An Eventful Summer For Craft Beer And The Beer Market In General
As we enter the waning weeks of summer, craft beer as well as the beer market in general, have undergone some major changes. From the SABMiller and AB InBev merger, Budweiser’s “America”” campaign and some quite surprising craft brew buyouts particularly in the past couple of weeks. In the end, we’ll probably have to wait until the end of the year to see what if any effect this has on the craft brew world.
In May AB InBev announced it would be re-branding its flagship beer with the name “America.” While Budweiser is notorious for trying to use America as part of its marketing scheme during the summer months, this was a direct attempt at using the Olympics as part of its ploy. To a lesser extent, it was also meant to play on the November elections as well. While the campaign is due to run through November, to this point AB InBev admits this has been a failure. Budweiser sales have slumped to their lowest all year with only 11% stating they would purchase it again the next time they buy beer. There are a couple of perspectives on the reasoning as to why. Budweiser has struggled to win over millennials from the craft beer boom. And even though Budweiser states it brews its beer in America, many are still of the mind that it is a foreign company utilizing the American name. It is also believed that the divisions and discord in the country recently may also be playing a role.
Mid-summer brought us talks of a mega-merger between SABMiller and AB InBev. After clearing all major hurdles it looks like this merger was cleared to take place last week. What does this mean to craft beer? Although the Justice Department has put antitrust rules in place specifically for this merger, it still gives this beer giant a vast amount of control over distributors. Both AB InBev and SABMiller have been on a craft brewery and distributor buying frenzy in an attempt to help their waning beer sales. The Justice Department has stated they will scrutinize any further distributor or craft brewery buyouts to prevent antitrust law violations by AB InBev. They have also said that the beer mega-brewery is not permitted to offer incentives or otherwise threaten independent distributors in efforts to squeeze smaller craft beers out of the market.
The past couple of weeks has also brought us a couple of more craft brewery sell-outs. Not just over the summer, but throughout the recent past, this is probably the most disturbing trend. One of the most surprising, and disappointing, ones has been the brewery who preached “Keep it local.” Almost seemingly wanting to keep it under the radar with no real mention of it anywhere in their PR, Terrapin Brewing in Athens, Georgia quietly sold out to MillerCoors in mid-July. MillerCoors had previously held a 25% stake in the company that the owners’ cited as “Mainly for distribution purposes.” I can buy that to some extent. With big beer trying to put a chokehold on distribution, I can accept using their channels to get your beer on the shelves, if that’s the extent of it. The total sell out has left the faithful fans of this popular craft beer less than happy, and they haven’t been shy about expressing their discontent on their Facebook page. MillerCoors wasn’t done with their acquisitions after Terrapin Brewing either. Last week they also bought a majority stake in Hop Valley Brewing in Oregon. Add these two to AB InBev’s buyout of Devils Backbone in Virginia and big beer has made three pretty sizable moves on the craft beer market over the summer.
It has been an eventful summer for the world of craft beer, but one thing still holds true. Craft beer is still growing and selling faster than any other beer on the market. Why? Because beer drinkers know good beer when they taste it, as well as enjoying the vast selection of flavors and creations. So no matter what happens in the world around you, keep drinking the good stuff with a smile.