AB InBev’s Rocky Relationship With Craft Beer

U.S. News recently published an article explaining that AB InBev employees have access to facilities allowing them to small-batch brew their own beers. As part of team building exercises, groups of employees compete to create the tastiest beers in the “Star Shop Brewery” facilities.

Star Shop brewmaster, Dusty Rhodes, suggests that this initiative gives all employees, regardless of their business function, an opportunity to explore the hands-on side of brewing.

“This gives all employees a way to relate back to hands-on brewing,” said Moore, who also is a homebrewer. “You can have hundreds of different combinations that determine the outcome. The folks in accounting and sales don’t work in the brewery and this is all about fun.”

The initiative coincides with AB InBev’s latest recruiting drive, with the them “We Are All Brewers”.

But Their Position In Craft Beer Is Less Than Popular..

Over the years, AB InBev (and a number of multinational conglomerates) have developed a habit of buying out up-and-coming craft breweries. Most of these acquisitions, such as their May 2017 purchase of Wicked Weed, have been met with widespread uproar from the craft beer community. The AB InBev portfolio also includes well known breweries such as Goose Island and Elysian and Texas brand Karbach.

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The reason many craft breweries oppose conglomerates such as AB InBev largely stem from their continued behavior aimed at stemming the rising competition of craft beer. Jester King Brewery Founder Jeffery Stuffings commented:

“We have some core principles that define who we are as a brewery, and those principles must not be compromised. One of our core principles is that we do not sell beer from AB In-Bev or its affiliates. We’ve chosen this stance, not because of the quality of the beer, but because a portion of the money made off of selling it is used to oppose the interests of craft brewers. In Texas, large brewers (and their distributors) routinely oppose law changes that would help small, independent brewers. We choose not to support these large brewers because of their political stances, and in some cases, their economic practices as well. Because of this core principle, it pains us to say that we won’t be carrying Wicked Weed anymore at Jester King.”

The concerns of Jester King were echoed by well known brewers such as Modern Times, Mystery Brewing and Black Project Brewing.

Why Do Big Beers’ Buy-Outs Matter?

A great article authored by NPR’s Alistair Bland sheds light on the trickle down effects of the issue. Beyond the commonly held opinion that the profit-driven motives of big-beer contradict the humanized, community building spirit of craft beer, the increasingly common practice of conglomerates buying out small breweries puts significant pressure on privately-owner microbreweries.

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As alluded to before, Big Beer and its lobby groups, throw their weight around in the legal sphere and in terms of dictating the distribution of resources. One such example is the issue faced by Rhode Island’s Proclamation Ale Company, who were suddenly cut off from their South African hop suppliers due to a power play by AB InBev and MillerCoors. They were told that the hops were committed to the conglomerates’ (formerly) craft breweries, and so Proclamation Ale could not purchase any.

But, assuming independent brewers still have the means to brew their beer, getting it into the hands of consumers is a whole other issue. Alistair Bland explains that big beer conglomerates are increasingly pressuring distributors and retailers to select their former craft brands over independently owned brews. He cite’s Brewers’ Association CEO and President Bob Pease saying:

“You’ll find Goose Island on tap practically everywhere across the country, and you’ll say, ‘I didn’t know they were that popular,’ and they aren’t. The distributors are just pushing these brands out there.”

AB InBev higher-up, Felipe Szpeigel advised Bland that the United States is home to “the most competitive beer market in the world,” contending:

“We are partners with just 10 craft breweries, and work with the entire industry to encourage growth and choice. The verdict on each craft beer will be made by consumers. No amount of distribution or promotion will keep substandard beers on the shelf.”

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Personal or Just Business?

It’s easy to say that, as members of a capitalist market, AB InBev have every right to behave in the manner that they are. And if you said that you would be absolutely correct. But just because they CAN do it, doesn’t mean they SHOULD. Fortunately, the beer-drinking public are increasingly speaking with their wallet. Beverage Dynamics reported in February that, for the first time, craft beer made up 10% of the market.

The increasing trend of craft beer consumption is undoubtedly fueling Big Beer’s interest in purchasing smaller breweries. But it also is the reason that industry leading brands such as AB InBev’s Bud Light feel the need to make statements like this one.

So There You Have It

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