Yesterday, the beer world was ablaze with the news that beer giant Anheuser-Busch InBev had purchased Wicked Weed Brewing, North Carolina’s beloved producer of wild ales. The response was as harsh as it was predictable: The outcry of “sell out!” ran rampant across Twitter and Facebook.
This is a narrative we hear a lot—that brewing megalodons like AB InBev, MillerCoors or Constellation Brands are out to gobble up every small brewer they can, crush the ones they can’t, and turn the beer their new subsidiaries produce into bland, watered-down swill. What we don’t often hear, however: What it’s actually like to be an employee at a brewery that’s owned by one of these dreaded macro-brewers.
So we found one: a high-level staff member at a brewery that had been purchased by AB InBev. This person felt there were too many misconceptions about the process of brewery acquisitions and its effects on the purchased brewery’s products and people. They wanted to give us an inside view of the acquisition process and its results, both good and bad.
Our source did have one stipulation, however. Fearing backlash from the beer community at large as well as from their new employer, the source wanted to remain anonymous. Thus, some of these responses have been edited to disguise his identity; the rest we present uncut. This is the view from the other side.
The integration period took a while. [AB InBev] doesn’t know as much as people think they do about these breweries when they purchase them. I’m sure they look over the big-picture financials, how much debt do they have, things like that. But the inner workings, there are a lot of surprises that they find. So there’s this integration period that goes on where they are really assessing what the brewery has, what they need. There are a ton of meetings. … It’s a big organization, and they’re learning too. That’s the biggest thing that you take away. They don’t know a lot about craft beer, and they really want to learn from these craft breweries.
No one at our brewery lost their job due to the acquisition. In fact, we hired around 12-15 new people that year.
One thing people lament after a big brewery purchases a smaller one is that the big brewery’s going to change the culture, replace all the people who make the most money, etc. Farthest thing from the truth. They really go above and beyond anything I’ve ever seen to ensure people stay. They want people to be happy. They take that part very seriously, even to the point that if there’s overlap—say, a brewery they’re buying has a finance department that does things that will already be covered by AB’s finance department—they’ve gone above and beyond to repurpose people into jobs that use their skill sets. They work with the brewery so no one leaves, which I think is really cool.
The brewers have been really happy with all the changes. The benefits have gotten way better, our safety has stepped up way more, our brewers are getting to go do all these fun things, collaborate with brewers they’ve never met before. The money’s there, which is really nice, and it’s being spent well.
There’s more paperwork and bureaucracy to work through now, but not a lot more. I’ve worked in this industry for a while, and the biggest thing I learned during that time is how jaw-droppingly loosey-goosey most breweries are and how little structure there is with most craft breweries. You’d be surprised how many craft breweries don’t even know their real margins. It’s just basic business things. So to answer your question about whether there’s more bureaucracy and oversight now, I’d say no more than your average company; it’s just that most breweries have so little.
More attention is paid to growth and sales, too. There’s more accountability. A certain amount of liquid has to be coming out of the brewery every day. If something happens one day and the production drops, brewers will have to get creative to make that volume up, whereas before, it would have been fine to miss that mark.
There isn’t more pressure to grow and to sell, because that’s already a given. As long as we keep our current markets moving along, we’re good. But you know what there is pressure to do? Innovate. That’s what they really, really want. They want to see more new, exciting things. That’s communicated a lot: “Do these crazy things. Come up with the next big-deal beer.”
Here’s the thing I learned from AB: They spend a ton of money on research and focus groups, and the biggest thing they’ve learned is that the vocal people, the people who are very active and complain the most, really represent the smallest amount of beer that’s purchased. You’re talking two or three percent. Yet these people are the most vocal. It happens everywhere that one of these buyouts occurs, people screaming about how they’ll never buy X brewery’s beers again. But if you look at the organic growth of those breweries, they’re still all growing. For some it was even to the point where they couldn’t find volunteers to pour their beer at beer festivals. But look: They’re up 30 percent in their home states.
We had some retailers tell us after the acquisition that they couldn’t carry us any more, they couldn’t support us because of this. We were like, “We’re sorry to hear that. We’re always here and we want to maintain a partnership. We look forward to the opportunity to work with you again.” Well, they would take of our handles and try a number of other beers, and either their customers were demanding they bring our handles back or what they put on was not selling anywhere near the amount. And about a month or two later, they started buying us again. The more this is happening, the less you’re seeing these negative reactions. People care more about how the beer tastes.
