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RateBeer sells minority stake to AB/InBev subsidiary, reactions mixed

ratebeerIn a climate that can only be described as “highly-volatile,” Anheuser-Busch/InBev has made yet another acquisition. But, this time it is not a craft brewery that the beer giant has purchased. This time a division of AB/InBev known as ZX Ventures has taken a minority interest in one of craft beers most venerable institutions: RateBeer.com. The sale took place in October of 2016 and was announced to the public and RateBeer users Friday, June 2, 2017.

For those unfamiliar with RateBeer.com, it is a website were craft beer lovers can document and rate beers they have tasted. Since the site first went online in May of 2000, millions of beer reviews have been posted on what the owners call the, “premier resource for consumer-driven beer ratings.”

ZX Ventures is a “global disruptive growth group, incubator, and venture capital team,” as described by the company’s website. The goal of the company is to gather consumer data to better anticipate their future needs. This goal is accomplished by mining data from various sources including RateBeer and other sources from all over the world.

The question that is on many people’s minds now is whether RateBeer can fulfill the mission it espouses on its website: “Our mission is to provide unbiased, consumer-driven information about beer and breweries and to enhance the image and worldwide appreciation of beer.” According to RateBeer owner, Joe Tucker, they can.

“ZX Ventures,” Tucker said in an announcement about the sale. “Has the utmost respect for the integrity of the data and the unbiased service we offer to the entire community and industry.”

Tucker goes on to explain that the integrity of RateBeer’s computational methods and reliance on crowd-sourced reviews, “Obviously won’t and cannot change.” He says that RateBeer has a large and loud membership and a data transparency initiative to ensure data will not be manipulated in AB/InBev’s favor.

But, at least one craft beer brewer, Dogfish Head Brewing Company’s Sam Calgione, isn’t buying it and has already spoken out regarding RateBeer’s move.

“We believe,” Calgione said via Dogfish Head’s blog. “This is a direct violation of the Society of Professional Journalists (SPJ) Code of Ethics and a blatant conflict of interest.”

Later in the same blog post, Calgione asks Anheuser-Busch and RateBeer to remove all data relating to Dogfish Head from the website.

“It just doesn’t seem right,” explained Calgione. “For a brewer of any kind to be in a position to potentially manipulate what consumers are hearing and saying about beers, how they are rated and which ones are receiving extra publicity on what might appear to be a legitimate, 100 percent user-generated platform. It is our opinion that this initiative and others are ethically dubious and that the lack of transparency is troubling.”

Calgione fully understands the power that a company like Ab/InBev can wield. In 2011, he had a popular craft beer show called “Brew Masters” that aired on the Discovery Channel. After a short, but successful run of the show that focused on Calgione and his brewery, the series was cancelled. The reason for the cancellation has been widely reported as AB/InBev threatening to pull all advertising on the channel and its affiliated channels if the show continued.

In a Facebook post, the owners of Moonlight Meadery and Hidden Moon Brewing quote ZX spokesperson, Samantha Ross: “It’s really insight. It’s insights into consumer trends. It’s a better understanding of the beer consumer, and the beer markets globally. That’s really going to help us kind of keep our finger on the pulse.”

The Meadery/Brewery’s post then goes on to compare this statement to wartime intelligence gathering.

Among the users of RateBeer, reaction is mixed. Many are condemning the sale, while other congratulate Tucker on working to further the future of the site. Most are conflicted and worry that the site they have loved contributing to for 17 years is now partially owned by a subsidiary of the company they have come to think of as the enemy.

“I do have concerns over impartiality,” RateBeer user The_Osprey posted on RateBeer’s forums. “But, I think the site deserves the recognition and investment and joet (owner Joe Tucker) deserves to put his feet up a bit. I hope the site stays true to what has made it a success so far.”

If, as Tucker has promised, ZX is only interested in the data it can cull from RateBeer, then there is very little for users, brewers and others to be concerned regarding the unbiased nature of reviews on the site. But, as stated in the opening of this article, the craft beer community is in a state of volatility, it feels as if it is under constant attack from market forces exerted by big beer to quash smaller craft producers. The reactions from industry insiders like Dogfish Head and Hidden Moon may be overly harsh, but in this day and age, that is the nature of the game.

Time will tell if RateBeer remains the unbiased source of beer information it has been in the past. This sale inject controversy into an area of craft beer culture that, though accustomed to controversy, should remain pure for the sake of integrity.

 

 

 
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Posted by on June 6, 2017 in Beer, Beer News

 

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Craft Beer Mergers

Over the past 10 years craft beer has been experiencing an incredible renaissance. The beers that were once novelty items relegated to obscure shelves at the local grocery or liquor store now occupy an entire section of the beer section at many stores. But, just like in the stock market, with such phenomenal growth comes the inevitable correction. That means that, because of economic factors some breweries will likely close or seek out other options to remain viable. Today, it is quickly becoming the norm for craft brewers to form coalitions, merge with other breweries or get bought by the big breweries.

