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What ‘Selling Out’ Is Actually About

On September 6, 2016 - 80 Comments -

Anheuser-Busch InBev is in the midst of a PR push, the goal of which is to soften resistance to their craft brewery acquisition strategy. Sadly, credulous beer writers aren't asking any of the right questions, so I feel a need to respond.

The sacrificial lamb in this takedown is Aaron Goldfarb's recent piece for Serious Eats entitled, "What 'Selling Out' Allows a Craft Brewery to Do.” I'm picking this one because it covers most of the bases on this issue, which makes it convenient.

I apologize to Aaron in advance because he’s sorta conscious of the fact that he's being manipulated, but he simply doesn't know enough about the beer business to understand exactly how. I don’t mean to pick on him; there are plenty of other similarly problematic articles I could have chosen. Hell, when I was a freelancer, I would've gladly cooked up a story about how to construct a helicopter from discarded sex toys if someone had offered me twenty five cents a word to write it. But I’ve heard the misinformation in this piece repeated too many times to ignore, so here goes.

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I'll take the arguments one at a time:

1) Claim: Moving production of core brands from acquired breweries to ABI's plants improves their quality. Goldfarb says ABI's plants are being "retrofitted specifically to handle craft beer in ways that the craft breweries themselves simply couldn't afford back when they were independent operations. InBev's added a Super Sack system...hop backs...conical tanks, and more cellaring space.” Other items cited are a mash filter, centrifuge, and tasting room.

Problem: None of the items listed are unaffordable to independent craft brewers and none of them are related to quality. Many craft brewers have Super Sack systems: they cost about $25,000 and do nothing to improve quality, although buying specialty malts in Super Sacks does reduce their cost slightly. Likewise, many craft breweries have hopbacks; I paid about $3,000 for mine. Most breweries don't bother with them, however, because it's generally understood they don't do a better job of imparting hop flavor and aroma than whirlpool additions. And "conical tanks"? What brewery doesn't have conical tanks? Literally every single brewery can afford conical tanks. What about "more cellaring space"? You mean, like, renting a building? Likewise, mash filters, centrifuges, and tasting rooms are all relatively common at mid-sized independent breweries. This is just a list of random words meant to give the appearance that the argument has substance. ABI is spinning minor logistical adjustments as proof of their commitment to quality. Anyone who has worked in a brewery can see that this is bullshit.

Side note: Calling ABI "the best lager makers around" is like calling Kraft the best cheese makers around; allowing that statement from Blue Point’s president to go unquestioned is bizarre.

2) Claim: ABI is investing in the breweries themselves with the goal of improving quality, which they couldn't have done on their own. Goldfarb writes, "It gave 10 Barrel $10 million to buy six new 400-barrel tanks, for instance, and it's helping Blue Point open a new 40,000-square-foot facility housing brewing and packaging operations, a tasting room, and office space. Collectively, these improvements have led to the production of more consistent flagship beers for many of ABI's craft breweries."

Problem: Anyone who has ever worked on the business side of brewing would immediately see the problem with the first part of this claim: 400bbl tanks cost around $100,000 each, so six of them won't add up to $10 million. Failing to notice the huge discrepancy between the dollar amount listed and the cost of the alleged purchase is indicative of the overall lack of industry knowledge throughout this piece and many others like it. It may seem like a semantic issue, but it means the author isn't equipped to dig into ABI's claims with any authority. The second problem is a larger point and it's one that gets repeated both throughout this article and many others: the idea that the breweries who sold couldn't have expanded without macro-beer financing it. This is bullshit, too. Goldfarb cites Bluepoint's 40,000 sq ft expansion, but I can think of literally dozens of independent craft breweries that have expanded far more aggressively than Bluepoint (Modern Times included) without ABI's money. But the breweries who have sold and the beer writers who accept their excuses without question would have you ignore this obvious reality because it undercuts an excuse that tends to go over well with the public.

3) Claim: Macro-brewers have made hops available to the breweries they've purchased which would otherwise be unavailable to them.

Problem: Virtually all hops, and certainly all of those cited in this article, are available to any craft brewer willing to plan ahead and contract accordingly. Modern Times is a mid-sized, rapidly growing brewery that almost exclusively uses highly sought-after hops in very large quantities, and yet somehow, without the help of ABI's private farm, we have more than enough hops contracted to see us through the next 7 years of extremely aggressive expansion. We are hardly the only ones who can say that. Hop contracting takes some work, but no one needs the help of macro brewers to get what they need or want.

4) Claim: Macro-beer's money gives acquired breweries access to capital they could not have gotten otherwise, and this money is spent on experimentation. Goldfarb writes, "Before Golden Road was acquired, in September of 2015, Gill and her two partners were relying heavily on small-business loans from Bank of America Merrill Lynch. That meant money was always tight and had to be used strictly to help the brand grow; there were no resources for experimentation."

Problem: There are several, but the first is simply a failure of journalism. If Goldfarb has simply asked Gill who those partners are, the fact that one of them is a billionaire would have made clear that she is completely full of shit. Golden Road was the most lavishly funded start-up in craft beer history, something that is widely known throughout the industry. Then there's the claim that "there were no resources for experimentation” at Golden Road, with the implication being that the same is true for many breweries. This is also nonsense. How money is spent within a brewery, especially one with access to virtually unlimited funds like Golden Road, is a question of priorities, not capabilities. If a brewery does not invest in experimentation or barrel-aging or a sour program, it is because the people who chose how money is spent at that brewery are not interested in those things. Again, there are literally thousands of breweries with far fewer resources than Golden Road or Goose Island who do all of those things and more.

The vast majority of independent craft breweries successfully rely on bank financing for their expansions. Interest rates are at nearly historic lows, and banks are more eager than ever to work with bricks-and-mortar companies with solid cash-flows. If you want bank financing and your business is even moderately healthy, it is there for the taking. My experience with several rounds of major expansion is that the equipment financing expanding breweries need is usually the easiest type of financing to access, and that banks are generally understanding of how and why breweries spend money.

5) This one isn't a claim, it's a key piece of information that goes maddeningly uncommented upon. Goldfarb writes, "Gill says. 'The margins we needed to hit on our beers are now gone'—ABI doesn't necessarily care if each and every beer released makes a solid profit—and 'it's changed how we think about our portfolio in a major way...'"

Problem: This is the most predatory and ill-intentioned thing the macro brewers have done with their acquisitions, and Goldfarb allows Gill to cite it as evidence of their benevolence, which drives me nuts. The reality is that selling a product at or below cost is an anti-competitive business strategy that is intended to put smaller competitors out of business. If there's one thing independent craft brewers can't do that macro-brewers can do it is lose money. And this strategy is, by far, the most effective way for macro-brewers to reduce consumer choice and extinguish the craft beer movement they’re now trying to co-opt. Goldfarb remarks upon this later in reference to $56(!) Goose Island kegs, but fails to grasp that this strategy is THE reason for these acquisitions. Not quality, not making dreams come true, not sharing information. The goal is to destroy craft beer from within by operating acquired breweries as zombie brands that wreak havoc in the marketplace long after the life has been squeezed out of them.

