It may be way too late to get this thread back on track, but I’ll give it a shot.
I saw Carlos Brito speak last month in a relatively intimate setting in front of a pretty conservative, pro-business crowd. He was asked about AB Inbev’s recent acquisitions of craft breweries and gave a pretty lengthy summary of their strategy.
In short, he said that buying craft breweries like 10 Barrel (and Elysian) are cheap ways to learn more about the craft market. When they buy a craft brewery, they generally do so on the condition that the talent stays for a few years and helps consult etc. These breweries aren’t seen as profit generators or as tools to muscle out smaller breweries. They’re a way for ABI to experiment and learn more about a growing part of the market. The more AB InBev can learn, the better they can respond to market changes and stay profitable in the future.
Also, I think a bit of perspective is needed here. The cost of acquiring Elysian is nothing to AB InBev. Elysian’s earnings will be a rounding error on AB InBev’s income statement. AB InBev made a strategic acquisition last year in South Korea that dwarfed the cost of buying Elysian, but no one bothered to mention it on this site at all. |
Originally posted by obguthr
Originally posted by brokensail
And to think that even if Anheuser or Miller-Coors acquired some massive number of "craft brands" that we’d end up only with Budweiser, MGD, and Banquet to drink is delusional.
It’s not delusional. The doomsday scenario you describe would not happen overnight and we’re not in any danger of that happening anytime soon as craft is trending upward. However, it is possible.
That’s the point. By the time that such overwhelming acquisitions could happen, the whole idea of craft beer will be even more popular and engrained than it is now. More and more people in the US don’t just want pale lager anymore. |
It only takes a generation (20-40 years) to change all that. Look what Prohibition did to beer in the US. That’s a long time to some, but if my liver holds out, I want to drink good beer well past my 80th birthday. |
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Originally posted by jackl
It may be way too late to get this thread back on track, but I’ll give it a shot.
I saw Carlos Brito speak last month in a relatively intimate setting in front of a pretty conservative, pro-business crowd. He was asked about AB Inbev’s recent acquisitions of craft breweries and gave a pretty lengthy summary of their strategy.
In short, he said that buying craft breweries like 10 Barrel (and Elysian) are cheap ways to learn more about the craft market. When they buy a craft brewery, they generally do so on the condition that the talent stays for a few years and helps consult etc. These breweries aren’t seen as profit generators or as tools to muscle out smaller breweries. They’re a way for ABI to experiment and learn more about a growing part of the market. The more AB InBev can learn, the better they can respond to market changes and stay profitable in the future.
Also, I think a bit of perspective is needed here. The cost of acquiring Elysian is nothing to AB InBev. Elysian’s earnings will be a rounding error on AB InBev’s income statement. AB InBev made a strategic acquisition last year in South Korea that dwarfed the cost of buying Elysian, but no one bothered to mention it on this site at all.
I find it really hard to believe anything Carlos Brito says. He’s the Sam Walton of beer. |
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Originally posted by poisoneddwarf
Originally posted by jackl
It may be way too late to get this thread back on track, but I’ll give it a shot.
I saw Carlos Brito speak last month in a relatively intimate setting in front of a pretty conservative, pro-business crowd. He was asked about AB Inbev’s recent acquisitions of craft breweries and gave a pretty lengthy summary of their strategy.
In short, he said that buying craft breweries like 10 Barrel (and Elysian) are cheap ways to learn more about the craft market. When they buy a craft brewery, they generally do so on the condition that the talent stays for a few years and helps consult etc. These breweries aren’t seen as profit generators or as tools to muscle out smaller breweries. They’re a way for ABI to experiment and learn more about a growing part of the market. The more AB InBev can learn, the better they can respond to market changes and stay profitable in the future.
Also, I think a bit of perspective is needed here. The cost of acquiring Elysian is nothing to AB InBev. Elysian’s earnings will be a rounding error on AB InBev’s income statement. AB InBev made a strategic acquisition last year in South Korea that dwarfed the cost of buying Elysian, but no one bothered to mention it on this site at all.
