The BS Arguments of Craft Beer Sell-Outs: How Brewery Buyouts Hurt Craft BeerPhotos via AB-InBev Drink Features Craft Beer Buyouts
Let me tell you who I care about, in the world of beer: I care about the craft beer industry as a whole. I care about selection and availability of great craft beer, and at night I dream of a world where great beer from independent breweries can be accessed just about anywhere.
That dream is currently under attack, primarily by so-called “Big Beer,” but not entirely. For all of the wrangling and shady dealing that AB-InBev and MillerCoors are conducting in the American beer market, equally disturbing is the propensity of beer geeks and even food & drink publications to rationalize and apologize for the buyouts and practices that are currently driving craft beer into the most dangerous situation it’s faced in more than a decade. In some cases, would-be allies are willingly parroting back the exact marketing copy that AB-InBev would love to place in their mouths. Other times, beer drinkers are simply accepting the bullshit reassurances of just-purchased breweries who have huge monetary incentives to be dishonest.
But don’t take our word for it. We’re not here to simply rant and rave—we’re here to give you specific examples of BS rationalizations you’ll see in the wake of every major brewery buyout. We’re here to point out the logical chasms and blatant hypocrisy that proliferate in the public response to buyouts. And we’re here to point out exactly why these buyouts are so capable of devastating the craft brewing industry.
Edit: Another great perspective can be found in Chris Herron’s (of Creature Comforts Brewing Co.) recent, extremely interesting essay in Good Beer Hunting, in which he’s arguing that brewery buyouts are less about the profit that can be made off craft brands, and instead linked to protecting AB-InBev’s legacy “premium” lagers.
First, let us simply acknowledge that apologist screeds, whether they’re coming from just-purchased breweries or publications, always have one thing in common: They skillfully and selectively choose to address some of beer drinkers’ concerns about brewery acquisitions, while conveniently ignoring others to which they have no satisfactory answers. When confronted with difficult questions, they fall back on straw man arguments without ever addressing the biggest problems with Big Beer’s desire to dominate every facet of the U.S. (and world) “craft” beer market. And if we, the passionate beer audience who care most about the health of this industry let them get away with it, how can we expect ANY brewery to remain independent in the long run? If craft beer drinkers don’t show that they care, we’re not exactly giving a compelling reason for not taking an AB-InBev check, are we?
This conversation has risen to the top of the beer industry jetsam once again recently, following AB-InBev’s acquisition (via their faux craft division, The High End) of beloved Asheville, NC sour-producers Wicked Weed, who have been a favorite brewery of Paste over the years. To say we were disappointed is a vast understatement, and although we’re sure the beer will remain just fine (more on that momentarily), there are so many other factors to consider. In the piece that follows, we’ll run through some of the BS rationalizations that have been made for brewery acquisitions, while referring at some point to this 2016 piece from Serious Eats, “What ‘Selling Out’ Allows a Craft Brewery to Do,” which I consider emblematic of the apologist attitude mentioned above.
Line of BS: “This buyout will allow access to new distribution networks and can get the beer to customers in new markets! You’ll be able to get our beer in more locations than ever before!”
Translation: Sure, at the expense of small breweries in those new markets, and local competitors at home.
It’s amazing to me how your average craft brewery can be so passionate about “supporting the industry” right up until the day of their buyout, and then suddenly turn the tables afterward and announce to their fans that one of the advantages of the sale will be “access to new distribution networks.” They are, in effect, asking people who drink their product to stop caring about any other brewery the second they do this. “Be happy for us,” the brewery asks. “Be happy that we’re entering new states. Sure, we’ll be doing so with the backing of AB-InBev, and yes, our product will be displacing small, independent breweries from tap handles and grocery store shelves, often via illegal pay to play tactics they’ve been caught for repeatedly, but the important thing is, it will be GOOD FOR US.”
Does a company like AB-InBev, when it acquires the likes of Wicked Weed, truly believe that the average, run-of-the-mill beer drinker in Asheville, NC, exclusively cares only about seeing Wicked Weed succeed? Do the owners of Wicked Weed believe their drinkers want to see only Wicked Weed thrive, rather than the several dozen other breweries that exist in that city? Because that’s the only person they’re making an appeal to, with “we’ll have access to new markets”—someone who has an intense desire to rationalize their local brewery’s choice to sell out. Go read that Anheuser pay-to-play settlement again, from only a couple months ago—it’s one of the largest ever at $400,000, but that money still means nothing to AB-InBev. It’s more efficient and profitable for them to break the law and pay occasional slap-on-the-wrist fines, rather than give craft beer a legitimate playing field. Now ask yourself: Why would you choose to support this, when you don’t have to?
