Nice article on how AB InBev is trying to destroy good beer for higher profits

[moviebrain]

I had a Redhook Longhammer and Stone IPA recently and they didn't taste anything like they used to.

InBev isn't the only company that looks at profit margins and tries to cut costs where they can.

I could see Stone IPA changing simply because they continually need to find complementary blends of slightly different hops since that is such a large component of that recipe.

Redhook, on the other hand, is part of the same small brewing conglomerate that Goose Island used to belong to (along with Widmer Bros and Kona brewing) Craft Brewers Alliance. I'm sure they're taking notes on how to maximize profits as well. When I last visited the Seattle Redhook brewery they were very proud of their new brewery "back east", but admitted that it would taste slightly different and as such would be packaged in slightly different bottles.

If you ask me, the process of blending and homogenizing the mass produced beer can only hurt the brand. Beer is EXTREMELY difficult to exactly replicate every time, and if your customers are willing to go months between purchases or the distributors take forever to sell through a batch then the changes are even more noticeable.

I don't agree with using lesser quality ingredients, I only mean to argue that making lots of delicately flavored beer with the same flavor consistently is one of those skills I'm constantly in awe of.

 

[cheezydemon3]

all in all isn't real craft beer actually taking up a higher portion of market share as time goes on?

Watered down becks and other crappy premium beers can actually be a gateway to better beer for a lot of BMC people.

 

[unionrdr]

What bothers me is that our constitution has always had laws against monopolies. but it isn't being enforced anymore. It really needs to be enforced when outside companies come into this country bying things up. Including our land. We need to change this greedy crap.

 

[b-boy]

I kinda got scammed a few days back. I have a monthly poker game at my house. I always hit a local brewpub for a keg of amber ale that my friends love. Its a bit of a haul and I didnt have time to make the trip this time.

I hit the local beer store for a 1/6 keg. All they had was IPAs and my friends wont drink it. They are mostly BMC drinkers. They had a special on Goose Island honkers ale. I'd heard of goose island, but never tried it. The keg was ridiculously cheap, so I bought it. Got it home and noticed A big ole AB eagle on the keg.

Got a little suspicious and googled goose island. Turns out I bought an InBev owned brewery product. It was definitely not marketed that way. I even spoke to the beer guy and he told me it was a high-end microbrewery in Chicago. He highly recommended it.

It was OK, not great. A little watery and kinda bland. Tasted like a malty budweiser. Its drinkable, but I feel a little duped.

The moral of the story is 'Be careful out there'. Make sure you know what you're buying.

 

[tennesseean_87]

our constitution has always had laws against monopolies.

Which part of the Constitution does this?

 

[Gameface]

I guess I'm not seeing the same tragedy in this article the rest of you are.

For one, InBev is delivering exactly what most of their customers want, an easy to drink, ultra clear beer. Go to a bar and ask an inbev customer if they liked it better when the budweiser was made with more Halletauer Mittelfruh and they'll likely shrug their shoulders. They aren't going to feel let down. And lets face it, folks, Budweiser doesn't have a discernible hop flavor or aroma, so we're talking about a very lightly bittered beer using a different bittering hop (or at least a smaller ratio of the original bittering hop). Was Budweiser "good" before InBev bought them? Right, so what's changed really?

On the bright side. The continued degradation of mass market commercial beer is driving huge increases in craft brewing and home brewing. I think eventually there will be a tipping point at which time most consumers will demand more from their beer than InBev will be able to provide.

 

[Brewmech]

They will keep cutting on process and quality until their main constituency starts crying. Unfortunately that may be too late. I think it sucks that there are companies that operate this way, but part of me is relieved. As an aspiring pro brewer I say let them screw it up and drive those drinkers to me.

 

[day_trippr]

It was either 2011 or maybe even this year that the craft brew industry sales topped five percent of the overall US beer market.

If the starting point corresponded with, say, the emergence of Samuel Adams Boston Lager on the national scene in 1985 (not saying "cause/effect", just chronology, as there were many hundreds of microbreweries by the end of that decade) it's taken 25 years to get to "5".

While The Bigs are clearly hedging their bets by snapping up some micros, I doubt they have all that much to worry about....

Cheers!

 

[Gameface]

It was either 2011 or maybe even this year that the craft brew industry sales topped five percent of the overall US beer market.

If the starting point corresponded with, say, the emergence of Samuel Adams Boston Lager on the national scene in 1985 (not saying "cause/effect", just chronology, as there were many hundreds of microbreweries by the end of that decade) it's taken 25 years to get to "5".

While The Bigs are clearly hedging their bets by snapping up some micros, I doubt they have all that much to worry about....

Cheers!

Sure, I agree. They'll continue to give a large portion of the population the beer they want to drink while the craft brew industry (no better or worse than the macro brew industry) gains larger and larger percentages of the market share. Good beer will become more available, home brewing ingredients, equipment and knowledge will expand. Life will be really good!

