Look Out Craft Breweries - Here Comes BMC...

[Zamial]

I didn't know that about WI, and I would be pissed about that, too.

But the notion that Terrapin beers went from good, wholesome, and local to mass produced swill the second they signed over a minority share to MC is ridiculous. To continue the music analogy I used above, if a local indie label signs a distribution deal with Sony, does that mean every new record they make is crap?

I am not saying the beer itself changed. I am saying where my dollar being spent did. I site Lienkugle's Big Eddy-RIS. I hear it is a fantastic beer and a good example of the style. I personally have seen it, walked right by the display and I have never tasted it because it is made by a company that is partially owned by BMC. I do not drink BMC products knowingly. Am I missing out? maybe but there are plenty of other great RISs to try/drink.
I do not wish ill on the Lienkugles brewery but I do wish they would get out of bed with BMC. The only way I have to tell them this, is with my lack of buying their product.

 

[Homercidal]

I didn't know that about WI, and I would be pissed about that, too.

But the notion that Terrapin beers went from good, wholesome, and local to mass produced swill the second they signed over a minority share to MC is ridiculous. To continue the music analogy I used above, if a local indie label signs a distribution deal with Sony, does that mean every new record they make is crap?

Sometimes a good artist goes big time and the management interferes with the recording and production and suddenly the artist is not who they once were.

Other times management has access to some amazing producers and the artist suddenly has a means of really expressing themselves AND a way to get his music out to more people who might not have heard of them otherwise.

I think it comes down to whether or not management "interferes" with the artist, or embraces their uniqueness and helps them get their music out to the people.

Then there are musicians who don't WANT to get their music out. They want to remain obscure and hidden. And there are some listeners who will stop listening to a musician simply because their music is now distributed through a major label. They only support the EAC label.

 

[Montanaandy]

It will be interesting to see how many breweries go to the "dark side" when MC comes calling and waving $$$$$ at them for a stake. It will also be interesting to see which breweries/markets that they target. I could easily see them pursuing New Belgium (large) O'Dells, Avery, Breckenridge, Great Divide (mid-sized) but would be very surprised to see any of them aligning with BMC. That would not go over well in CO where people are pretty knowledgeable about their beer and passionately support smaller breweries.

 

[Clanchief]

Clanchief,

Personally, I try to buy mom-and-pop as much as possible, but you have to admit that it's much easier when you happen to live in a city like Chicago rather than in the vast swaths of the country where they're pretty much non-existant. I'm currently stuck way out in the sticks in Southern Maryland and there's no such thing as a local butcher shop or farmer's market. There are a couple of decent liquor stores that carry good beer, but the selection is limited and the turnover isn't great, so you often end up with year old bottles. So you can see why I'd be thrilled if InBev came down here and "forced" some Goose Island on the local distributors.

Living in Chicago definitely has advantages in terms of availability of craft beers. That said, I go out of my way to buy local Chicago-land beers whenever possible. Other than my beers, you will routinely find things like Two Brothers, Half Acre, Flossmoor, Revolution, Metropolitan, and others from the area, apart from my homebrew. The furthest I like to go is Kalamazoo and get some Bell's, mainly because I have a lot of friends there and it's supporting their local economy. That's not to say that I NEVER buy from others, but I try and support local. You're in Southern Maryland. Aren't they any breweries there? I understand you may not have stores where you can get a great selection, but surely you have local breweries you can support. Or even Northern Virginia. That whole area is fairly geographically compressed. It seems to me that there has to be somethings close. You should also lobby your liquor stores to carry better quality, locally sourced, craft brews. If you tell them you'll buy them, and then follow up and do so, that helps. If you have a local homebrew club, and you can get everyone to do the same, it's even better.

Also, I feel like it's so important to support those types of businesses specifically because of what you say. People simply choosing comfort and convenience over quality is one of the biggest problems with American consumerism.

 

[Clanchief]

Sometimes a good artist goes big time and the management interferes with the recording and production and suddenly the artist is not who they once were.

Other times management has access to some amazing producers and the artist suddenly has a means of really expressing themselves AND a way to get his music out to more people who might not have heard of them otherwise.