6) Claim: Being acquired by a macro-brewery gives access “to the minds of fellow brewers,” allowing breweries to improve their practices.

Problem: Craft beer is the most open, collaborative industry I know. There is absolutely no shortage of access to information from “fellow brewers.” I have not once been told something was “proprietary information” by another craft brewer. If there is anyone in the beer industry who jealously protects their “trade secrets”, it is the macro-brewers, who are notorious for their harsh treatment of employees who fail to obsessively protect information from competitors. "The minds of fellow brewers" are there for anyone to access, no buy-out necessary.

7) Claim: Breweries can’t expand their geographic distribution without the “muscle” of macro brewers. Goldfarb claims Founders "would never have been able to obtain shelf space” in “foreign cities” had it not been partly acquired by a macro-brewer.

Problem: Independent craft breweries expand their geographic distribution literally every day. There has never been a time when distributors were more eager to take on new brands. This has, in fact, been one of the seismic shifts in craft beer over the last decade. In the late ‘90s and early ‘00s, craft breweries often had to beg and plead distributors to take them on. Now, distributors are so eager for new brands, the Brewers Association has had to enact a rule preventing distributors from openly pitching to craft brewery owners at the annual trade show because it became overwhelming. Meanwhile, loads of craft brewers of all sizes are jumping at export opportunities, which are abundant. Hell, Modern Times, which is about one tenth the size of Founders, exports to 12 overseas markets, zero “muscle” required.

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Here’s the truth: selling to a macro-brewer is the fastest, simplest way to turn equity in a craft brewery into cash. That’s the only reason to sell to them. Anyone who claims otherwise is full of shit.

Cheers & thanks,
Jacob McKean
Modern Times Beer

Comments

Josh
September 6, 2016 at 3:21pm

Thank you for writing this. When I read Goldfarb’s piece I was flummoxed. Serious Eats was always a publication I had a lot of respect for, mainly due to Kenji Lopez-Alt’s Food Lab. Yet here they were rather openly shilling for Conglomco, Inc. Some people I know involved with the beer industry, who ought to know better, claim that all they care about is purchasing tasty beer and if <insert previously independent awesome craft beer here> is now a little cheaper and more widely available, how is that not a win? Apparently they don’t understand that the diversity and innovation we see in craft beer was only possible due to independent breweries.

I’m old enough to remember when Nike using “Revolution” in a commercial was controversial. Now we have breweries starting with the express intent of building a “craft” brand only to sell it later. A depressing state of affairs, but I’m glad there are still breweries sticking to their independent status. There are two reasons Modern Times cans are always in my fridge at home: 1) the beer is awesome, 2) the money’s not going to AB/InBev/SABMiller.

Alan
September 6, 2016 at 3:29pm

A good commentary by Jacob, however I think the truth lies somewhere in between.  Point 1. Quality can indeed be improved upon since AB has much improved laboratory facilities and analysis than what craft brewers have.  Point 3. I can certainly see that the acquired breweries can get access to hops that they might not have had access to, especially new hops that may be hitting the market that they did not have a contract for. Point 4. Money is cheap right now and easy to access, that will not always be the case as the economy improves.  Point 7.  Modern Times is not most craft breweries. Just because Modern Times does not have a difficult time getting distributors to carry their beer many breweries do. Many Craft Brewers have a hard time getting distribution in out of state markets and the purchased breweries can now easily expand to other markets and to have access to a huge salesforce which they may not have been able to do on their own.  Four Peaks as an example was only available in Arizona before the buyout, not they are in multiple states.

Andrew
September 6, 2016 at 4:05pm

Enlighten me if I am mistaking, but if the purpose of operating a business, brewery or otherwise, is to generate a profit for the owner, is it not logical to sell out when a huge sum of profit can be made for said owner? It’s not all about money, but for many it is.

Scotty
September 6, 2016 at 4:18pm

Stellar read.

I never really understood the impact that craft beer would have on the world until a few years ago, but it has been making an impact on my life for the past few decades. As a young man while most of my buddies were pounding Natty Ice or Bud, my buddy Bobby and I would hit the “Little HEB” in San Marcos always trying what was new like St. Arnold Lawnmower or Sam Adams Summer. When I got my first “real job” I traveled the US and got really into Lagunitas IPA and Shiner because they were more widely available at the hotel bars where I would stay. When I asked my wife to marry me, we were leaving Breckenridge after a long weekend enjoying some of Colorado’s finest. Eventually, I negotiated with the singer of the band that eventually MC’d our wedding over a pitcher of Live Oak Hef. In 2014, the day after learning we would have our first son, we were invited to the 1st annual Collaboration Festival in Denver with the brewers from Vine Street, and we got to sign the bricks in the sour dungeon. We ended that trip, with a hop back down to Austin and an afternoon out at Jester King, where I started to realize the beauty in keeping craft beer independent. When I got back, we took the team from Native Foods to Lomoland just after it opened, and that’s when I fell in love.

Thank you for what you have begun. Here’s to culture my friend!

Scotty Montgomery

Wes
September 6, 2016 at 4:42pm

Jacob, I agree wholeheartedly. If you sell out to ABI, its simply to take a profit by the owners, of which they are more than entitled if that is their prerogative. It has nothing to do with being more altruistic about the product or the brand in quality or distribution. That is just an method to try and “brand” a “brand”. Speaking for myself, the minute these craft breweries are bought up, I bow out. The list grows of the beers I don’t drink. Goose Island, Shock-Top, Kona, Golden Road, Redhook, Blue Moon, etc etc. I live in tech M&A, and once bought, the brand, and the zeitgeist have been compromised. They aren’t the same again…..they are just better marketed, and in more places, and thus more mass produced giving way to efficiency and better profitability. So ABI can do all they want to stop the backlash, but I’m not buying it or the beer.

Bryce
September 6, 2016 at 4:52pm

No offense, love your beers, but this reads like “if we had to do it, then you do do” good for you for sticking to your guns, but that is not the path for every craft brewer. The Serious Eats article mentions Goose Island first, I grew up in Chicago, I’d always considered Goose Island on the level of Bud Light, I’m surprised it was ever considered craft beer, that would be like considering Old Style craft beer. I don’t really understand what any of this back and forth between the craft beer industry is supposed to achieve. I keep seeing articles and it just further makes me not care about whether a brewery “sold out” or not. Lots of musicians “sold out” once upon a time, the good ones are still good, same goes for beer.

Ronnie
September 6, 2016 at 5:10pm

I am a big fan of your beers, but you’re acting like you are a much smaller brewery than you are.
Also, without a shadow of a doubt, if the right offer came along - I am sure you would jump at the chance to be bought out by one of the bigger players.

Also, Wes (the guy who commented above) you are an absolute pretentious, foolish swine. Thinking that somehow the beers are ‘not the same again’ is a false sense of romanticism you hold about beer production. No doubt, many of the craft breweries you hold dear to your heart are probably owned by a larger conglomerate. And how selfish of you to not want them to be successful. If you don’t like capitalism, go live in North Korea.

