Issue #6: Beer Wars

I watched a very interesting documentary today entitled, "Beer Wars." It was about the beer industry and the challenges faced by microbreweries in a market dominated by 3 brands, Bud, Miller and Coors. It really felt like the woman that did the documentary, Anat Baron, had an axe to grind but nonetheless it was entertaining and pretty informative.

A lot of it was focused on bashing the big boys and making them out to be bullies. Miller and Coors were pretty much exactly how I pictured them. A strong focus on profit and gaining market share; but they actually seem to really enjoy the beer industry and looked like pretty cool companies to work for. Anheuser-Busch was a completely different animal.

They had one focus, and that was becoming a flat out monopoly and garnering a 100% market share. Their plan to do this was simple, anyone who had achieved any level of success and built a recognizable brand, acquire them. Those that hadn't gotten that far, put them out of business. They even showed an internal sales video that looked more like a nazi propaganda film. A smooth talking sales rep is trying to get more shelf space with a customer. When he's informed that there just isn't anymore room, he cuts a hole in the floor and pushes a competitors product into it and says, "how about this big empty space here?" Funny? Yes, but wow. You also see how they've been able to control distribution through a "three tier" program that was put in place after prohibition but manipulated by big beer through their political connections.

The point when my feelings truly changed about Anheuser-Busch were when Sam Calagione, founder of Dogfish Head, shows a letter notifying him that AB is suing him to stop using the names, "Chicory Stout" and "Punkin Ale", beers he's been brewing for over a decade. Their claim is that the names are too generic and confusing to customers. Surprisingly they don't mention that AB is one of three companies to call their beer Budweiser, and they're not even the original.

There was a decent portion centered on Sam Calagione and Dogfish Head brewery and the strides he's taken and the risks he continues to take to do so. Being a huge fan of Dogfish Head and Sam Calagione it was really nice to see him get some exposure and credit as one of the faces of the craft movement.

In the end I don't think things are as dire as the filmmaker would lead you to believe. More and more people everyday are choosing flavor over advertising and retailers are noticing. Most distributors I go to are nearing a 50/50 split between craft and mass produced beer. Wegman's, the only grocery store in PA that carries beer (way too long of a story to get into right now) is about 80% craft, 12% import and 8% macro. The tide is definitely turning.

I liken it to McDonald's vs a locally owned restaurant. McDonald's is always going to make a lot more money but that doesn't mean they can't both be successful or that people can't eat at both. People should drink what they like and if what they like is Bud Light, good for them, that leaves more of the good stuff for me.


Drink On,

Dan