It isn’t difficult to see the effects of AB-InBev’s faux craft portfolio in action. How many airport bars or neighborhood sports bars have you been at in the last two years that have been filled almost entire with AB-InBev-owned brands? They’re relying entirely on the consumer’s willful ignorance in knowing/caring which brands are owned by whom. The customer walks in, sees tap handles from Goose Island, Elysian, Wicked Weed, Golden Road, Four Peaks, Blue Point, Breckenridge, 10 Barrel, etc. Looks like a nice little craft selection, right? Except for the fact that the profits of every one of those places go straight to the coffers of AB-InBev, and are then levied against the rest of the craft industry.
Line of BS: “It’s a BUSINESS. The point of a business is to make money. Are they not allowed to cash out? What’s the difference between this buyout, and ____ other buyout?”
Translation: “We desperately want you to pretend that every single buyout should be treated equally, regardless of the company’s reputation.”
This is one area where I diverge from the Brewers Association’s rather limited perspective on what does and does not constitute “craft beer.” In their eyes, Founders Brewing Co. selling a 30% stake to Spanish brewing conglomerate Mahou-San Miguel—who have basically no presence in the American beer market of any kind—is the same thing as Wicked Weed’s 100% buyout by AB-InBev, which produces the most widely consumed beers in this country. I don’t think it should be too complicated to understand why these two cases are significantly different, and it shouldn’t be treated as absurd that the consumer would thus perceive the two “buyouts” differently as a result. Put bluntly: One brewery sold a portion to a company that isn’t actively undermining the craft beer industry in the U.S., and one sold a 100% stake to a company that is the single biggest threat to the success of that industry. These things are not equal.
Should a 30% stake to a Spanish company with no presence in U.S. beer really be considered the same as a 100% buyout by Anheuser Busch? We say no.
This is all to say the following: Yes, it makes perfect sense as a consumer to treat one buyout as different than another, and it doesn’t make you some kind of hypocrite to examine these breweries on a case-by-case basis. And likewise, it’s not unreasonable to expect craft breweries that care about the industry to find a non-AB-InBev or MillerCoors solution to finding investment or cashing out.
It should go without saying that it is the right of these companies’ founders to eventually sell the brewery they worked to create, but recent years have demonstrated a variety of alternative routes that breweries both large and small can take in order to do so. Look at Oskar Blues and Cigar City, which both became part of Fireman Capital’s United Craft Brews LLC company. St. Louis’ Schlafly (Saint Louis Brewery) was able to find local investors when they sold out, in the form of Sage Capital. Victory Brewing Co. and Southern Tier joined forces to form Artisanal Brewing Ventures with Arbor Investments. And on a smaller level, Stone Brewing Co.’s True Craft program intends to invest its $100 million fund specifically into small breweries looking for investment of less than 25% of their companies, with a stated goal to “allow brewers to continue to operate independently without having to borrow from banks, sell to traditional venture capitalists, or sell to multinational conglomerates.”
What do all of these alternative sources of investment/buyouts have in common? Well, as far as we know, none of them are making campaign contributions to your local state rep/state senator in exchange for opposing any forthcoming, pro-craft beer legislation in your state. This is why ownership matters. If you’re a Georgia resident, and you’re wondering why the state is JUST NOW, for the first time, able to sell you a pint of beer at a local brewery, look no further than local lobbying from AB-InBev and the distributorships that are in bed with them.
Here are some eye-opening numbers. In North Carolina, where Wicked Weed just sold to AB-InBev, the N.C. Beer & Wine Wholesalers Association has contributed a total of $696,462 in lobbying in the last three state election cycles. The Craft Brewers Guild, on the other hand? A total of $13,000. Is it any wonder that HB500, a craft beer bill designed to modernize the state’s beer industry and increase the self-distribution cap, just had all of its most important provisions stripped out, despite support from the public and the breweries? How can small, independent breweries stand up to that kind of lobbying to state reps who don’t care about public opinion or supporting small business?