Matthew Keen
September 6, 2016 at 5:23pm

Just as some here says it’s OK to compromise and cash-in - it is also totally acceptable to not sell your business because of ideology.  Do not attack those breweries or craft beer enthusiasts that choose not to compromise on their favorite breweries products and the culture surrounding it.

It is believable that their are people who love their craft and want to make a living at it without “selling out”.

 

JB
September 6, 2016 at 5:35pm

Poster Ronnie. I disagree completely with your argument that “the beers are not the same again”. In many cases they are not. It could be a coincidence but after the buy out, Bourbon County Stout is a shadow of what it was IMO. It’s still a decent shadow, but a shadow nonetheless. When a company only cares about the bottom line there is no way ingredients, time and process will not be compromised.

Jesse
September 6, 2016 at 5:38pm

Mr. McKean’s article isn’t about whether someone should sell their business. The way I read it, at least, is that a number of exaggerations and lies are being told as a means to justify the sale. He’s trying to clear corporate propaganda.

And let’s be clear about something here - whether to sell your business is all about your individual goals and particular life circumstances. Few, if any of us outsiders are qualified to speak to the legitimacy of someone selling their business. The fact that you’ve had beers someplace small/local is of virtually no consequence compared with the financial, family, and health risks endured by someone who took the leap to start a business.

The real concern here, is what below-cost Goose Island kegs do to smaller/local craft brewers. What does that mean for getting shelf space, or a faucet or two at your local bar/restaurant? I’d love to hear more about that.

BJ
September 6, 2016 at 5:54pm

AB has never had as much trouble fighting for shelf space in the battle with craft breweries as they are now.  In fact, they never really have had trouble.  In the past, it was much easier to squash small breweries and muscle them out of the industry.  Now, they are changing their gameplan.  Breweries like Golden Road wouldn’t have even had the chance to exist if other craft breweries didn’t pave the way by defying AB.  But after just only 4 years they can no longer survive without their help?  They are just giving back the shelf space to AB that craft has fought decades to obtain.  Angel Stadium had a rather diverse selection of beer to choose from until this year.  At the beginning of this season I was extremely disappointed to find 25 taps of GR, Goose, Elysian, and the other crap they pedal. There are PLENTY of So Cal brews that could be served at the stadium, but not with AB around.  That is a perfect small scale example of how this affecting the entire industry.  They are NOT contributing to the craft industry.  And they do not want to see craft beer flourish.

stan macias
September 6, 2016 at 5:59pm

thanks for the solid write up, there is so much illusion in big beer these days it makes me sick. I saw an elysian beer that had a label of corporate beer still sucks. they are putting forth the image that buy purchasing these craft brands they are integrating or “helping” the craft beer movement. Its a total farce, i’m glad that somebody is writing about the truth of these evil giant’s intentions.

Travis
September 6, 2016 at 6:10pm

In response to “Ronnie” who commented above, i really take issue with your last comment. Saying “if you dont like capitalism, go live in north korea” is just ridiculous. Im so sick of seeing people comment on things they disagree with by saying the other person should just leave america. Oh, Colin Kaepernick sees issues in America right now so he doesnt stand for the National Anthem…HE SHOULD JUST LEAVE THEN. The beauty of our freedoms as Americans is that we can disagree with what goes on in our country, and not be locked up, put on trial, or just shot on sight. Grow upx

Nathaniel
September 6, 2016 at 6:51pm

The people defending the breweries that have sold out are defending them now because they still have the freedom of choice. The macro breweries are trying to create an illusion of choice. If these trends continue, and people buy in to ABI and their “High End Division” marketing schtick, eventually breweries will be pushed out of the industry. Make no mistake, they are trying to monopolize beer and they could careless who they steamroll in their efforts to do so. They make it all sound so friendly and nice though.

Colin Kaepernick
September 6, 2016 at 6:53pm

I have to laugh at all the pretentious craft beer snobs who act like they care about who owns a brewery.  Being bought out and growing is a part of the American way.  Anyone drink Dr. Pepper or A & W Root Beer? They were once stand alone companies but you don’t hear anyone complaining about how they are not the same or are now owned by larger companies, Apple has purchased over 80 companies but no one is complaining about that when they buy an I-phone. Everyone knows Microsoft basically stole DOS which pretty much started the company and are buying Linkedin, next time you are looking for a job I’ll bet you use them even though many people look at Microsoft as the evil empire on par with ABI.  People ultimately will buy what tastes good.  I’d rather drink a good Elysian beer than a bad Lost Abbey beer anyday of the week.

Rick
September 6, 2016 at 7:13pm

Hi Colin!

I’m glad you find it funny that there are people who think about how they spend their money. While it’s true that it’s much easier to go through life as a lazy consumer who buys whatever the teevee tells you to, I find it much more interesting to be an active participant in my life. Since when did being bought out become “the American way”? I thought we were a nation that valued independence. I think we even declared such, and have a federal holiday celebrating it.

While it may be true that a good Elysian beer is better than a bad Lost Abbey beer, what about choosing a delicious Modern Times beer? Or a delicious Green Flash beer?

Colin Kaepernick
September 6, 2016 at 7:19pm

Rick, Is that a Green Flash Beer or an Alpine Brewing Green Flash beer?

John Stack
September 6, 2016 at 7:44pm

Saw this link in FB. I respect the varied comments; however, the beer market is not exempt from things that all markets do. I prefer craft. Many people prefer craft. Why? The same reason I don’t go to Chili’s except once in a blue moon. Variety, originality, genuine work and passion behind the product.

Personally, I wish this debate would go away. It’s ages long now. It’s flogging a dead horse.

 

JT
September 6, 2016 at 7:45pm

I applaud the sell-outs for their success (other than the built to sell, mediocre beers Golden Road) and I wish them the wealth they worked so hard to obtain.  And yet, as each one sells, I cross them off my buy list (started in 2011 with Goose Island).  Bud remains the nemesis of craft beer, as it was when it crushed so many through distribution power in the mid-90’s.  I refuse to encourage them, or give them my money.  Frankly, I hope every one of their new brands goes to zero so that they stop buying reputation and quality brewers, and they have to instead compete on quality.  And remember all the beer quality they bought was achieved without their help - the only future for Bud owned craft quality is watered down, either sooner or later - the numbers will demand it.

Erich
September 6, 2016 at 8:00pm

AB-InBev = Sam Walton

Omar Passons
September 6, 2016 at 8:28pm

These comments sections seem to frequently devolve into name-calling, which is too bad. I’m not a snob because I like that Modern Times pays its lowest-paid non-tipped employee $15 or $16/hour and I use that as a factor in supporting them. Same for them (or many others) being independent. Having values-driven market preferences doesn’t make someone a snob, I imagine we all make at least some decisions based on what we think is right. If you want to buy a beer owned by AB InBev, that’s your right. But why make my choice not to do so about being a snob or over-romanticizing the beer? Most people have an article of clothing made in conditions we’d rather not see exist. But at least for me when it’s a choice I can easily make I’d prefer to (and with dozens of good independent beers to choose from on any day it is an easy choice). We’d be better off if we didn’t perpetuate the ugliness and rancor of the national political landscape.

