Did Northern Brewer Purchase Austin Homebrew AND/OR Adventures in Brewing?

[Ibrew2]

Beginning of the end for affordable home brewing?

If most of the small to medium home brew suppliers are bought out, then prices will increase.

Also, bigger buyers have much more sway over suppliers like hops growers and malt houses, which means they are first in line to get product and they also negotiate a better price then the smaller shops can get, if the smaller shops can even get inventory.

The fact that AB/InBev had a hand in acquiring a large home brew supply house indicates to me that they consider it to be potentially profitable or they consider home brewing to be a threat to their bottom line.
I would not doubt the AB/InBev is somehow involved in the ongoing aquasitions through Blackstreet using them as a shill.

If the price of ingredients and supplies to make home brew far exceed what we can buy a decent craft brew for, much less the swill that made home brewing so appealing to many to begin with, then a big advantage of home brewing disappears.

Going to be interesting to see where this all goes.

Growing our own hops is entirely feasible for most of us, but growing and malting barley is a whole different kettle of brew.

I completely support the idea of using LHBS for all my needs. But alas, the closest one to me is 4 hours away, so I buy from them when I have to travel, or I order online.

I liked Austin Homebrew and ordered from them in the past. I was going to order 50lbs of dextrose and and a recipe kit recently and they wanted more to ship a sack of dextrose then I could buy it WITH free shipping from another vendor.
Sent and email asking about it, no response.

Customer service is out the window it appears.

Oh well, that’s all I have for now.... rant over!

Ibrew2

 

[Bassman2003]

It seems like a stretch for InBev to be buying out business' just to drive the cost of ingredients up to protect sales of their beer. Pretty far out on the limb unless they buy every LHBS. If Morebeer stays separate then they will be able to sell everything at a lower price than the InBev consortium and internet loyalty (or lack of) will backfire on the InBev group. Stranger things have happened so I can't say it is not true, just seems like a lot of effort for hombrewers to buy Bud.

 

[Ibrew2]

It seems like a stretch for InBev to be buying out business' just to drive the cost of ingredients up to protect sales of their beer. Pretty far out on the limb unless they buy every LHBS. If Morebeer stays separate then they will be able to sell everything at a lower price than the InBev consortium and internet loyalty (or lack of) will backfire on the InBev group. Stranger things have happened so I can't say it is not true, just seems like a lot of effort for hombrewers to buy Bud.

Not a stretch at all. American corporate history has many examples of this happening. There used to be strong antitrust laws that made this less likely, but they have been watered down over the decades. And home brewing is done by such a small number of people that we have nobody lobbying for our cause where it matters.

Also, They don’t need to buy them all, just enough of them to make them the biggest player buying a majority of the ingredients and they control the market.
During the recent supply chain shortages, big buyers like Amazon, Walmart, Home Depot as well as other huge players could still get most things, albeit at a slower pace, where as the small player could not get many items. And when your the only game in town, you set your own prices. That’s how capitalism works, love it or hate it.

I wonder what percentage of beer consumed in the US is home brewed.

Ibrew2

 

[Ibrew2]

I wonder what percentage of beer consumed in the US is home brewed.

According to the brewers association, as of 2017, 1.1 million people home brew, producing about 1% of beer produced in the US.

I don’t know if that’s enough to concern the big guys or not.

The question I have is this: Why did AB/InBev get involved with and purchase NB to begin with? They must have some motive to do that.

Ibrew2

 

[Bassman2003]

I am not really speaking to if or why, but more to how effective it would be for InBev's end goal. Imho it would limit homebrewing which probably not have an impact on sales of Budweiser. Maybe some craft beer brands they own would see some benefit, but how much compared to buying up multiple business' in a squeezed margin space to begin with?

I think they already own BSG (Brewer's Supply Group) don't they? That would be the best way to raise prices. Raising pricing at the retail level has a risk of losing customers and not making your rent. (in this case not operating in the black). It is odd but as you state, predatory practices is not new for the space.

 

[Ibrew2]

I am not really speaking to if or why, but more to how effective it would be for InBev's end goal. Imho it would limit homebrewing which probably not have an impact on sales of Budweiser. Maybe some craft beer brands they own would see some benefit, but how much compared to buying up multiple business' in a squeezed margin space to begin with?

I think they already own BSI group don't they? That would be the best way to raise prices. Raising pricing at the retail level has a risk of losing customers and not making your rent. (in this case not operating in the black). It is odd but as you state, predatory practices is not new for the space.

I think the question of “why” is important to try and understand their motives. In reality we will never fully know what their motives are until the act on them, with the exception of maximizing profits, as that is a given.

Concerning the buying up of businesses and consolidating the operations, that cost is minor in the scheme of things. Market cap of AB/InBev is about $96 billion US, with revenue of about $53 billion worldwide.
I believe we would be hard pressed to think they couldn’t take majority control of the home brew market for more the $20-30 million. Just a guess on my part.

