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.