George
September 6, 2016 at 8:34pm

Thank you for the annotated look at craft beer buy-outs. Definitely teaches me to read about these deals with a more critical eye.

To Andrew:
“Enlighten me if I am mistaking, but if the purpose of operating a business, brewery or otherwise, is to generate a profit for the owner, is it not logical to sell out when a huge sum of profit can be made for said owner?”

Yes, that’s what this whole post is saying. It’s about the money. That’s okay. Let’s just not pretend it’s about something else.

Nate McLaughlin
September 6, 2016 at 9:02pm

Even at 1BBL I have all those things available to me (except Super sacks, no need) and I’ve been at it full time for 4 years now.

What they also failed to mention is the QC failure of Goose Islands Bourbon County release last year, somehow slipped by the industry leader’s techs.

Mike Yurgec
September 6, 2016 at 9:40pm

ABI or whomever will never get their hands on my beer.  It will always be small batch and brewed to order.

So there.   :)

Steve Shapiro
September 6, 2016 at 9:59pm

Ronnie, how come commenters who have the freedom to direct the   angriest and nastiest comments to people they don’t agree with, are the first to suggest that those people should leave the country?

Keith
September 6, 2016 at 10:52pm

I researched the product lines of AB-Inbev after their merger and have ceased even buying their imports. I home brew and can make anything they do, at a higher quality. Before I ceased purchasing any of their products, I noticed a change in several of the well known beers that they brewed that I had been drinking for over 30 years. They are obviously dicking around with the recipes and processes to save a buck. For instance Paulaner Hefe Weiss no longer tastes the way it used since they use more Munich Malt and ceased decoction mashing to save on time and energy. The difference is noticeable. I only buy American craft brews and keep tabs on who exactly is making it.  I kind of threw up in my mouth at the recent medial blitz where several comedians popular with Millennials I suspect were recruited to taut Budweiser as an American Beer. Try to convince the Americans that go laid off when AB changed Beechwood providers and put the former supplier out of business over night. AB was their sole client and had been for over 50 years.

Svott Schmeet
September 6, 2016 at 11:28pm

Solid response, Jacob. I was shocked to see this article coming from the special op food warriors at seriouseats.com.  They are better than that.  Thanks for setting the record straight.  Stay craft, and for pete’s sake, start producing Booming Rollers year round, bro.  Good stuff….

TerryM
September 7, 2016 at 12:00am

re: #5 (..“Gill says. ‘The margins we needed to hit on our beers are now gone’—ABI doesn’t necessarily care if each and every beer released makes a solid profit”..)

My first thought when I read it in Serious Eats: “Give it time, Meg, give it time.”

No stakeholder in a business would approve -0- profit margins unless it is a short term cost for a long term gain.

Andrew
September 7, 2016 at 12:57am

I can’t figure out why I’m such a super snob about craft beer (love this article, seriously. I don’t drink those that have… chosen to receive investment from big beer), but absolutely nothing else. Why isn’t my Pliney on sale at Walmart? I do all my other shopping there. As a matter of fact, let me get the Equate Body Soap and Great Value canned corn. It goes great with my Dr. Perfect. I mean Dr. Thunder.

Honestly for me it’s about deception. I know these off brands at chain department stores are cheaper for a reason. But when these craft breweries ‘sell out’, most people don’t know. They are still marketed as craft. And perhaps the recipies haven’t changed. And perhaps the craft industry is partially to blame for the fuzzy definition. But it’s pretty easy for me to define what isn’t craft and if you sell to big brew that suddenly includes you. Maybe if you stop misleading people I can relax my snobbery.

My next raise I’m upgraging to up&up;.

Alex Morrison
September 7, 2016 at 1:00am

It’s nice to see someone write about what they are passionate about, and this truly is prevalent here.  I have a small burger shop up in Carlsbad, and have made it a point to only offer California brewed craft beer that is not macro owned… A feat that has become more and more difficult due to pricing and hiding who owns what.

As the “customer” to the brewery, I choose to spend my money locally, not with some overseas conglomerate that will funnel the money into expensive commercials bashing the product I love so much.  I would rather support breweries like M.T., Booze Bros, even Tomme (I think he makes good beer, btw).  I am also pretty damn proud to explain why we don’t carry what people might wander in looking for.

In the end, just like ABI has the right to spend their money how they please, the consumer has the right to know what is real, and what isn’t.  I have yet to see a brewery that has been acquired “improve” on the product that they were acquired for… And I don’t ever expect to.

Jordan Regehr
September 7, 2016 at 2:46am

Interesting article. I work in corp M&A, so I spend a lot of time on this topic (from the macro perspective).

The simple story for the craft brewer is in the very last sentence:

“Here’s the truth: selling to a macro-brewer is the fastest, simplest way to turn equity in a craft brewery into cash. That’s the only reason to sell to them. Anyone who claims otherwise is full of shit.”

Indeed owners want cash. Nothing else. These breweries are typically 10 to 20 years old at sale, and the owners are ready to get rich and move on to something else, despite how much fun their brewery life has been.

One key thing the author skips though is the reason for the macro producer to buy the craft brewer. The macro producer has no desire to improve quality (nor worsen it), no desire to infuse it with capital, no desire to share knowledge, no desire to share hops, no desire to help the craft brewer at all (though they promise all these things). All the macro brewer wants is to ride the growth wave and add ‘brands’ to its ever-increasing collection.

In fact, the trend today is for multinationals to buy very small companies that are growing rapidly and leave them alone. Time has shown that the more involved MNCs get into small businesses the more they suffocate them. It’s no surprise MNCs can’t create their own exciting ‘small brands’ that mirror the growth success of the little guys. So, pragmatically, they give up and buy the small guys. After a short time, the founders quit (despite their ‘excitement’ and promise that the craft brewery won’t change). Then, bullies like Brewdog delist them :) , and their street cred dies a slow death.

Even the successful craft breweries that stay independent should go through a life cycle of birth, life, decline, and death. The final chapter can be either liquidation or selling out… in which the brand will die eventually.

The outlier in all this are the Trappists. To my knowledge none have been bought.

Greg Koch
September 7, 2016 at 7:29am

Jacob -

Well-written and well-reasoned piece. No doubt it will be met with some contentious defenders of the sell-out mindset.

One thing I’ve noticed that selling out has really allowed (former) craft brewers do…work on their justification skills.  (And admittedly, some of them have developed some mad skilz at that endeavor.)

Of course, anyone in the craft brewing industry knows the truth of which you speak, but few are able to take the time to write thoughtful posts as you have done (or inclined to put themselves in the path of the Sell-Out Defenders League members).

Hope all is well.  You’re doing a great job.