To quote the statement from Craft Freedom, a coalition of N.C. breweries that were supporting HB500:
“We are disappointed with the outcome of today’s ABC Committee Meeting. The barrel cap & franchise reforms were stripped from HB500 before the vote to pass it. But, our fight continues… We are especially disappointed that some members of the General Assembly would side with an established foreign beer distribution cartel that has a long history of back room political deal making. It appears that backroom political pressure is more important than public opinion or fighting for North Carolina small businesses.”
So in short: Sell your company whenever you want, but don’t pretend that AB-InBev or MillerCoors are the only avenues to do so. Breweries like to couch this choice as “We’d rather be owned by ‘beer people’ than banks or private equity, because they understand our industry better,” without acknowledging that the reason AB-InBev “understands the industry better” is that they have plenty of (occasionally illegal) experience in attempting to crush their craft competition. So it would be more truthful to say “We’d rather be owned by someone willing to apply their unique brand of ruthlessness and anti-craft fervor in a way that benefits us,” but that doesn’t sound quite as pleasant.
Line of BS: “As long as the beers don’t change, what’s the problem?
Translation: “Please judge us exclusively by this standard, given that we have no answers for your other concerns.”
The single biggest, most common deflection of any concern a craft beer fan espouses over brewery buyouts is to simply make this promise: “Our beer won’t change. Don’t worry! Your favorite thing will remain the same, so please allow this to placate you entirely.”
Nevermind the fact that the company’s profits will now be channeled toward the shady practices cited in our response to the two previous lines of BS. This is the “best practices” reply that breweries purchased by AB-InBev have come to realize gets them off the hook with the greatest number of fans—simply ignore all serious criticism, and cherry-pick any opportunity to respond to accusations that “the beer will change.”
Let’s get something clear, here: The people at AB-InBev and MIllerCoors are not stupid. They have long since realized that actually trying to mess with what these craft brewers are creating is a bad strategy that comes with negative headlines. They purchase successful companies with well-liked core beers, and they allow those core beers to remain relatively unaffected—even if they do often transfer production of them off-site to AB-InBev mega facilities. But in general, issues of “beer quality” are the last thing that craft beer fans need to be concerned about.
This has admittedly been rather difficult for many beer geeks to wrap their heads around. We feel righteous anger when beloved breweries such as Wicked Weed are bought out, but we give those companies constant escape routes for accountability when we claim that the product will now be “watered down” or magically changed into swill within a month. In doing so, we’re tacitly admitting that the only bar they should have to pass is keeping their product tasting the same, when in reality that should be the assumption in 2017, rather than some kind of exception.
By way of illustration, allow me to post the text of several questions posed to Wicked Weed’s Facebook page in the immediate wake of their buyout. Let’s see which ones get answered. You can see every one of these comments on the initial buyout post.
Facebook commenter: “Good business move, but let’s see the quality of the products. Mass production doesn’t typically bode well for quality. Hoping for the best.”
Immediate Wicked Weed response: “Our beers will continue to be made here, with the same attention to detail as always.”
Facebook commenter: “Quality is only one issue. AB-InBev fights craft brewers at every turn. Their endless amounts of cash lobby heavily in politics to keep their stranglehold on the market. Wicked Weed is basically throwing the middle finger at all other craft brewers who are trying to carve out a niche outside of big brother brewing co.”
Wicked Weed: …no response.
Facebook commenter: “Interesting how some throw around terms like haters & hipsters in their responses to the anti-AB-InBev backlash. Somehow they don’t seem to grasp why craft beer fans don’t like to give their money to a multinational who uses their huge financial clout to lobby for anti-craft legislation, engages in shady business practices, markets & promotes an anti-craft message, and snaps up beloved local breweries ….all in an effort to crush the competition. It’s not capitalism. It’s cronyism.”
Wicked Weed: …no response.
Facebook commenter: “Sounds like the High End team has you spouting all the things I heard from other breweries that sold out. “The opportunity to prove that to you”. “Good for your staff”, “product will remain the same”. Sorry guys, I’ve spent a lot of money on your beers at our bar in Denver. Actually have two taps on right now. Unfortunately, we will be giving said beer away today as we don’t sell Bud or Bud products. They are destroying craft, not elevating it. Sad day for me.”
Wicked Weed: …no response.
Facebook commenter: “No wonder we never heard from you when we were pushing for HB500. All of us in this state fighting for reform and cutting out the conglomerates. So now it’s your money that paid the politicians to strip our bill and the smaller guys can’t flourish and create more jobs in our local communities.”
Wicked Weed: …no response.
