What Is "Good" Beer? Ask Charlie!

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The perennial, endless debate among, well, people, not just the beer geeks, is "what is good beer"? Personally, I think it's the one human question whose answer is absolutely relative: A "good" beer is one that you like.

My "favorite" beer, for example, is whatever I think will taste best with whatever I'm about to eat (I usually have beer with food.) And I know my tastebuds are mine and that they "lead" my palate and "good beer" brain in a particular direction. (And so I hereby bequeath my share of the world's IPA's to anyone who wants them, but I retain all rights to my share of the world's malty brown beers.)

Anyway, Charlie Papazian has been pondering the whole "good" beer quandry over at his blog and it's definitely worth taking a look. It's a multi-part series, and I think the most current entry is part six or seven. To find the beginning of his series, follow this link to the blog, and then look at the left side of the screen for links to the whole series. Enjoy!

A-B InBev, History, and American Brewing, Part 2 of 6

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Part 1 --- Part 2 --- Part 3 --- Part 4 --- Part 5 --- Part 6 The past fifty years of American brewing is littered with the remains of other, similar deals in which a large corporation with no particular interest in beermaking acquired a family-owned/operated brewing company.

The most notable example is that of Philip Morris, which acquired Miller Brewing in 1969 and 1970. PM was a global conglomerate that manufactured/distributed/marketed many products (including cigarettes). It was not a "brewing company." As far as PM was concerned, the beer was just another commodity, and Miller was just another appendage with which to make profit. (*1) But there are other examples: Rheingold. Ruppert. Schaefer. (You can find more details in my book, especially in chapters six and seven.) (*2)

Historically, such deals have not had happy endings. The acquired company regarded beer as beer and as something special. To the acquiring company, beer was just a thing, something to be bought and sold; interchangeable with widgets, shoes, or cattle.

But, you say, Miller is the second largest beer company in the U.S. (*3) Surely things worked out just fine!

Not exactly. The full story is too long to recount here, but the short version is that PM spent billions to expanding and streamlining Miller's operations. (It also slashed costs by altering the recipe of Miller High Life). It spent huge sums on marketing. It introduced Miller Lite. And then set out on its stated objective: to destroy Anheuser-Busch.

In that task, the company failed miserably. Since the 1980s, Miller has existed in what I call the dead man's land of American brewing: a distant second to the giant. (Quick numbers: A-B makes about 100 million barrels of beer a year. Miller makes --- about forty.) As Gus Busch, who ran A-B from the late 1940s to the mid-1970s, once said, "being second isn't worth anything." (*4)

What made the difference -- what took the zip out of Miller (and Rheingold and Ruppert and Schaefer, etc.) -- was the removal of the family presence. Because the family members regarded themselves as BEERMAKERS. The new corporate owners did not.

So as a historian, I don't see any happy ending to this InBev/A-B story. Over the next few years, the loss of the Busch patina -- the Busch edge -- will result in a gradual erosion of A-B's power and clout. Sure, InBev is huge and can spend zillions on advertising. Sure, it will try to grab a larger share of the US import market by bringing in more of its global brands. (I predict that Stella Artois will be the new Starbucks: there'll be a bottle on every corner.)

But A-B itself, as I noted in my earlier five-part series, will experience disarray. The InBev slash-the-costs culture will collide with the A-B "spend money to make money" culture. Distributors, already uneasy and discontent, may become more so.

Turmoil, in short, lies in the company's future. A-B will lose its otherwise (giant-sized) sure footing. It will stumble. And as it does, its only remaining "mainstream" rival, MillerCoors, will finally enjoy something like a level playing field. The people at MillerCoors will grab that opportunity. The result? A beer war of the sort that has not ocurred since the 1970s.

More next time.

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*1: Miller's current parent company is SABMiller, based in London. A few months ago, SABMiller and MolsonCoors (a Candian company) merged their North American operations into a new venture, MillerCoors.

*2: And you're gonna buy NEW copies of the book, right??? Because, ya know, authors make ZERO dollars on the sale of used books...

*3: "Large" is relative. A-B makes around 100 million barrels of beer a year. Miller makes about 40 million; Coors about 20 million.

*4: Quoted in Ambitious Brew, p. 234.

A-B InBev, History, and American Brewing, Part 1

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Part 1 --- Part 2 --- Part 3 --- Part 4 --- Part 5 --- Part 6 My buddy David Fahey at the Alcohol and Drugs History Society posed an indirect question the other day at the Society’s blog: namely, what’s my take as a historian on InBev’s acquisition of Anheuser-Busch?

Yes, I recently posted a five part series of blog entries about the future of American brewing, and those posts were inspired by the InBev/A-B deal. But I realize now (thanks to David) that I’ve not addressed the deal itself directly, at least not here at the blog. Which is pretty funny because for the past four weeks, I’ve done nothing BUT talk about the deal to what feels like fifty bazillion reporters (okay, it’s more like two dozen; but it feels like fifty bazillion...). (Indeed, as my husband will attest, InBev and A-B temporarily took over my life and his....)

Anyway, this is the first of what will likely be two, maybe three, blog entries about this deal from a historical perspective, and what history can tell us about its potential impact on American brewing in general and craft brewing in particular. (*1)

First a bit of background: A-B is a publicly held company and has been for decades. The Busch family does not own controlling shares and has not for decades. That’s largely due to the enormous size of the family itself; various chunks of stock were passed on by inheritance and often sold as part of estates; there was no way to keep control of those shares.

Nonetheless, the Busch family has remained the company’s guiding force. Anheuser-Busch is saturated with this one family’s presence, personality, and ambition. In that sense, it has always functioned as a “family" business. (That, by the way, is a remarkable feat by any standards.)