Greg Koch, the outspoken craft beer advocate and owner of Stone Brewing Company in San Diego, Calif., secured $100 million in April from a group of “independent investors,” that will be used to acquire “minority, non-controlling” stakes in craft breweries. His finance platform called “True Craft,” is designed to help craft breweries avoid being bullied into selling to the big breweries.

“They can make their own decisions about their future,” Koch said in an article in industry magazine Bevnet. “They can stay independent. They can get financing and flexibility that they need to flourish, while keeping their soul and control.”

In March, Colorado-based Oskar Blues Brewing Company used a similar tactic to add Tampa’s Cigar City Brewing Company to their portfolio. Through a Boston private equity firm called Fireman Capital Partners, Oskar Blues has been able to bring Cigar City under the same umbrella as Perrin Brewing, and the Utah Brewers Cooperative outfit that includes the Wasatch and Squatters brands. The coalition strengthens each brewery individually and allows them to retain their own unique presence while providing an influx of financial security and access to surplus production facilities at Oskar Blues’ Colorado and North Carolina breweries.

In February of this year, two prominent East Coast breweries, Southern Tier and Victory announced that they were merging breweries under the title Artisanal Brewing Ventures. Under the new arrangement, both breweries will retain their own identities and creative control, but will join forces for marketing and distribution.

“Like-minded brewers,” said Victory Brewing founder, Bill Covaleski in an interview on TapTrail.com, “Such as Victory and Southern Tier can preserve our character, culture and products by standing together. Allied we can continue to innovate and best serve the audience who fueled our growth through their loyal thirst.”

Finally, there is a growing presence of the big beer brewers in the world of craft beer. And this is a point of much consternation to many craft beer drinkers who fear that “Big Beer” will ruin the innovation and imagination found in many craft breweries. Breweries that do sell to Big Beer are often reviled by many in the craft beer community. But, despite the shouts of “Sellout!” that permeate the Internet when another craft brewery sells, beer connoisseurs still line up for beers such as Goose Island’s Bourbon County Brand Stout. Goose Island sold to Anheuser-Busch/InBev in 2011. Since then there has been a slew of craft brands bought by non-craft breweries such as Constellation Brands’ purchase of Ballast Point Brewing, Heineken’s purchase of a 50% stake in Lagunitas Brewing Company and, most recently, MillerCoors’ purchase of Terrapin Beer Company in Athens, Ga.

How will all this buying and selling within the confines of craft beer affect the overall industry? The jury is still out, but for the short-term it does mean that brands will be more available to more beer-lovers. And, how could easier access to good beer be a bad thing?

 

 
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Posted by on September 9, 2016 in Beer, Beer News

 

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A-B InBev acquire 10 Barrel Brewing Company

10_Barrel_Brewing.sflbThe folks at Anheuser-Busch InBev are at it again and have snapped up another craft brewery. This time they have grabbed Bend, Ore. Producer 10 Barrel Brewing Company. This is the mega-brewopoly’s second craft acquisition this year; the first was New York’s Blue Point Brewing Company.

Read the press release below for more details.

ST. LOUIS and BEND, Ore. (November 5, 2014) – Anheuser-Busch today announced it has agreed to purchase 10 Barrel Brewing Company, located in Bend, Ore. One of the country’s fastest-growing and most innovative breweries, 10 Barrel was one of only four U.S. breweries to win three medals and tied for most medals won at this year’s Great American Beer Festival, the largest beer competition in the world.

“For the past eight years, we’ve been brewing beer, drinking beer and having fun doing it.” said co-founder Jeremy Cox, who will continue to lead 10 Barrel along with his partners, co-founder and brother Chris Cox, and Garrett Wales. “We are excited to stay focused on brewing cool beers, get our beers in more hands, and make the most of the operational and distribution expertise of Anheuser-Busch,” said Cox.

10 Barrel expects to sell approximately 40,000 barrels of beer in 2014. Apocalypse IPA, the brewer’s most popular beer, accounts for nearly half of the company’s total volume.

“10 Barrel, its brewers, and their high-quality beers are an exciting addition to our high-end portfolio,” said Andy Goeler, CEO, Craft, Anheuser-Busch. “The brewery is a major contender in the Northwest, an area with a large number of craft breweries. We see tremendous value in the brewery’s unique offerings and differentiated style, which 10 Barrel fans know and love.”

In addition to the Bend brewery, the acquisition will include the company’s existing brewpubs in Bend and Boise, Idaho; and a Portland brewpub scheduled to open in early 2015.

Anheuser-Busch’s purchase of 10 Barrel is expected to close by the end of 2014. Terms of the agreement were not disclosed.

