A Campaign of Confusion
Eckhardt’s words inspired Mitch Steele, then one of Anheuser-Busch’s specialty brewers and now brewmaster at Stone Brewing Co., to write a letter to the editor. Steele first set about correcting some of Eckhardt’s claims about the technical aspects of brewing at Anheuser-Busch, after which he said this of contract brewing:
“We don’t take issue with contract brewing—we just think beer drinkers have the right to know who really brews their beer. We, along with many other traditional brewers and beer enthusiasts, object to those who mislead consumers by marketing their beers as “craft brewed,” when in fact their beers are made in large breweries.”
Though Anheuser-Busch was an unlikely proponent for such a position, it was one that was shared by many. One of the first websites devoted to craft beer was RealBeer.com, which was formed in 1994. The page’s about section from 1997 described how the site was formed to promote real beer, which stood in stark contrast to what Eckhardt called “industrial beer.” When it came to the latter, the site had this to say:
“In fact, the Industrial brewers have already telegraphed strategies to enter the segment through acquisition or through a campaign of confusion or both. We take a neutral position on the actual marketing battle, but, as staunch consumer advocates, aggressively campaign to deconstruct strategies and messages that we feel are counter to the proliferation of the craft movement in all its diverse forms. Because big brewers have larger budgets, their messages are more accessible, and therefore more often the subject of our newsletter editorials.”
This “campaign of confusion” was of concern to beer drinkers and brewers alike. In an interview with All About Beer in 1997, Bert Grant, who founded the nation’s first brewpub following Prohibition, was asked what the worst thing was that he had witnessed in the industry: “The worst thing is the proliferation and prosperity of beers pretending to be craft-brewed beers,” he said. “We really need some ‘truth in advertising.’”
The Bubble Bursts
In the late 1990s, the craft beer market continued to grow. The problem, however, was that it was not growing as rapidly as it did in the early ’90s, and that this much-smaller growth was shared among many more breweries. To put it simply, the bubble burst and many breweries closed their doors around the turn of the century.
In “The Shape of the Beer to Come,” which appeared in the November 1998 issue of All About Beer, Greg Kitsock offered up some thoughts about where the industry was headed. He noted that in 1997, five of the country’s top 10 craft brewers lost volume. Layoffs and shutdowns plagued bigger breweries like Redhook, Pyramid and Pete’s Brewing Co., which saw a 15% decline in sales that year. If these problems plagued the larger, more regional craft breweries, you can imagine how small breweries were affected.
When craft brewers were thriving, the big brewers responded by either acquiring other breweries or brewing specialty beers themselves (whether they advertised them as their own or not). It’s not surprising, then, that as soon as craft beer sales started to slip, the big brewers ditched their own specialty beers, as Kitsock pointed out: “Miller’s Lowenbrau Marzen and Premium Pils sank with barely a ripple. The Jack Daniels Distillery axed its line of specialty beers at the end of 1997. Latrobe Brewing Co. in Latrobe, PA, will probably write finis to its Latrobe Pale Ale, Bohemian Pils and Bavarian Black.”
“The craft beer segment is in such disarray that it’s not wise [to back these specialty beers],” Latrobe marketing director Brad Hittle told Advertising Age back in February. Anheuser-Busch quietly retired its American Originals line, preferring to bank on the less assertive Michelob specialty family.”
Kitsock also suspected that mergers and buyouts would continue, citing the sale not only of Pete’s Brewing Co., but of smaller operations across the country as well. It was a matter of math, according to Kitsock: “Right now, there are 1,300-plus small breweries in the country and a pie that’s not growing fast enough to feed every mouth.”
He was right about that, of course, as well as several other predictions—even if they might have taken a while to really come to fruition. Credit to Kitsock for, in 1998, predicting that craft brewers would start brewing lagers and putting their beer in cans.
The More Things Change…
A lot has changed since those early discussions over what was and was not craft. Molson and Coors merged in 2005 and formed Molson Coors Brewing Co., which just two years after that entered into a joint venture with SABMiller to form MillerCoors. MillerCoors still has a specialty line of sorts through its Tenth and Blake Beer Company, which is the brewery’s craft and import division. Included in this division are brands like Blue Moon Brewing Co., Leinenkugel’s, Batch 19 Pre-Prohibition Style Lager and Henry Weinhard’s. In 2011, Tenth and Blake purchased a minority share in Terrapin Beer Co. MillersCoors also introduced a new specialty brewing group in 2007 called the AC Golden Brewing Company.