 

[iambeer]

AB/Inbev is first an foremost a corporation, no different that Wal-Mart/Costco/etc, and i'd even compare them to the big pharmaceuticals, in the way of sponsoring laws that benefit them and hurt the little guy, back room deals, buying the competition instead of upping their product. They really are a bug bad company, but no one here should be surprised about that. All businesses want to make money, the difference here is craft breweries also want to make a fantastic product.

I don't agree about Costco being compared with InBev or Walmart. From my own experience of the store wares and from what I have read about the way they run their business. There is a lot of material on the subject, including this one that calls Costco the anti-walmart. http://www.nwprogressive.org/weblog/2005/07/costco-business-philosophy.html

In my own experience, Costco evidently cares about the quality of what it sells. It's not just a bottom line distributor.

I guess by proxy, I'm saying that inBev doesn't care about what it sells. Which is the article summarized, maybe.

 

[iambeer]

Evidence that the BMC mindless masses will drink anything as long as it has less flavor and is less filling.

A good percentage will probably drop the product once they know it's not an American business and that the acquisition cost American jobs. News travels very slowly to BMC drinkers.

 

[weirdboy]

I kinda got scammed a few days back. I have a monthly poker game at my house. I always hit a local brewpub for a keg of amber ale that my friends love. Its a bit of a haul and I didnt have time to make the trip this time.

I hit the local beer store for a 1/6 keg. All they had was IPAs and my friends wont drink it. They are mostly BMC drinkers. They had a special on Goose Island honkers ale. I'd heard of goose island, but never tried it. The keg was ridiculously cheap, so I bought it. Got it home and noticed A big ole AB eagle on the keg.

Got a little suspicious and googled goose island. Turns out I bought an InBev owned brewery product. It was definitely not marketed that way. I even spoke to the beer guy and he told me it was a high-end microbrewery in Chicago. He highly recommended it.

It was OK, not great. A little watery and kinda bland. Tasted like a malty budweiser. Its drinkable, but I feel a little duped.

The moral of the story is 'Be careful out there'. Make sure you know what you're buying.

Goose Island is a high end microbrewery. They were independently owned for many years and the owner(s) just sold the company to AB-InBev last year. So, maybe if you are an elitist you can choose to call them "sellouts" since they chose to, you know...sell their business that they built up over many years. However, so far as I know, they are still running the same operation and selling the same beers they were two years ago.

You may not like that beer you picked up, but it's not because they are AB-InBev swill or whatever you convinced yourself.

 

[fosgate]

Beer Wars is a really good documentary, it is available on Nexflix on demand.

+1 This company has to grow or die. Once they are done with the big boys they will increase their intimidation toward craft brewers. I would say start teaching your friends and your family how to brew their own beer instead of supporting these big brewers practices. And check the labels to make sure your brand hasn't sold out.

 

[iambeer]

So, maybe if you are an elitist you can choose to call them "sellouts" since they chose to, you know...sell their business that they built up over many years.

The article seems to gloss over InBev's strategy of buying craft breweries (merely calling craft breweries a 'threat'). But it seems clear their bottom line of cutting costs is the main goal. Which means closing breweries, firing people, reusing brands.

Goose Island is not an obscure brand so it does fit in to their idea. There are so many breweries producing beer right now that I don't have a problem not buying any of the InBev brands until their reputation takes a turn. This decision has nothing to do with being elitist. Home brewers are the opposite of elitists. That is why we naturally question the over the top marketing of microbrewery brands. In this day and age anyone with the internet can get information without it being marketed at us, so our choices are more informed than ever.

 

[fosgate]

Of course. The Brazillian is using an aggressive business model of the 80's (watch Wallstreet to jar your memory of hostile takeovers during the 80's). Aquire cheap, gut the company and sell off. They make much more money that way. The beneficiaries will be the companies who don't gain much notice and purchase these companies as this company discards what's left of them. They are killers no doubt but when they run out of food they will starve like any other predator or find another industry to plunder.

 

[Ben58]

AB-Inbev did the same thing here where I live. Here is a link to the article.
http://www.thestar.com/business/article/798898--labatt-dismantles-lakeport-brewery-angers-hamilton.

 

[Greyhound]

This article confirms the fears I had when AB-InBev bought Goose Island. AB's decisions are ultimately influenced by shareholders, not by brewers. Eventually, cost-cutting wins at the expense of the craft beer drinker. Fortunately, there are still plenty of small independent breweries competing for my craft beer dollars.

 

[olefattguy]

So why are there a post-prohibition record number of breweries in this country?

But you must take into consideration another fact. Population growth.
The US population in July*1870 : 38.56 million
The US population in July 1920 : 106.46 million
The US population in July 2012 : 313.85 million


Breweries development in the period:

So the population has almost multiplied by TEN , and breweries JUST managed to come to a figure slightly above the figure of 1887.
Logically, there should be ten times as many breweries today, no?

 

[BWN]

This actually good for craft beer drinkers. The way I see it InBev will keep bringing their companies product to new lows. At the same time craft beer is growing in popularity. It is almost like a perfect storm.

 

[biochemedic]

Perhaps these brands taste different b/c they're now much fresher? Wonder what would happen is you took the St. Louis brewed Becks and put it on a container ship on the Mississippi river for a few weeks then distributed it?