I would like to know what AHB & AIB sold for. That info may shed more light on these questions. Realistically, $50 million would likely be a fair price for a 1% market share increase and more control in that same market.

Concerning losing customers, I know of more then 1 person who would live in their car before the would give up beer! Lol
And most people would give up other things before giving up beer or a place to live.
Beer is important to many people in the US and elsewhere. If the price doubled, consumption would go down, but not by 50%.

I’m retired on a fixed income, but the wife likes her apple cider and wine, so we make adjustments.
As an example, Locally we pay $12.00 a 6 pack for Angry orchard. That’s $2.00 a bottle!
I am currently ramping up my cider and apple wine making and hoping she likes it well enough that I can discontinue purchasing commercially produced stuff.
I can make Edworts apple wine for less the 50 cents a 12 oz bottle. That’s paying $4/gallon for juice. Add sugar, yeast and bottle caps and I’m under 50 cents/bottle. Get the juice on sale and it’s less. Recently got generic juice for $2/gallon locally. That gets my cost down to under 30 cents/bottle.

As Americans, we will find a way to make things work as long as we have the freedoms that allow us to.

My opinions are not meant to be empirical evidence of anything, rather a thought provoking exercise.

Brew on!

Ibrew2

 

[kevin58]

AB InBev sold Northern Brewer in 2019.

 

[Ibrew2]

AB InBev sold Northern Brewer in 2019.

Those deals don’t mean much.

I saw a major grocery chain bought out by another grocery chain, only to have the buyout go the other direction years later. Corporate shell game.
Point is, things aren’t always as they seem in corporate America.

Ibrew2

 

[BrewnWKopperKat]

AB InBev sold Northern Brewer in 2019.

Those deals don’t mean much.

The deals do "mean much" to many people.

I sense that there was a loss of brand loyalty as a result of the sale of 1) Northern Brewer to ZY Ventures, and 2) AIH /AHS to Blackstreet Capital Holdings [1].

Regional and national competitors - who deliver the same commodity products on time and at lower prices - appear to have taken advantage of this loss of brand loyalty.

Hop suppliers appear to have also taken advantage of this - attempting to 'dis-intermediate' online home brew stores by offering hops directly (quality product, on time, lower price) - and then expanding their product line to include other brewing supplies (e.g.: Yakima Valley Hops offers Muntons DME).

There are other well known examples of 'dis-intermediation' - craft breweries that sell their inventory (e.g.: Bells offers 'Bell's Select Hops" at Bell's General Store).

Value added ingredients - Much like grocery stores that offer freshly prepared meals, at least one online home brew store offers style specific malt extracts (e.g. Williams). There are a couple of brewers here (not me at the moment) who use these products and report enjoyable beer.

I doubt any one business can either 'horizontally integrate' (e.g. personal computer operating systems) or 'vertically integrate' (e.g. mainframe computing) home brew supplies to a level where they are the only viable option.

---

[1] The other "blackrock" is an asset management company named BlackRock, Inc.

 

[Ibrew2]

My comment saying those deals don’t mean much was in response to Kevin’s post saying that AB/InBev sold their interest in 2019, not a general response to those deals happening. The reality is that AB/InBev could still be a player in those aquisitions, weather publicly or through a shill company or an entity acting on their behalf.

The reality is that these deals will happen. It’s up to us to deal with reputable sellers of what we need and to cease doing business with those whom we consider to not be reputable.

Ibrew2

 

[Teufelhunde]

Not a stretch at all. American corporate history has many examples of this happening. There used to be strong antitrust laws that made this less likely, but they have been watered down over the decades.

Ibrew2

^^^^^THIS^^^^^^

The super big corporations have figured out that by enriching the politicians, it more than comes back to them in desired legislation getting proposed and passed. We no longer have a capitalist system, but a corporatist system.

YMMV

Lon

 

[BrewnWKopperKat]

AB/InBev could still be a player in those aquisitions, weather publicly or through a shill company or an entity acting on their behalf.

If you have evidence to support that statement, please present it.

 

[Ibrew2]

If you have evidence to support that statement, please present it.

The word “could” means exactly that, they could be, not that they are or even probably are.

As I stated in an earlier post, I am not posting empirical evidence of anything rather, engaging in a thought provoking exercise. Is that not what we do in open forums like this?

My post are asking questions and discussing possibilities, that’s all.

How about you present evidence that I’m wrong in what I stated as possibilities.

Most likely you can’t, anymore then I can present evidence that they are right.

You seemed to have taken offense to the possibilities I have presented. Are you somehow employed by any of the big brewing companies, either as an employee or paid agent?

Just curious.

