Sorry to keep harping on this topic lately, but more keeps coming out on the relative same subject – the mass consolidation of commercial beer brands under the AB In Bev umbrella and the potential for the big guys to further squash competition.
This is a “must-read” if you care about the beer industry: LINK
For a number-crunching manager like Brito, an old, family-run company like Anheuser-Busch provided plenty of opportunities for cuts. He laid off approximately 1,400 people, about 6 percent of the U.S. workforce. He sold $9.4 billion in assets, including Busch Gardens and SeaWorld. AB InBev also tried to save money on materials. It used smaller labels and thinner glass for its bottles. It tried weaker cardboard for its 12-packs and cases. The old Anheuser-Busch insisted on using whole grains of rice in its beer. AB InBev was fine with the broken kind.
The danger here isn’t lower quality or continually fooling consumers with “tradition in name only” brands. This is becoming more and more difficult as people learn and understand more about brewing and care more about what’s in their beer. More people realize that these brand acquisitions are often not their same brand any more…traditional brewing methods are being lost on a mass scale as their older, less efficient breweries are shuttered. According the article, the process has already started with Goose Island as well, where they’re trying to squeeze profit out of an acquired brand (11.15.12 – UPDATE: Original owner, John Hall leaving Goose…IBIV exec takes over), at the same time they push more profitable versions of their core brands.
The real danger here, in addition to the loss of traditional brands, is the continued aggression towards competitors in distribution and eventually supply. AB already has a history of strong arming their distribution network to push out rivals, and strength of supply for certain brewing ingredients – exercised during the “hop scare” a few years ago. They have trademarked a style and poured resources into squashing any challenge. They’ve strong armed vendors and cut their local work force (again, read the above-referenced link in detail for more). It’s not a stretch to imagine them further using their market strength to make life difficult and more expensive for competitors going forward, particularly as their individual brand sales continue to fall…and we don’t mean just in “competition,” but in using their market power to UNFAIRLY impede, squash or acquire rivals. It’s already difficult in many markets to get distribution, particularly in three-tier states, and retail access in “pay to play” markets. It may become more challenging in the future to acquire brewing ingredients such as hops and grains, packaging supplies, certain equipment, and other vital resources. As their market share gets larger around the world, often through acquisition, it’s entirely possible for them to lock down markets in entire nations or regions in the future.
If you care about “local,” if you care about “tradition,” if you care about consumer “choice,” you’ve been warned – do NOT buy or support AB In Bev products. Yes, every sale matters.