We were expecting a little bit of push to start using certain vendors for ingredients. Not at all. They said, “You buy from who you want to buy from.” When it came to procurement of supply and ingredients, they left it up to us.
When something is cross-brewed, meaning beer from one brewery is made at another facility, it’s totally up to the brewery whether they want to do it. So they start on a small scale first. There are a lot of moving parts—this takes months and months to do. Flavor-matching, to make sure everything is okay. And then they bring it up another level. And they always check with the brewer to see if it passes; if it doesn’t they start from square one. And all this beer that gets produced is dumped, no matter what, because it’s still in the testing phase. And all along the way, the brewery owners have final say on the product before it goes out. I cannot stress that enough. Even the big batches—once they bring it up from those small test batches to the big brewhouse and fermenters, if it does not flavor-match, it does not get sold, plain and simple.
Something that disappointed me, and this got no coverage: The High-End breweries did very well at the World Beer Cup at this past CBC [Craft Brewers Conference]. They’re making quality products, and it’s a blind tasting, no ifs, ands or buts about it. But at the Great American Beer Festival—the rules of GABF say you’re allowed to enter in six or so different beers per location. And almost all breweries take advantage of that. But the BA [Brewers Association] limits the number of beers a brewery group can enter, so the High End could only enter 10 beers, total, for all those breweries combined.* That pissed me off. I see that as a tainting of the credibility of the competition. My analogy is like the Olympic Committee going to the United States and saying, “Well, you have a lot better training facilities than Jamaica, so you can only enter in X number of athletes.” It should be about whoever makes the best beer, man. And it breaks my heart to say that, because I’ve always believed in the BA, and I understand what they’re trying to do and that they want to be a resource to help new breweries and educate consumers. But it’s supposed to be about the beer, and when you’re limiting things, it’s no longer about the beer. … All it says to me is that the BA is scared of these breweries cleaning up at their competitions because they’re producing some great beer. Isn’t that the whole point? I get it. It’s their contest; they can set the rules. But come on. It’s a blind-tasting, and we see every year some little no-name brewery with a five-barrel system clean up in awards. It’s a blind tasting; the best beer wins. Don’t handicap us.
Here’s the deal: What’s happening is beer is cannibalizing itself. Yes, the craft segment is growing, but beer overall is down. In the long run, that’s not good for anybody—craft brewers included. That’s fewer people drinking beer. What I think High End is trying to do is draw more drinkers into the beer category. They love that some craft breweries are selling beer at $15.99 per six-pack; it’s proof of concept. That’s great. Beer has always had that perception as the layman’s drink. Sam Calagione said once—I’m paraphrasing—“Think about the best bottle of wine in the world; how much is it going to cost you? You’d pay thousands of dollars for it. Now think about the best bottle of beer in the world. You can get some of the best beer ever made for $30 or $40 a bottle.” There’s such a price variance. Some people can afford Hondas; some people can afford Ferraris. But even a brand new Honda still costs a certain amount, and if the price of cars goes up across the board, that’s a good thing for the car industry. Think about this: The variance right now between craft and domestic beer isn’t that wide. The cost-per-ounce between domestic and craft is getting narrower. If you can raise that bar, it raises the whole category. And for a company like Anheuser-Busch, that helps them on both ends, but it’s going to help everybody.
It’s not like everything they’re doing is perfect, but it’s nowhere near what people are making it out to be. Sometimes it’s the complete opposite. The biggest thing I could say about the High End is that it’s a whole different thing from AB. You’ve got the core brands—Bud, Bud Light, all that—but that’s its own thing. The High End is like this separate organization that uses the resources of AB to grow the smaller breweries. But they’re on their own, for the most part.
The best thing I can recommend for any craft brewery: It’s easy to complain about the big guy, but, you know, be better. In any industry, there’s always going to be a huge player. It’s possible to compete; it just takes innovation and hard work. Too many of these breweries fall back on this idea that AB’s going after them or trying to shut them out. That’s just not the case.
There are always going to be big guys. There’s always going to be a big guy who’s in a way better position than you are. You have to be smart; you have to be innovative. That’s what all these breweries should be focusing on, instead of blaming AB for their problems.
*GABF rules say groups that own multiple breweries, whether packaging breweries and/or brewpubs, are limited to a total of 20 entries across all locations. The number of entries allowed per location varies every year; last year’s maximum was five. Had each brewery in the High End been allowed to enter the maximum number of beers at the 2016 GABF, 40 beers would have been entered into competition.
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