 

[grmski]

The likely consequence in the long run is that the giant firms producing tasteless low quality beer will start losing market share to the craft brew scene and to compensate will then buy out the independents and the cycle will repeat ad infinitum

 

[BrewKnurd]

But you must take into consideration another fact. Population growth.
The US population in July*1870 : 38.56 million
The US population in July 1920 : 106.46 million
The US population in July 2012 : 313.85 million


Breweries development in the period:

So the population has almost multiplied by TEN , and breweries JUST managed to come to a figure slightly above the figure of 1887.
Logically, there should be ten times as many breweries today, no?

look, I see your point, but you ignore the fact that significant improvements in transportation and delivery are going to have a significant impact over that period.

What's really interesting to me is that the overall trend is essentially unchanged by prohibition. That is, if you look where the line was headed pre-prohibition, that's right where it picks up after prohibition.

As for AZs point about the strength of craft brewing... the fact that the number of breweries has increased by more than a factor of 20 in 30 years say sit all.

 

[IffyG]

So the population has almost multiplied by TEN , and breweries JUST managed to come to a figure slightly above the figure of 1887.
Logically, there should be ten times as many breweries today, no?

That's a quite leap in logic. I'd say it holds up for something like schools or hospitals (as those need to be in proximity to the people), whereas beer can be transported. I think the metric you would expect to have increased by a factor of ten is the number of barrels brewed. Even that is with the assumption that per capita beer consumption is equal between 1887 and today.

Edit: just a second too slow...

Perhaps these brands taste different b/c they're now much fresher? Wonder what would happen is you took the St. Louis brewed Becks and put it on a container ship on the Mississippi river for a few weeks then distributed it?

It probably plays a minor role in the difference in flavors, but I think I'd say most of it is due to differences in process and water between locations.

 

[b-boy]

Goose Island is a high end microbrewery. They were independently owned for many years and the owner(s) just sold the company to AB-InBev last year. So, maybe if you are an elitist you can choose to call them "sellouts" since they chose to, you know...sell their business that they built up over many years. However, so far as I know, they are still running the same operation and selling the same beers they were two years ago.

You may not like that beer you picked up, but it's not because they are AB-InBev swill or whatever you convinced yourself.

First - I'm not an elitist. I'm drinking a Labatts Blue right now and watching football. Hardly something an elitist would do. In fact I'm just about to pop another Blue. Oh, and there is no Brie in sight.

Second - I don't hate the beer. I enjoy English Ales. I'm just very underwelmed. I can't comment on how good it used to be. The keg won't go to waste.

Third - I said I googled It. Its made at AB in Baldwinsville, NY.

Here's the link: http://mybeerbuzz.blogspot.com/2012/05/goose-island-honkers-ale-ipa-harvest.html

here's another: http://www.huffingtonpost.com/2012/08/26/goose-island-going-nation_n_1831409.html

I wasn't trying to slam Goose Island. I don't care what they do. I'd just like to know what I'm buying. The advertising in the store indicated I was buying a Chicago-made craft beer. I was willing to pay a premium price because of that. That wasn't the case. What I bought was a mass-produced InBev-owned product. It's my own fault for being under-educated about the product. I take full blame, but it won't happen again.

Consider my post a PSA.

 

[Krovitz]

Customers don't like becks and bass now because it's too fresh? Hahaha. That article is pretty sad when you think about it. There are many people who will be inspired by this business model and "success" story.

 

[bob1852]

But you must take into consideration another fact. Population growth.
The US population in July*1870 : 38.56 million
The US population in July 1920 : 106.46 million
The US population in July 2012 : 313.85 million


Breweries development in the period:

So the population has almost multiplied by TEN , and breweries JUST managed to come to a figure slightly above the figure of 1887.
Logically, there should be ten times as many breweries today, no?

Does your point including production, or are you suggesting production per brewery hasnt't matched, or exceeded population growth?

100 years ago, breweries were producing volume for their small, local markets. Not so, for today. And 100 years ago, they were producing mostly similar styles. Again, not so for today.

As Maureen Ogle says in "Ambitious Brew," the greatest time for beer in the U.S. is now.

 

[BrewKnurd]

As Maureen Ogle says in "Ambitious Brew," the greatest time for beer in the U.S. is now.

I have a hard time seeing how anyone could even try to argue against this claim.

 

[bob1852]

I have a hard time seeing how anyone could even try to argue against this claim.

But, but, but, but inbev is killing 'em all, don't you see???

 

[BrewKnurd]

But, but, but, but inbev is killing 'em all, don't you see???

Well, all we've really seen is stats on number of breweries. Nothing about number of *living* breweries. Hmmmmmmmmmmmm... maybe they ARE all dead!

 

[Markd27]

Seems the sentiment here seems to be "I don't care, because I drink craft beer and they are only messing with the big macro breweries that I could care less about".

You might care once they are done acquiring the large macro companies, and start taking over mid to large sized craft breweries and start effing with their product.