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Another craft brewery acquisition, and why it’s upsetting

Greene’s Corner
Winter

 

It happened again. AB InBev acquired yet another craft brewery. I know, shock of the century. Except, this time it was the highly praised and respected Wicked Weed Brewing of Asheville, N.C., and it nearly broke the internet.

After reading hundreds of comments from various sources, the same arguments, explanations, and cynicisms surfaced, just like we’ve seen after other acquisitions. Here’s the gist of it:

  • From the acquired craft brewery: “This allows us to grow … and nothing will change as far as the beer goes.”
  • From some beer lovers: “As long as the beer continues to taste great, I’ll still buy it.”
  • From other beer lovers: “I will no longer support this sellout brewery because I don’t want my money supporting an evil corporation that is hell bent on destroying craft breweries while putting profits over quality and selection,” and, “I will no longer support this brewery because it’s no longer a local company; now it’s a foreign, multi-national corporation.”
  • From business-minded folks: “If someone offered me a ton of money, I’d take it, regardless of who it was from.”

Personally, I don’t have a problem with breweries “selling out” to larger breweries, investment companies, etc. I congratulate and fully support small companies that successfully grow into large companies or chain companies – assuming they do it legally, responsibly, and ethically.

What I have a problem with is the hypocrisy of playing both sides. Most craft breweries start out small, and they often play the following cards heavily: “I’m small. I’m local. I’m independent. I make a quality, hand-crafted product in small batches. I’m not in this to get rich; I just want to make great beer. My beer is better than that industrial BudMillerCoors swill, which is made by an evil multi-national corporation that tries to kill the little guys at every turn. It’s US vs. THEM!”

Then, of course, after selling out, they completely change their tune to “Nothing will change …” and “This allows us to grow and expand our distribution.”

To make things worse, even after the sale, they continue to play the “local” and “craft” angles, while attempting to hide the fact that they’re owned by a foreign mega corporation.

One of the most obvious examples of this flip-flop was how Lagunitas owner Tony Magee used to be completely anti-corporate and a very outspoken proponent of independent craft beer. But in 2015, he sold half of his company to Heineken, the world’s second-largest brewery. And recently he sold the rest of it.

“I’m not selling out, I’m buying in,” Magee wrote, which made me puke a little bit in the back of my throat.

In a past interview, Magee was asked, You once said you’d rather put your eyes out than sell to ABI. What’s different about Heineken? His response: “The difference is primal: ABI is owned by bankers. Heineken is controlled by the great-granddaughter of the founder. The former is in the cash-flow management business and the latter is in the beer-flow management business. The former is an end-game play and Heineken is still building for the future. Their interest in actually ‘partnering’ with us is proof of that.”

I guess we all draw lines in the sand at vastly different places. But again, all the spin and hypocrisy makes me want to puke.

Don’t get me wrong, I couldn’t care less whether someone drinks Budweiser or a barrel-aged peach saison from a nano down the street. That’s not what this is about. It’s about breweries being real, honest, and transparent. And it’s how they conduct themselves in the market.

Some people question why we should view the beer industry any different from any other industry, where buyouts are not only acceptable, but they’re often applauded. The major difference is this: When you frame and position your business around an ideal, and you attach your story to the rich culture of “local” and “craft,” people buy into more than just the beer. They also buy into the brand. They wear the clothing, and they recommend the product to their friends and family. Essentially, they put their name and their reputation on the line, and they identify with and trust in the company’s message.

When a craft brewery sells out to AB InBev or the like, it’s basically saying that everything was just a lie, and that it was really in it just to make a pile of money. This is why its fans feel betrayed and cheated.

When Google buys a small tech startup, no one gives a shit because that small tech startup didn’t build its business with a story about how it was nothing like Google.