Anyway, I stated opinions and questions concerning home brewers access to reasonably priced supplies and the possibility that we as home brewers may not have that same access in the future if the acquisitions continue, that’s all.

I will have no further discussions with you on this matter.

Have a great day and brew on!


Ibrew 2

 

[BrewnWKopperKat]

You seemed to have taken offense to the possibilities I have presented. Are you somehow employed by any of the big brewing companies, either as an employee or paid agent?

I did not (take offense). And I am not (employed in the brewing industry).

Anyway, I stated opinions and questions concerning home brewers access to reasonably priced supplies and the possibility that we as home brewers may not have that same access in the future if the acquisitions continue, that’s all.

And I offered evidence, using common business analysis models, that we'll continue to have access.

Or we'll find other hobbies - hobby time is fungible between hobbies.

I will have no further discussions with you on this matter.

OK.

 

[kartracer2]

It really makes no difference who owns NB/MS/AIH/AHS to me. As long as the price and service are acceptable to the buyer (me) that's the deal.
I actually emailed "AIH" today and asked what the "order to ship" time was. The answer was 7-10 days. "I" find that unacceptable, not this day and age. They blamed on lack of staff. It could be that simple, I have no idea what the labor market/wage is like up there. In my opinion something went horribly wrong when they bought AIH, it could be for any number of reasons and they are in damage control right now. When I need stuff I will ask again and if it's not any better I'll order from someplace else.
It's real simple.
I take my homebrew with out conspiracy theories, thank you.
Cheers,
Joel B.

 

[ZmannR2]

I live 3 hrs from Austin and it’s my only “local” choice for ordering ingredients. I found out the hard way that they were bought out and getting a package from Minnesota SUUUCKS in this heat and takes forever. With AHS, they would have it shipped within a day or 2 and another day to reach me. With this change, it took about 10 days for them to ship it and another 5 days to reach me. I’m done with “AHS in MN”. I won’t be purchasing from Austin Homebrew anymore. They’re still going by that name too. Imo it’s false advertising if they plan on continuing to use the AHS name.

Is there any one selling online located here in Texas??

 

[Bassman2003]

Texas Brewing but they have seemingly downsized their homebrew business.

 

[D.B.Moody]

Here's a source of information, though you'll have to check to see which one(s) sell on line.

My last order for 9 brews was split among Rite Brew, Label Peelers, and my local, Missouri Malt. None of these are in Texas, but, then, neither am I.

 

[mashpaddled]

I live 3 hrs from Austin and it’s my only “local” choice for ordering ingredients. I found out the hard way that they were bought out and getting a package from Minnesota SUUUCKS in this heat and takes forever. With AHS, they would have it shipped within a day or 2 and another day to reach me. With this change, it took about 10 days for them to ship it and another 5 days to reach me. I’m done with “AHS in MN”. I won’t be purchasing from Austin Homebrew anymore. They’re still going by that name too. Imo it’s false advertising if they plan on continuing to use the AHS name.

Is there any one selling online located here in Texas??

Well AiH bought out AHS and saved that shop from shutting down after years of unraveling. I'm not sure what the plan was with AHS to operate it just as a storefront or as a southern warehouse for orders as well. Not sure if NB/MW/AIH/AHS intends to use AHS's space to fulfill orders in the south but if not it's a missed opportunity. There aren't many shops shipping orders out of the south which is a lot of lost sales especially during the hot months. I'm not sure they even know what the plan is or how long it will take to integrate everything the way they want it.

Texas Brewing Inc. out of Fort Worth ships but from the other post mentioning them they may not have a great selection these days. I was always surprised by their growth given their lack of competitive online pricing.

 

[matt_m]

Not sure if NB/MW/AIH/AHS intends to use AHS's space to fulfill orders in the south but if not it's a missed opportunity.

Nope:
https://www.loopnet.com/Listing/15112-N-Interstate-35-Austin-TX/25210958/

 

[Kemo]

So... at this point, what is a good source to go with? NB appears to struggle with fulfilling orders in a timely manner. They're pretty much my LHBS, and I'm not fond of them. I've noticed you can't call, you can't use their chat, and email is pretty much the only way to reach out to them. No thanks.

I'm an extract brewer, and I'm not too fond of gambling with Amazon for Brewer's Best kits... there's no way of knowing how well or proper they keep the kits.

Morebeer is really the only other supplier that I know of.

 

[Teufelhunde]

So... at this point, what is a good source to go with? NB appears to struggle with fulfilling orders in a timely manner. They're pretty much my LHBS, and I'm not fond of them. I've noticed you can't call, you can't use their chat, and email is pretty much the only way to reach out to them. No thanks.

I'm an extract brewer, and I'm not too fond of gambling with Amazon for Brewer's Best kits... there's no way of knowing how well or proper they keep the kits.

