Cheers to Michelob

Most craft beer drinkers I know, didn't start out drinking BMC, but no beer at all. So that's one way craft beer can grow not at the expense of BMC.

I never said BMC, as corporations, don't want to compete with craft beer. I'm saying, actual Budwesier, the beer, is not a competition for craft beer - and that's the beer with prime shelf space. That's like saying Dodge and Bentley are competitors. Sure they both sell cars, but to different markets.

 

Craft beer sale growth is greater because the total volume of craft beer sale is less. If you sell 10 items, you have 100% growth if you then sell 20 items. If you sell 100 items, you only have 10% growth if you then sell 110.

 

I wonder about this, next home brew club meeting I am going to ask everyone if they started on BMC or no beer at all.

I started on BMC. My career has allowed me to travel the globe extensively, I learned to try everything new that I could, that is probably where my love of variety comes from.

 

Some would argue that craft brew drinkers take as much market share from the wine industry as they do from BMC

Many establishments with a good craft list has a good wine list

 

Im drinking on Michelob Amberboch right now.

 

I think the main issue for me is when big companies like BMC see a new market emerging and try to move into that market in a way that seems to be trying to fool the average consumer into thinking they're buying (and more importantly supporting) something that they're not.

Blue Moon is a good example of MillerCoors trying to move into the "craft" beer market with a new brand that seems more like a micro or craft brewery when it's really not. There's nothing illegal about it, but it just seems kind of sleazy. And I've had my share of Blue Moon. If you like it and want to drink it that's awesome. But know what you're drinking. I'd be willing to bet there are a lot of people that think Blue Moon Brewing Company is an independent company.

This same thing happens in the music industry (and I'm sure many others) where the big labels started "indie" labels to try to give new artists more street cred. Bands can get signed to an "indie" label without the stigma of "selling out" and still have access to all the things that come with being signed by a major label (money, distribution, etc).

And that would all probably be ok if they co-opted not only the appearance of independence but also the passion and mindset. But they're all still driven by the bottom line so they're operating on a different level. They'll compete on taste and quality for as long as is necessary but once the competition is pushed out, they'll start to cut back on quality and coast on the strength of their "craft" brand names and most people won't even know the difference.

 

Bud uses Williamette I think. Actually, I hear they are not anymore, or at least planning on switching varieties.

 

I wouldn't drink Michelob for bottles. Maybe I'm a bottle snob nowadays, but I don't like the Michelob raised logos around the taper and the weird bulbous ring right above that. At least in the comps I've entered, you can't use bottles like that.

I have a bunch of Sapporo, Sam Adams, Abita, Warsteiner, Bass and Michelob bottles that I'll eventually weed out (aka make sure I use at least 12 crap bottles when bottling and those are the ones I give away).

 

Ok Lets Speak Hypothetically here for a second.Lets Say that AB/Inbev Decides to REALLY jump into the craft beer market. Lets say that they Either Build or Assign a Plant that they own to making a Brand of Each Style, Stout,Porter,Old Ale,Pale ale,Barley-wine, etc. Now Since they are AB/Inbev, they already have BILLIONS of dollars backing them up. This means they have Bulk Buying Power that dwarfs ALL the craft Brewers. Of Course you know they will also come up with Creative Brewery names to hide the fact that they are Owned by AB/Inbev, because if it says Inbev on the bottle you have lost the market that wants to support the little guy. So no where on the bottle will it say AB or INBEV, and you will have to DIG to find out that it is one of their holdings, most wont put in the effort to find out, they will just assume its a new craft brewery.

So what happens? You start seeing barley-wine for 6 bucks for a 6pack. Same for all the other Styles, you see them all 6 bucks or less PER 6 PACK. So your thinking well that is great how is that a bad thing? Yup for the end customer,the craft brew drinker, sure that is great, its cheaper so it has to be good right?

Now what happens to the craft brewer, you know the one that cant buy 500,000 lbs of grain at a time without ever worrying about the cost? Well this is what happens, he has a product, lets say a RIS that he has to sell for 15 bucks a 6 pack, Just to make a profit, Pay his employees,Buy his next grain order etc. Now when the customer walks into a store, and Sees this Craft RIS for 15 bucks for a 6 pack, sitting right next to the AB/Inbev (that says nowhere on the label that it is an Inbev company) RIS for 6 bucks for a 6 pack, Which one do you think that the average customer is going to buy? Thats right, the cheaper one and the craft brewers go bankrupt, not because they have a worse product, but because they cant compete with the buying power of the big billion dollar company.

