If ya can’t beat em…

The big news in the brewing world this week is the Boston Beer purchase of Dogfish Head Brewing.  Billed as a “merger” as the Dogfish crew will join the Boston Beer board and continue to help run Dogfish Head, it still involved Boston Beer paying for DFH in a mix of stock and cash and paying off Dogfish’s private equity investment so they will be wholly owned by Boston Beer. Based on the BA guidelines, the combined entity will continue to be considered “craft” since it’s a craft brewer buying another craft brewer.

I’ve written on the blog before about the BA definitions of “Craft” in my 2017 post “The war goes on..” Since that post, they adjusted the definition again to include “non-beer” products like seltzers and FMBs (flavored malt beverages), which seemed to favor Boston Beer almost exclusively.  And for me, that’s where the rub lies.

Compared to most people in the craft community (or at least the vocal minority), I have an “unpopular opinion” when it comes to Sam Adams/Boston Beer.  Not about the company themselves, but more about this ridiculous idea of “craft” beer versus the big “industrial” brewers.  Where it breaks down for me is the fact that Boston Beer IS a giant multinational conglomerate.  They are the 4th largest brewery in the country and in my opinion, literally no different than AB In-Bev or MillerCoors.

Boston Beer is a publicly traded company with a market capitalization of 3 billion dollars and nearly a billion dollars in annual revenue. They have several brands under their umbrella, including Sam Adams, Truly Sparkling Water, Angry Orchard Hard Cider, Twisted Hard Ice Teas, The Traveler Brewing Co and Coney Island Brewing. They are nationally distributed and can afford to advertise during the Super Bowl. There is no other BA defined “craft” brewer who is even remotely close to this level.  Now they’ve reached the point of buying craft breweries to pad their portfolio and increase their “street cred”.  No different than AB InBev buying Wicked Weed.

Now, I want to be clear, I don’t mean this as a judgement statement.  I want to present this as a statement of fact.  Simply what Boston Beer IS. To me, it’s neither good nor bad it just simply is. What I want to highlight is a tendency in the beer community to bash on AB InBev for using it’s size to push other products off the shelf, bash them for making “mocktails” like Bud Light ‘Ritas and Mikes Hard Lemonade etc, and especially for bashing them when they buy your favorite local brewery, and yet Boston Beer does all of those exact same things and yet they are the crown jewel in the BA Craft portfolio, the feather in the cap if you will.  To me, that’s hypocritical.

The BA has made it clear, doubling down on the logo deal, that the ONLY thing that matters is ownership.  Not product line, not innovation, not local interaction, not distribution, not advertising etc.

This is my opinion and I understand it’s not going to make a lot of people happy, but Sam Adams is not craft. A giant company pumping out 5 million barrels of nationwide distributed industrial lager is exactly what those of us in the “craft” are fighting against.
To me, a local 10,000 barrel brewery that pushing the boundaries with 10 or 12 different beer styles, rotating seasonals, experimenting with sours or barrel aging, THAT is craft. Even if it’s a brewery like 10 Barrel or Wicked Weed who is owned by the big boys.  If I walk into a bar with limited choices, I would choose a 10 Barrel (ABInBev) or Hop Valley (MillerCoors) beer over Sam Adams.  I don’t hate Sam Adams, but I’m not likely going to choose a light amber lager if there are more flavorful options like an IPA or a Stout. Especially, if they are the same price.  If the Sam Adams is on special or a lot cheaper, sure that might influence the decision.

To be transparent, I work for a brewery that does not fit the BA definition of craft, because of our ownership situation, but I held this position before I started working here.  Does working for a “conglomerate” color my opinion on this? Of course it does and I wouldn’t claim otherwise, but my experience is at a small local brewery (less than 60,000 barrels) who is involved in the community and constantly innovating and to me that fits more into “craft” than ownership.

In the end.. it should just be about the beer, man.