I think it comes down to whether or not management "interferes" with the artist, or embraces their uniqueness and helps them get their music out to the people.

Then there are musicians who don't WANT to get their music out. They want to remain obscure and hidden. And there are some listeners who will stop listening to a musician simply because their music is now distributed through a major label. They only support the EAC label.

This is a good way of describing the situation. Aside from the support that I want to give to the David's of the world over Goliath as a customer, there comes a point where management will probably interfere to one degree or another, and change things to their liking. I know what the liking of BMC is, and I can unequivocally say that it is not in line with mine. So, no money is going from my pocket into their till. At least not knowingly.

 

[Steelers77]

For me the anti-BMC is not to be trendy, I am not trying to impress anyone nor do I care what 99% of the general population thinks of me, I want to drink what I brew or another local craft brewer has made. Local being relevant to where I happen to be at the time. This is also true for food. When I travel I hardly ever eat at a fast food place. I do a little research and planning and go to places that are unfranchized "mom and pop" places (sometimes brew pubs) So my question to you is: Do you perfer a handmade, grilled over a charcoal fire, burger with a hand sliced from the block cheese or one that went through multiple machines and has a cheese that is chemically closer to plastic than it is to dairy? From were I am there is not much difference to this than to the beer world.

Amen brother!

Look, I really do like Terrapin. I actully love their Rye Pale Ale and based my own off of it. That being said, I just don't agree with them taking money from one of the big three. I feel as if they needed financing they could have went out and leveraged themselves to get the capital they needed. You didn't hear about Sam from Dogfish, or Greg Koch from Stone running to BMC to get money for expansion.

 

[Montanaandy]

Amen brother!

Look, I really do like Terrapin. I actully love their Rye Pale Ale and based my own off of it. That being said, I just don't agree with them taking money from one of the big three. I feel as if they needed financing they could have went out and leveraged themselves to get the capital they needed. You didn't hear about Sam from Dogfish, or Greg Koch from Stone running to BMC to get money for expansion.

I was thinking along the same lines when I was contemplating this thread/the state of the craft brew market at present. I have no doubt that DFH, Stone, Firestone Walker, etc. have been approached by BMC. Time will tell whether or not any of them take the bait.

There is the Craft Brewers Alliance model which is composed of Kona, Widmier & Red Hook. Goose Island used to be a part of this until they sold lock stock and barrel to AB/InBev this year. AB/InBev owns 32% of CBA. CBA members make use of AB/InBev's distribution strength. Perhaps this will be the way that BMC ultimately controls the craft market. Create CBA type of arrangements throughout the country which merge leading craft breweries and make them wholly owned subsidiaries.

 

[Glossolalia]

Well Gloss, I worked at Bell's when they were brewing in 40gal Groen soup kettles... which was a huge step up from the 15 gal kettles Larry started with. I know Larry, I know John Mallett, these guys are serious about beer... as are Geoff and Marcy Larson (a couple of damned nice folks right there) of Alaskan. To suggest that they are "rather large breweries that simply aren't Anheuser-Busch, MillerCoors, or Pabst" is pretty damned insulting. Larry Bell, the Larsons, Ken Grossman and the folks at Sierra Nevada were there at the start of this thing and made the industry what it is today. We all owe them a debt of gratitude... don't belittle them for their success!

Oh, I don't belittle them for their success at all. It's well deserved. Their success has absolutely no bearing on whether I continue to consume their beer at all. I'm simply stating that the definition of "craft beer" has become so loose that it simply has become "not them" (Bush, MillerCorrs, Pabst). Some people want to push the idea that consuming craft beer is somehow more moral or lofty than consuming non-craft beer. I really can't see how. It mostly comes down to a matter of taste--a subjective criterion--when it comes to the bigger guys. "Craft beer," as currently defined, is simply a sales pitch/a business model. There's nothing wrong with that. It's just I sometimes get sick of the moralizing, and the spreading of numbers that are clearly rooted in BS.

 

[Glossolalia]

While it is true that the larger "craft" breweries account for a significant portion of the growth in the sales of craft beer, I believe that the true majority of the growth is occurring beyond the larger "craft" breweries that you mentioned and is happening at the local/regional level. [/QUOTE]

But it's not. Well, at least, not yet. That's sort of my point. Crunch the numbers.

