A Conflict of No Importance

The craft-beer business may have peaked. After a few decades of seemingly unending growth, a shake out has begun. The 101 North Brewing Company, after seven years, is the latest to cease operations. The brewery, located in Petaluma California a short drive up the road from Lagunitas (now 100% owned by Heineken) was too big to survive on its taproom alone and too small to leverage itself into the major beer distributors or taverns already crowded with craft-beer taps. Other brewers are scaling back and closing their brewpubs. Even Widmer Brothers, with the financial backing of Anheuser-Busch/InBev, has shuttered their restaurant. Those that have not already sold out to the giant beer manufacturers are in for a struggle.
Meanwhile, multi-national companies have lawyered up, fighting over accusations of false advertising and corporate espionage, stealing the secret recipes of the other’s beer-like products. (Anheuser-Busch once sold something they called “Bud Dry,” promoting its appeal as having no aftertaste!)

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Beer News

One of Molson/Coors/Miller’s beer factories

Everybody loves full-flavored craft beer. (Well, almost everybody; there are still a lot of Coors Light drinkers.) In the last couple decades, so-called craft beers have taken an increasing share of the beer market. Their percentage is still small, but it’s enough so the big guys have taken notice. MolsonCoors/MillerCoors, Anheuser-Busch InBev and others are marketing their brands as craft, e.g. Blue Moon, Shock Top. They also are busy buying up small breweries. Boulevard, Widmer, Lagunitas, Firestone-Walker are among the many dozens who have outside ownership.

Can you find the name Anheuser-Busch InBev anywhere on this label?

The craft-beer industry is maturing and entrepreneurial founders of breweries are looking to retirement or a payday – or may have investors who are – or have grand visions of expansion. The giant beverage companies are eager to add an admired brew to their roster of brands. A few, such as New Belgium Brewing (Fat Tire) have taken a different path: employee ownership. Others, like Full Sail, have private equity funds as owners. But as Boston Beer founder Jim Koch recently told a gathering of brewers, PEFs are not content with collecting a share of profits. They expect a “liquidity event” event within a few years, i.e. a sale for cash.

Try to find on the label or in advertising, though, who owns a brand. They want their consumers to envision hands-on entrepreneurs working with a tight group of enthusiast-employees. The giant beer companies believe that disclosing a brand’s corporate ownership spoils the craft-brewery cachet. So you won’t find any mention of it.

The Brewers Association has come up with a seal to identify independent brews. To be authorized to display the Independent logo a brewer must meet three requirements:

  • Small – Annual production of 6 million barrels of beer or less.
  • Independent – Less than 25 percent of the craft brewery is owned or controlled by an alcoholic beverage industry member that is not itself a craft brewer.
  • Traditional – A brewer that has a majority of its total beverage alcohol volume in beers whose flavor derives from traditional or innovative brewing ingredients and their fermentation. Flavored malt beverages (FMBs) are not considered beers.

The Brewers Association has on its CraftBeer.com web site a tool for finding craft brewers nearby. I tried the CraftBeer.com search tool for breweries near me. Included in the list that came up were Widmer Brothers in Portland and 10Barrel Brewing in Bend. Both had the notation “Greater than 25% ownership by Anheuser-Busch InBev.” (32% of Widmer and 100% of 10 Barrel)

This poster highlighting brewery ownership is from themadfermentationist.com. An ever-changing list is at craftbeerjoe.com.