Northern Brewer Replacement

[mmb]

Can't tell if this is sarcastic or not? Evils of corporate greed? That's what America is based on. How many people out there want a good paying jobs with benefits like paid time off, health insurance and a pension? You think you are going to get that working for a small "non greedy" business?

Yes. Ask all your Walmart employees who are simply thriving while working for one of the most profitable, largest companies in America.

Oh, wait. They're encouraged by Walmart to sign up for food stamps. Corporations are for maximizing profits at almost any cost. Small business is about succeeding in the community they live and work in.

 

[iioan]

Nice article. Mostly because it does consider all perspectives.

We are all familiar with the disruptive approach. See it way too often on the beer shelves. Will certainly be good for homebrewers. Not so much for competitive shops.

Too soon to tell where this will go. I'll hold off lighting the torch and keep the pitchfork on the ground until the "boogeyman" shows his true colors.

That's not how it will work.

If they cut deep into margins and price out other retailers, it will be a slow bleed. Start with maybe 10% of assortment and keep scaling. There will not be enough buzz to make any effect in the industry if they execute this strategy.

It's my most executed guess This is not a data play, This is purchase the largest homebrewing company, use their immense buying power & capital to lower prices, price out other retailers, start whole distribution. Then once they have even more dominant market share and a distribution network in place, raise prices.

It's what happens, very common MO. Standard Oil did it and that's why finally broke up their monopoly. Undercut prices in certain areas to kill business, then swoop up assets and raise prices.

 

[bob1852]

Yes. Americans complain about big business screwing the small guy.

Except most American's vote with their wallets -- aka, how much something costs...

There's hundreds of threads alone on HBT about "where can I get the cheapest bulk grain shipped to my house??"

Unfortunately, the small guy is having to get by on less and less, so they are more inclined to look for cheaper products. It's a race to the bottom....and we're almost there!

 

[GilaMinumBeer]

That's not how it will work.

If they cut deep into margins and price out other retailers, it will be a slow bleed. Start with maybe 10% of assortment and keep scaling. There will not be enough buzz to make any effect in the industry if they execute this strategy.

It's my most executed guess This is not a data play, This is purchase the largest homebrewing company, use their immense buying power & capital to lower prices, price out other retailers, start whole distribution. Then once they have even more dominant market share and a distribution network in place, raise prices.

It's what happens, very common MO. Standard Oil did it and that's why finally broke up their monopoly. Undercut prices in certain areas to kill business, then swoop up assets and raise prices.

Same thing I said. I just said it in fewer words.

Good for homebrewers. Bad for competitors.

I also did not suggest that the "data play" was the only incentive. Just a big one.

 

[JimBrewMagic]

www.BrewMagic.com - Made in the USA, high quality, sanitary, commercial grade supplies for all levels of brewing, from home brewing to those ready for the next level. Check us out. Free freight on systems through the end of the month. Cheers.

So looking for opinions in whi will be your online supplier for those no longer using NB. Some people are not lucky enough to have a local shop to visit. Would love to know who the community frequents that is trusted / reliable. Thanks!

 

[Aristotelian]

morebeer and homebrewsupply.com

Very happy with both.

 

[Murphys_Law]

That's not how it will work.

If they cut deep into margins and price out other retailers, it will be a slow bleed. Start with maybe 10% of assortment and keep scaling. There will not be enough buzz to make any effect in the industry if they execute this strategy.

It's my most executed guess This is not a data play, This is purchase the largest homebrewing company, use their immense buying power & capital to lower prices, price out other retailers, start whole distribution. Then once they have even more dominant market share and a distribution network in place, raise prices.

It's what happens, very common MO. Standard Oil did it and that's why finally broke up their monopoly. Undercut prices in certain areas to kill business, then swoop up assets and raise prices.

I think people will be surprised at how hard it will be for InBev and NB to actually realize the efficiencies of "buying power" in this deal. And even if they do lower the price to kill competition and then raise price as they become more monopolistic...that price increase will create a disruption/vacuum which will be filled by some savvy entrepreneur looking to expand their on-line home brew presence.

I think "water will find it's own level" here and the market will dictate the price points, not InBev.

 

[TasunkaWitko]

I've had outstanding service from www.homebrewsupply.com as well as www.eckraus.com. I would order from either one of them with absolutely no reservations.

 

[mmb]

I think people will be surprised at how hard it will be for InBev and NB to actually realize the efficiencies of "buying power" in this deal. And even if they do lower the price to kill competition and then raise price as they become more monopolistic...that price increase will create a disruption/vacuum which will be filled by some savvy entrepreneur looking to expand their on-line home brew presence.

I think "water will find it's own level" here and the market will dictate the price points, not InBev.

AB already has the purchasing power to lower prices on Malt and hops, that's the competitive advantage for craft breweries to gain access to the AB supply chain. Adding Northern Brewer to that is fairly easy, just drop off malt to NB instead of "insert gobbled up craft brewer here."

It also gives AB a toe into the market of supplying HB shops to maybe threaten LD Carlson and some of the smaller malt suppliers like BSG Handcraft. Making Northern Brewer into more than an online retailer but a distributor as well. AB already has a distribution market in place, one of the best around that knows how to get the lowest to the retailer door.

 

[Murphys_Law]

AB already has the purchasing power to lower prices on Malt and hops, that's the competitive advantage for craft breweries to gain access to the AB supply chain. Adding Northern Brewer to that is fairly easy, just drop off malt to NB instead of "insert gobbled up craft brewer here."