 

[Montanaandy]

While it is true that the larger "craft" breweries account for a significant portion of the growth in the sales of craft beer, I believe that the true majority of the growth is occurring beyond the larger "craft" breweries that you mentioned and is happening at the local/regional level.

But it's not. Well, at least, not yet. That's sort of my point. Crunch the numbers.[/QUOTE]

Sure it is, at least in my neck of the woods (the West). When local/regional breweries are constantly expanding facilities + production and still cannot meet local/regional demand immediately after expansion and are already planning their next expansion, when local/regional breweries are restricting sales to local/regional consumers because they cannot produce enough product to sell nationally, that is indeed indicative of growth occurring at the local/regional level. This is why BMC has such interest in the craft beer segment. The MC incubator (10th & Blake the area near Coors Field where it is located) is in Denver. You don't think that they see what is going on in terms of craft beer locally in Denver, Ft. Collins, Boulder?

Now I can only speak with some authority for CO, MT because that is where I do business but the situation appears to be the same in OR, WA, & CA each time I visit. The beer scene in San Diego has been strong for years and keeps getting stronger. In Los Angeles, Golden Road just opened and they are projected to break New Belgium's first year sales records. They expect to be up to 60,000 barrels annually within a short period of time. Sure sounds like growth to me...

 

[Homercidal]

Amen brother!

Look, I really do like Terrapin. I actully love their Rye Pale Ale and based my own off of it. That being said, I just don't agree with them taking money from one of the big three. I feel as if they needed financing they could have went out and leveraged themselves to get the capital they needed. You didn't hear about Sam from Dogfish, or Greg Koch from Stone running to BMC to get money for expansion.

Except with extending their debt, they would get ZERO other benefit. By receiving money from the bog boys, they get enhanced distribution (AKA shelf space) and a MUCH greater chance at paying back the debt.

I have not seen the terms of their agreement, but it's possible that Miller (or whoever) has extra capacity, and would make an excellent opportunity for Terrapin to expand production without building. A HUGE COST SAVINGS! And one that would not necessarily entail obtaining a large loan since the physical expansion would be minimal.

It's so much easier to sit back and play brewery owner when you don't actually have any stake in the company.

 

[emjay]

But it's not. Well, at least, not yet. That's sort of my point. Crunch the numbers.

I also have an extremely hard time believing this. Where did you get this information? I'd love to see your source(s).

 

[gr8shandini]

. . .You're in Southern Maryland. Aren't they any breweries there? I understand you may not have stores where you can get a great selection, but surely you have local breweries you can support. Or even Northern Virginia. That whole area is fairly geographically compressed. It seems to me that there has to be somethings close. . .

I wish that that were the case, but to paraphrase George Clooney in O Brother Where Art Thou?, "this place is a geographical oddity; two hours from everywhere." I'm out near the tip of a long peninsula between the Patomic and Patuxent rivers. There are no highways down this way and the two lanes down here have plenty of traffic lights (for god-knows-what reason) and 45 mph speed limits that are well enforced. We've got a mediocre brewpub here (which I frequent), but the nearest places to get real brews are DC, Annapolis, and Baltimore, which are all two plus hours from me.

So it truly is difficult to get to anywhere decent in a reasonable amount of time, even in parts of the mid Atlantic region. Now imagine how bad it must be for some poor schmuck in Utah or Wyoming who has to haul his ass all the way to Colorado to support a "local" brewery.

 

[FantasticBastard]

I tasted a couple of Terrapin brews at a Taco Mac in the Atlanta area last month. There were not worthy of my $5 for a pint IMHO, so I moved on to something better like Bell's Two Hearted Ale and Sweetwater IPA.

Good for Miller. They can have their crappy beer to go along with the rest of their line.

Totally agreed. Sweetwater is vastly superior in my mind. Terrapin has a pretty loyal fan base here though.

 

[Steelers77]

From what I've read they are producing 18,000 bbl and had demand for 30k bbl. The way I look at it is if you have that type of demand and believe in your company why do you have to strike a deal with MC for expansion? They could have just made a deal with a contract brewery or MC (if they do indeed have excess capacity) for the interim until they secured financing and moved into a larger brewery. I just don't see why you would do a deal with MC when you have the demand to expand on your own.

