Brad Tuttle

The Empire Strikes Back

The mega-merger between Anheuser-Busch InBev and SABMiller will give the combined business a 30-percent share of the world’s beer market and control of eight of America’s top ten brands. And, according to Time magazine correspondent Brad Tuttle, it will pose a serious threat to the growing craft beer sector. The big brewers’ campaign against craft is being waged on several fronts.

Big Beer’s first line of attack on craft brewers is “crafty” beers such as Blue Moon and Shock Top. Critics call these products “crafty” because many, if not most, consumers are unaware that they’re made by big breweries.

The big breweries are also buying craft breweries whose products have a following, such as Goose Island, Elysian, 10 Barrel, Golden Road, and Blue Point. Even though there are 4,000 breweries in the U.S., Tuttle points out that strategic acquisitions of key craft breweries make it much more difficult for other craft brewers to succeed.

Advertising is another weapon in the mega-brewers’ arsenal. The craft-bashing Budweiser commercial that ran during the last Super Bowl, poking fun at hipsters who fuss over pumpkin peach ale, is the most notorious.

The big brands still dominate distribution, and the three-tier system isn’t going away anytime soon. In some states, such as Colorado, A-B InBev has bought distributors outright—a practice that may lead to antitrust investigation by the Justice Department.

Finally, consolidation helps offset the big brands’ sagging sales growth by cutting costs. Advertising is one such cost. A-B InBev and SABMiller spend billions on sports sponsorships to promote their brands. Now that the two companies are no longer competing, they’ll have more negotiating power with the sports industry and will demand lower fees for their “official sponsorship” status.

The Friday Mash (Noble Experiment Edition)

On this day in 1919, the 18th Amendment, which ushered in national Prohibition, became part of the U.S. Constitution. The 14-year-long ban on “intoxicating” beverages, which meant anything with more than 0.5 percent alcohol, had a profound effect on the United States—an effect that persists to this day.

And now….The Mash!

We begin in Rhode Island—one of two states that didn’t ratify the 18th Amendment—where Narragansett Beer has launched a four-beer series honoring H.P. Lovecraft, the master of horror fiction who lived in Providence.

In the San Francisco Bay area, the latest trend is “activity bars”, which offer giant basketball Plinko games, oversize Jenga sets, and bowling alleys along with local craft beers.

According to CBS MoneyWatch’s Kim Peterson, plunging gas prices is good news for breweries. The average motorist stands to save $700 this year, some of which might be spent on beer.

Newcastle Brown Ale is back at it, sponsoring a Super Bowl “ambush ad” and inviting other non-“official” brands to join in. Last year’s ad featured an extended rant by actress Anna Kendrick.

Caveat emptor. Fortune magazine’s Brad Tuttle names five “imported” beers that are brewed in the United States: Kirin, Beck’s, Foster’s, Killian’s, and—believe it or not—Red Stripe.

Pennsylvania’s Snitz Creek Brewery is incorporating a local specialty—Lebanon bologna—into one of its beers. Snitz Creek has also brewed beers using local pretzels and opera fudge.

Finally, Anheuser-Busch offers another reason not to over-indulge. In this year’s “Up for Whatever” Super Bowl ad, a Bud Light drinker gets pulled into a life-size Pac-Man game after a night out. Imagine running from Blinky, Pinky, Inky, and Clyde while fighting a hangover.

How Long Can Craft Beer’s Run Last?

Time magazine’s Brad Tuttle wonders how much longer craft brewing’s run can last. His list of concerns starts with the new definition of “craft brewery”: six million barrels a year hardly fits the image of the indie underdog challenging Big Beer–which, for its part, has rolled out “crafty” beers like Third Shift and Blue Moon.

Then there’s sticker shock. A growing number of craft breweries are putting their high-end beers in 22-ounce bomber bottles. They justify the high price of the product by comparing it to wine, but Tuttle points out that a customer with a bit of math savvy can figure out that the per-ounce cost of bomber beer is twice that of beer sold in six-packs.

Powered by WordPress