Home > Beer, Business > How do the “big boys” fit with Craft Beer and the Craft Beer Business?

How do the “big boys” fit with Craft Beer and the Craft Beer Business?

Anheuser-Busch InBev's Holiday Gift to Revision3

Anheuser-Busch InBev’s Holiday Gift to Revision3 (Photo credit: dlprager)

I’ve been thinking about the Big Beer companies, the big and the getting-bigger companies.

The story starts a few weeks ago. I had been watching a thread on a forum where a homebrewer started off by saying something like “I can’t drink macro lager anymore. I can’t believe anyone who like craft beer can stand to drink that other stuff.” There were a lot of comments like “I can’t drink that swill,” or “there’s no substitute for flavor.” There were some comments to the tune of “yeah, but at the ball park or the beach on a hot day,” or “I still have a macro beer at a party now and then.”

So here’s my thinking: Whether you like their product or not, you have to give credit to the breweries that are turning out light american lager on a global scale. Any homebrewer that has tried to do it can tell you that Light American Lager is a *very* difficult style to brew and brew well. Yet, here are the massive companies turning out millions of gallons of the stuff all over the world and achieving flavor and production consistency that most small commercial brewers can only hope to emulate. Clearly, these macro breweries know their business and have the brewing down to a science. Folks like AB-InBev, MolsonCoors/SABMiller have developed, used, re-invented, and forgotten more beer science than most people will ever know. They have their process control tight and their Quality Control tighter. They know how to brew beer.

And they’ve got money. And they’re not stupid – they’re watching the steady growth of craft beer year over year. And they’ve got to want in. Examples of attempts include everything from AB-Inbev’s Shocktop and Amberbock to MolsonCoor’s Blue Moon. Some forays are more successful than others (Budweiser American Ale anyone?).

So: (1) they’ve got the money (i.e. capital to invest), (2) they’ve got the science know-how, (3) they’ve got creative people (surely out of those hundreds of thousands of employees, someone’s got to be creative right?), and (4) they’ve got the marketing and desire to do it. Why aren’t they bigger players in the craft beer segment. Some have turned to buying up craft breweries to help augment their foothold, but these guys are science and marketing juggernauts, why do they struggle with getting into craft beer?

This seems like a conundrum from the outside. I have my thoughts on why this is, I’m sure you do too. My question here is, what do you think the long term role of the marcro beer companies is going to be in the craft beer market segment?

  1. July 9, 2012 at 5:00 pm

    It’s likely difficult to put the craft back into craft brewing when their business model relies on annihilating inconstancies, fostering mass appeal, and extending shelf life. Concepts of broad appeal and using any chemical means necessary to create a heat and light stable beer are incompatible with craft beer. Craft beer is all about local, fresh ingredients, appealing to small number of people and creating once a year magic. Hops and barley are supposed to be different year to year. Like a hand crafted cigar that has subtle notes of acidic soil the tobacco is grown in; craft beer feels special, not plebeian.

    Also, consider the history of american brewing. The big boys survived prohibition by creating 0% alcohol beer and entering the pharmaceutical production field. They learned how to produce consistently on a massive scale. I think these companies cant shake the ideas of homogenizing and control in order to brew craft beer.

    The big breweries have created flavor science and brewing science but they’ve used it to their own ends; making cheap, drinkable, low alcohol, and largely forgettable lagers. That science was needed to make beer last longer, taste the same in every bar across america and withstand abuse it was never expected to endure before.

    That said, they have made some headway. Mostly with heavy, citrus extract infused wheat beers. These are some of the easiest beers to brew on a huge scale consistently. Lemon and orange were probably originally added to american wheat ales to cover up infected or poorly brewed beer. citrus notoriously covers up most problems in beer. Wheat adds sugar and texture and also covers up any problems with particulate in bottle. When brewing 800-1000 bbl of craft beer the risk of infection and minor change batch to batch is huge. This is not sterilized rice and isomerized hop extract. Craft ingredients are inconstant and vary year to year if not batch to batch. Choosing easy styles helps breweries manage that risk.

    They may have the money, desire and science to get into craft beer but it wont be on their terms entirely. Craft beer is less about bottom line mentality and more about individuality, humor, frankness, and quality ingredients. Frankly, they just wouldn’t get it.

    Big companies will likely continue to buy up craft brands and run them on a small- medium scale to keep as much of the original flavor as necessary to hold onto loyal customers and brand identity. They’re not dumb, they can sense change coming and will diversify to survive the slow death of american lagers. So they buy or create small brands and keep them regional. They will have to have many small breweries contributing to their distribution flow. Eventually these separate breweries will develop tiny differences and new recipes, techniques and brands will emerge as the number of professional brewers increases and they eventually leave to start their own breweries.

    Cross pollination of large brewery technology will improve craft beer as personnel will migrate away from big labs and into craft beer. Quality will go up in craft beer. Women, minorities and smaller segments will become important consumers. Moronic and sexist advertising will fade into bemused embarrassment as we look upon a new golden age of american small business and the revival of beer culture in America.

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