More to the point, the family regarded its business as making beer. They knew beer. They understood beer. They understood the peculiar demands that the brewing process imposes on a manufacturer-beermaker. (*2)

What about InBev? We can trace its creation to the 2004 merger of two companies: Ambev and Interbrew. Ambev dates back to 2000, the result of a merger between two South American brewing companies, Brahma and Paulista. Interbev is a bit older, dating to 1988 and the merger of two Belgian companies, Artois (you’ve heard that word before) and Piedboeuf-Interbrew (which was itself the result of earlier mergers.) Confused yet??

Interbev = Artois + Piedboeuf-Interbrew (1988) Ambev = Brahma + Paulista (2000) InBev = Interbev + Ambev (2004)

InBev is a Big Deal. It owns breweries and sells beer on six continents, etc. (And I urge readers to visit the InBev site just to get a sense of the company’s scope.) But I’m not sure it’s a “brewing" company.

Yeah, Carlos Brito keeps talking about how InBev has made beer since 1336 or whenever. (One of the Piedboeuf-Interbrew breweries dates back that far.) But -- well, that’s a lot of marketing hooey (or, as my wise pal Jim Koch would say, a lot of marketing smoke and mirrors.)

Stripped to its basics, InBev is a huge corporation cobbled together in a series of mergers and acquisitions. It earns profit by acquiring and operating companies that make beer. Period. It could just as easily consist of shoe factories or widget makers or cattle ranches. Carlos Brito isn’t a beermaker. Indeed, I bet we’d have a tough time finding a single InBev exec that has, ya know, ever made any beer or knows HOW it’s made. (Of course, I could be wrong about that....)

Anyway, InBev isn’t a brewing company in the way that A-B is a brewing company. The people at A-B understand beer. The Busch family understands beer. But to the suits and ties at InBev, beer is just a commodity. The InBev/A-B deal consists of a marketing corporation that specializes in beer acquiring yet another brewing company. So, what’s this got to do with the history of American brewing? Plenty.

More next time!

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*1: And again I remind everyone: I’m not a number-cruncher or economist. I’m also not a “beer person"; I don’t now and never have worked in any capacity in the brewing industry. I’m a historian. I’m an outsider; it’s my job to stand back and survey the Big Picture from the Long View.

*2: Yes, I understand that many people loath Budweiser or any other A-B product. To them, it’s not “real" beer. That’s an opinion. My opinion is that A-B makes BEER, and makes a particular KIND of beer, and does so with great skill and talent. They also make a consistent product, day in, day out, year after year. Any beermaker, craft or otherwise, will tell you that it’s incredibly hard to do that. You may not like A-B’s beer, but the company deserves credit for the skill with which it makes the kind of beer it makes. And yes, you’re absolutely entitled to disagree.

Evidence That Craft Brewers Have A LOOONG Way to Go

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Over the next few days, I plan to comment on the InBev/A-B deal and what it means for the future of American brewing. And of course I'll discuss its impact on craft brewing.

But here's one thing I know: craft brewers aren't getting their message out. (If they were, they'd have at least 20% of the market by now.) How do I know that? Well, see above: they own just a tiny share of the overall market. Yes, it's growing, but the craft brewing is now thirty years old, its share of the consumer market has barely budged since the late 1980s, early 1990s. (*1)

Second, I do a lot of speaking to various groups. The events typically include a beer tasting. I ALWAYS pick local beers made by craft brewers. I try to choose beers made within the state where the event is held, and, if possible, beers made within twenty miles. And it never fails: almost no one -- sometimes not a single person -- has ever heard of the beers. These are gatherings of smart, educated (and affluent) people. And they've never heard of the beers at the tasting.

But here's more immediate evidence that craft brewers aren't getting their message (or their beers) across. Check out this piece in today's Salon. Or, more specifically, check out the comments that readers have posted about the article. Read those comments, and you'd never know that there are 1400+ craft breweries in the U.S. You'd never know that the U.S. has the most dynamic, creative brewing culture in the world. Craft brewers are NOT getting their message across. (More on this over the next few days.)

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*1: (Yes, I am aware that the Brewers Association has a small budget, but.... )

AUGGGHHH!

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This is a non-beer-related rant, so feel free to ignore. Today's Wall Street Journal includes the latest in its "Cheapskate" series.

This time, the reporter explains that he saves money by checking books out from the library. Great! I LOVE libraries. I've had a library card for fifty years. Libraries are a fundamental component of civilization. But then he goes on to say that in the few cases where he plunks down actual MONEY for book, he buys a used copy. Because, ya know, used copies are cheap and can be had for pennies and so why pay for a new copy?

AUGGGGHHHH. Augh.......... sob. snurfle. whimper. (Picture me banging my head on my desk and wailing.)

At no time does Mr. Cheapskate (aka Neal Templin, whom I'm SURE is a lovely man, a loving husband, and perfect father, son, and brother) mention the obvious and relevant point: Writers make zero dollars from the sale of used books.

That's right: when you buy a used book, the person who WROTE the book, the man or woman who created its content, gets nothing. As in: Zip. Nada. Zero.

Yes, I know. Times are tough. Money is tight. Still -- writing is a cornerstone of human existence. It matters. And that purchase is doable. Cut two Starbucks lattes each week from your budget (you could carry your coffe from home in a thermos). Take leftovers to work for lunch once a week, thereby eliminating a trip to a restaurant. Voila! You've "found" enough money to pay for a new book.

So, to cut this rant short because I could rant from now till midnight and then start again tomorrow: If you value the content of books, if you enjoy reading, if you like what your favorite authors produce, PLEASE, I beg you, BUY NEW BOOKS. Because if no one buys new books, writers will earn nothing, and after awhile there won't be any books left to buy.

Thanks.