It's Not Craft, It's Crafty by Greg Katzman In the U.S., we drink $200 billion worth of the hops-brewed libation annually. What many Americans might not know is that most domestic beer, 90 percent in fact, is dominated by just two companies: Anheuser-Busch InBev and MillerCoors. Innovators, however, are challenging that dominance in the form of craft beer breweries. In fact if you're a regular reader of BeerNexus or a friend of Bob, that's about the only kind of beer you ever drink. Small mom-and-pop-style breweries — or larger ones like Sam Adams — now account for about 6% of domestic beer sales. That may seem like a small number, but it's been growing every year since the early 1990s, while big brewers' share is declining. There are now more small breweries than there were before Prohibition, when beer was largely a regional business. Sounds good but there are issues in this beer paradise. First off, every brewer wants to be on grocery store shelves at eye level and craft brewers say big beer is increasingly pushing them out of those prime spots. Second, there's the issue of what the Brewers Association calls "crafty" beers — beers owned by big beer companies disguised as small craft beer. A common example is Blue Moon, a Belgian-style beer, which many people think is a craft beer. It's not of course, it's owned by MillerCoors. Craft brewers understandably argue that this limits consumer choice. For instance, if a bar stocks the top brands from a big brewer along with these "crafty" beers, consumers are essentially only buying from a single company. Look on the label you say. Sorry, often times the origin is top secret. Instead you'll find some pseudo sound craft name (Third Shift, Tenth and Blake, etc.) designed to do one thing - fool you. I believe big beer should print its names on the bottles. There should be a transparency of parent company ownership, on the beer label so the beer lover has a chance to know who's behind those brands.Branding matters to many beer drinkers, especially those who care about the brands they consume and who owns those companies. I've heard my good friend Bob say simply let the beers compete in the marketplace and the true craft beer will surely win. I agree but sadly that tenant of free-market capitalism won't work in this case. Sad to say but the producers with the best product at the lowest price will not win; it's not the reality of the beer business. Big producers use their capital to keep competitors from the market place. Big producers work toward the oligarchy of nothing but big producers. Even federal law does not protect true craft brewers. The laws generally force the small brewers to fight for distributorship not letting them do it themselves. That clearly benefits Miller/Coors and Budweiser.. That's most certainly not a free market in any way. Capitalism isn't the problem, government regulation is a problem. Keep in mind there are also states such as Ohio where beer over 12% abv is not allowed. This again only benefits the big guys who don't make anything stronger than 6% adjunct lagers or 8% 40 ouncers. It's my believe that government should be out of the alcohol arena. If that happens the survival rate of small brewers will increase dramatically. Look, competition is a good thing but excessive regulations stifle it; more regulations would almost certainly benefit Miller/Coors and AB-InBev . That would hurt the smaller brewers which means when there are less competitors allowing big beer to charge whatever they want as you will have no other options. Don't feel bad for the big boys by the way. The big breweries will always be college kids who drink their swill because they haven't yet learned what real beer tastes like or simply want to get drunk on a budget. And don't feel bad for them because they are the ones trying to limit competition in the marketplace. Talk to a start-up brewery and ask them how easy it is to get a distributor or shelf space. Ask them about the perks big beer gives and the threats they make. Ask them how big beer will force them to take one of their slow moving products just to gobble up shelf space and keep craft competition out. Why would the retailer listen you ask? If you want to get your Coors or Bud Lights then you better listen. Hope I didn't get too carried away there. I'm just passionate about good beer. I really have nothing against big beer as such, just their marketing tactics. ------------ Thanks to Greg for writing such an interesting and thoughtful column. It's a controversial topic to be sure but an important one to beer. Please remember I encourage all my readers to send me their articles and just maybe you'll see yours in print just like Greg! Cheers! Bob |
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