It also gives AB a toe into the market of supplying HB shops to maybe threaten LD Carlson and some of the smaller malt suppliers like BSG Handcraft. Making Northern Brewer into more than an online retailer but a distributor as well. AB already has a distribution market in place, one of the best around that knows how to get the lowest to the retailer door.

And "lowest to the door" can be good for consumers, no? I guess my post was addressing the second half of the equation people seem afraid of - lower price, put people our business, raise price and kill craft and home brew.

I don't foresee that happening. Sure, they are going for a market grab (disruption) but to have market share you need a robust market worth fighting for. I don't view this as a move to kill a market (competitors maybe) but to leverage and grow the market (i.e. revenues and profits).

 

[Vandulus]

I live in Ohio so Label Peelers is often a place I'll order from when they run 30%+ sales, which is frequently. Both my LHBS and Label Peelers are supplied by LD Carlson so I'll also use MoreBeer which has 2 day, free shipping for orders over $59.

 

[mmb]

And "lowest to the door" can be good for consumers, no? I guess my post was addressing the second half of the equation people seem afraid of - lower price, put people our business, raise price and kill craft and home brew.

I don't foresee that happening. Sure, they are going for a market grab (disruption) but to have market share you need a robust market worth fighting for. I don't view this as a move to kill a market (competitors maybe) but to leverage and grow the market (i.e. revenues and profits).

The fewer choices available to consumers the more profit there is to be had. Less overhead, less stocking of "loser" products, less variability in the supply line, less products to stock. Time will tell, of course, but the fewer SKUs you have the more you profit, if the consumer is buying that product.

I don't believe AB wants to kill craft and homebrew. I do believe they want to see a contraction of choice to leverage their ability to provide low cost SKUs. Why have 14 types of 2 row when AB 2 Row is $10 a 50lb sack? As the other malts have less demand, price increases to compensate for less turnover as per item production cost increases. It's standard micro economics.

So no, lowest price isn't always best for consumers, short or long term.

 

[GilaMinumBeer]

It also gives AB a toe into the market of supplying HB shops to maybe threaten LD Carlson and some of the smaller malt suppliers like BSG Handcraft.

This makes the most sense to me. Being the end retailer seems too "small time" for this conglomerate. Psuedo-monopolizing the distribution chain of raw material could be the real "big picture" here.

 

[Le_Ace_Club]

I'm just going to use Brewmasters Warehouse from now on.

 

[GilaMinumBeer]

I'm just going to use Brewmasters Warehouse* from now on.

*La Cave a Bulles.

 

[jleiii]

I stopped buying from NB when I found love2brew.com

 

[Le_Ace_Club]

I stopped buying from NB when I found love2brew.com

Funny. I started buying from NB when I found a love to brew.

 

[Aristotelian]

I don't believe AB wants to kill craft and homebrew.

No, this was probably a decision by some bean counter acquisitions manager to "diversify" their portfolio. They want to profit from homebrew, not kill it. Just hedging their bets.

 

[Brownalemikie]

What's the big deal? I'll keep buying ALL my supplies from NB as long as their product remains high quality and prices stay low. JMO

 

[rmchair]

I'm sure they won't be turning over your purchase records to government authorities. I never come close to 80 gallons per year, but people about to turn pro might.

 

[balrog]

Ritebrew. Awesomeness. Quick turnaround; will double mill; purchase by the ounce; easy to use.

 

[brewgar]

^ Ritebrew is my go to shop.

 

[Le_Ace_Club]

Ritebrew. Awesomeness. Quick turnaround; will double mill; purchase by the ounce; easy to use.

+1 to RiteAid. Great place for supplies.

 

[ericbw]

Rite Aid is a drug store.

 

[Le_Ace_Club]

Rite Aid is a drug store.

Exactly. It's where I get all my Sudafed for homebrewing.

 

[Michigan_Wolfman]

Adventures In Homebrewing has been my go to LHBS ever since Michigan Brewing Company's Things Beer homebrew shop went belly up along with the rest of the business, and I got sick of the yuppie wine and cheese snob looking down their nose at you sort of attitude from Cork N Cap over in Jackson Michigan.

 

[timdillon36]

My LHBS is great fermentations. I saw them mentioned once earlier but they are a great mom and pop shop. I stopped in today and it's been months since I was last there but was greeted by name as I walked in the door.

I have bought everything except my equipment from them because I am the diy type. I will continue to go there bc I like what they offer and I think it is a fair price.

 

[Zuljin]

You might be talking about Stubby's Texas Brewing Inc. Not sure. I shop there in person (so I've never ordered online) but they have just about everything you could want. Extremely knowledgeable as well.

https://www.txbrewing.com/

Yep. With Stubby and Foreman's, I haven't had to order much online. There's also Dr. Jeckyll's and Homebrew Headquarters. Austin Homebrew supply has done me right.

There's also this "Homebrew Supply" in San Antonio. They have a website and stuff. I dunno. Guy's been involved in the homebrew scene for a while. Runs a forum or something. https://www.homebrewsupply.com

 

[DromJohn]

I sighed and then purchased the backup items from NB today.
In the futrure I will cross the country and order from Seven Bridges if they have everything that B&V doesn't, yeast transport be damned, and only look at NB/MW if Seven Bridges is lacking. I do not want to buy from three stores for one brew.

All y'all HBS wanting to take away some of InBev's business: I challenge all y'all to stock Briess Organic Light LME.

 

[dustinthompson85]

Wow, I got a lot more information than expected! I've already checked a few of these places out. Thanks for all the great resources and for the great participation! Good luck out there!