Facebook commenter: “I hope AB only helps in distribution, and doesn’t inhibit your creative process.”
Immediate Wicked Weed response: “Our creative process will be staying the same, quality will always be our number one priority!”
Facebook commenter: “I think you need to consider the motives of their new parent company. Of course WW will have more cash and exposure now, but at what price? AB InBev actively pushes smaller craft breweries off of store shelves and distributor lists so they can control as much of the market as possible. They’ve recently been fined for pay-to-play schemes. The worst part is WW will now be one of their major instruments in pushing other up and coming breweries off the shelves.”
Wicked Weed: …no response.
Facebook commenter: So Wicked Weed, do you back InBev’s lobbying for laws stifling craft breweries? Are you going to join them in pushing non AB brands off their distributors portfolio with money? And their aggressive tactics in buying out shelf space from other brands distributors? Because that’s the family you’re a part of now.”
Wicked Weed: …no response
Would you say that we’ve officially established a pattern at this point?
Line of BS: “We have the same team running the company and making the beers.”
Translation: This is just the human extension of “the beers won’t change.”
As with the previous line of BS, this one relies entirely upon the consumer simply not caring about the industry as a whole, and instead having a more personal form of loyalty or attachment to the brewery that sells out—not to its products this time, but to the people making the product. Once again, Big Beer is hardly stupid. They’re not going to insert their own brewmaster or CEO into a company they acquire, as long as they don’t have to. It’s much easier to get fans of the purchased brewery to accept the new ownership if the original owners are still present as figureheads whose job has become repeating variations on “Don’t worry, everything will be fine.”
Look no further than Elysian Brewing Co.’s Dick Cantwell for the ultimate illustration of how even a founder who doesn’t want to sell his brewery to AB-InBev can end up being forced to not only sign that piece of paper, but be contractually required to remain and put a happy face on things for a period of time. When Elysian was sold out from underneath him by his partners in 2015, against his wishes, Cantwell had literally no say in the matter. Moreover, in a lengthy interview with Good Beer Hunting, he explained that AB-InBev tried to get him to agree to stay for at least 2 years after the transaction, obviously knowing that having the original owner on hand would be good for PR purposes. It was only thanks to a poorly considered “30-day out” clause that Cantwell was able to escape from the company he founded and begin sharing stories with the world of how he had been wronged. As he said in an email to Washington Beer Blog:
The tenor of the deal, mainly from the point of view of my former partners and me, was such that I can’t possibly work with them into a future of any duration. My concerns were never even considered as a factor of whether we should or shouldn’t. From the start it was me against everyone else, with no regrets expressed. Enough about that. In the past few months AB has treated me with consideration and seriousness, and they’ve presented me some pretty exciting future possibilities, should I be able to see my way clear to working for them. But I can’t. I am a craft brewer, past, present and future, no matter what I end up doing.
And as he theorized to Good Beer Hunting, about why AB-InBev would want to acquire so many mid-sized regional breweries:
“I think their thought is probably—and this is not anything I heard from them—the ability to clog up a full length of tap handles or shelf space with these other brands, so that it will look like there’s a big choice when, in fact, it’s all under one corporate umbrella.”
As a result, it’s no surprise that the craft community has since hailed Cantwell as something of a folk hero; the iconoclast who wouldn’t simply remain silent and instead chose to leave. That stands in stark contrast to say, Todd Usry of Breckenridge Brewery in Littleton, CO, which was acquired by AB-InBev at the end of 2015. Here’s what he told the Denver Post, a mere 10 months before his brewery was sold to AB-InBev:
“The big thing to me is, the craft beer industry was built on individuals and their stories,” Usry said. When craft breweries sell out, “I think there is some serious authenticity that is lost, and that the brand loses,” he said. “We’re not corporate. We are entrepreneurial and individual.”
Usry, like others, is concerned about the business ramifications of big-beer buyouts. “It’s going to be harder and harder to get our voices heard at the wholesale level,” he said. “It’s hard enough for craft beer in general to get meetings with big chain buyers. Now, AB can go in and pitch Elysian.”
