Craft brewers warily view Anheuser-Busch’s march into their market
Has the King of Beers become the king of fears?
Corporate giant Anheuser-Busch InBev has been making inroads into the craft beer industry, and small, independent brewers are grappling with its arrival onto their turf. Their fears grew when the RateBeer website, with roots in Santa Rosa, sold Anheuser-Busch a stake in the business last October, igniting an outcry and forcing industry observers to wonder if indie beer can survive now that the big guys are looking to buy their way into the club.
The Belgium-headquartered company has taken a number of steps to grow its domestic portfolio, even as it retains about 45 percent market share of the $37 billion U.S. beer industry. In contrast, craft brewers represent about 12 percent of the U.S. market, according to the Brewers Association trade group, though its share is much higher in brewing hotbeds such as the North Bay, one of the strongest craft brew regions in the country.
“Yes, it’s a threat,” said Tom McCormick, executive director of California Craft Brewers Association, which represents more than 500 craft brewers in the state. The No. 1 complaint from his membership typically concerns Anheuser-Busch, McCormick said.
Local brewers said they aren’t afraid of competition, but they bemoan the outsize advantages that Anheuser-Busch has, especially in marketing and distribution. The company employs an “if you can’t beat them, join them” philosophy by acquiring smaller craft breweries and to make it more troublesome, its efforts come at a time of slowing growth in the artisan industry. The Beer Institute trade group reported last week that the industry has 100 million barrels in idle capacity that breweries are not using for production purposes.
“My take is the industry is going through a transition,” said Richard Norgrove, brewmaster and chief operating officer at family-owned Bear Republic in Healdsburg. “In the end, I think this is going to be redefining about what craft is.”
Despite its overall size, Anheuser-Busch contends that it still plays a small role in the craft industry.
“The U.S. is the most completive beer market in the world. The three-tier system (manufacturer-wholesaler-retailer), which we fully support, ensures it will stay that way,” said Felipe Szpigel, president of The High End, which represents the company’s craft portfolio, in an email statement.
“The explosion of craft breweries in the United States has been remarkable and is great news for all beer lovers. With 700 breweries opened in just the last year, it shows no signs of slowing down. We are partners with just 10 craft breweries, and work with the entire industry to encourage growth and choice,” Szpigel said.
The most recent uproar started in May, when Anheuser-Busch bought its 10th craft brewery, Wicked Weed Brewing in Asheville, North Carolina. The news triggered an outcry from devoted craft beer fans, who charged the brewery known for its barrel-aged sour beers was “selling out.” Wicked Weed was forced to cancel a July beer festival after dozens of craft brewers said they would not attend.
The backlash has also been seen locally.
Anheuser-Busch has encountered resistance to efforts by its Golden Road brand, which it bought two years ago, to open a taproom in Oakland’s Temescal neighborhood amid opposition from local brewers.
And most notably, it acquired a minority stake in RateBeer, a digital website that provides reviews and ratings for a wide variety of beers, through Anheuser-Busch’s ZX Ventures unit, its global incubator and venture capital team.
RateBeer is owned by former Santa Rosa resident Joe Tucker, who for the past two years has sponsored the heavily attended RateBeer awards and festival in Santa Rosa.
In January, about 2,000 people attended the event at the Sonoma County Fairgrounds, which featured brewers from all over the world as well as locally, such as Russian River Brewing Co. in Santa Rosa.
The reaction to the RateBeer acquisition was ferocious, especially as the deal closed in October but was not revealed until June through reporting by the Good Beer Hunting website.
Delaware’s Dogfish Head Brewery founder and CEO Sam Calagione, one of the pioneers of the craft beer industry, posted a June 5 blog post in which he demanded that RateBeer pull its ratings of his beer, calling Anheuser-Busch’s ownership a blatant conflict of interest and a violation of journalistic standards of independence and fairness.
“To our fellow independently owned brewers, we encourage you to join us in this effort to ensure consumers continue to get the best and most accurate information about their beers,” Calagione wrote in early July. “For everyone else, we encourage you to shift the sharing of your beer opinions and reviews to another platform that remains loyal to the principles of journalistic integrity. America’s Independence Day is just around the corner. Support the indie craft brewing movement!”
UPDATED: Please read and follow our commenting policy: