Craft Beer distribution will soon be a thing of the past...

[SDFarmer]

Craft Beer distribution will soon be a thing of the past because there is going to be a multi-billion dollar brewing and beer distribution merger eliminating craft beer distribution and...

Take a look at this New York Times article that explains a huge merger and a how to of U.S. beer distribution.

http://www.nytimes.com/2016/06/02/opinion/a-big-merger-may-flatten-americas-beer-market.html

While this article is entertaining it looks like the only way anyone will get a different beer style than American lager is to brew it ourselves.

This merger will eliminate craft distribution channels in America or at the least reduce them to the point where our friends will go out of business.

Are we going to be training/producing brewers?

Is this an opportunity for us?

It is something to think about.

Ken

 

[SMPress]

I read a few months ago where AB was going to give up distribution rights in the US all together in order to make this deal go through. They would retain distribution rights in the rest of the world. Time will tell I suppose...

 

[GilaMinumBeer]

I suppose this is where a two-strength system wins.

Since most of the AB-Inbev products are low-point beers they control the grocery shelves. Which leaves free reign on bottle shop shelves for all the high-point offerings. Of course, AB-Inbev acquisitions have allowed them to creep into that market as well but, so far, it stays a level playing field in Oklahoma.

That is, until the lobby to change the two-point system passes.

 

[worlddivides]

That was a really depressing article. I hope to hell that DOESN'T happen.

 

[kh54s10]

With the exploding growth of new breweries, any disruption of distribution, IMO, would be temporary. If this merger were to allow InBev to dominate distribution I would think that someone would step in and take up distribution of the craft beers.

 

[jerbrew]

It wouldn't take long for someone with a few refrigerated trucks to start hauling beer around, especially here in San Diego. The people who buy AB beer are the people who will always buy it. taking other things off the shelf means I, and everyone else looking for craft beer, just go get a few more growler fills. Or take it as an excuse to brew more of my own.

 

[mongoose33]

With the exploding growth of new breweries, any disruption of distribution, IMO, would be temporary. If this merger were to allow InBev to dominate distribution I would think that someone would step in and take up distribution of the craft beers.

You beat me to it!

I think it's too late for InBev or anyone else to derail the Craft Brew industry--all they can do is throw daggers at it from time to time.

Where I'd be more concerned is in their buying politicians who will put in phony restrictions (health, safety, etc.) and regulations designed to limit distributional competition.

 

[dwhite60]

The recording industry got strong-armed in their methods when they saw the rise of independent recording labels and people producing and selling their own recordings via the internet. Record companies are now dying a slow death. They are history.

It'll be the same with this. Small brewers will band together and start their own distributorships. AB-InBevs strategy will fail and craft beer will survive.

A store beer display lined with nothing but Bud-esque products is not going to turn on the buying public especially those with taste. Retailers will want their variety to pull in more customers. Those who support craft beer WILL pull in those customers.

All the Best,
D. White

 

[kh54s10]

The recording industry got strong-armed in their methods when they saw the rise of independent recording labels and people producing and selling their own recordings via the internet. Record companies are now dying a slow death. They are history.

It'll be the same with this. Small brewers will band together and start their own distributorships. AB-InBevs strategy will fail and craft beer will survive.

A store beer display lined with nothing but Bud-esque products is not going to turn on the buying public especially those with taste. Retailers will want their variety to pull in more customers. Those who support craft beer WILL pull in those customers.

All the Best,
D. White

I wondered where you were going with the recording industry. It changed some but there are still low talent music artists who are becoming millionaires.

Low talent breweries will not survive but the industry will survive.

If Inbev disrupts distribution, the industry will find another way.

 

[Scturo]

Which means that I'll keep trading with my contacts. Oh well,

 

[Natdavis777]

In the words of Marco... "Good Luck"...

A lot of the best breweries locally here can self distribute without Monarch, Zink, World Class, etc bc they dont meet capacity. I am ok with that. 90% of the beer I drink is mine anyways.

Seriously though, they are obviously rebelling, trying to blockade distribution, buying up smaller craft breweries, etc. Let them. Laws can be changed. Within a year (I believe) 3 Floyds and Sunking expanded Indiana's cap distribution to allow for more production/ distribution. Inbev wont stop people from getting their beer.

 

[ImNoExpert]

This is exactly the thing the three-tiered system should prevent. My state doesn't allow a brewery of that size to self distribute in the state. On the other side, a small brewer also can't have any sort of interest in a (beer or liquor) retail business besides their own tasting facilities. No part owner in a liquor store or even a restaurant with a liquor license. The latter could be loosened but it was part of Miller's attempt to lock down the former. Ahh, politics.

 

[murphyslaw]

While its certainly not a positive development for craft beer, I think its unlikely to have a major effect. Like others have saod, theres enough of a market for other distributors to cater to the craft guys.

More problematic IMO is buying up smaller breweries, pretending their independently owned, and then filling the retail shelves and tap lines with all inbev products. Once inbev can offer "craft" ipas and whatever else, it becomes easy for retailers and bars to just buy from inbev and still look like they have a diverse selection of craft beer.