I realize shelf space and distribution are an issue but I really think that is all changing. If the demand is there retailers will put your beer on the shelf it's just that simple. I know you are going to say it's not that simple but in the end it really is. The tide is turning and the demand is there so soon enough it will just be bad business if you don’t support the craft breweries. Well at least in Wisconsin.

In the end it is their decision and we are just casual observes looking in, speculating. But it does bring up the debate and it is a good one.

Cheers!

 

[Montanaandy]

Except with extending their debt, they would get ZERO other benefit. By receiving money from the bog boys, they get enhanced distribution (AKA shelf space) and a MUCH greater chance at paying back the debt.

I have not seen the terms of their agreement, but it's possible that Miller (or whoever) has extra capacity, and would make an excellent opportunity for Terrapin to expand production without building. A HUGE COST SAVINGS! And one that would not necessarily entail obtaining a large loan since the physical expansion would be minimal.

By extending their debt they retain complete control of their company and the decision making process. I am certain that the contract is structured to allow MC to purchase 100% of the company if they so choose.

It is not like MC is telling Terrapin, "here's the deal. We will buy 25%, enhance your distribution and sales and just leave you alone.". No, they want to grow Terrapin so that it becomes a money maker and they can add it to their portfolio. MC is publicly traded and is beholden to shareholders and share prices. They have to find a way to grow and make money and this is frankly a pretty smart way to go about it.

MC is taking the Microsoft approach. Take the vast amount of cash that you earn from the sales of your flagship product (Windows = BMC beers) and use it to purchase other innovative companies because you are unable to do so in house.

 

[Montanaandy]

I wish that that were the case, but to paraphrase George Clooney in O Brother Where Art Thou?, "this place is a geographical oddity; two hours from everywhere." I'm out near the tip of a long peninsula between the Patomic and Patuxent rivers. There are no highways down this way and the two lanes down here have plenty of traffic lights (for god-knows-what reason) and 45 mph speed limits that are well enforced. We've got a mediocre brewpub here (which I frequent), but the nearest places to get real brews are DC, Annapolis, and Baltimore, which are all two plus hours from me.

So it truly is difficult to get to anywhere decent in a reasonable amount of time, even in parts of the mid Atlantic region. Now imagine how bad it must be for some poor schmuck in Utah or Wyoming who has to haul his ass all the way to Colorado to support a "local" brewery.

While I would agree there are not nearly as many micros in WY & UT as in CO, there are a few really good ones (Snake River in Jackson + Wasatch in Park City & Uinta in SLC). Further, I wish that I was one of those "poor schmucks" that could afford to live in Jackson Hole or Park City.

 

[gr8shandini]

Point taken, Montana. I was just trying to say that it's easy to be idealistic about being a "locavore" when you live in a place where everything you could want is within a few blocks of your apartment versus a more remote area.

 

[Montanaandy]

Point taken, Montana. I was just trying to say that it's easy to be idealistic about being a "locavore" when you live in a place where everything you could want is within a few blocks of your apartment versus a more remote area.

No harm, no foul.

Believe me, living in MT, I understand what it means for some to live in areas where they are cut off from many amenities that are taken for granted by most of us.

Fortunately, what we may lack in some areas here (population for example, which is not necessarily a bad thing) we are rich when it comes to beer and the beer culture. Much of that is an accident of geography - we grow the barley here and in nearby Canada, the hops come from neighboring WA, our water is pure. We also are in a strong beer region with CO leading the way and the "Napa Of Craft Brewing" close by in Boulder/Denver/Ft. Collins...

 

[Weizenwerks]

The craft brew market is the only beer market that is currently profitable and it is gaining market share by leaps and bounds (some estimate that craft beer could account for 30% of the market by the end of the next decade up from some 7% or so at present). .

Not by a longshot. Current craft beer market share is only 4%, not 7%. Thirty percent in the next decade is a pipe dream.

Blue Moon and Leinenkugels is craft beer?

Leinie's is still brewed in the old Leinie's brewery and is more "craft" than Blue Moon is.

I truly believe we will never go back to the days when there was only 82 breweries in the U.S. and the big three are worried about this.

BMC is not worried about the craft beer breweries, they are simply moving into a market they can make more profit in. Craft beer is growing at a 100% rate (production) each year on average while industrial beer (BMC) is slowly decreasing. BMC still has 96% of the beer market. I know of no monopoly of market share like that which truly scares the big market holders. No one holding a collective 4% is going to damage BMC in any capacity. AB loses more beer to waste during production than Boston Beer Company (Sam Adams) bottles for sale. You think AB is scared? Not a chance.

 

[Montanaandy]

Not by a longshot. Current craft beer market share is only 4%, not 7%. Thirty percent in the next decade is a pipe dream.

Leinie's is still brewed in the old Leinie's brewery and is more "craft" than Blue Moon is.


BMC is not worried about the craft beer breweries, they are simply moving into a market they can make more profit in. Craft beer is growing at a 100% rate (production) each year on average while industrial beer (BMC) is slowly decreasing. BMC still has 96% of the beer market. I know of no monopoly of market share like that which truly scares the big market holders. No one holding a collective 4% is going to damage BMC in any capacity. AB loses more beer to waste during production than Boston Beer Company (Sam Adams) bottles for sale. You think AB is scared? Not a chance.

*Agreed that the 30% is really out there but that is what some respected industry pundits are predicting. I also believe that they were looking at a 15 year time frame.

* You are correct about market share (I mixed it up). The craft brewing sales share in 2010 was 4.3% by volume and 6.9% by dollars. At this point the numbers are not in for 2011

*Used to drink Leinie's 30+++ years ago in Wisc. Was decent beer but Point Beer out of Stevens Point was much better IMHO.

*InBev is concerned about craft beer because the beer paradigm in this country is shifting (once again). They obviously are not quaking in their boots but they are definitely concerned. Why do you think that they are once again making inroads into the craft world by investing in regional craft breweries and controlling distribution?

It is not the market share (which they obviously control) but the margins that are really the cause for concern. Yes, you can continue to control 96% of the market selling yellow fizzy water, but if you are losing money on each sale and sales are down year, after year, after year (albeit at 2% increments) and your margins (which were razor thin to begin with) are going to be non-existent, shareholders (primarially institutional) will revolt and the stock will plummet. AB is just one piece of the InBev puzzle.

Further, truly the biggest threats to BMC come not from craft beer but from wine and mixed spirits which also continue to grow by double digits each year. Couple this with declining market share & margins in your core and this is a recipe for trouble.

 

[Weizenwerks]

Why do you think that they are once again making inroads into the craft world by investing in regional craft breweries and controlling distribution?

All for profit and none for beer. Industrial beer companies (BMC) are about profit first, beer second. Craft beer companies are beer first, profit second. Both are in business to make profit making and selling beer, let's not mince words about that. The difference is who cares about their product.

I've stated this before on the forum: BMC is exceptionally good at making a particular style of beer very well, very consistently, and marketing the heck out of it to a culture that is susceptible to it like children watching fireworks.

The style of beer they make I don't care for one bit. I don't like their illegal business practices either. But the beer you bought 10 years ago is nearly identical to the beer you would buy today. That consistency in product from lot to lot simply has to be respected. That's the only thing I respect of them. Their brewers are damn good at what they brew.

 

[Montanaandy]

All for profit and none for beer. Industrial beer companies (BMC) are about profit first, beer second.

I don't really understand your response. You are basically preaching to the choir.

You reiterate my central point - that craft brewing generates margins & profit whereas sales of fizzy yellow water are not at this point which is why they want back in in a big way.

 

[BrewMU]

Not bloody likely.

 

[Glossolalia]

I also have an extremely hard time believing this. Where did you get this information? I'd love to see your source(s).

