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Wicked Outrage Over Macro Beers Owning Micro’s…. Deserved?

Do you care who owns the brewery of the beer you're about to drink?

Do you care who owns the brewery of the beer you’re about to drink?

In April of this year Jim Koch of Boston Brewing (Sam Adams) published an editorial in the New York Times titled “Last Call for Craft Beer?”, in which he stated: “Drinkers buying cute-sounding brands like Goose Island or Terrapin or Ten Barrel are often unaware that these brands, some of them once independent, are now just subsidiaries of AB InBev or Molson Coors”. He expressed outrage at the fact that the macro’s are buying up craft beers and not disclosing big beer ownership: “The growth and the excitement in the beer business is in craft.”

Shortly after this was published, Lagunitas – once a vocal leader of iconoclastic craft movement – announced it had sold the remaining 50% of its ownership to Heineken. Even more recently AB InBev announced the purchase of “Wicked Weed” – once one of craft’s “darlings” thanks to their innovative sour beers, and early “extreme” approach to style.

In the press, and at beer bars – when sharing a few craft beers – craft beer enthusiasts argue whether the trend of acquisitions by the big guys really matters that much anyway, or if it is in fact a betrayal of the original values and culture of craft beer universe.

Where to for the future of Lagunitas?

Where to for the future of Lagunitas?

Tony McGee, who was the founder and an owner of Lagunitas defended his sale of total ownership to Heineken essentially saying that the Lagunitas team were now “all in” and ready to leverage the muscle of the Dutch beer giant to spread Lagunitas beer all over the world. The owners of Wicked Weed pointed out that with the help of AB InBev, craft enthusiasts across the nation would be able to indulge in their sour beers – which are currently hard to get out of their market.

As craft beer matures as an industry, it’s really not surprising that AB InBev is acquiring craft brands, and it’s not very surprising that some craft breweries want to sell out. Most breweries (and most small businesses actually) are often established by family or other personal relationships, and after “retirement age” the desire of the first generation to cash out is to be expected. And investors sometimes want their money – witness the sale of Elysian to AB InBev that rocked the industry back in 2015 due to the owners “lack of a common vision of the future” per prior owner Dick Cantwell.

But the intensity of the reaction from within the craft beer industry and some of the public is somewhat surprising: anger, disappointment, feelings of betrayal and sometimes even leading to defamation of those involved. Talks of open boycott and even demonstrations have surfaced.

Some brewers and craft beer enthusiasts share common culture

Some brewers and craft beer enthusiasts share common culture

When Devil’s Backbone in Virginia sold to AB InBev last year, on the brewery’s Facebook page and in online beer forums, former loyal customers posted hostile rants accusing the brewery of selling out and promising to never again buy another of their beers. The Brewery was kicked out of Craft beer’s prestigious Savor beer festival, and will no longer be able to host the Virginia Beer Festival, an event it helped originate.

Other industries have matured and gone through periods of local brand acquisition by larger players that resulted with only minimal angst and little outcry. For example, in the banking industry larger regional or national banks acquire smaller local banks frequently.

If Bank of America or PNC Bank absorbs a smaller regional bank, they just change old bank brand name to theirs and that’s that. Sure they do lose some of the old customers that identified with the “First Community Bank of My Town” but there is not a lot of long lasting anger or outrage toward the acquiring bank’s brand. Most customers just walk into the same bank branch with a new sign and logo over the door.

What are the aspects of the craft beer industry that creates this drama, and why?

Well surely part of it is that fact that many in the craft beer industry started out in the 1970’s and 1980’s with brewing being a badge of an “edgy” and sort of “renegade” lifestyle and purpose. Bud and Miller were “the man” and by brewing your own beer you were instantly somewhat of an eccentric non conformist, and you were thumbing your nose at big corporate at the same time.

I once asked Jeremy Cowan of Schmaltz Brewing about why he documented in his book “Craft Beer Bar Mitzvah” an open depiction of his frequent participation in illegal recreational activities. He replied “Hey, I’m a brewer, as long as I don’t kill anyone, I am cool. People expect me to act crazy”.