Guess who stopped caring about “the business ramifications of Big Beer buyouts” the second his company was owned by Big Beer? One Todd Usry. In fact, he even remained a board member in the Colorado Brewers Guild regardless of the fact that he was now working for AB-InBev, a move that was so distasteful to the state’s independent craft breweries that 14 of them immediately split away from the Colorado Brewers Guild to form a new guild for the promotion of craft beer in their state, Craft Beer Colorado. This organization included such big figures as Left Hand, Oskar Blues, Great Divide, Funkwerks, TRVE and New Belgium, the biggest craft brewery in the state. And it worked—their presence was apparently missed, to the extent that five months later the two companies recombined back into the Colorado Brewers Guild, with a significant change to the rules structure. To quote Porch Drinking:
One of the many major changes that stems from this newly formed group is the exclusion of corporate breweries like Breckenridge and only allowing craft breweries under the Brewers Association’s definition of producing 6 million or fewer barrels of beer a year and are owned no more than 25 percent by non-craft-beer interests.
Breweries like Breckenridge no longer qualify as craft, but they still crave the appearance of authenticity they chose to give up, along with the massive market advantages of being owned by AB-InBev.
Usry, naturally, seems bitter. He, and other brewery figuredheads who are piloting ships now owned by AB-InBev, want to be treated as part of their local communities in exactly the same way as they were before selling out. They get used to status as beloved local figures, but can’t (or choose not to) understand why members of the community might no longer choose to recognize that status once they’re actively working against the interests of the community. They take offense at the idea that any local beer drinker might care more about the virility of the scene as a whole than the fortunes of their own brewery. But how can you venerate a Colorado brewery when they’re now owned by the same company that fought for YEARS to prevent beer stronger than 3.2% ABV from being sold in Colorado grocery stores? To quote Usry in Westword, before he was replaced in the guild:
“People told us we are not welcome at the table,” he says of the Colorado guild members who formed their own organization. “Basically, what happened is that they took their ball and went home. Whatever happened to competition?”
My god. The irony. The hypocrisy. It’s luminous! You have the gall to say “whatever happened to competition” when you’ve joined up with a company doing absolutely anything in its power, be it legal or not, to impede legitimate competition? You say that when your beer is largely being distributed through AB-InBev distributors, which were given monetary incentives by the company to push your product, rather than beer from independent craft breweries until the Department of Justice defanged the program? That’s the literal opposite of competition, sir. That’s more like challenging someone to a fight, and then showing up with a team of hired goons who beat the hell out of your opponent before you step in to deliver the coup de grace.
Over in L.A., Golden Road Brewing president Meg Gill is apparently experiencing the same type of cognitive dissonance over the continued beer geek reaction to Golden Road’s 2015 AB-InBev buyout. Despite the backing of a corporate giant, and her own TV show Beerland on Viceland with an oily corporate sheen, Gill has encountered constant pushback from beer geeks, who most recently have organized in Oakland to oppose the construction of a satellite Golden Road location in their city, with some success. This has led to Gill attempting to distance the image of her company from its corporate masters, at times reportedly claiming that Golden Road wasn’t truly associated with AB-InBev, and claiming that she is being personally attacked for being successful. According to the East Bay Express, she’s even adopted some Trumpian vocabulary:
In fact, she suggested more than once that Golden Road wasn’t really even associated with Anheuser-Busch, even telling a group of residents on Wednesday that “non-factual opinion columns” are trying to paint Golden Road as part of Anheuser-Busch, and that such reports are — her words — “fake news.”
From Gill: “I think that your articles are abusive. I think that you’re incredibly discriminatory against a successful businesswoman who has done well, partnered with a big beer company, and is now wanting to build in Oakland, just like Rare Barrel or any of these other guys,” she explained.
Sorry, Meg, but you don’t get to have it both ways. Just like Todd Usry and Breckenridge, once you choose to sell out, that’s something you have to live with. We actually like Golden Road’s beer over at Paste, but there’s absolutely nothing “fake news” about reminding people of who your ownership is, and what your ownership’s business practices are. Being reminded of how AB-InBev behaves is exactly what you signed up for when you accepted that check for an “undisclosed sum,” and gender of all things couldn’t possibly be of any less relevance to the story. The people of Oakland are speaking clearly, as is their right: They don’t want your brewery in their neighborhood. They’re allowed to care about your ownership. Accept their right to give a shit.
Remember the Serious Eats piece I referenced about 3,000 words ago? It’s this one, and it runs through most of the lines of BS cited in this piece, while offering token analysis—the appearance of considering the craft beer side of the equation, while in reality simply printing AB-InBev’s perspective on every issue, straight from the mouth of Felipe Szpigel, president of Anheuser’s The High End division.