I'll admit it depends how you measure it, but let's look at it this way for a second. All my numbers are coming from the Brewers Association, by the way. I'm only dealing with the numbers that are freely available. Evidently there's more and better data available for those who pay. First of all, the top 10 "craft" breweries in the US account for roughly 49.71% of all craft volume sold! BBC alone constitutes roughly 20% of all craft volume sold. Yes, the total volume of "craft" beer sold has went up from 9,115,635 bbl to 9,951,956 bbl from 2009 to 2010 (+ 9.2%). Of that, so-called "regional crafts" were UP 12.2%, "contract crafts" were DOWN 38.6%, "microbreweries" were UP 7.1%, and "brew pubs" were UP 6.4% by volume sold.

As an aside, it's worth noting that the total beer volume sold in the US actually decreased roughly 1% over the same time period and has been doing so regularly for some time now.

Now, we also had a large number of craft breweries open. Sounds good, right? More breweries and more total volume sold. However, if we divide the volume sold by the total number of breweries in a given category, we observe something interesting. The average volume sold/brewery for "regional craft" brewers between 2009 and 2010 was DOWN 0.4%, for "brewpubs" UP 0.4%, and for microbreweries DOWN 10.9%. So, yes, while the total volume and total number of breweries is going up for craft brewers, the average volume sold/brewery is actually going down for all categories except a modest increase in brewpubs, and it's going down most significantly for those defined as microbrewers, the group that we usually are referring to here when we speak of craft brewing.

One might suggest that we're blowing up a bubble here. The number of breweries opening is happening quicker than individual breweries can grow. Furthermore, total beer consumption is decreasing. This sort of thing happened in the late 1990s both here and in the US, where more microbrewers opened than the market could sustain. I suspect, individual microbrewers will need to increase their prices to maintain profitability if volume sold continues to fall.

 

[thegerm]

if BMC wants to start making beer that's more flavorful in response to a market, or if they want to start pumping huge sums of cash into small brewers who are making good beer, I'd call that a success of capitalism, and I'd be fer it.

 

[Nightbiker]

I guess I don't really care one way or the other. On one hand, if BMC is making a bigger push toward the craft-beer market, it will expose that many more beer drinkers to other varieties of flavor than they were used to in the first place -once they get a taste of fuller-bodied beers, and (if) they find they LIKE more flavor and body in their beer, they will be more open to experiment with other beer styles and or brands -this is a positive for all of us.
Locally, the Publix chain of grocery stores has been stocking a number of craft beer offerings in their beer aisle. At first, there was little evident public interest. NOW you can easily see that those stocked beers have been moving -and at an increasing pace -in response, Publix has started offering even more varieties -its regional, to be sure. AND the prices are competitive.
I think this will be good. I also expect that it won't hurt our homebrew 'market' in any way -and may even help it to expand -as people decide they like the other offerings, may decide they would like to try their hand at it as well. After all, no store ANYWHERE could possibly carry all of the varieties that are available to those of us who brew our own.

 

[Fizzycist]

Not bloody likely.

In regards to your title "McDonald's replace grannies cooking"
Not likely? You kidding? McDonald's definitely is ****, I agree, but it has already replaced grannies cooking, even just mom's cooking, for lots of people. Brewing beer takes time and energy, just like cooking a good meal, and recent generations have been all about time and energy for themselves. They want someone else to do that work, and will trade convenience for quality every time.

 

[bosunbrew]

You'd think the big 3 breweries could produce an amazing beer or two, something on the order of the finest European brews in terms of taste and quality (i.e., not another American pale ale or brown-- we've got plenty of good ones). They obviously have the technology, knowledge, and talent, but it's now spent slaving away producing swill. The big 3 should look at getting some credibility back on the basis of their brews, not simply marketing and brewery take-overs. I realize this will probably never happen.

 

[BrewKnurd]

Now, we also had a large number of craft breweries open. Sounds good, right? More breweries and more total volume sold. However, if we divide the volume sold by the total number of breweries in a given category, we observe something interesting. The average volume sold/brewery for "regional craft" brewers between 2009 and 2010 was DOWN 0.4%, for "brewpubs" UP 0.4%, and for microbreweries DOWN 10.9%. So, yes, while the total volume and total number of breweries is going up for craft brewers, the average volume sold/brewery is actually going down for all categories except a modest increase in brewpubs, and it's going down most significantly for those defined as microbrewers, the group that we usually are referring to here when we speak of craft brewing.

