WHO’S NEXT?

Image courtesy of Desiree Duzich, PorchDrinking.com

At this point, it’s almost more surprising when a day goes by WITHOUT a craft brewery being sold or partially sold to a larger corporate entity. During the early days of Aleheads (ah, those halcyon days of 2010!), we lauded the craft beer industry for its robust independence and willingness to put the product above profit. But of course, that was before craft beer reached its tipping point and the bankers and CEOs in control of the global purse strings realized that there was gold in them thar hops.

There’s no ill will or bitterness from our end. Beer is a business, and a huge one at that. The craft segment of the industry has come into its own over the past decade and the writing was on the wall when Goose Island was snapped up by AB InBev 5 years ago. We railed against it at the time and warned our readers of the coming reckoning, but in the end, it was like fighting the tide.

In the past year we’ve “lost” three of our favorites: Founders, Ballast Point and Lagunitas. Aleheads darlings like Southern Tier, Uinta, Boulevard and Sweetwater have sold minority stakes to private equity firms. Perhaps most frightening, AB InBev quietly spun off a craft beer division called The High End which has now purchased 7 well-regarded craft outfits outright (Goose Island, Blue Point, 10 Barrel Brewing, Elysian, Golden Road, Four Peaks and Breckenridge). With InBev’s deep pockets, the acquisitions won’t be stopping any time soon.

In five years, the Aleheads have gotten older, wiser and FAR more cynical about craft beer. In 2010 we would have lambasted all of these breweries for getting into bed with Big Beer or Big Banks. But, as is often the case in America, you can’t fight corporations. The entire system is set up to benefit them and almost every industry that shows even an inkling of staying power or profit creation will eventually be chewed up and spit out by monied interests. Private equity companies with zero experience in the brewing industry are getting into the game because they see dollar signs. And aging brewery founders without good succession plans are cashing out while they’re young enough to enjoy the fruits of their labor.

It’s beyond sad that one of the BEST end games for a small brewery is to be bought up by AB InBev or MillerCoors because, hey, at least those guys technically brew beer (or whatever you call that jaundiced, piss-smelling water that flows out of a Miller or Bud Light tap)! Most of these stories follow the same pattern. AB InBev gets a call from a small craft outfit looking for some investment help and before you know it, the brewery has been sold outright and the owner/founder promises that nothing will change about the beer or brewery.

Of course, that’s horseshit. Even if AB InBev (or MillerCoors, or Constellation, or Heineken, or “fill in the name of a private equity firm”) doesn’t drastically alter the brewery in the present, the future of the company will CLEARLY look different than it would have if the craft brewery had remained independent. The beauty of the craft beer industry was that these small companies followed the lead of their visionary, oft-quirky founders and employees. Even if the recipes and offerings aren’t changed immediately, the “sell-out” companies are now following the lead of dispassionate bankers who live in different time zones or huge, multi-national brewing outfits that care far more about the bottom line than brewing innovative beer.

Many folks will argue that if the beer remains the same (and in almost every case, it has), what difference does it make? Beer is a commodity and if the quality and offerings haven’t changed, why shouldn’t we keep buying Ballast Point or Founders or Breckenridge or 10 Barrel Brewing? It’s a valid argument, but you probably know how the Aleheads (mostly) feel about it. When you support breweries owned and operated by banks or macrobreweries, you’re not really supporting the craft beer industry. Yes, the brewery in question may still employ the same people. And yes, those employees are getting at least a portion of your hard-earned dollars. But when a brewery is bought up by a larger corporation (or even partially owned by a corporation), a good chunk of your money is flowing away from the brewery and into the pockets of Big Beer execs or bankers. That doesn’t hurt anybody, but it certainly doesn’t help craft beer. Remember, the industry is made up of thousands of breweries, not just the small handful lucky enough to align themselves with massive outside investors.

Those companies that have been snapped up by AB InBev, MillerCoors or a variety of banks and other huge, international breweries now have the resources to muscle out the small-timers. You can claim that this is how capitalism works, but should it work this way? Ideally, the nearly 4,000 breweries in the US would compete with one another based on the quality of their products…not based on which one was lucky enough to sell out to AB InBev first. If 10 Barrel Brewing pushes other, worthy Oregon-based breweries off the shelves because AB InBev has infinitely greater resources than the small craft breweries, is that right?

Aleheads can’t change the industry, much as we’d like to. Who are we to tell an aging brewer that he or she shouldn’t sell their company for millions of dollars? It’s their business…they can shutter it, sell it, or light it on fire if they want to.*

*OK, technically they can’t do the latter.

I fully understand the claims of someone like Tony Magee that aligning Lagunitas with Heineken gives him the opportunity to grow his company in a way that he couldn’t have had he remained independent. I’m not faulting him for this decision if he thinks it’s what’s best for his company. But Magee can make that decision because all he cares about is Lagunitas (and rightly so). As craft beer bloggers obsessed not with one particular brewery but the industry as a whole, the interests of the Aleheads are vastly different. We may not fault Magee or other CEOs for selling their companies, but we certainly don’t have to support their decisions.

I have made this speech hundreds of times and will continue to do so because it’s important and because at this point it could serve as something of a mission statement here at Aleheads. If you care, and I mean truly, deeply care about the “idea” of craft beer as something more than just a collection of salable entities that happen to make beer, then perhaps you agree with us. Most people don’t. Most people don’t have the time or energy to waste on researching who is “really” making their beer…and that’s OK. I don’t roll my eyes at someone for drinking a Lagunitas or Four Peaks beer any more than I roll my eyes at someone for eating at McDonalds, watching the latest Transformers movie, or wearing an Apple Watch. Each of us has things and industries we care about more than others.

Me? I care about craft beer. And since I have a small, insignificant soapbox from which I can shrilly pontificate, I choose to do so. Be mindful of who makes your beer. The industry is better served by remaining independent and in the hands and control of those who actually make the beer. Money corrupts. Money influences. Yes, you need to make enough to keep your business going and growing, but when the millionaires and billionaires get involved, they and the sellers benefit…not us.

So…who’s next? Who will be The High End’s latest acquisition? Who will spurn them? Who will fall sway to the siren song of an immediate cash influx? And who will align themselves with organic, industry-empowering growth? As consumers, we have the means to influence these decisions. We just have to choose to care.

Know your beer and who makes it. Know your breweries and who owns them. The future of craft depends on it.