The beat goes on:
This is an interesting dynamic between ‘big’ and ‘small’ in the industry. Initially it would seem both sides win, but I will be watching to see how it may play out.
They also bought Camden Town in the UK. Not slowing down at all.
I was having a conversation about this with my dad yesterday. He was saying how much he hated AB-Inbev for buying out all these breweries. But you know what? It goes both ways. Breweries are giving in to the money, they’re letting greed get the better of them. It’s not just that AB are jerks trying to take over the world beer market, it’s also these breweries LETTING them take over. They’re perpetuating this nonsense because AB offered them “enough” money, instead of sticking to their principles of being independently owned.
Correct me if I’m wrong… it just doesn’t seem like AB is holding a gun to these guys head saying sell to us or die.
Greed is getting the better of humanity, as it almost always does.
From what I’m hearing, New Belgium is wanting to sell now also, probably to some big conglomerate.
The article I was reading about New Belgium was that they were looking for a Private Equity firm, not a multi-national brewery. Is that better, I don’t have a clue. An article the next day said it was all rumor.
Exactly! You either love what you’re doing and stick with it, or you take the money and run. I cant say whether its financial need or greed but its done willingly so I assume its what they wanted to do.
Right. I’m not necessarily defending AB, but people only see one side of the story, typically - that AB are evil and trying to ruin the craft beer market. Yes, that’s true, BUT, these damn breweries are LETTING THEM.
IME being purchased outright by a private equity firm means they want to position the company for bigger profits…for the private equity firm. That often means manipulating things to put them in a position to sell.
I have my doubts as to New Belgium selling, but stranger things have happened. Dogfish sold a 15% stake to private equity and no one blinked an eye.
If I made a living selling something and I had a chance to sell it all, why wouldn’t I? Its not like there’s more honor in selling pints than kegs, or kegs vs the whole brewery. As far as it ruining craft beer, there’s plenty of small breweries already doing that at the pint level.
Way to nail it on the head Jim. The problem with “Craft” beer is too much “Craft” beer.
That’s not the point. The point is people doing it for themselves, their way. Not allowing a big conglomerate to buy them out, contributing to the corporate “reich”.
People get into making beer and selling it because it’s something they love doing. Selling out is compromising those ideals. This is like Bob Dylan doing commercials. He has stated before he plays music for the money and ONLY FOR THE MONEY. He may write good music, but that is selling out. Period.
So what is more important then? Keeping true to ideals? Or continuing to make good beer? These kinds of decisions would only affect me if the beer in question took a nosedive. If the beer still tastes good then who cares who owns what?
This whole discussion (the larger discussion in the community) is turning into a “war” of ideals. If the beer quality tanks then I’m in the camp that says buyouts are bad. If not, then far be it from me to cast stones at the business decisions of other adults.
As homebrewers we can be all about the beer.
Once you open a brewery you had better be focused on making a profit. If you don’t, the doors will get padlocked, all assets auctioned off, and you are a Homebrewer once again.
Well, I’ve never fit in with the mainstream crowd. I’ve had arguments about selling out with my dad, a long time musician, as well. He says, “If you had the opportunity to play drums on tour with a big name country band, would you?” I say, hell no, I hate that crap. I play what I like to play because I do it for the music, not the money. I’d open a brewery because I thought I could bring good beer to the market and beer would be my main focus, then profit. If you make good beer, the profit should eventually follow. Selling out ideals (a real and dignified thing) to money (a fake and made up thing) is no excuse. Obviously, I’m in the minority in thinking one should have dignity and integrity. Ha!
There’s no integrity when one has dollar signs for pupils. But hey, this is why I’ll probably never open my own brewery and money isn’t something I strive for in life. As long as I can make a comfortable living, I’m happy. But I’m weird that way, too.
It’s funny, I was at Breckenridge’s new facility on Saturday for a tour before any of this news. I didn’t realize they currently distribute to 30 something states. Their goal was to get to all 48 contiguous states with their new 110 barrel brewhouse. Looks like the buyout will guarantee that…
Their most popular beer is vanilla porter which is disgusting. Overall, their beer is average in my opinion.
I respect your ideals but agree with Jeff. Professional brewing is a business and not a hobby. IF, and I stress IF, you can be successful AND maintain the ideals and aspirations of a homebrewer then what a wonderful world that would be.