In my experience, people that have been in the industry for decades have a sensibility that the craft brewing industry is a tribe and an alternative culture of authenticity – which needs to be protected and nourished. This view was articulated recently in the Craft Brewer Convention’s keynote speech, with warnings about new brewers not showing respect those who blazed the trails in the 1970’s and 80’s.

With the massive influx of new breweries and thousands of  start ups in the past few years, it appears that there is less interest in maintaining the counter culture and sense of rebellion in craft – even though that mythical value still perpetuates to a degree in edgy beer and brewery names, tie dye t-shirts and the beard and cargo short outfits of today’s young brewers. But the historical culture of craft brewing seems to becoming more of a mythical story valued and retold by “the elders” rather than a real cultural bind in 2017.

Steve Dresler - original brewer at Sierra Nevada to retire in 2017

Steve Dresler – original brewer at Sierra Nevada to retire in 2017

So, if you were involved in the brewing industry in the earlier days – the culture and ethos of craft brewing may have been very important to you – and you took real personal risks to create and maintain that. But many of today’s craft brewers appear to be a somewhat different breed. They spend years creating their business plan, lining up investors and creating their brand and marketing differentiation. Is it important that they maintain the “craft beer culture” when they still have a day job? If the owners of Ballast Point can get “one billion dollars” for their brewery from Constellation Brands – well, good for them.

The fact is that the craft brewing industry has changed a lot in the past 10 years – through immense rapid growth, the ready availability of equipment and licensing now accessible to most anyone (with money or investors). There are new technologies and business models unthought of even in the 80‘s 90’s. To most of today’s beer drinking millennials, this is literally not your father’s craft brew culture, and generally that’s OK with them.

“All I care about it good beer and I don’t care who the owners of the brewery are” is a refrain I have heard now and again (though often heard from industry insiders close to people involved in a merger or acquisition). I recall reading an extreme reaction to “craft backlash”  from a monthly craft beer paper who wrote an editorial in 2016 that in essence said: “How dare you disparage a brewery that worked hard to make great beer to establish a brand that they could sell to a mega brewer for millions? What right do you have to criticize them? Brewing isn’t a social responsibility or a charity, it’s a business.”

But in many ways it’s an individual decision made by can or bottle. Do I give pause when I see a choice of Goose Island, 10 Barrel and Ballast Point? Would I choose to drink something else? (All things being equal, probably yes.) But if given a chance would I refuse to drink my old favorite Lagunitas because of their change of ownership? – Most likely no.

As the industry continues to mature, and old brands are bought out and new ones appear every day, and the idea of allegiance to craft beer brands and the lifestyle and culture that craft beer stands for appears to be simply fading away. The ideals of Ken Grossman, Fritz Maytag, Brian Hunt and Jim Koch (and many others) is giving way to ideals of new corporate owners who like a good beer, but not necessarily with the ethos of the 1980’s and 90’s or the “excitement that is craft” as a critical consideration.

Newer breweries aren't always focused on alternative themes - are they authentic? Does it matter?

Newer breweries aren’t always focused on alternative themes – are they authentic? Does it matter?

Is this change worth mourning by craft beer enthusiasts? I guess that’s in the mind of the beholder, in particular the one who enjoys a Sculpin or Hopsecutioner at a baseball game or corporate event that used to offer only Miller Light, Bud and Bud Light just a few years ago. It does matter to me, but the old craft beer culture mattered to me because of what it meant to me then, maybe not so much in the changing landscape of the industry now. I suppose that those beer appreciators that boycott the beers from AB InBev’s acquisitions probably do feel that it still matters to them now.

What would happen if AB InBev chose to rebrand the beers they bought and called them “Budweiser Craft Series” with a red label on them – calling each beer by its old name like “Bud 10 Barrel IPA”, “Budweiser Goose Island Barrel Ale” and “Wicked Weed Bud Sour” – all with Budweiser logos? Would people not be as upset, and would they still buy it? Would they accept it more as “business” instead of “trickery”?

Time will tell us if it’s really the “Last Call for Craft Beer” or instead it’s craft beer brewers and their enthusiastic fans finding a different calling about what matters to them about their beer. I hope that there is room for all beer appreciators, and room for tolerance for all as the industry continues to grow and change.

Do today's brewers need to care about yesterdays?

Do today’s brewers need to care about yesterdays?

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