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Comment by tptacek

This is past silly. It makes absolutely no sense for "big beer" to try to "crush" craft beer.

First, it's not possible: it's too easy to start new breweries, and too easy to get local distribution to bars and the kinds of stores that already do a good job of stocking craft beer. The capital costs to start a new craft brewery are small. There are tens of new brewery starts in major metros every year (we're flooded with them in Chicago). So AB InBev takes out Goose Island. Who cares? For every Goose Island, there's a dozen Half Acres.

Second, it doesn't make economic sense. Macrobrews and tiny local craft brews are not substitutable products. Macrobrews are defined not by quality but by availability: they're produced in enough quantity and their logistics are managed competently enough to be reliably available in the places where people who buy macrobrews shop. The same is absolutely not the case for craft beer; even the best-run largest-scale craft breweries are often on allocation systems with retailers.

By the way, AB InBev's customers generally aren't trying to maximize IBUs, don't give a shit which hop varietals got used, and would probably assume a brett beer had somehow gone bad. Again: not substitutable products.

Meanwhile: on the off chance that a Three Floyds or Bruery "graduates" to real nationwide distribution, in 6-pack/case format, Big Beer will simply buy them. They can, in effect, use craft breweries as laboratory for product development: the products that succeed in the market get acquired, and AB InBev supplies its logistics and distribution to milk profits from the acquisition. It's a very old, very effective business model (see, for instance, Cisco).

Finally: I call BS on the idea that Big Beer somehow ruins acquired craft breweries. Goose Island is if anything doing a more consistent and competent job now than they were prior to the acquisition.

parent tptacek 11 years ago

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