Tag Archives: beer mergers

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.

One Beer Article You Need To Read And Why, 10/25/16

There is a point, somewhere around 24 or 25, when you understand you can’t act like you did in college.  It is that point where you have been out of college the same amount of time you were in college.  Your job is going well.  You may be up for a promotion.  You’ve gotten a couple of raises and have moved to a better apartment.  Maybe you’ve even bought a car that is reliable.  However, you keep thinking of yourself as a college student with no responsibility.  You still try to go out on Thursdays and drink with your friends until the wee hours, but slowly you and they realize, you have to go to work the next day and it’s much easier to work without a hangover.  Maturation comes in steps of realization that point out to you that the things you did in college may have been fun, but they aren’t feasible all the time.

Craft beer likes to continue to think of itself as this bunch of insurgents.  This rowdy bearded group of pirates out to make beer and have fun drinking it.  The slow realization that this fun anything goes insurgency has become a business with all the attendant problems is creeping across the craft beer world.  At the high end, beer is a business that is increasingly cut-throat.  Layoffs and plant closings are here in this little happy valley and they aren’t going away as the business matures and morphs into its next phase.

Some of the answers and quotes in this Jason Notte piece show an almost naive or arrogant belief that the explosive growth of the last few years would continue unfettered.  That is either a lack of common sense or a lack of vision.  I don’t know.

Until the last few months, anyone who dared say that the kind of growth craft beer saw over the last 4 or 5 years was not sustainable was accused of saying the “craft bubble will burst.”  That seemed to be a way of pushing the inevitability of maturation down the road so people would not have to think about it.

I think there were bad assumptions made by many in craft, in retrospect.  One, there seemed to be a belief among many that they would get to make their beer and eat away at Big Beer’s edges and Big Beer would not respond.  Big Beer did respond by buying some smaller breweries and investing in others.  They did that because they saw something coming that many of the larger craft brewers didn’t.

I think among craft people the initial assumption was that the Big Beer national brands would be replaced by a group of smaller craft national brands like Sierra Nevada and Stone and Ballast Point.  While that has happened to a certain extent, Big Beer is also being replaced by really small beer. If you are a craft beer drinker in North Carolina, Big Beer was replaced with Sierra Nevada, Stone, and Ballast Point, but also Olde Mecklenburg, Lonerider, Newgrass, and Legion.  Craft beer is becoming increasingly localized which somehow the people who helped create the attitude that local and fresh is better didn’t see coming or maybe they thought they were immune to its effects.

Five Beer Articles You Need To Read And Why, 7/17/15

The reason there was no blogging yesterday is insomnia sucks.  I actually got a few hours of sleep last night, so let’s do this.  Today we have merges, beer laws, and one of the worst opening sentences I’ve ever read for something in the New York Times. (Editorial note: my tone today reflects my lack of sleep.)