I have been a small business owner since 1990. In those 25 years we enjoyed a steady growth to where I have made a pretty good living the past 15 or so years. It has not come without sacrifices. I worked 10-12 hours a day during the week and almost every Saturday. My salary would have put me below poverty and many months I’d write out my check and stick it in my drawer until the business had enough in the bank to cash it (thank God for my wife!). I’m sure many of the craft brewer have owners with a similar story.
When I was in my late 50s I started to think about an exit plan as I wanted to do things that I didn’t have time to do. Finding some one to sell the business to was a task that took several years. It’s not that easy to find some one who has the money (or has access to it) and willing to work more than 40 hours a week with no benefits. A couple years ago I was fortunate enough to find a young man who is now half owner and soon to be, hopefully, full owner. As a result I will have a better retirement.
Do I like it that InBev is buying up craft breweries? Absolutely not. However I do understand owners needing an exit plan. If the owner wanted to retire, what does he do, just close the doors?? I wouldn’t call that greed at all, greed is what Uncle Sugar is going to take from the sale.
The attorney that I used to facilitate the sale used to say that there are three times when a business is sold, when you WANT to sell, when you HAVE to sell and when your heirs sell it. Two of them are not good.
Unless you know these people personally and what their motivations are, how do you know they don’t have dignity and integrity? Maybe they are doing it for the money and want an early retirement. Who the hell wants to work until they die or retire when their so soar and slow they can’t enjoy it?
If some go into the brewing business with the plan to sell in a couple years for a big score, then maybe the craft beer business is better without them.
This is what I tell everyone who asks if I want to brew professionally…nothing ruins a great hobby more than making it your job. Maybe if I was younger and just starting out, I’d feel different. And maybe I’d be out there looking for my big scrore 
My concern with this pattern is two fold:
the more ‘craft’ breweries the big guys have in their tent the easier it is for them to control the market. Right now new breweries have a chance to get a spot, however small, on store shelves because the market want’s an alternative and until recently the big guys have not had one to offer. They do have money and resources though. if they can not only give lots of cool free stuff but can also fill those ‘alternative’ spots on the shelves it becomes increasingly difficult for a new guy on the scene to make a mark.
second, When you are a company as large as AB/Inbev you MUST cut costs in order to increase profits. and you MUST increase profits (note to less careful readers, I’m talking about INCREASEING profits not simply MAKING profits) There are two ways to cut costs, cut labor costs or cut materials costs. given that Budweiser has dropped from ~17 IBU in the 1970’s to ~6 today you can see where they chose to cut costs.
the idea that you can’t run a business and be obsessively concerned with quality is just false. Look at Russian river. But you can’t run a multinational mega brand commodity business like AB/Inbev and be obsessively concerned with quality.
I’m sure that these small breweries are told that the quality will remain the most important thing and nothing will be done to change their creations. But once the contract is signed, the check cashed, that beer will have to meet quarterly profit expectations. if that means using 5% less hops because focus groups say they don’t notice a difference then that’s what’s going to happen, this year, and next year again, and the year after that, and so on and so on. it’s the death by a thousand cuts.
I don’t care that these breweries are selling out. Because I think that the small sector of the market that made craft brewing what it is, the customers that want something new, amazing, interesting, and quality will continue to look for that. so these buy outs are just opening up a spot for the next Vinnie Cilurzo, or John Kimmich, or Patrick Rue, or whoever is ready to make that next shining star.
I DO WORRY about these buyouts because it could be used as another tool to manipulate the ‘free’ market in a way that will make it harder for the next Cilurzo, Kimmich, or Rue to even get on the shelf. However, I am hopeful that there are enough smart business people running bottle shops and tap rooms to give the new guys a chance.
True. I’m not sure I’d ever want to do that though. I really enjoy business models like New Glarus, who have no interest in expanding out of their own state. They aren’t struggling to make a good profit, I’m sure. They claim that they can’t even keep the shelves in Wisconsin full, why would they expand? It’s just a different view and it’s all about the beer, not the money. The money will follow with good beer.
If I were to open a brewery, it’d be small, probably a brewpub with no interest in distributing other than kegs to local bars.
Good points from ibru, darkside, and Jonathan.
While I don’t remotely begrudge brewery owners selling to retire with a nest egg, these are exactly my concerns, too. I choose to vote with my dollars, and when I buy beer my dollars don’t support ABInbev’s obvious strategy.