 
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Posted by on November 5, 2014 in Beer News

 

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Big beer vs. craft beer, a David and Goliath story

BA_logoThe Brewers Association, a non-profit organization that acts as an advocate for small brewers and brewing enthusiasts, fired shots across the bow of the mega beer producers of the nation yesterday, December 12. Charlie Papazian, president of the organization along with Bob Pease, the groups COO, and Dan Kopman who serves as a member of the Brewers Association Government Affairs Committee and is CEO of Schlafly Beer in St. Louis, authored an opinion piece that ran in yesterday’s St. Louis Post-Dispatch. While on the same day, the Brewers Association website published a similar piece.

The articles call out the likes of SABMiller, A-B InBev, and Heineken for jumping on board the craft beer band wagon and producing brews like Shock Top and Blue Moon. The op-ed says, “…they don’t label these faux-craft beers as products of A-B InBev and MillerCoors

In the article on the Brewer Association’s website, it is said, “The large, multinational brewers appear to be deliberately attempting to blur the lines between their crafty, craft-like beers and true craft beers from today’s small and independent brewers.”

Papazian has long been known as an advocate for small, craft beer producers. In 1978 he founded the American Homebrewers Association as an education and advocacy group for home beer-making enthusiasts. His group later merged with the Brewers Association and he became president. The group is well-known for its very visible festivals such as the Great American Beer Festival and Savour as well as its lobbying activities on behalf of small brewers.

In an article on the beer news website Beer Pulse, Tom Cardella, president and CEO of Tenth and Blake Beer Company, which markets brands like Blue Moon, Leinenkugel’s and Crispin Cider, responded:

“Anyone who visits Jacob Leinenkugel Brewing Company in Chippewa Falls, Wisconsin will understand the blood, sweat and tears that went into building that brewery, and they’ve continued brewing amazing beers for 145 years. And anyone who spends time chatting with Blue Moon Brewing Company founder and brew master Keith Villa will understand the passion and creativity that has gone into developing his Artfully Crafted beers for 17 years. To question the quality of these beers due to their size or success is doing a disservice to the entrepreneurs who created them, and to beer drinkers who love them. Most beer drinkers don’t get hung up on industry definitions, which often change. They just enjoy drinking great beer. Whether people call them craft or some other title is fine with us. We’ll just keep brewing great beer.”

Even Fortune magazine has taken notice of the actions of the big brewers. In an article that ran on their website November 15, the magazine says, “What’s noteworthy about these forays into the craft segment is the way these brands are purposely distanced from their Big Beer parents. You won’t find the Coors name on a bottle of Blue Moon. Rather, you see the name Blue Moon Brewing Company. The same goes for a bottle of Anheuser-Busch‘s Shock Top.”

To many, the actions of the large beer producers are signs that they are worried about the future of their brands. Indeed, over the past few years brands seminal brands like Budweiser and Coors have seen significant drops in their sales and market share. Research released by the Brewers Association shows that the overall beer industry was down 1.3 percent by volume and domestic non-craft was down 5 million barrels in 2011.

At the same time as the large American lagers have been seeing declines, the craft industry is experiencing unprecedented growth. Craft beer grew by 13% in 2011 and by an additional 12% in the first half of 2012.

A craft brewer, as defined by the Brewers Association, is a brewery that produces less than 6 million barrels of beer per year and is less than 25% owned by a national or multi-national adult beverage company. Meaning that brands such as Sierra Nevada, which produced approximately 724,000 barrels of brew in 2011, and Samuel Adams maker Boston Beer Company, which produced approximately 1.9 million barrels are considered craft breweries. By comparison, Anheuser-Busch produced a staggering 340 million barrels of beer last year.

The battle of David and Goliath between the big brands and craft breweries was made even more apparent in 2011 when a bill passed in Texas allowing small breweries to sell beer directly to consumers who toured their facilities. An article in the Houston Chronicle tells of A-B executive Mark Bordas appearing before the Texas senate committee that the bill discriminates against his company because it is tailored to breweries producing fewer than 75,000 barrels per year. Because of this, it appears that AB InBev is very concerned about the competition even the smallest of brewers introduces in the market.

Add to this that the major producers have been busily snapping up smaller breweries, and it is very apparent that craft beer is a force that big business wants to control. Just last year, AB InBev purchased popular Midwest producer Goose Island and has been rolling the brand out nationally. Other brands that have been folded into the big boys include Henry Weinhard, as well as large stakes in Red Hook, Kona, and Widmer Brothers.

In an interview with Bloomberg Businessweek Kopman said that all brewers should label their products so consumers aren’t mislead about a beer’s origin. “We definitely need to discuss this as an industry,” he said. “We need to have an agreed-upon standard for transparency where you are a multinational or an independent.”

And that is the true contention between the craft beer industry and the large producers. The mass producers seem to be trying to masquerade as craft brewers while the true craft brewers struggle to scratch out an existence among the heavily marketed and financed big boys. The Brewers Association ended their article by simply asking that beer-drinkers educate themselves on the beer they are drinking.

Keep up to date on all the beer happenings and news going on in town at the ALL NEW www.JaxBeerGuy.com.

 
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Posted by on December 14, 2012 in Beer, Beer News

 

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