After two decades, MillerCoors is still committed to marketing Blue Moon as a craft beer—even suggesting that it is crafted in local markets (it’s unclear whether the image below was produced by MillerCoors or one of their distributers).
Anheuser-Busch hasn’t been quiet over the last few years, either. In 2008, they were acquired by InBev, which resulted in the wholly-owned subsidiary Anheuser-Busch InBev or “AB InBev.” And InBev was itself the product of a merger between Belgium-based Interbrew and Brazil-based AmBev in 2004. Also in 2008, the Craft Brew Alliance was formed when Red Hook and Widmer Brothers—once competitors—merged together. AB InBev owns 32.2% of this alliance, which also includes Kona Brewing Company and Omission Beer.
AB InBev made news in 2011 when they acquired Chicago’s Goose Island Brewing Company. In early 2014, they purchased Long Island’s Blue Point Brewing Company; in late 2014, they announced plans to purchase 10 Barrel Brewing Co. in Bend, Oregon.
Just as they did in the ’90s, Anheuser-Busch continues to brew their own crafty beers as well. The main difference between then and now is that they no longer campaign for the transparency they once were so passionate about. The Shock Top line and Land Shark Lager are brewed by Anheuser-Busch, even if their websites tell you they are produced in St. Louis, Missouri by Shock Top Brewing Company and Margaritaville Brewing Company, respectively.
What is Craft Beer?
This debate, which has clearly been going on for the last two decades, has now reached fever pitch, at a time when there have never been more craft breweries in the United States. Back in 1996, the Institute for Brewing Studies changed the definition of craft brewer so that it included an “ownership test that would exclude several well known breweries, such as Celis, Grants, and Shipyard, that have been acquired by large companies” (Market, p. 30).
The Brewers Association has changed its definition several times in recent years as well. For many years, the association said that a craft brewery was one that produced fewer than two million barrels of beer a year. In 2011, they upped that cap to six million when Boston Beer Co. threatened to eclipse the two million barrel mark.
They changed the definition again in March of this year, expanding upon their basic tenants that a craft brewer is small, independent and traditional. Accompanying their “Craft vs. Crafty” press release in 2012 was also a list of non-domestic craft brewers that included the usual suspects (Blue Moon, Shock Top, Leinenkugel’s) as well as a handful of brewers that violated the “traditional” aspect of the definition due to having flagships that were brewed with adjuncts. August Schell Brewing Company, the nation’s second oldest family-owned brewery behind Yuengling, responded to say that in addition to their adjunct lagers they also brewed a host of traditional styles. And so it was that in 2014, the Brewers Association again changed its definition to reflect “that adjunct brewing is quite literally traditional, as brewers have long brewed with what has been available to them.” As a result, August Schell is now once again a craft brewer as defined by the Brewers Association, as are bigger breweries like Yuengling and Narragansett.
As David Edgar pointed out in the aforementioned “Craft Brewing: Fastest Growth in the Industry,” 1994 was a year that saw the big players make significant moves in the craft or specialty beer market. Anheuser-Busch acquired Red Hook in 1994, and it was also then that the “big three” introduced their own crafty styles through specialty lines like Anheuser-Busch’s Specialty Brewing Group, Miller’s American Specialty and Craft Beer Co., or Coors’ UniBev, Ltd.
And while much has changed in the last 20 years, the approach that big brewers are taking in regards to the craft market has not. With craft breweries again making up a significant portion of the market, big brewers continue to compete by either acquiring established brands (as Anheuser-Busch has done with Goose Island, Blue Point and 10 Barrel) or producing their own brands and marketing them under non-existent breweries (as in Shock Top Brewing Co., Blue Moon Brewing Co., Margaritaville Brewing Co., Band of Brewers, etc.).
The difference in today’s climate and that of the mid-to-late ’90s is that—though we still talk about saturation points—craft beer is here to stay. But what, exactly, is craft beer?
Twenty years later, and we’re still trying to figure that out.