Budweiser Is Trying to Fool You Into Thinking Its Beer Is Still Craft. Don't Buy It
Ever since Anheuser-Busch InBev – the largest beer producer in the world and the makers of Budweiser – started buying up American craft breweries en masse in 2014, the conglomerate has launched a full-throttle campaign to convince you that selling out doesn’t matter.
Between the promises of sustained quality made by the brewery’s owners and the two recently launched AB InBev-funded beer blogs (The Beer Necessities and October, the latter a collaboration with Pitchfork), the message it is pushing is clear: all beer deserves to be celebrated.
The goal? To dilute your definition of “craft beer” so much that as long as what’s in the glass still tastes good, you’ll continue to equate their brands with your local, independent small brewer.
Well, excuse the harsh language, but fuck what’s in the glass.
If you care about the success of truly independent craft beer, believe in the power of small business to build and change communities, and wholly reject the predatory business practices of other large corporations like Monsanto, Walmart and more, then a craft brewery selling out most definitely matters.
Craft beer began over 40 years ago as an opposition to the flavorless monopoly of fizzy yellow beer, which reduced consumer choice to two options: Bud or Miller. Craft breweries like Anchor, Sierra Nevada, Stone and more fought against the deep pockets of these few big-beer brands to launch a national revolution built upon innovation and creativity that in the last decade more than tripled its market share to 12.3 percent.
But over the last few years, big beer has been trying desperately to get back its taps and shelf space.
In conjunction with a marketing assault that muddies the line between craft and crafty, the last two weeks have brought even more examples of the frightening lengths a corporation like AB InBev will go to to regain lost profits.
On May 3, AB InBev acquired its tenth craft brewery, North Carolina’s Wicked Weed, a beer-nerd favorite known for its progressive sour program. Then, less than a week later, officials in Massachusetts released a scathing report from the distribution front: over a several year period, a single Anheuser-Busch wholesaler gave away $1 million in free equipment to Boston-area bars, in violation of state alcohol laws enacted to keep competition fair for small brewers.
The most disturbing insight into AB InBev's new multi-pronged approach against the industry formerly known as craft, though, came Wednesday when several American hops vendors — who import experimental South African hops (think: your favorite new IPA) — emailed their clients to tell them that they would not be able to sell them anything from this year’s harvest.
According to emails published online, AB InBev (which as of last year owns all of South Africa’s hop farms) refuses to let anyone except their own brands use the hops this year, hoping it will afford them a competitive advantage and stifle creativity among independent brewers.
All this is just a reminder that AB InBev is not a small business and never will be. It has not made any authentic innovations in the craft beer sector — it just bought into the innovations that have been done for decades by others. AB InBev is a (still-growing) multi-national beverage conglomerate (headquarters: Belgium) that got scared when its American sales numbers began to fall. And it's doing anything it can to prevent a further slide.
The first step was to buy out craft breweries, which the Brewers Association defines as independent businesses that produce less than 12 million kegs of beer per year. AB InBev acquired its first, Chicago’s Goose Island, in 2011, but didn’t make another purchase until 2014, the year that craft breweries finally achieved double-digit market share. It’s been a buying spree ever since, with two acquisitions in 2014, four in 2015 (including L.A.’s own Golden Road), two in 2016 and one so far this year.
The debates that rage about whether or not a brewery is a sellout, though, is just a distraction from a more subversive war — the one being waged at both the ingredient and distribution levels, where invisible middle-men hold power over which beers can be made and what selection you find at the store in the first place.
Like the federal government, beer's three-tier system was erected as a form of checks and balances — a way to protect consumer choice by setting up a barrier of independent distributors between breweries and retailers. Lobbying groups have created loopholes, however, and in the states where breweries can legally own distributors, AB InBev has gamed this system in their favor by owning the two top tiers of the supply chain.
Of the large markets covered by the 10 craft brewery purchases made so far by AB InBev, Anheuser-Busch (the American subsidiary of AB InBev) already wholly owned or had recently purchased a large regional wholesaler in nine of them.
This effectively allows the corporation to undercut independent breweries by buying beer directly from themselves and passing along the low costs to retailers happy to have a range of passable crafty options from one single source.
In 2015, the most recent year for which there is such data, Anheuser-Busch wholly owned 21 of its more than 500 distributors, representing about 10 percent of its total sales. Couple that with the company’s two-year-old voluntary incentive program (which rewards independent distributors for not selling larger craft brands) and you have a corporate-hatched plan that takes one half of the large-scale distribution options off the table. This means small breweries have a harder time than ever accessing the high-volume accounts necessary to grow their brands.
Yes, yes, I’m aware this is how capitalism works. The big guy buys out the little guy and customers believe that it's all for their benefit.
So maybe this all comes across as paranoid or petty, but let’s be clear: If you purchase a beer made by Golden Road, Goose Island, Elysian or any of the other formerly craft breweries currently owned by Anheuseur-Busch InBev, at least some of that money goes directly into funding predatory business tactics and increasingly insidious marketing campaigns that directly prevent your favorite local independent breweries from growing beyond a certain size.
I continue to believe in the power of independent breweries to innovate and provide crucial consumer choice at the shelves. But they can’t continue to do that when consumers are fooled into thinking that AB InBev cares about anything more than its own bottom line.