Cheers from Berlin at the moment,

Greg Koch
Executive Chairman & co-founder
Stone Brewing
Stone Brewing World Bistro & Gardens


Disclosure: Stone Distributing distributes Modern Times beer in SoCal, and Jacob was an employee at Stone before he left to start Modern Times.

Juan O
September 7, 2016 at 10:06am

This is awesome Jacob!


Stay true to the Craft!!

Cheers!

Steve Hindy
September 7, 2016 at 10:45am

Wow.  Lovely job Jacob.  Makes me proud to be an independent craft brewer.

Branden Borden
September 7, 2016 at 11:43am

Excellent piece Jacob

Jared Flood
September 7, 2016 at 1:02pm

I really enjoyed reading this piece Jacob. It was well thought out and targeted a lot of misinformation that we deal with here on the East Coast. I work mostly on the retail side of things, so I’ve seen the numbers big beer offers and their margins are meant to undercut everything else so that more of a profit can be made, therefor making their beer more appealing. When in fact it isn’t. Since GI was cited, can we bring up the bad batches of BC that rolled our last year, and the recent dump of a lot of the batch from this year due to off flavors?

I also do a little volunteer work with some of the local breweries, since most of my ‘business acquaintances’ have become some damn fine friends. This industry has many mechanics a family does, which is why I love it. I’ve watched breweries get snatched up and everything change to a closed minded and guarded mentality.

Love the beer, keep up the good work and the good words!

Cheers!

Frank
September 7, 2016 at 2:08pm

Thanks for taking the time to comment Jacob. Anyone who thinks that selling out doesn’t affect quality is crazy. I work for a big corporation and trust me when I say the first step in any acquisition is to Lean out the waste in the process.  All those flavors that are being added to your grapefruit Or Blood orange IPA that you currently buy from the local company down the street will be replaced with cost efficient flavors from a preferred supplier in China.  That is how the conglomerate will reduce the price, crush competition, and still make the profits necessary that are required to keep stock holders.

Ron Moore
September 7, 2016 at 2:19pm

As a consumer this article addressed the third and lesser of three reasons I purchase a “Craft Beer” (Red Oak Humminbird). Ok so I like the idea that my miniscule contribution to the wealth of some people who live in the same state as I may somehow enhanace a so-called local economy , but secondly I must agree with all of the points made here ,one lesson I have learned through my feeble attempts at brewing my own beer is that this company referred to as ABI without question is in the business of brewing and distributing beer flavored water at the absolute minimum cost. The number one and really the only reason I purchase the aforementioned “Craft Beer” is because this brewery makes an excellent product and then makes sure that product is delivered fresh and refrigerated ,my point is everyday thousands of bottles of beer are ruined by brewers/distributors trying to make a beer that will last longer in storage without refrigeration .We all know beer contains a living organism,yeast. I have no problem at all ,PAYING MORE for a product that is brewed and distributed in such a way that I always have what I know to be the best. You can’t fake good beer!

Local Solo
September 7, 2016 at 2:43pm

Jacob’s next beer should be Truth Teller Triple! 
Everything he shared was spot on.  To hear guys like Devils’ Backbone make statements that a bank would not lend him money to buy a fermenter but ABI will give him $100,000,000 is a joke. 
Or Four Peaks’ claim that right after the state guild stood behind them to bet the barrel cap lifted, that they just went looking for a partner to help figure out their future and just by sheer luck bumped into ABI oddly even before the new law went into affect.  They must just live right.
It is a simple fact that the growth of craft on the shelves has come at the expense of someone and they are here to take it back. And the fact of Rotation Nation making it hard to hold a tap is here to stay.
Meg’s short and failed time in the biz is an outlier as most all other sell outs were older and had seen success at some point.
In my opinion most sell outs got to a place that profits got tiny and risk got huge.  Along with thousands of new breweries all sporting the local thing and the older ones being seen as having been there and done that beers.
But be honest and move on. Don’t insult those that have been loving this craft with your disingenuous claims of hop fields, shiny new things, and my personal favorite, better health care lol.

Tony
September 7, 2016 at 8:06pm

re : “If you don’t like capitalism, go live in North Korea.”

Life doesn’t get any simpler than that.
Absurd, wrong + simple.

Joe
September 7, 2016 at 11:03pm

Everyone is entitled to their own opinion; but let’s get a few things straight. As far as quality; Your argument is just plain wrong. Quality is about more than just taste-you may not like bud or bud light, but if you have drank them then it doesn’t matter when or what part of the world, they taste the same. If you have such strong “industry knowledge” then you should be aware that AB has the absolute best quality control and assurance industry wide, period. AB actually spends exorbitant amounts of money on excessive quality control, so maybe you like a contaminated batch here or there, or a pint that’s milky white with sediment, that’s fine, but to say AB can’t improve quality is ridiculous.

Secondly your ability to use minor knowledge like the price of a 400bbl tank does not allow you to decide it did not cost $10 million. A 400 bbl tank only cost $100,000 so six don’t add up to 10 million. Okay; around $100,000 is as vague and arbitrary as it gets. Some may be 100k, some may be 200k plus. Configure shipping, location, maintenance, operation costs, extra labor/ingredients/supplies for the massive increase in capacity (for those “lacking industry knowledge”, combined those tanks would hold the equivalent of more than 793,000 bottles) you can easily get where $10 million or more could be needed. He didn’t say they bought six 1.5 million tanks, your us ring transitive logic to make a foolish point. The point was 10 Barrel didn’t have capital to enable those purchases and expansions, and was able to provide that.

Finally, yes you can grow without help-but it would take decades of saving to build up the capital it takes for wide geographic expansion, where as with AB you can take something like Golden Road from LA and bring it to the east coast almost immediately. The reach and access to distributors provided by a macro enables people that would potentially never get to try these beers in their lifetime, to try beers from all over the nation not just regionally.

Do what is right for you, believe what you want, drink what’s good, but don’t insist whatever Modern Times did as the only way to grow, or the best.

Bil
September 7, 2016 at 11:25pm

Great read but COME ON GUYS HOW ABOUT A MOBILE RESPONSIVE WEBSITE? How is anyone supposed to read this on a phone I mean seriously now.

Albert Kuwano Bakonyvari
September 8, 2016 at 5:47am

Great work, Jacob. Thanks for coming out and saying this, and for calling out former fellow craft brewers by name. Your man Greg at Stone is the only other one I have heard call former friends and colleagues out by name. I understand that friendship and comradery run deep, but some things do transcend even those noble principles. When your very existence as a craft business is called into question, survival must take precedence over all else. You can`t get to the truth without calling people out by name, no matter how much you may have liked and admired, for example,  Jack White in a previous life.