I think that's exactly what I would expect from an industry adding so many new businesses. I would expect that every microbrewery that opened between 2009 and 2010 was smaller than the existing average at the time they opened. So I think using the "average volume" method doesn't paint an accurate picture in a time when you have such a significant increase in number of players. Not surprisingly, the group that showed the biggest drop in volume per brewery was microbreweries, and microbreweries showed by far the largest increase in number of breweries. Micros went from 486 to 603. Almost a 25% increase, and again, almost all of those new micros were probably smaller than "average".

For all interested: Brewers Association | Number of Breweries

 

[COLObrewer]

And the saddest part of all this is:

All the wonderful beers that we cannot enjoy anymore either because they are not going to be produced due to low sales, or they are not what they once were or they were purchased (aquired, consumed, taken over, incorporated) simply to get them off the shelves. I've already seen this and experienced it first hand, sadness.

 

[Clanchief]

You'd think the big 3 breweries could produce an amazing beer or two, something on the order of the finest European brews in terms of taste and quality (i.e., not another American pale ale or brown-- we've got plenty of good ones). They obviously have the technology, knowledge, and talent, but it's now spent slaving away producing swill. The big 3 should look at getting some credibility back on the basis of their brews, not simply marketing and brewery take-overs. I realize this will probably never happen.

The problem which stops that is cost-effectiveness. Look at who BMC markets to - generally speaking the poorer working class and lower middle class in America. People who are generally very cost conscience at the store. College kids - so many of their commercials are clearly targeted at a market of males aged 18-25 - who have very little money and whose only desire is to get drunk. You're never going to make great beers using corn as your primary grain. But because of high government subsidies, it's always going to be much cheaper than barley, thus enabling them to make a consistent, albeit lower quality beer, at a very low cost. That's how they can sell 24 packs for $12 and still make money, whereas a smaller brewer needs to sell a 6-pack for $8.99, and some for even more. Higher quality ingredients make better beer, but also increase cost to consumer. Some (like me) are happy to pay that for something which is better quality. Some simply aren't, and would prefer to just get hammered on Miller Lite or Milwaukee's Best or the like.

 

[PollardsVision]

The problem which stops that is cost-effectiveness. Look at who BMC markets to - generally speaking the poorer working class and lower middle class in America. People who are generally very cost conscience at the store. College kids - so many of their commercials are clearly targeted at a market of males aged 18-25 - who have very little money and whose only desire is to get drunk. You're never going to make great beers using corn as your primary grain. But because of high government subsidies, it's always going to be much cheaper than barley, thus enabling them to make a consistent, albeit lower quality beer, at a very low cost. That's how they can sell 24 packs for $12 and still make money, whereas a smaller brewer needs to sell a 6-pack for $8.99, and some for even more. Higher quality ingredients make better beer, but also increase cost to consumer. Some (like me) are happy to pay that for something which is better quality. Some simply aren't, and would prefer to just get hammered on Miller Lite or Milwaukee's Best or the like.

The crazy part is, the main BMC brands aren't exactly "cheap". What BMC saves on ingredients, they surely spend on marketing.

A $12-pack of Coors Light or Miller Lite still costs about $10-11. That's the exact same price as Yuengling (which I don't personally like, but is a huge step up from BMC obviously).

Heck, I can keep Sierra Nevada well-stocked in the house without ever having to spend more than $15 for a 12-pack.

BMC obviously does quite well with the super cheap crowd, but their marketing budgets also have them doing quite well with people who can afford good beer.

If SN or Sam Adams can get a 12-pack of great beer on the shelf for $15, there's no good reason BMC can't. At this point, though, they don't really need to, if they can get $11 for a box of corn water. Hopefully, this will change somewhat as Americans are slowly, but surely starting to demand better beer.

 

[BrewKnurd]

The crazy part is, the main BMC brands aren't exactly "cheap". What BMC saves on ingredients, they surely spend on marketing.

A $12-pack of Coors Light or Miller Lite still costs about $10-11. That's the exact same price as Yuengling (which I don't personally like, but is a huge step up from BMC obviously).

