A-B InBev, History, and American Brewing, Part 5 of 6

Part 1 --- Part 2 --- Part 3 --- Part 4 --- Part 5 --- Part 6 Craft brewers are smart, ambitious people. I learned that when I was writing my book and interviewed a number of them. I’m telling you: they’re smart. But you knew that, right? After all, no one creates a major brewing company out of thin air by being stupid. And no one even thinks about doing so unless he/she is ambitious with a capital A.

Craft brewing is full of exceptionally talented people who have created VERY attractive properties. And I don’t mean the brewhouses and other real estate. I’m talking about brands and beer. I’m talking about companies. I’m even talking about people: If I were a large to medium-sized beermaker, there are several people in brewing that I’d be trying to buy right this minute; those people are that smart, that talented. So I doubt anyone in craft brewing will roll over and play dead while MillerCoors and A-BIB rip each other’s heads off.

BUT: some of them are gonna get caught in the crossfire. And as I’ve said before, historically speaking, when the giants get restless, the small fry get caught in the crossfire. It’s happened over and over again, particularly when the industry is already facing tough times. (Eg, during the 1950s and the 1970s, when the entire brewing industry struggled to maintain its footing, although for somewhat different reasons than it is now.) Some of them may even welcome that midnight knock on the door when a Big Boy shows up waving a wad of cash. 

After all, every beermaker, regardless of size, is getting hammered by high prices for barley and malt. And glass, paper (those labels and six-pack carriers aren’t free....). Fuel and water. Not every beermaker is going to survive the current economy. On the other hand, the current brewing industry marks a sharp departure from the past in that craft brewers aren’t a one-for-one match with the small brewers of yesteryear.

Still . . . . Craft brewers need to be wary. Anyone who thinks that somehow Inbev has nothing to do with them is in for a rude, perhaps even nasty, awakening. If nothing else, Carlos Brito will flood the American market with imports.

And in this country, imported beer still carries clout with consumers. Back in the 1970s, imports made a serious impact on American drinking habits. (*1) In the 1980s, craft beers were able to take advantage of the groundwork laid by import beers.

Even today, if craft brewers have any direct competition with their “niche," it’s with imports: Many of the same consumers who will drop Big Bucks for a craft brew regard "imports" and "craft" beers as an interchangeable beverages. (More's the pity, eh?) So craft brewers ought to be thinking hard about how Mr. Brito will affect their lives. Ought to be thinking about how to position their products -- and, more important, their industry -- against this soon-to-be-tsunami of imports.

More next time.

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*1: Import mania, which began in the 1950s and strengthened dramatically in the 1960s and especially the 1970s, was due mainly to “push" factors in Europe: Beer consumption there dropped somewhat because of changes in demographics and the economy. No surprise, European brewers turned to the US market to boost their sales. But of course, as imports took off in the U.S., this country became an even more attractive market, and imports grew and the niche became more viable, etc. But the key point here is that the strength of that niche in the 1970s provided a boost for the microbrewing movement that emerged in the 1980s.