One Beer Article You Need To Read And Why, 11/18/16

There is nothing people in any industry like to talk about more than their industry and themselves.  Every industry has its own little ecosystem of trade talk and gossip.  Most importantly, every industry has this need for self-reflection that can border on navel gazing.  Craft beer is no different.  If you get enough craft beer people (2 or more) in a room at some point the talk will turn to today’s era of mergers and acquisitions.

I like this article that discusses the recent buyouts of a couple of Texas breweries because it doesn’t take a position on the good or evil of these buyouts.  It looks at these buyouts in the context of the national trend of buyouts in a dispassionate way that focuses on this as the way craft beer is now doing business.

I will admit that I am not a fan of these buyouts.  As the article suggests, I am one of the people drawn to craft beer because brewers are independent and local.  However, I also try to focus on the liquid in the glass.  The beer being good is what is most important.

For me, whether I liked the brewery’s beer before they sold out will dictate whether I’ll continue to drink it after they sold out.  I liked Boulevard’s beer before they were bought by Duvel, so I continue drinking Boulevard.  I didn’t like Goose Island before they were bought by AB-InBev, so I don’t drink them now.

An interesting test case will be Ballast Point and how scaling up production will affect their product.  Initially, some of the product hasn’t been affected by increased production.  However, some of their flavored beers have.  Pineapple Sculpin is still as good as it was before, but the Watermelon Dorado was not good.  It tasted like they melted a vat of watermelon Jolly Ranchers and dumped it in during the whirlpool.

Back to the article, it does a good job of giving the many reasons a brewery will allow itself to be purchased.  There are two common reasons, neither of which are evil.  The first is the brewer/owner is old and wants to step away from the brewery but has no succession plan.  They know if they leave, the brewery could cease to exist.  So, to keep the brewery going and those people employed, the owner sells out to a bigger brewery.  The second reason is the need for capital.

For a brewery to expand their footprint through increased production and greater distribution that requires capital.  Building new production facilities cost money and sometimes the easiest way to get that is to allow a bigger company to invest.  Also because of their size, the bigger companies have greater distribution channels that will allow your beer to be sold across the country.

These acquisitions are now a part of the craft beer landscape and we all need to figure out how to navigate it.  However, just as there are people who still won’t listen to “corporate rock” there will be craft beer people who will never buy or sell a beer owned by any of the big beer companies.