The war rages on…

Last week was a roller coaster in the beer world.  The Brewers Association announced a special logo, recognizing independently owned breweries.  You can read the release and see the logo HERE. To me, this just further emphasizes the point that the only important part of the “Craft” designation from the BA is ownership.  Based on the BA’s definition of craft, “small” is 6 million barrels of beer a year.  The largest craft brewery is Yuengling at a reported 2.9 million BBLs of production (2012) so there’s still a lot of room to grow and still be considered craft.  The limit was increased last year or the year before, specifically to bring Yuengling into the fold.  Sam Adams (Boston Beer), the 2nd largest “craft” brewer (4 million BBLs/2016) is distributed nationwide.  I can walk into a grocery store in tiny Canby, Oregon and find Boston Lager, Rebel IPA, Grapefruit IPA, 3 flavors of Angry Orchard (a Boston Beer wholly owned subsidiary) and now the new Truly Alcoholic Sparkling Water (another BB subsidiary).  I find it hard to swallow that they aren’t pushing other beer off the shelf, which is exactly what we accuse ABInBev of, but it’s OK because Sam Adams is “craft”.

The other problem I have with the logo comes from a strictly food labeling standpoint.  Even though the logo is not designed as any sort of designator of product quality, that is how it will eventually be perceived.  The BA is trying to assert that local and independent beer is “better”.  That “better” can be interpreted millions of ways, but for the average consumer that will equate to better quality or “tastes better”.  Earlier this morning I responded to a post on the American Homebrewers Forum about how the logo will be adapted into a quality statement.  I was already thinking about this post when I formulated this reply, so I will just copy it here in it’s entirety.  Click the link above to scroll through the entire post.

“This is all well and good for those of us who are deep into the industry, but as always these moves are made for the “rest of the world” who don’t care as much where the stuff in the can comes from.

As with most things that go on a label, and which several people have mentioned above, there will be an implied quality statement with the logo.  That’s just how food labels work.  I’m a food scientist and there’s a lot of stuff that goes on food labels and of course if it goes on a label it must be important right? That’s how people’s brains work.  The FDA doesn’t regulate beer labels yet, but it’s coming very soon.  We’re already having to work on calories and nutrition facts labels.

There’s a lot of stuff out there that has nothing to do with quality, but crafty advertisers or just human intellect of “this must be different and special” turns into quality statements.  For example, if I say the words Black Angus, what do you think? Most people are going to think about a fancy downtown steakhouse like Ruth’s Chris. Black Angus is a breed of cattle.  Not a quality designation.  There are three grades of meat, Select, Choice and Prime.  Choice is what you get in the grocery store, Prime is what you get in Ruth’s Chris, but they are both still Black Angus.  When Hardees/Carl’s Jr is advertising Angus Burgers they are banking on most people equating that with expensive steak.  Are they using Prime beef? Hell no, they are using Choice (or even Select) but people equate Angus with Prime.

The BA’s selling point is “local and independent is better”.. better how? Better for the economy, better business practices, better for your community etc etc.  Over time most people will turn that into “better quality” or “tastes better”.  Is the BA trying to intentionally mislead people? No, I don’t think so, but they are certainly taking advantage of how human emotions work to push their message.  In essence that’s how all advertising works.  Is it meant as a quality statement? No, but in 5 years that’s not what people will remember about it.  People automatically assume “better quality” and pay a premium for things like “Natural”, “No Corn Syrup”, “Free Range”, “Dolphin Safe” “GMO Free” etc etc, all of which are unregulated and mostly meaningless statements (Organic is the only one certified by the government) and don’t always (or sometimes ever) equate to product quality.  It’s a shell game.. and it always has been.”

Of course, the other side of this coin is the immediate and comical reaction from ABInBev’s High End. This is the branch of the company that owns the 10 Barrel’s and Wicked Weed’s in their portfolio.