Morebeer is really the only other supplier that I know of.

Morebeer is my go to since NB starting having it's issues. My order is always shipped the next working day and delivered in 2 working days if it is coming from their CA warehouse and 3 days if from back east (PA, I think). A bit less expensive than NB as well....

 

[Bramling Cross]

So... at this point, what is a good source to go with? NB appears to struggle with fulfilling orders in a timely manner.

I'm an extract brewer, and I'm not too fond of gambling with Amazon for Brewer's Best kits... there's no way of knowing how well or proper they keep the kits.
Morebeer is really the only other supplier that I know of.

Morebeer, Beer, Beer, and More Beer, or B3 or whatever they're calling themselves has always been good and remains so. Especially as an extract brewer, you want to buy your goop from a place that keeps its stock moving at a brisk pace. Morebeer moves a lot of goop.

Williams is an interesting outfit, a bit spendy, but they stock some really unique stuff.

Label Peelers frequently has great dry yeast sales.

Hopscraftsupply is one I haven't dealt with yet, but I gave them a shortcut on my menu bar because they have some really interesting ingredients.

Currently, I get my base malt, CO2, and liquid yeast from my LHBS. My hops come from Hopsdirect or Yakima. My dried yeast is purchased based upon discounts from online sellers--I know the strains I like and they'll get used eventually, so price is the only consideration. Morebeer gets most of my character malt and non-pils/otter/US 2row basemalt orders, plus some hops to hit the free shipping threshold.

There's still lots of great options out there, but your LHBS remains the most important one.

 

[Kemo]

Morebeer is my go to since NB starting having it's issues. My order is always shipped the next working day and delivered in 2 working days if it is coming from their CA warehouse and 3 days if from back east (PA, I think). A bit less expensive than NB as well....

Looks like they'll be my go-to from here on out as well. It's sad that Cali/PA is seemingly faster than ordering from within the same state.

 

[kartracer2]

Hello @Kemo
There are many outfits out there. It's sad NB is struggling to fill orders in a timely fashion right now. They have been my go to so I hope it's short term. I have used NB/MW and Morebeer as of late because I have been happy with both.
That said I'll post a few others for you to look into.
RiteBrew.com - Brewing Supplies at Wholesale Prices I have heard good things about them and from Little Chute, WI, "somewhat" close to you.
Home Brewing Supplies and Home Brewing Kits Again good reviews and some interesting extracts that are not found elsewhere.
Farmhouse Brewing Supply Can't say much about these folks but they are from Janesville WI. so again "somewhat" close.
I'm sure others will chime in with their favs.
Cheers,
Joel B.

 

[Kemo]

My LHBS is NB... if I were to drive, it's at least a 600 mile round trip. I am stuck ordering online, it's the most economical route for me.

That said, I appreciate the suggestions for alternative sources.

 

[Jayjay1976]

I also love ritebrew.com, always the best price, especially with their Speedy shipping option, if you live within Speedy's territory.

Sometimes I buy extract from Williams too, they have great sales from time to time and I believe their stuff is custom made for them.

 

[govner1]

So... at this point, what is a good source to go with? NB appears to struggle with fulfilling orders in a timely manner. They're pretty much my LHBS, and I'm not fond of them. I've noticed you can't call, you can't use their chat, and email is pretty much the only way to reach out to them. No thanks.

I'm an extract brewer, and I'm not too fond of gambling with Amazon for Brewer's Best kits... there's no way of knowing how well or proper they keep the kits.

Morebeer is really the only other supplier that I know of.

Morebeer is my go to since NB starting having it's issues. My order is always shipped the next working day and delivered in 2 working days if it is coming from their CA warehouse and 3 days if from back east (PA, I think). A bit less expensive than NB as well....

My go to online suppliers are Great Fermentations, Atlantic Brewing, and as a last resort MoreBeer.
I had my LAST “experience” with NB over a year ago and will NEVER order there again.
i do have a small LHBS operation that I try to use when I can order in advance but they’re 1 1/2 hours round trip.
I’ve gone to all dry yeast for 98% of my brews.

 

[BrewnWKopperKat]

I'm sure others will chime in [...]

This may look like the start of an online store meta-list ...

• American Homebrewers Assocation we site (via duckduckgo search link)
• BeerMaverick web site (mentioned in #170)
• /r/homebrewing wiki (aside: the wiki keeps getting better and better and ...)

... with their favs

I mentioned mine earlier. If HomeBrewTalk has any meaningful influence on where people buy, it's possible there may be some delays in orders and deliveries with these sites. Time will tell.

 

[Steveruch]

I'm an extract brewer, and I'm not too fond of gambling with Amazon for Brewer's Best kits...

If you use dme ritebrew has the best prices, by far.
And it isn't that far away from you so shipping wouldn't be too bad.