Also, amazing how kind you were to Aaron Goldfarb,  the author of the Serious Eats article. I won`t use loaded words like “corporate shill,” but at best it was irresponsible soft-ball journalism, at worst it was an article with a serious agenda to support the buyouts (whatever his reasons behind it). He started the piece as if it was serious skeptical investigative journalism, and then simply accepted whatever he was told that sounded nice and reasonable. As you said, he questioned nothing, and his two short paragraphs on the opposing view were bizarrely short and irrelevant. Greg Hall pissed in two pint glasses? That was the whole meaning behind one of the opposing paragraphs. What the hell does that mean to the discussion? A solid interview with Dick Cantwell who did not want to sell out but was forced to do so by his partners would have gone a long way to give a modicum of credibility to the piece. Some folks say Serious Eats is a serious site; if that is the case, they should be ashamed of that lame “journalism.”

Finally, amazing that some commentators still come back and try to refute what you said by saying “there are other ways of doing business than the Modern Times way.” You never said there weren`t. You simply stated the universal reason for selling a business: getting your cash out. That is true for craft beer, software, fashion, and any other industry in the world. Have we forgotten the dot.com era already?

Lisandro
September 8, 2016 at 1:10pm

Re: Greg Koch-I can’t wait for the day when people see him as I see him.  He is nothing but the persona of Big Beer living as a charlatan Craft Brewer. I’m sorry but anyone who owns multiple breweries, owns their own beer distributorship, owns a brewery overseas and is getting into other ventures like Investment Banking and Hotels is not a craft brewer and his opinion needs to be discounted if he is coming from the stand point of being a craft brewer.

How many people really know who ‘owns’ the craft brewery they love.  Most breweries are owned by multiple investors (both other individual’s, perhaps family members and friends and investment capital groups), not as sole proprietorships.  So one must ask, does it matter who owns a brewery or is it about the beer. These breweries are not hiding the fact that they are owned by others, and now others can share in their growth by buying shares of BUD stock.

local solo
September 8, 2016 at 2:34pm

Ms. Lis,
Now you stepped in it.  The scripted answer from sell outs is “it’s whats in the bottle, not who put it there”. 
A few thoughts of what makes Koch from Venus and you from Mars. 
Stone’s history of distributing was born in the fire that none of the big beer distributors would carry them so they had to go it alone.  Well done Koch and company.
Sounds kinda like history repeating itself with the fact that ABI is paying millions to distributors not to carry independent craft beer.  Hope you see the difference.
That is as clear as a Bud Light to anyone that has been around in this wonderful, sharing community of brewers.
Stone is and always has been a model of what start up craft brewers aspire to be.  I don’t frequent them a much as I used to because a grilled cheese sandwich and a cup of tomato soup however good should not cost $14.

Lisandro
September 8, 2016 at 4:54pm

Local Solo, First off it is Mr. Lisandro to you.  You have certainly swallowed the kool-aid hook line and sinker.  Get your facts straight, Stone had no problem finding distributors for their beer. They opened up a distributor as a way to make more money than their craft beer competitors by taking two rungs of the three tier system in their home market and to control craft and premium import brands in their market. Hope you see the difference of how they are trying to monopolize their home turf and control the flow of craft beer in their home market. Do you honestly think someone from Stone Distribution is going to suggest a non Stone beer to a customer first or a Stone beer?  Stone is just as bad as ABI in trying to dominate the market, yet they do it under some mythical craft beer guise. Wake up Solo.

Voodoo
September 8, 2016 at 5:31pm

“The reality is that selling a product at or below cost is an anti-competitive business strategy that is intended to put smaller competitors out of business.” This line really resonates with me and my family. I don’t know how much experience any of the commentators have with selling craft beer in the marketplace, however what many people fail to understand is that these large conglomerates have a ridiculous amount of expendable cash to throw at any retailer willing to sell their shelf space or tap handles. Fyi – paying for shelf space, tap handles, swiping a credit card for $500 in exchange for a burger, or giving away things like a chartered plane trip to Vegas with free concert tickets is illegal in the state of California (BUSINESS AND PROFESSIONS CODE SECTION 255003.) This problem is systemic and quick frankly a double edged sword. Small beer manufactures cannot bite the hand that feeds. We cannot tattle on retailers for not understanding that every dollar they take in illegally from large conglomerates is detrimental to the lifeblood of small craft beer manufacturers and the people they employ. Craft beer manufactures cannot afford this luxury, we are forced to quietly turn our heads in hopes a retailer will still allow us to sell them beer without incentives or strings attached. My family makes a living in the craft beer industry, each time one of our tap handle is bought and replaced by big business beer it directly affects my family’s income (i.e. my rent, my bills, my kid’s college fund.) Why doesn’t the ABC do anything, you ask? Well many of us ask that same question and the most simplistic answer I’ve ever gleaned was they don’t want to see business close for violations because that puts people out of work. Oh the irony! You can coldly comment about how that’s capitalism, however what they are doing is illegal and it’s shutting out small craft beer manufactures and putting people out of jobs. I’d love to see how you’d respond if your livelihood was affected by a similarly frightening ordeal. But then again, maybe you work for Walmart.

Byrun
September 8, 2016 at 7:04pm

Selling out to bigger factory brewers didn’t help create a better beer culture here in British Columbia, which is what happened to our many of our upstarts that rose up in the 1980’s as a reaction to the hegemony of the country’s, then, three biggest brewers: Labbat’s, Molson’s and Carling O’Keefe (now swallowed up by MolsonCoors). It is the determinedly independent brewers in this province that have created the interesting and diverse range of beers we enjoy in British Columbia - not the ones who sold out to MolsonCoors, Sapporo, etc.

Our breweries are highly collaborative with one another and across the line into the United States. Try as I might, I cannot ever image a collaboration beer between Labbat’s and ABI - let alone a worthwhile one, such as the collaboration between Bomber Brewing in Vancouver and Stone out of Escondido or Four Winds (Delta, BC) with The Commons (Oregon) and Le Trou du Diable (Quebec). Hell, the strictly local collaborations are always hotly anticipated.

Corporate culture is not about options, choices or quality. Corporate culture is about hegemony, homogenization, uniformity with - maybe - the appearance of choice. Craft is about diversity, choices, the pursuit of individual vision and innovation. That is where my money is going every time. I have never seen Modern Times for sale up here in British Columbia and I think that is something that needs to change.

Byrun
September 8, 2016 at 9:45pm

I might also ad a link from Bloomberg that takes a look at the InBev business model and how it is inherently hostile to anyone with taste. In the long run, if InBev achieves to regain a lion’s share of the American beer market, expect to see extensive cuts and cost saving measures to it’s craft acquisitions.

http://www.bloomberg.com/news/articles/2012-10-25/the-plot-to-destroy-americas-beer

Sayre Piotrkowski
September 9, 2016 at 6:10pm

Thank you so much for writing this!  I was so annoyed by Aaron’s piece in particular I have been working on my own response.  Has anyone shared this with the editors at Serious Eats yet?  If not, would you mind if I did?

 

Andrew
September 10, 2016 at 1:33am

Thanks for the insight into the real nuts and bolts behind the business aspects of InBev’s acquisitions. I was going to bring some cans of Sculpin to a beach party tomorrow, but Fortunate Islands makes a lot more sense these days. Cheers.