You can watch the video HERE from Draft Magazine.  It’s… well.  It’s something.  It’s ridiculous and it’s a video that doesn’t need to exist.  I may or may not agree with the labeling, but there was absolutely no reason for InBev to respond to it.  Just let it go.  They aren’t helping themselves with this at all.  They come across as whiny and judgmental even though they are the ones controlling the market.  They have a huge chunk of market share, but some new label comes along and they are all up in arms about how it’s “not fair!”.  Wow.  This is greed and capitalism 101, big companies only like something if it’s *their* rules.  The whole “we need to gang up on wine and spirits” is complete bullshit.  The market doesn’t work that way, at least not at the distributor level.  It may look that way in the high up offices of a multi trillion dollar international conglomerate who has to worry about the Diago’s and Robert Mondavi’s of the world, but on the boots on the ground level, at your local pub, it’s beer vs beer.  Mr Small Local Brewer wheels a keg into a bar, the bar man say’s sorry, we don’t have any open taps because some distributor went in and brought 12 kegs instead of one.  What looks like a decent selection of Budwieser, Elysian, 10 Barrel, Goose Island, Breckenridge and Wicked Weed is not much of a variety at all when they all come from the same company.

I’m all for fighting against illegal business practices.  I don’t think a large brewing concern like ABInBev should own distributors.  In some states that’s legal, in some it’s not.  To me that pushes the boundaries.

However, I don’t think the BA is going about it the right way.  You can’t beat the behemoth at their own game.  It won’t work.

What is Craft?

An Men’s Journal article crossed my Facebook this morning entitled “The Complete List of Fake Craft Breweries and Their Real Owners“.  The brewery I work for is on that list.  Does that make me mad? No. It’s true, we’re owned by a larger entity and therefore not eligible for the Brewers Association definition of “craft”.  What irritates me though, is the implication of this article and others like it that circle around every time a brewery gets bought that these companies are lying about being craft and trying to fool the consumer.  In 30 out of the 32 cases on the list that’s simply not true.

The two “Breweries” on the list that I would consider faux craft are Blue Moon and Shock Top.  Those two were started as anonymous branches of their parents, Miller Coors and A-B InBev respectively, specifically to compete against the burgeoning craft industry 20 years ago.  It’s pretty common knowledge now who those are owned by.  Blue Moon Brewing Co. Golden Colorado isn’t too hard to figure out.

Every other brewery on the list is a brewery that was previously considered craft but then got bought by a larger entity.  It seems to happen more and more often these days, but here’s the thing.  It’s not a secret.  These aren’t back room deals.  That’s not how the American market works.  There has to be transparency to prevent monopolies and protect unions and trade organizations.  When 10 Barrel here in Bend, Oregon got bought by A-B InBev it was reported by both the BA and American Homebrewers Association and every beer blog and beer enthusiast website in Portland within *hours*.  Everyone knew.  It was announced publicly, because legally it has to be.

Is there an argument to be made that these larger breweries are using their clout to push other beers off the shelf and dominate distributor channels? Sure, that’s possible.  But, in all honestly, that was happening before they started buying up other breweries.  The big boys have always thrown their weight around.  That’s nothing new.

Here’s the beauty of it though.  Beer is a democracy.  We vote with our dollars.  Everyone is entitled to decide what they want to drink.  Brands that don’t sell will discontinue, it’s as simple as that.  You choose what you support and what you don’t.

Here’s food for thought though when it comes to “craft”.  The BA is a trade organization and they do great work protecting the smaller breweries from “the big boys”.  But, there’s no legal definition of “craft” besides their member guidelines.  It’s not a protected appellate like Trappist.  It’s not a tightly regulated and tested status like “Organic”.  It’s just a word.  The BA recently upped their limit of “small” to 6 million barrels, specifically to include Yuengling as craft.  Do they deserve to be? Sure.  They are America’s oldest still operating brewery and are still family owned.  But they are also a huge industrial brewery that distributes beer across the nation.  The brewery I work for produced roughly 100,000 barrels last year and we only distribute in Oregon and Washington.  Which one is more close to the definition of craft? You decide.