to a Craft Beer customer.
__________________
"Yes, I am a pirate two hundred years too late. The cannons don't thunder there's nothin' to plunder,
I'm an [under] forty victim of fate, Arriving too late, arriving too late."
-Jimmy Buffet
WOP31 is offline
 
Reply With Quote Quick reply to this message
Old 10-22-2007, 10:15 PM   #20
jdoiv
Feedback Score: 0 reviews
 
jdoiv's Avatar
Recipes 
 
Join Date: Mar 2007
Location: Nashville, TN
Posts: 1,149
Default

Quote:
Originally Posted by Fish
See that makes sense but I just don't see it. I cannot remember the last time I went into a bar and all they had was BMC. Even the local tiny corner store here carries about a dozen beers. And yes BMC dominates but its not the only choice, the only places I have been that only carry BMC are the 7/11's. It could change but it seems to me there is too much interest in good beer. The only time I remember ordering a Bud was 3 years ago at Sea World. Thats all they had and then it was only because it was the new novelty energy beer they tried to market. I just don't like getting drunk I like drinking. I like beer but I won't drink it if I don't like it.
Oh, I think there will always be other things to choose from, but I think that choice will be limited. Just go into your local store and count the number of items on the shelf. Then count how many of them are from BMC. Next look at the brands that aren't noticeably BMC. Find out who makes them (SABMiller for PBR as an example or look at Pete's). I bet you'll find that less than 20% of the product on the shelf is from a real craft brewery. Now, in order to get more choice in the market, something on those shelves is going to have to go. Do you think it will be a BMC product or one of the smaller craft beers?
__________________
Drinking on the keg: BPA, Brown Ale, Dry Mead, Wee Heavy aged on Oak, CAP
Drinking in the Bottle:
Conditioning:
Fermenting:
Planning:
jdoiv is offline
 
Reply With Quote Quick reply to this message
Reply



Quick Reply
Message:
Options
Thread Tools


Similar Threads
Thread Thread Starter Forum Replies Last Post
Brooklyn Brewery Brown Ale DirtyJersey Recipes/Ingredients 0 03-22-2009 06:47 PM
Brooklyn Brewery BillyVegas General Chit Chat 4 12-30-2008 12:58 AM
Article in the New Yorker on Dogfish Head, Brooklyn Brewery, and "extreme brewing" climateboy General Beer Discussion 17 11-22-2008 12:05 AM
Brooklyn Brewery brews different kind of green beer graphicgeek80 General Beer Discussion 4 03-18-2008 03:34 PM
Brooklyn Brewery @ Beastie Boys Concert Ivan Lendl Commercial Brew Discussion 8 08-14-2007 07:50 PM



Newest Threads

LATEST SPONSOR DEALS