This is the thing that I think people need to wrap their heads around. People don't buy BMC because its cheap. They buy it because its honestly what they like. Maybe they like it only because they're used to it, but it is really what they like. As bizarre as that may seem to us.

 

[PollardsVision]

This is the thing that I think people need to wrap their heads around. People don't buy BMC because its cheap. They buy it because its honestly what they like. Maybe they like it only because they're used to it, but it is really what they like. As bizarre as that may seem to us.

It's certainly what people are used to.

I guess we're just now getting the point where there are new beer drinkers with fathers that had access to and drank good beer.

For pretty much everybody up to this point, it's probably a near certainty that your father drank a BMC-style lager.

 

[Nightbiker]

I think you both hit it pretty squarely on the head. BMC is what they LIKE, and its ALSO what they're USED TO. I remember my grandfather (my earliest memories of him when I was a little boy) THOROUGHLY ENJOYED 'Old Milwaukee' -he burned through those cans like they were soda pop. Personally, I was completely disgusted by the odor of the stuff -not to mention the smell the cans made after sitting in a pile for a few days. I can STILL smell that...
He certainly could afford better (though in truth, there really wasn't a lot of variety in those days -certainly nothing along the lines we enjoy today) -he also enjoyed single-malt whiskey. He drank that beer because that was what he genuinely wanted (there were cheaper as well as more expensive brands available).
But then, this is also the same guy who literally made home-made wine in an old bathtub or drum in the barn, and drank that as well (and we won't get into what used to have to be scooped out of the batch from time to time).
IF he were alive today, he really would have had no use for the craft brews most of us (on this site) enjoy. We could go in circles figuring out why he actually liked Old Mil, but it would make little difference if it was simply what he was used to for lack of other choices, or because thats what he had always consumed, or because he genuinely enjoyed the taste -or a combination of the above. It really isn't relevant. The fact of the matter is that there is a huge market for BMC -nevermind that its sold in all of the finer refueling establishments, its also extremely consistent -BMC tastes the same no matter WHERE you purchase it. Every time. We all can make good (even great) beer, but most of us aren't going to be so consistent, and for a consistently lower price -and those are two things that the masses expect, period.
I used to go over to my old fire-chiefs' house to knock back longnecks every weekend. I'd often bring a sixpack of a craft brew (or some of my own) for him to try. He would try them, but he always went back to Bud -that was what he enjoyed.
It may make some feel good to turn their nose up at the 'general beer' but the fact of the matter is that it sells, and it sells because it is consistent, relatively inexpensive, and what the masses will drink -for WHATEVER reason. My point is, they aren't likely to go away anytime soon. Be grateful that you brew what YOU like, and that you DO have an ever-increasing access to an every-growing variety of other beers.

 

[Nightbiker]

I would like to add that the local 'big grocery chain' (Publix which has stores throughout the state, and some of the other southeast states) has taken to stocking a reasonably diverse collection of craft brew labels -one of my old favorites, Warsteiner (especially their dunkel) is kept as well -and some of the brands or beers change from time to time, but none of them seem to sit on the shelf for very long -the stock is always reasonably fresh (as much as could be expected for beers that come from other countries), so there is definitely a growing market for the better class of brews -if there weren't, BMC wouldn't be taking a hard look at some of the smaller brewing companies. I wouldn't say BMC is scared or worried, just that they are acknowledging that there IS more to the market than the 'old standby' blander beers.

 

[Montanaandy]

Whether BMC is "scared" "concerned" "interested" "not worried" you can take your pick. The economic and business fact of the matter is a shift is occurring at generational levels and in the general public at large where taste, ingredients, who made something, where it came from are becoming more & more important every day. I call it the "Whole Food Effect" which I am not going to get into at this point but you can catch my drift. Many individuals (families) are willing to pay more for products that meet the aforementioned criteria in their eyes (& mouths). Craft beer is a part of this wave.

 

[Nightbiker]

can't argue that. All I have to wonder is wheather it will continue -or will it become yet another passing fad? Regardless, I'll still be brewing my own. But I do enjoy having a growing (so far) vairety to choose from.

 

[DannPM]

I don't know about these arguments about college kids. I'm 25 now but I started drinking craft beer in high school and continued through college. I never really liked mass market lagers.