Todd
September 10, 2016 at 2:52pm

I find it extremely humorous that people think that brewing is not a business.  In business, companies get bought and sold for any number of reasons. Heaven forbid though that anyone actually create a brand, grow a business and sell out in the brewing world though.  I say good for the companies that have sold out to Inbev, they’ve created financial stability for themselves, their families and employees.

Fred
September 11, 2016 at 6:44pm

Sounds like quite the controversy. I still like your beers better. Won’t hold it against you if you “sell out”// ▲ fredsguidetolife.com ▲

Eddie Glick
September 12, 2016 at 8:40am

The “it’s just business” line of thought is great for people who don’t care where their food comes from, how many children held in virtual slavery made their shoes, or which forests are illegally logged for their cheap furniture. It’s also incredibly naive and dangerous to our economy and society. What’s going on in the beer industry is a microcosm of our local and global economies. It’s pathetic that the most concern some folks can muster is a disinterested shrug even when it comes to something as basic as drinking a beer.

Great article, highly informed. Never sell out.

brandon
September 12, 2016 at 5:01pm

god I love you for this.

every single article I have read about another brewery selling out usually has the same scripted response from the (former) owner, or brew master. its the same recycled shit that is saved on someone’s computer at Anheuser-Busch InBev and sent to the brewery to ‘issue’ a statement of them selling out. I have never bought that garbage for a second.

F the sell outs. even though the list gets longer and longer, I will never forget and never support the sell outs.
I cannot thank you enough for this,
brandon

JAMES BUDMAN
September 12, 2016 at 9:44pm

Since when is it is everyone’s authority to make decisions for others business via blog. Unless you own stock in the companies that have “sold out” what business is it of yours to question their ideals or business concept. I like to think they BOUGHT IN to a company that gives them capital, grows them beyond anything they could do for themselves in 10 years and continues to pay the bills of its employees. You are so right(sarcasm) and the bear should not eat the dear if it catches it. 
ABI has grown and continues to support the beer industry, its employee family and ultimately the shareholders. OMG, the soon to be largest brewer in the world taking care of their company and working to grow share and ultimately making lots of money…for shame!! They are like your grandpa that worked hard in the mills for 50 years and can now buy a boat or a Mercedes if he wants…THEY EARNED IT!!  I see competition and I fight or I acquire, I play to win and to the victor comes the spoils!! ABI doesn’t whine about all the breweries that stand strong against the giant, they move on to any one of the other 4000 start up breweries out there. Ultimately in comparison to the hundreds of years of brewing expertise, growth and billions of satisfied consumers worldwide…you are all just start ups in the grand scheme of things. And quite frankly you seem to give so much false hope on your over indexed category. Possibly without ABI some would just fail and die. Let’s all remember the days ice beers, super low calorie light, flavored malt beverages and root beer ran the world…look at them now!! You sound like spoiled teenagers…mind your manners and watch your mouth. Stop telling your parents you hate them, show them respect and be better than them if you can!! You never know who might hold your purse strings in the future. And get over yourselves…at least they focus on the beer business and brewing, not on blogging about you theory of the beer business and ultimately somebodies love and passion.
When I want to make and sell beer, I will call them. When I want a good whiney blog written…you are the man!!
One other thing, it is laughable all the craft breweries associated with big beer wholesalers depending on them to deliver, market and grow their beers. We put 100 cases of craft on the trucks and thousands of cases of Bud Light. You might want to respect those that pay for the gas or you might find yourself broken down on the side of the road!
Cheers with a Bud!

Drew
September 12, 2016 at 10:55pm

James and Joe, cable companies are looking for similarly impassioned defenses of their mergers and are willing to pay handsomely. You don’t have any time to waste with free posts here. They need you in Washington now!

Aaron
September 13, 2016 at 12:28pm

A lot of you are missing the point. Jacob isn’t saying microbreweries don’t deserve money and success, he’s saying the microbreweries are being duped by big beer into thinking they are helping the craft industry. He’s also saying that denying the fact that you sold out purely for the money is not only delusional, it is, as Jacob put it, bullshit.

morlock
September 13, 2016 at 3:51pm

{ corporate welfare for megacorp beer in the name of labor } Virginia Economic Development Partnership (VEDP) board was confronted by out-of-work Virginians protesting the commonwealth’s decision to provide a $500,000 grant, plus tax breaks & other incentives to MillerCoors in exchange for only 27 new jobs at its Shenandoah Valley brewery.
MillerCoors shut its Eden brewery in neighboring North Carolina this month. Of 500 jobs lost in Eden, 122 were held by Virginia workers.
“Why should Virginia taxpayers subsidize a $21 billion company that is destroying more jobs than it is willing to create ?” said Vernon Gammon, Teamsters Local 391 Secretary-Treasurer, the union local which represented Eden brewery workers for more than 30 years.
http://www.craftbrewingbusiness.com/.../virginia…/ 9.12.16

Leah
September 14, 2016 at 4:08am

I have seen many references to the super-funded, built-to-sell Golden Road, as well as rumors they were “in bed” with ABI from the beginning. Does any one have any information on this?  Or on the “private investor”?  Inquiring minds…

Tee Morris
September 14, 2016 at 10:20am

This was an amazing read. Thank you. Thank you. Thank you.

Kevin
September 14, 2016 at 1:00pm

ABI doesn’t care if their beers don’t make a profit? That’s great news—even they’re on board with me choosing something else.

Steve
September 16, 2016 at 2:22pm

You’re just mad because your beer isn’t good enough or your business healthy enough for AB to consider making a move to acquire you.

Craig
September 16, 2016 at 2:25pm

Great article and I largely applaud the bottom line message. I do suspect that the macros can ultimately offer greater technical, distribution, and procurement resources than most any craft brewer, but that doesn’t necessarily translate to all the qualities that the serious craft brew consumer/fan most values. The most critical point I take from this is that ultimately the big boys are merely bullying our beloved craft heros in their purely capitalistic quest to eliminate what has become annoying competition. ABI and others of their ilk have always tried to market themselves as champions of the common man, a national tradition and treasure that spans generations of family and friends. Yet they showed us how much that mattered when the Clydesdales moved to Belgium (essentially). The underlying beauty of craft beer is multidimensional and at its heart so American. It’s variety, experimentation, personal, fun and can often represent a tie to a specific town, neighborhood or region much like sports teams. Big corporate/global brewers are chained to growth and cost cutting and can’t claim any true company-wide association with anything but revenue and profit. Any suggestion otherwise is purely marketing. While craft brewers have marketing of their own, the appeal has a much better chance of being genuine and translating to what is a more discriminating and passionate consumer. When I pass the macro-backed craft beer boutique bars at airports I am disappointed to often see all the same selections at each one. Few represent real local brewers. This is what the macros are doing with the “revolution”. Taking it and making it their own and we know how that goes after so many decades of a 3 or 4 horse race. Some of their beers may be great, they may be cheaper, but it’s not the same product. It’s one dimensional and “less filling”. I think our hold out craft champions will persevere regardless, but I for one will not support the charade.

moikes
September 17, 2016 at 2:15pm

Serious Eats.  I like to play a game on their website by counting how many articles have the words “quick”, “easy”, “fast’, and “crunchy”.  Pretty much every article.  Their contributors are responsible for that and ill-informed articles such as the one being discussed here.

mike buhler
September 18, 2016 at 5:52pm

Interesting article for sure, I think it can clarify a few points.