 

Inbev already has craft brands out there that they are disconnected from 100%. Its shady, but its business. They can also be majority shareholders in private companies without disclosure. Who knows, they may be financing more than anyone knows?

 

Very good points! Your agrument could already be corroborated by pointing to beers like Blue Moon/Shocktop. I think it all comes back to whether or not you think a free market is the proper economic policy. If InBev produces brews rivaling craft quality for cheap, then I think it is still up to the consumer to decide where he wants to spend his money.

Economics aside, i see how it could also be a very good thing for craft brewers. I know people that love craft beers/home brews I have when I let them try them, but would never buy them when I told them the cost. Someone producing this quality of beer and selling it for prices comporable to light lager prices might lead to more people realizing there are differnent styles of beer availible and cause them to be more willing to branch out.

However I am not fully convinced on my argument because I know people who say they love dark beer and cite Guiness as thier favorite, then hate a RIS/porter/oatmeal stout/etc when I give them a sample.

Bottom line is I think it could go either way and I am personally not sure which one I would direction I think it would go if InBev did ever start producing a variety of beers targeting the craft consumers.

 

My Biggest problem is that AB/Inbev is damn near a monopoly and that Monopoly grows with every company that they buy out, Such as Goose Island, Which they clearly do to eliminate competition/branch out and further control the market.

I have no problem with the "idea" of big business, just in the lack of business ethics they all seem to have. I do believe that market practices should be FAIR across the board. That means that EVERY brewery should have EQUAL space both in the Distributors warehouse and On the truck and that just because AB/Inbev/Sabmilliercoors should not get MORE floor space just because they are bigger companies with more money, Which judging by the beer choices in small towns that is exactly what is happening.

Sure its no big deal to those living in large urban areas like Seattle where you can get pretty much any beer style you want, but Come to Bryan,Ohio walk in to the average gas station,grocery store or wal mart, and you will see about 98% of the beer available is from one of AB/Inbev/Sabmilliercoors holdings. Sure in the big Cities people dont notice the market control near as much because they have access to far more choices, but i am almost willing to bet that 95% of the small towns in America are very similar to my home town in how limited we really are on beer choice.

 

That part I do respectfully disagree with. They don't get more space across the board necessarily because they are bigger (richer) companies, but because their products make up a VAST majority of sales. I feel that entitles them to have more space...both bars and stores stand to make more money and sell more volume from their products, so why can't they have more space?

I don't think they should have space proportionate to sale percentages, but I also don't think they care to. Can you imagine if AB beers took up as much of a percantage of space in displays as the percentage of beer sales they take up? There would be next to no room for other products haha.

I actually go to school in a small, rural town and we have a HUGE selection of craft brews. Damn hipsters might be good for something...

 

Yes, but if the craft brewers had equal space, AB may not be so high up in sales, trust me when i say, you are lucky, their is ONE store in my town that carries craft brew, and only because the owner is a home brewer/craft brew fan. The closest you get to craft brew outside that store is Guinness and corona.

Also the tier system, was originally set up to prevent just that, Other companies being limited on space because the big boys sell more. That same Tier system is now protecting those big boys sales interest.

 

Well, if there is only one store and such demand for craft beer then you should open up a store that caters to that crowd. Respectfully I have to say that you are confusing "monopoly" with a lack of demand for craft beer.

 

If the demand was there, than that one store owner must be rich! But it even sounds like he only offers craft beer because he likes it. Not because of booming sales.


And for all those that want to take away the three tier system, think about what would happen. The craft beer scene would get squeezed out completely.

 

There "theoretically" is nothing preventing them from doing that. Why haven't they done it? Probably the same reason GM can't build and mass produce a "Ferrari".

 

Another thing I think we owe to companies like AB is the awesome fact that the beer industry is not like the wine industry. Most of the very expensive bottles of beer are $10-30 bucks, because frankly, even less people would support craft beer if they sold bottles and even cases of their beer for the same prices as one bottle of expensive wine. They are like a regulating body keeping prices reasonable in all of the industry.

Its sad that some craft brewers, once established, begin raising their own prices since they cater to a more specialty consumer.

 

In terms of the entire world beer market - the craft beer market is still a niche market. Their strategy will probably be to buy a few of the craft breweries out there that are willing to sell out. Such as redhook, pyramid (i think), and goose island. That makes the most sense. They already have a brand, a good product, and In-bev can give them the resources to expand production and distribution.

