Shock Top

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.

Beer….By the Numbers

  • U.S. brewery count as of June 30, 2015: 3,739.
  • Increase over the year before: 699.
  • Full- and part-time workers employed by U.S. breweries: 115,469.
  • Premium beer’s share of A-B InBev’s U.S. sales: 63 percent.
  • Craft beer’s share of Anheuser-Busch InBev’s U.S. sales: 2 percent.
  • Shock Top’s share of A-B InBev’s U.S. craft beer sales: 50 percent.
  • A-B InBev’s share of the U.S. beer market: 45 percent.
  • MillerCoors’s share of the U.S. beer market: 26 percent.
  • Craft beer’s share of the U.S. beer market: 11 percent.
  • Beer drinkers arrested for DUI in Napa County, California, in 2014: 361.
  • Wine drinkers arrested for DUI in Napa County in 2014: 114.
  • Tap handles at the Raleigh (North Carolina) Beer Garden: 366 (believed to be the world’s most).
  • Locally-brewed beers on tap at the Raleigh Beer Garden: 144.
  • Percent of the price of beer attributable to taxes in Mississippi: 60 (highest in the nation).
  • Percent attributable to taxes in Montana and Oregon: 32 (lowest in the nation).
  • The Friday Mash (Coke No Pepsi Edition)

    On this day in 1886, pharmacist John Pemberton first sold a carbonated beverage named “Coca-Cola” as a patent medicine. Pemberton, a wounded Confederate veteran who became addicted to morphine, developed the beverage as a non-opium alternative.

    And now…The Mash!

    We begin in Rochester, New York, where North American Breweries is putting Genesee beer, Genesee Cream Ale, and Genesee Ice in retro bottles. The packaging hearkens back to the 1960s, the heyday of the “Genny” brand.

    Sad news from North Carolina. Dustin Canestorp, a 20-year veteran of the Marine Corps, has closed his Beer Army Combat Brewery. He blames state franchise laws that effectively tie a brewery to a distributor for life.

    Executives of the nation’s big breweries are getting worried about the amount of discounting going on. The beers you’re most likely to find on sale include Bud Light, Budweiser, and Shock Top.

    Craft beer has been susceptible to “the next big thing” mentality. According to Allen Park of Paste magazine, trends that “have more than overstayed their welcome” include waxing bottles, session IPAs, and adjuncts.

    Craft brewers are scrambling to comply with a little-known provision of the Affordable Care Act, aka “Obamacare,” which requires breweries and restaurants to disclose nutritional information, including the caloric content of their beers.

    City officials aim to make Toronto the world’s craft beer capital. Measures include creating a craft brewery culinary trail and lowering regulatory barriers to brewery start-ups.

    Finally, a growing number of craft breweries are making their recipes available to the public. Some, such as Russian River Brewing Company and Rogue Ales, are working with supply shops to develop kits for homebrewed versions of their beers.

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