I find it really hard to believe anything Carlos Brito says. He’s the Sam Walton of beer.
The whole point of doing this is the squeeze for shelf space and tap handles. Nothing else. It won’t hurt Elysian; it consolidates breweries that were already in AB’s distro network and allows them to demand blocks of retail slots at once.
It won’t change anything about the beer--it’s all about manipulating retail. |
Meh. Dick deserves a comfortable retirement. |
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Well that was a fun read...christ...
I think globally Ab-InBev is more concerned about the "emerging" markets of South America, Africa, and Asia than they are about Cascadia or any other part of North America. The symbolism of this purchase is a big deal: I know when I started really getting into beer and doing research, Elysian was one of the PNW breweries I book-marked to keep an eye on.
It is a good point that AB-InBev would target PNW breweries if their recent craft acquisitions are stalling out on shelves up there. I don’t think those distributors want Goose dying on the shelves, either. Now, the bit about the distributor not taking it back, that is BS and they should if it’s old, or at least mark it down. But if they can phase Goose out and replace it with Elysian and 10 Barrel, that would be a better move.
Perhaps they are seeing that craft is stratified into big national stuff (Sierra, Sam, NB), super-regionals (Alaskan, Bell’s, Sweetwater, Victory as a few examples), small 3-5 state regionals (Upland, Tyranena, Two Brothers in my area as examples), and then the local brewpubs. If they really want on this train, ideally they’d want a big national that they themselves didn’t hatch in a lab (a la Shock Top) in their catalog (imagine if Sam sold to Bud as an example) and a few regionals that covered the whole country. Strategically, that would make the most sense. They are definitely in "we can’t be you, so we’ll join you by buying you" territory now.
Once again, in the grand scheme of things, I really don’t think they give a shit about the "mature" markets of North America and Europe. Bud houses and Miller-Coors house will continue to have their back-and-forth battles over tap-handles and shelf space on a local level, but as craft grows, tap-handles and shelf space will increase, too. Indie craft distributors will continue to tout their catalogs and do their best to hold their own as well.
I have yet to see Blue Point or 10 Barrel on shelves in my area, or even Alpine for that matter. It wouldn’t surprise me if we never do. Goose has been big in the Midwest for a while so it may not be necessary to them.
It’s gonna be weird next 30 years in the beer industry. The good news is there is so much good stuff to drink now, and that will continue. |
Come on folks, ultimately is about the bottom line
If a brand sells it make them money, if it just becomes a shelf turd then it does not. Initially Elysian will be a big deal when it hits new markets for this I am sure. However once the hype and novelty wares off then what? We are seeing this already occurring with the Goose Island brand (minus BCBS) where bottles of Matilda and Sofie are not moving. Then you have 312, Honkers and IPA becoming grocery store turds, gathering dust and aging to the point of becoming even more undrinkable. Somewhere there are hundreds of kegs too getting the same treatment. Soon the bottom line will force InBev/AB hand into changing the visibility of the Goose lineup.
And those who claim that the quality of the lineup has not changed post acquisition must not have tasted those bottles coming out of New York. Again going back to my point about the bottom line (and maximum profitability), they bean counters will always be looking for ways to make an extra penny. Lesser quality ingredients at a cost saving will make lesser quality beer. Sure the changes may be minor at first but over time the product diminishes. History tells us that. It happened with Redhook, Widmer and by those who drank/drink Kona Brewing regularly told me they seen a change in them too.
It will happen again and again... a few months from now this same discussion will occur as another "craft" brewer will be sold to one of the mega corporations, Inbev/AB, SABMiller, or even Moortgat or Carlsberg. (yeah I fully expect the Carlsberg Group to make a play at a large American brewery soon)
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Ah man i feel refreshed after that ding-dong battle last night.
Like the good old days for me!!
I still think this is political for AB-Inbev
They want to be able to say they are now local businesses so they cant be accused of being outsiders trying to impose stuff via lobbyists in Olympia or Salem.
Just wait i forsee some bills tightening restrictions on smaller breweries/tasting rooms etc. |