I am a craft beer lover but I have one of the worst selections in my country despite our beer club of over 4000 members helping us get more good new beer here on a regular basis. We have had only 3 microbreweries in my province up until this year, now 4 but they don’t bottle. Outside of 3 or 4 towns they are not available.

What that means is if I want to drink beer where I go for work or play I have no choice but to drink beers from the macros, they are what they are and I enjoy them after a 10 hour day hanging around 200’ up a surge tank tower in the wind and rain.

What the macros do best is consistency and quality control. My friend is the production manager for the local Labatts brewery and he sends his sample of Bud Light to St. Louis every Friday for testing. All samples are still tasted/tested by a human test panel. If his diacetyl is 2 points high he hears about it. Their products are generally similar quality anywhere in the world you find them.

Do I like some of the big guys business practices? No! But I do accept that where I live it is what it is and I have to live with what is available. I’ll be waiting for years for good craft beers to be available in small towns in this province if they ever are. Coors Light owns 30% of the provincial market!

mike buhler
September 18, 2016 at 6:04pm

as an addendum I joined Instagram a few days ago and last night a coworker showed me how to post a pic on it. Just now I scrolled through the 50 or so people following me and one from today was molson_coorsnl so I guess they like me too.

James
September 29, 2016 at 9:36pm

Man, so many RWNJ comments on here about capitalism.

If Lefttists are all Communists, then you’re all a bunch of Nazis.

The quality of the beer would undoubtedly suffer, not to mention the wars over shelf-space and taps in retail and hospitality.

If you love capitalism so much, go live on a fucking giant Libertarian floating tax-haven out in the middle of the Atlantic.

jw
September 30, 2016 at 12:33am

I have never seen the amount of brotherhood (and sisterhood) in any other business venture than I’ve seen in the brewing community.
In San Diego for (not brewing-related) seminar this weekend and will sure be stopping by for a few.

JW

Katherine Scheri
October 15, 2016 at 4:28pm

Well, Jacob, I told you when we met you at the GABF (we were your neighbors a booth down) that you inspired us in how we conduct our business.  We are a small brewery and have the same struggles and issues many others in the industry, this is a very collaborative business and the resources and help available to a brewer are endless.  It takes hard work, dedication and thinking out of the box to keep going.  Your blog continues to inspire us.  It is well written and I am proud of you for speaking your mind.  You are entitled to disagree and speak up.  So many responders here seem to think that if you don’t follow along like sheep you have no rights to voice your opinion.  Don’t listing to the James Budmans of the world.  Small brewers created this business because they wanted beer that tasted like something.  If James likes watery beer made by huge conglomerate breweries that are supported by bureaucrats then he’s welcome to it.  That doesn’t mean however, that we a) have to accept what we are given, shut up and be grateful as he suggests or b) tolerate bullies who try push us around and keep us in our place.  Those 100 cases on the truck has continued to grow year over year and they certainly pay their own way by a sizable margin. 

Bottom line for me:  don’t be bullied- keep pushing back - we are all in this together.

noneofmybusiness
October 20, 2016 at 4:43am

” reality is that selling a product at or below cost is an anti-competitive business strategy that is intended to put smaller competitors out of business. “

They aren’t selling “at or below cost”. They are shrinking your profit margins, through predatory pricing, leveraged through massive threw-put.  Either 1) stop selling your douchebag brews at ridiculous markups and start charging “fair prices”, or 2) see your market share diminished and eroded further.

They have the capital to undercut you. If you want customers to keep buying your product than find a way to deliver it for a fair price. Us homebrewers don’t expect you to understand. I mean you have a 5th house to buy and a 3rd boat purchase to make don’t you. All that “equity” you speak of.  Your own greed will be equally responsible for the failure of your business, at least as equally responsible as large corporations selling beer at lower margins because they are able to. You fight it by reducing your “PROFIT” margins. Oh wait, you’re only it for the money too but that’s acceptable because you’re not a huge player. YET.

Starbucks started at a weekly market. Stop pretending that your end game isn’t selling out.

Bilbo Baggins
October 26, 2016 at 10:03pm

Selling out is actually all about joining the East Coast bandwagon and literally “selling out” of “limited release” beers, in alternatively designed cans, so people who wait in line and fork over money early feel special about it. The Alchemist, Grimm, Other Half…nothing new here…

ellen adore
November 30, 2016 at 12:42am

My colleagues were requiring CA Multiple Offer Addendum Highest Best Price Terms recently and saw a website that has 6,000,000 forms . If others want CA Multiple Offer Addendum Highest Best Price Terms too , here’s https://goo.gl/Bhvw9P.

Dayana
December 15, 2016 at 7:03pm

A wonderful job. Super helpful intnomafior.

Irene
December 15, 2016 at 7:04pm

Most help articles on the web are inaccurate or ineecorhnt. Not this!

Roseanna
December 15, 2016 at 7:08pm

Me and this article, sitting in a tree, L-A—-R-N-IEN-G!

Samuel Allsopp
March 2, 2017 at 2:49am

Sooner or later, there will be so many small breweries owned by a larger corporation it’ll be tough to discern between what’s ‘craft’ and what’s not.  Gone will be the frivolous denouncing of breweries due to their ownership, because it’ll be such a thickly weaved web, people may have to do the unthinkable: PICK WITH THEIR PALLETS AND NOT THEIR PREJUDICES!

Heavens, these people may actually have to form knowledge about beer instead of just opinions!  An educated consumer will demand higher quality and we all get good beer.  If you’re that guy refusing to drink any brewery picked up by ABI, we need to start with you.  Multinational corporations DO NOT buy brands that make inferior products, not when you’re dealing with the most fickle ‘informed’ customer base of perhaps any industry.

That is of course, taking into consideration that people want GOOD beer.  If they just want to support local, no matter what it tastes like, we’ll be headed back to the days that bred American Light Lagers.  Which will in turn (ironically) breed it’s own revolution..

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Jerry Klein
March 31, 2017 at 4:29pm

I am contributing to a business plan to gain funding to launch a new craft brerwery in San Diego County. Your writing is insightful, informative, inspirational, and thrilling. When I was 20 years old (now much older) I was afforded the best advice I’ve ever received - “Discover what you really like, do it the very best you can, in fact strive to be the best ever. Don’t worry about the money. If you constantly strive to be the best, the money will follow.” Too often that’s not the case. People chase the money, not what they really like. You chose to chase what you really like. Kudos to you.

BTW - I’ve enjoyed Modern Times when in San Dieogo

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