After a craft brewery is acquired, two things make the situation even more confusing:

  1. The quality of the beer no longer seems to change. In the past, Big Beer would buy a small, successful craft brewery, move production to a large facility, dumb down recipes to make them more affordable and to appeal to a wider audience, then they’d kill less-profitable beers (even highly rated and beloved ones), lay off duplicate employees, and they might even eventually close the brewery. Nowadays, they take a more hands-off approach, and sometimes the beer even improves, as the brewery has better access to QC labs, specialized personnel, etc. Although, because it’s cheaper to make, they sell their kegs for up to half as much as other craft breweries, which some say gives them an unfair advantage in beer bars, while still “pretending” to be craft.
  2. It’s difficult to keep track of which brewery is owned by AB InBev or the like. So many acquisitions have occurred over the last decade, many people, even passionate craft beer lovers, have lost track or have become completely jaded. Additionally, when an acquired brewery expands its distribution into new markets (facilitated by AB InBev’s powerful distribution network), it’s often an unheard-of brand in that market, and the local beer lovers there don’t realize they’re actually buying an AB InBev product. Here in Bellingham, as an example, many are unaware of the owners of some of the new beers to hit our market, such as Saint Archer (Molson Coors) and Golden Road (AB InBev), let alone some of the old regulars, such as 10 Barrel (AB InBev), Ballast Point (Constellation Brands), and Elysian (AB InBev). Of course, some don’t care who owns the brewery, “as long as the beer tastes good.”

I understand that this whole thing is not black & white. It’s complicated. I personally know many great people who work for ABI-owned breweries and distribution companies. My intention isn’t to slam ABI or any of its breweries. I just find it difficult to support breweries that are owned by a predatory corporation that actively tries to snuff out small and independent craft breweries, while limiting beer drinkers’ options at the same time – sometimes in unethical ways at best or illegal ways at worst.

Ironically, even Magee once held a similar belief, saying “… smaller brewers will experience a future with more limited opportunities if the biggest brewers are allowed to have their way. When you drink those beers, delicious or not, you support the platform they will use to change the game.”

Of course, deciding to eschew macro-owned beers is made easier by the fact that there are now more than 5,300 breweries in America, and, fortunately, many of them will never sell out.

From the Rare Barrel:

Yesterday, Wicked Weed announced that they are selling their brewery to the megabrewery AB InBev. Here at The Rare Barrel, we’ve made a decision not to serve, collaborate with, or affiliate with AB InBev because our values do not align with theirs.

Perhaps Jeffrey Stuffings of Jester King said it best:

This has been a difficult day for us. The news that our great friend Wicked Weed Brewing was acquired by AB In-Bev came as quite a shock. As you might guess, we’ve been getting a lot of e-mails, media inquiries, and online questions about what we think and what it means for Jester King.

It’s no secret that Wicked Weed has been one of our closest friends in the beer industry. Regardless of what has transpired, we’ll always consider the people of Wicked Weed friends, and want the best for them and their families.

With that said, 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. We think Wicked Weed beer is some of the best in the world. Their talent, techniques, and patience produces some of the most beautiful beer we’ve ever tasted. That, combined with their great friendship, is what makes this decision so tough for us. But like we said, our core values must be paramount at the end of the day.

We wish Wicked Weed the best, will deeply miss having their beer at Jester King and working with them on collaborations, and expect them to continue to make fantastic beer. Like we mentioned, they’ll always have our friendship and we look forward to the next time we can share a beer together.

Cheers,

Jeffrey Stuffings
Founder
Jester King Brewery

 

Another great perspective, by Beachwood Brewing.

About Aubrey Laurence

Aubrey Laurence
Aubrey has been a craft beer fanatic since the mid '90s and he has written about beer for a wide variety of publications in Washington, Oregon, and Colorado for well over a decade. He has judged beer in multiple competitions, plus he has rated and taken notes on thousands of beers from all 50 states and 68 countries -- visiting 16 of those countries on 6 continents. He is also a Certified Beer Server with the Cicerone Certification Program, an avid homebrewer, and a hop grower. In 2013 & 2014, he spearheaded Bellingham Beer Week. When he’s not drinking beer, he’s probably climbing a mountain somewhere. He lives in Bellingham with his wife and three cats. Follow him on twitter @AubreyLaurence.

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