Boozin’ Blog

I’ve been fascinated to watch the anit-Anheuser-Busch Inbev movement over the last few months. Since the takeover of the American brewer by Belgium based Inbev a loud minority of beer drinkers have advocated a drink-American-only policy. Their latest efforts have focused on convincing Americans to drink Sam Adams on Super Bowl Sunday this weekend instead of anything from the big three.

I have to wonder if Jim Koch foresaw these events when he formed the Boston Brewing Company and established its flagship brew, Sam Adams Boston Lager almost three decades ago. Probably not. Back during the Reagan years who’d’ve thunk that the three brewers that dominated American beer, Anheuser-Busch, Miller and Coors, would all be foreign owned by the time the vice-president’s son’s administration was over. (And who’d’ve thunk that that son would be George and not Jeb but that’s another conversation.)

But that’s what happened and suddenly we have as the country’s largest domestic beer brand a beer that is so well branded with the name and image of one of the original American patriots that many know the beer better than they know it’s namesake.

Boston Brewing Company makes good beer. However if you really want to keep the money you spend close to home here’s my suggestion. Spend it on beer that’s brewed nearby. For most of you I’d imagine that Boston is more than a couple hours drive away. In that case, look for that regional brewer in your area that isn’t distributed nationwide and spend your dollars on a pack or two of their best.

Better still stop in at your local brew-pub. Chat up the bartender, taste some of their brews and pick up a couple growlers of your favorites. Talk about keeping you money local; this way it stays right in your community!

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It should come as no real surprise that Inbev shareholders have approved the deal to buy Anheuser-Busch. Only two more hurdles remain - approval by Anheuser-Busch shareholders and regulatory clearance – but there’s little doubt that the big beer buy will go through.

It’s interesting that this was the year Anheuser-Busch starting pushing the idea of “American lager” and “American ale.” Although the marketing plans were in place well before the first offer from Inbev some are already pointing to the brewer’s use of American as a cynical attempt to make beer drinkers overlook the foreign ownership. I suspect that this perception will deepen with time as people look back at 2008 as the year Inbev bought A-B and the same year that American began to appear prominently on the advertising and labels for Budweiser.

Actually they began using American because they decided that with Budweiser American Ale they would define the idea of “American ale” in the same way that Budweiser has come to represent “American lager.” They have a pretty strong argument in the lager category. Although Budweiser appeared on the scene around thirty years after lager began being sold in a commercially viable way in the US it has since become one of the best known exemplars of American lager.

But I’m not so sure is that’s possible to do with ale. There are so many different types of ale that it seems unlikely any one can serve as the quintessential ale. Can one particular ale serve to represent the family of beers that includes IPA, stout, barley wine and hefeweizen? This is also true of lagers but American’s are not nearly as familiar with different lager types as they are ales.

Also, while the craft beer “revolution” is roughly as old as was the lager business was when Budweiser lager appeared, Americans are more educated about beer and more familiar with style variations now.

Anheuser-Busch is facing an uphill battle if they hope to define ale for Americans.

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In case you haven’t heard what’s going on, here’s the issue. European beer giant Inbev appears to be making moves to take over Anheuser-Busch. As I pointed out previously I doubt that this will have much of an effect on the major products like Budweiser, Michelob, Busch, etc. But Inbev’s leaner meaner approach to beer will likely lead to fewer of the craft-like beers and real craft brewers that A-B has been dabbling in over the last few years.

Another movement has arisen which caught me by surprise. It shouldn’t have but it did. SaveBudweiser.com makes the argument that another U.S. company shouldn’t be allowed to fall into the hands of an overseas concern. The site does mention the “great taste” of A-B beer but only peripherally. Its main thrust is clearly a jingoistic one – don’t let those greedy Belgians get their hand on our company.

Overall I don’t think that an Inbev takeover would really mean that much. Let’s consider a couple of instances of big beer mergers and acquisitions.

First, many beer drinkers would be surprised to know that Miller hasn’t been just Miller since 2002. The company is now called SABMiller. The SA stands for South Africa. Five years ago an African brewer became the second biggest beer company in the world when it acquired 100% of Miller. To make things more confusing SABMiller and Molson Coors (a Canadian company) will merge their US interests later this year. Have any of these things had a really major affect?

Second, consider the case of Rolling Rock. Inbev acquired the well-known regional brand and left it largely untouched. The famous brewery in Latrobe, Pennsylvania continued to churn out the familiar green bottles of Rolling Rock. Then a few years ago Inbev and Anheuser-Busch cut a deal that included, among other things, A-B’s distribution of Inbev’s brands like Stella Artois, Becks and Leffe. Rolling Rock was also part of this deal. Once A-B had control of the company they took the brand, the distinctive bottles and got rid of pretty much everything else. They closed the brewery leaving the workers without jobs and moved production to their New Jersey plant.

I doubt that SaveAnheuser.com will receive overwhelming support from Latrobe.

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Surely by now you’ve heard of the bid for Anheuser-Busch that Inbev is rumored to be considering. At this point there’s only rumor and speculation but this is often how these things first appear in the world of big business before becoming reality.

There’s enough real to this rumor to make Bloomberg columnist David Pauly wring his hands fretfully about the fate of his beloved Budweiser. Never fear, Dave, Bud will be safe. Given past performance I doubt that Inbev will dismember nor significantly alter the well-known brand. There might be some shuffling and shifting of small aspects of Bud but the taste and the general market position of it will remain largely intact.

The real danger of the Inbev takeover is what it will mean to the craft beer industry. The story of such take-overs in Europe has been one of the race to the bland. When big beer companies like Inbev take over smaller brewers their big, recognizable brands remain but the smaller product lines tend to get choked off.

Anheuser-Busch, on the other hand, long ago recognized the potential of the craft beer industry in America. They have been working on long-term strategies to claim as much of that part of the market as they can.  The “faux crafts” of A-B are well known. Lesser known is the huge investment that A-B has put into independent brewers. Deals like the one famously made with Redhook more then fifteen years ago are far more common these days than most beer drinkers realize. A-B owns minority shares in small, regional brewers all over the country and has made distribution and marketing available to these brewers that otherwise would have been out of reach.

Does Inbev understand to potential of this market? I doubt they care. Although A-B’s motives are no less based in profit they have the ability to think long term while Inbev’s exploits seem more focused on a slash and burn policy designed to produce quick profit.

By the way, I recognize that fans of Rolling Rock with memories must now think that I’m completely nuts.

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