 

[Sammy86]

For any of you history buffs out there this sounds eerily similar to when the DuPont family was forced to sell its shares of GM in 1957 after being found to be a monopoly.

This has to be seen as a monopoly and the anti-trust laws will ensure that craft beer and competition to Big Beer will remain. We gotta have a little faith right?

 

[ThatVideoKid]

I'm not too worried...most of the beer I drink is distributed by the small regional distributors as I am drinking mostly beer no more than a few states away, and many that have the capability to move a lot of their own product(harpoon especially). All else fails I'll just have to visit the 3 breweries within 1/2 a mile of me...or trillium more often. Or homebrew more

 

[jrgtr42]

To me, the biggest problem the merger poses is in distribution. I posted on a Facebook thread the other day that IMO, the two conditions the regulatory committee here in the US should let this through is by SABMiller giving up the brewing side, to MillerCoors (which I think they already have agreed to, to MolsonCoors) and also to give up the distribution side entirely. ABInbev-SabMillerCoors (whatever the conglomerate calls themselves after merging) should not have any sort of distribution owned by themselves, and the commission also needs to crack down on the incetives they can give to distros. Encouraging distributors to concentrate on their brands to the detriment of craft beers only hurts the industry as a whole, along with the laws, at least in Massachusetts, where I am, that basically give all the powers to the distros - a brewery can not leave a distro once signed, without paying several years worth of revenue. A distro can literally not sell a breweries beers, and the brewer has no recourse.

 

[Natdavis777]

Its like the small baker who has ready to make cake mix but cant compete with the big guys in Walmart or Korgers (bc big corp owns shelf space) . There are other outlets to not only sell but be successful. Craft beer is the same.

They have a bug in their butt Inbev, MillerCoors) or else they wouldnt be trying different styles and buying out small craft beer guys.

I applaud those who dont sell out. Though I cant blame those who sell.. I mean, you went into business to make money, and you get a multimillion dollar offer.

I relate it to college sports. You play college basketball to get an NBA shot. If you get the opportunity, take it!! Make a few million. It makes more than your Billiards degree... So it pays off.

 

[MaryB]

State laws prevent you from starting up a beer distributorship in MN... It is tightly controlled by a few families...

 

[signpost]

A store beer display lined with nothing but Bud-esque products is not going to turn on the buying public especially those with taste. Retailers will want their variety to pull in more customers. Those who support craft beer WILL pull in those customers.

Except, with AB-InBev buying up craft breweries, they will make that beer display appear to have independent craft beer. The average person that doesn't follow the exploits of ABI will have no clue that those supposed craft beers are all brewed in the same place as the Bud Light further down the shelving unit. That Goose Island beer... and that Virtue Cider... and that Four Peaks Kiltlifter... and the Breckenridge Vanilla Porter were all brewed in the same factory set-up in a distinctly non-craft manner.

And the vast majority of people won't even notice.

 

[Natdavis777]

I feel the people who "wont notice" arent the real customers. I went to 3 different shops just to find my wife some decent lambics/ berliners... I looked around each store and nothing jumped at me. I know what the big guys push, and I know what the little guys push. I wish I could find the little guys more often.

My best local discovery was Mosaic Promise from Founders. I bought as much as I could. I had it at their release and it was AMAZING. I literally had 2 cases. That is the stuff I look for. F InBev. If people sell out Im out. My friends locally brew amazing beer. Mashcraft IPA, Daredevil Vacation Kolsh, Bier PDG, etc.



#NotWorried

 

[signpost]

ABI doesn't care who the 'real' customers are. They care about how to get the most people possible to part with their money.

 

[bonecitybrewco]

Thank goodness I live in Canada... Some of our provinces are legislating a %age of shelf space be craft beer and REAL craft beer. No Shock Top et al. Sad to hear about this happening in the US though.

 

[k1ngl1ves]

For any of you history buffs out there this sounds eerily similar to when the DuPont family was forced to sell its shares of GM in 1957 after being found to be a monopoly.

This has to be seen as a monopoly and the anti-trust laws will ensure that craft beer and competition to Big Beer will remain. We gotta have a little faith right?

Or will they be "too big to fail" now? Here we go again...

 

[MFWINZLOW]

If it is wrong for the people - trust the idiots in charge to do the wrong thing. It is what they do.

 

[dwhite60]

I wondered where you were going with the recording industry. It changed some but there are still low talent music artists who are becoming millionaires.

Low talent breweries will not survive but the industry will survive.

If Inbev disrupts distribution, the industry will find another way.

The big recoding companies, RCA, Atlantic, Columbia, etc. have all changed their business model. It was that or die. They gave in to consumer demand rather than trying to shut down the small places thinking they could.

AB-InBev will go the same way. They'll try their little market manipulation and fail.When those distributors stuck selling AB-InBev products realize they could have a bigger market if they could carry craft beer they'll start working on AB-InBev to change.

Free market works.

All the Best,
D. White

 

[day_trippr]

"Free market works"

Umm...so, the three-tier model is the "free market" in action, then?

Cheers! ("I don't think so, Tim" )