02 Mar Are We Seeing A New Tactic In The Independent Craft Beer Fight Against AB-InBev?
Big beer and independent craft beer have been going at each other for years; sometimes the war is cold, at other times it gets quite feisty. But there may be a new weapon in the hands of independent craft beer, and I find it to be a fairly interesting development. But first, let’s look at how we got to this point in the battle.
The first shots were fired by independent craft beer in the 1970s; a few free thinkers actually designed to sell beer that had more flavor and complexity than the mega-beer’s light lagers. The retaliation from big beer didn’t come for decades, simply because there wasn’t a need to acknowledge craft beer until they started to take a measurable portion of the market share.
When the shots did come, they took the form of trying to offer some different flavors and other alternatives to their brand name beers. Things like Shock Top, Bud Ice, and Miller Chill Lime (amongst others) were a feeble attempt to steal back market share, but they still tasted like mega-beer (or worse). The next round of the fight was more insidious. As the large beer corporations merged to form even larger entities with many brands carried by just a few houses, big beer tried two new tactics.
One – they tried to suppress craft beer by buying distributors and ingredient purveyors. In Kentucky, a single distributor purchased by Budweiser removed almost two hundred craft brands and just carried AB-InBev and their faux craft labels. It took an act of the state legislature to keep Bud from owning distributors. Two – big beer decided if they couldn’t make beer as good as independent craft, then they would try to destroy the distinction between the two.
AB-InBev starting buying craft breweries that were having some success. Goose Island was first (2011), then by nine more breweries, most in 2014, ‘15, and ’16. The strategies in this were several, from trying to reduce the price difference between craft and mega-beer by flooding states with reduced price beer from the newly acquired faux-craft brands, to simply trying to use these brands to make up for some of the profit loss they were/are experiencing with their house brands.
And yet AB-InBev continues to lose market share as sales decline. So they have started aggressive ad campaigns making fun of craft beer, from the original Dilly, Dilly commercials to SuperBowl ads poking fun at the flavor profiles of craft beer. Besides being disingenuous – AB-InBev owns people they think make craft beer, it just looked silly for this huge corporation to be attacking people for making advances on their product.
The next move in the chess game came from craft beer, and was both funny and poignant. Soon after the Brewers Association introduced a label to distinguish independent, craft beer from faux brands (not a bad move at all), the craft community decided to go on a money raising campaign to buy AB-InBev in October, 2017. They only needed to raise a paltry $213 billion. It would only take about a $775 from every man, woman, and child in the country; that’s doable….. or maybe not. Even so, the crafty campaign had raised more than $3.5 million by November of 2017.
AB-InBev had said they were done buying up craft breweries in 2017, but that apparently applied only to American craft breweries, because they have since started buying breweries in Australia (Pirate Life and 4 Pines). So now craft beer has started to take another shot at big beer, and I think this one has legs. Actually, this movement started a couple of years ago, and is now starting to gain real traction.
As a strategy, this new-ish move may not have originally been aimed at big beer, but it may well have the unintended affect of further reducing mega-beer’s market share. I call it the, “we can do your job better than you can” strategy. What if craft breweries started making light lagers and other beers with a comparable ABV to Bud and Lite, but they tasted much better?
This was actually tried in the 2010-2011 range by several breweries, but the beers didn’t catch on. So why try again now? Because session beers (lower ABV beers) are becoming quite popular now. Younger drinkers seem to be more health conscious and are drinking less. When they do drink, they are looking for lower ABV beers because they tend to have fewer calories.
In early 2018, there are now independent craft brewers that are now trying to merge low session beers, light beers (sometimes called introductory styles), and big flavor. They are selling well now, and may just take another bite out of AB-InBev. How ironic would it be if craft beer hurts big beer using their own styles to grab market share?
A recent article in the LA Times article highlights the growth of light lagers by craft brewers, including the Sam ’76 from Boston Beer Company (a 4.7% light lager). Stillwater Artisanal Ales, Figueroa Mountain, Perrin, and even Oskar Blues are starting to work their way into the world that has been traditionally for big beer.
The latest entry is Founders Solid Gold, a light lager that will be released in cans and perhaps draft on a regional basis in the next week or so (South Bend will get a taste at CJ’s Pub on Friday, March 2). I know, Founders isn’t technically called independent craft beer any more since they sold a portion to Mahou San Miguel. We can argue that distinction for hours and go nowhere, but what I appreciate from this move is that they are wittingly or unwittingly taking a bite out of AB-InBev. And if they’re not making an economic difference in the battle, they are metaphorically sticking a thumb in the eye of big beer.
Look for more light lagers on the horizon from craft breweries, perhaps supplanting the cream ale and the American blonde as the “gateway beers” that convert mega-beer drinkers into craft drinkers. The two questions I see coming from this are; 1) will it make a difference, and 2) what will big beer’s response to this movement be? As for question one – I don’t really care if it makes a dollar difference, although I hope it does. It’s just nice to know that craft is better at what mega-beer does best. For question two – I’m guessing it will be something deceitful and underhanded. It’s their fallback position. Just look up how many times AB-InBev has been fined for unethical business practices, including pay for play.