I also don't think bud could sell a barleywine for $6/sixer. Nor would they want to, they'd rather convince you that their current product will make you sexier and get you laid instead. You still cant find any barleywine in most liquor stores, so they arent going to mass produce this stuff for a niche market.

 

They almost have to, because they can't increase production to meet the demand of a cheaper price. They still have to feed their families.

 

All while being at production capacity? Then I wonder how were they making money before the raised their prices. I understand adjusting for inflation, etc. but when rouge raised their prices 33% in a year I wonder what motivates that.

 

I went to a really nice liquor store yesterday and while I'm checking out the bombers, this guy comes in who has already had a few.

He starts looking at all the different beers, starts asking questions (really loud and annoying) about what's good. Checks out all the labels, likes the arrogant bastard schtick, etc. He can't make up his mind.

Finally somebody asks what kind of beer he likes. He said he likes really light beer. That's the problem right there with craft beer. It's that, people want to buy really good craft beer, but in general, most people's palates aren't up the challenge. Anytime I try to get somebody to drink a good beer, they always want something light. That's what people want.

Meanwhile I kept my mouth shut and was hoping he'd go with the arrogant bastard - just so that this obnoxious guy would stop pretending he likes "craft" beer and just admit he's a bmc drinker.

 

They probably weren't making money. I read a thing about he'brew and how it took the guy 14 years to make a profit.

 

Yeah, I wasn't trying to pick a fight...I am just a bit bitter that one of my favorite breweries and the one that got me into homebrewing is now out of my price range And after they raised the prices, they definitely changed something in Dead Guy that I don't even like as much now.

 

At my wedding I had 2-1/4 bbls of Homebrew, 1-1/4bbl of craft pilsner and 2-1/4bbls of BMC. 90% of my friends and family drink BMC/BMC light. The homebrews were an IIPA (PTE clone with a ramped up ABV) and a lilac honey orange wheat.

The very 1st keg to float was...the New Glarus totally naked pilsner! Then the wheat and finally the IIPA. The only kegs that had beer in them after the reception were the BMC kegs! (My test group was around 150 participants not 1 drunk dude...lol.)

To quote you,"Maybe it is a regional thing...". Do none of your craft/local breweries make a pilsner or lighter beer in the summer? I could have pointed that guy you talk about above to at least 5 different "lighter" craft beers. "Lighter" does not always equal BMC...

 

good point. there are a ton of better "BMC" freindly beers. pilsner is a great example, i've had quite a few that were quite tastey, had some really nice flavors, but were still light in color (as not to scare of the uninitiated) and easy to drink, while having enough flavor to appease most any craft beer drinker.

 

Just pointing out it was an most likely an open bar at your wedding (feel free to correct me if I am wrong!). Was the New Glarus keg the same price as the BMC kegs?

I have no doubt BMC drinkers would drink pilsners or other comparable craft beers if they were free, but had each tap cost its respective price for the people actually consuming the beer, I bet you would have had different order of kicked kegs! Not to mention you had twice as much BMC as any other beer...

 

Yes, it was open bar but we only had beer and wine.

The new Glarus keg was about $10 more than the least expensive of the 2 BMC and within $5 of the more expensive. They were Bud light and Miller High Life and I do not recall which one of those 2 were more than the other. So you are talking about the difference of 0.05 to 0.10 a pint.

Most of my relatives are fairly well to do. They drink what they like to to drink. I am still hearing comments like"My Miller doesn't taste good anymore.", "Did you make the Totally Naked? It was my favorite." and "Are you going to throw another party like that soon." Then there are the more rare "I did not know beer could taste so good.", "I was shocked to find out I like IPAs!" and everyone asks me "What is brewing now and when can they come by to try some?"

Best part of this reception was we moved it to a bar at 10:00pm were the hotel rooms were. No one wanted BMC other than the die hard BMC drinkers. I had uncles walking around drinking SN Pale ales and Kellerwiess, imports and just about anything other than BMC.

 

Thats awesome! At the very least you showed people what is out there!

If we get a keg for something, it is usually Yuengling. It is the same price as BMC here, light enough that BMC drinkers can enjoy it, and its not BMC so snobs can equally enjoy it without the light lager stigma haha

 

I disagree with that. For that to be true distributors would have to be the ones that create demand, they don't its the consumer. When Jimmy Carter signed HR 1337 no one imagined it would give rise to the craft brewing industry. In that same vein, if the feds and the states lifted all statutory distribution requirements it would likely unleash a whole new wave of innovation in getting beer to the consumer.