We go through “Are they watering down the beer?” first of course, because it’s always the most easily defensible position. The author cites Facebook posts from beer geeks bemoaning that “there goes the flavor,” which serves to make those beer geeks look overly emotional and mistaken, given Szpigel’s assurances that nothing will change at any of the breweries they acquire. We then launch into “Are the people working at these breweries happy?” And wouldn’t you know it: The people who accepted buyouts and are still working at those breweries have nothing but good things to say about The High End! Can you believe that? Who would have expected these guys who sold their companies for millions of dollars to report that they’re ever-so-fond of their current bosses?
Now, let’s see: Who doesn’t this article seek commentary from? Is there a comment from the Brewers Association, perhaps? No, it doesn’t have that. Perhaps a quote from a single independent brewer in response to anything Szpigel says? Nope, doesn’t have that. Well, did the author speak with a single person from any of the acquired breweries who isn’t still with the company? NOPE. After all, why talk to Dick Cantwell when you can talk to Meg Gill or an AB-InBev representative, right?
Instead, he simply notes the existence of those dissenters, from Cantwell to Ballast Point founder Jack White (who also walked away from the company with three other executives after it was acquired by Constellation Brands) in a single paragraph, without apparently making any attempt to interview them, effectively reducing those people to caricatures of eccentric, unrealistic outsiders who couldn’t just accept a check and keep their mouths shut. The author doesn’t personally speak to a single person who doesn’t have an immediately obvious monetary incentive for agreeing with everything coming out of Szpigel’s mouth. If I did this as a writer, in a piece that was ostensibly “trying to get the full story,” as the author puts it, I would expect to be called out on it.
The piece asks the question “Does anything actually improve when Big Beer buys you?” to breweries that sold out, instead of the question it SHOULD be asking: “Does anything get worse for every other brewery in your industry?” Because the answer to THAT question, of course, would be “yes.”
Perhaps unsurprisingly, the author of that piece currently has bylines frequently appearing at two recently launched “craft beer” blogs (October, and The Beer Necessities, recently criticized by Beachwood Brewing ) that are financed by—you guessed it—The High End and AB-InBev. Although the same guy produces excellent craft beer content elsewhere on the web and in print, doesn’t contributing freelance work to a website literally owned by AB-InBev almost necessitate the need for some sort of asterisk next to a writer’s byline? Or are we the draconian ones here, for daring to care about the fortunes of independent craft brewers?
Line of BS: “This buyout will allow us access to new malt and hop contracts that we could never pull off before.”
Translation: Once again—sure, but at the expense of the entire rest of the industry.
It’s no secret at this point that one of the most limiting aspects of innovation these days within the cutting edge of the craft beer scene is access to hop contracts for elusive and popular new varietals. There’s just only so much Citra or Galaxy to go around, and if you can’t get it, good luck keeping that award-winning IPA flowing. Even newer, more limited varietals are fun for brewers to play around with, but their popularity is a double-edged sword: You can make a great IPA with some brand new, experimental hop varietal from New Zealand or Germany, but never be able to replicate that beer again if it’s a huge success.
Breweries within AB-InBev’s The High End get an immediate big advantage here, given their access to hops from Anheuser’s Elk Mountain hop farm, the largest contiguous hop farm in the world at more than 1,700 acres. There, AB can grow the popular varietals that breweries such as Golden Road, Elysian and Wicked Weed will covet for their IPAs. But of course it doesn’t stop there—craft breweries are right to be nervous about the possibilities of AB-InBev encroaching upon the rest of the raw materials supply chain in the future. Antitrust law might make it difficult for the company to snap up major U.S. hop farms in Yakima Valley, but only weeks ago we were given a taste of InBev flexing its control of resources on an international scale, when it leaked that they would be holding on to the entirety of the South African hops market, rather than allowing any of it to be sold to American craft breweries. The news broke and spread after a memo from South African independent hops distributor ZA Hops was leaked, revealing that the surplus hops they previously sold to American craft breweries would not be made available to them by AB-InBev, who owns the farms after acquiring them in its international merger with SAB-Miller.
Kiss those nouveau South African hop varietals goodbye.
Granted, in all fairness, AB-InBev primarily cites a significantly reduced 2016 hop crop as the reason for these hops being withheld, and they do OWN THE HOPS, but that does little to placate the small American craft brewers who will no longer be able to purchase these new varietals, which are widely considered some of the most exciting and groundbreaking of new hop styles. Hyped IPAs made with South African hops had already been on the U.S. market from the likes of Cellarmaker, Russian River, Great Notion and Proclamation Ale Co., who all took to Twitter and Facebook to tear AB-InBev a new one in response. The idea that brands within The High End may have access to these hops, while small, indie craft breweries did not? Well, that didn’t sit well with folks.
Next time you consider buying beer from AB InBev & their zombie breweries, we hope you’ll take this extreme dickishness into consideration
— Modern Times Beer (@ModernTimesBeer) May 10, 2017
Personally, I would argue that the appearance of “extreme dickishness” is only amplified when you look at a quote that appears in the Serious Eats article we’ve previously been discussing. From former Goose Island brewmaster Brett Porter, who now works as director of craft innovation and brewing for The High End: “We have unprecedented access to more hops and malt than we ever did before. I feel like a kid in a candy store!”
Such an apt metaphor, is it not? Porter and the breweries at The High End are running around in a candy store shopping spree. Meanwhile, the doors to the candy store are padlocked, and there are about 6,000 independent breweries waiting outside, with their faces smashed up against the glass, watching the shelves be ransacked. But don’t worry, says Szpigel in the same piece, it will all be okay.
“What do we have? Five percent of the craft market?” he retorts. “It would be impossible for us to control [the market for all] these hops.”
The market for “all these” hops? Yes, it’s unlikely that AB-InBev will be able to control that. The market for specific, rare, sought-after varietals? Such as those from South Africa, for instance? That’s a different story.
A little while back, in an unrelated interview I was conducting with the owner of a thriving Georgia brewery, talk turned to the company’s extremely popular flagship IPA. Right now, the brewery’s single biggest challenge is ramping up production of that IPA. And it’s not because they’re out of capital for investment, or because they’re out of tank space for production. It’s because they can’t increase the amount of hops they have access to fast enough, in the necessary varietals. There’s simply no more of that hop to be had. And if AB-InBev is able to acquire some of the farms producing that varietal internationally? Then things for this Georgia brewery will only become more dire.
Where does Paste stand?
After going on for 5,000 words on our perspective on these lines of BS that both the brewery sell-outs and the apologists are fond of, our position should probably be pretty clear. But in case it somehow isn’t, I’ll sum it up more tidily.
We, at Paste, support the craft beer industry as a whole. We support the Brewers Association’s aims to prop up the dreams of small, independent breweries, and we support the quixotic goals of those little breweries, provided they’re making good beer.
We understand that brewery owners eventually sell their companies. Not everyone has a child in waiting who wants to take over the family beer business. But we have serious problems, enumerated above, specifically with selling out to certain international conglomerates, such as AB-InBev, or MillerCoors/Molson Coors, which continues to operate independently in the U.S. and acquire former craft breweries of its own. These concerns are rarely based on “quality of the beer,” but instead are the result of the underhanded business tactics (such as AB-InBev’s recent pay to play infractions and fines) and political lobbying against craft beer interests.
Does this mean we refuse to ever drink any of the beers owned by AB-InBev or MillerCoors ever again? No, actually—but it does mean that, by and large, we won’t pay for them, or put money into the coffers of these companies. We have accepted, and will continue to accept beers from AB-InBev and MillerCoors breweries into our monthly blind tasting series, because it’s the fair thing to do. If we didn’t, then someone from The High End would have a legitimate gripe that Paste wasn’t willing to recognize quality for the sake of quality, and that ain’t true.
Case in point: Heal the Bay, an IPA from AB-InBev-owned Golden Road Brewing in L.A., was #21 out of 247 the last time we blind-tasted American IPAs, landing in the finals alongside stuff from Tree House, Trillium and The Alchemist. Goose Island’s classic Bourbon County Stout recently landed at #5 out of 144 barrel-aged imperial stouts in our February tasting. This is objectivity in blind taste testing—admitting when an AB-InBev owned brewery is making a delicious product. But simultaneously, we reserve the right to publish pieces like this one, pointing out what we see as duplicity in how these buyouts are presented to the public. That’s balance, as we see it.
In the end, we’re on the side of craft beer. And that’s all you really need to know. And unlike Wicked Weed, we won’t post the following on social media, and then sell out to that company a couple years down the line.
Jim Vorel is a Paste Magazine staff writer and beer obsessive. You can follow him on Twitter for much more beer content.