• An open Letter on AB Buyouts and Advertising

    An open Letter on AB Buyouts and Advertising

    From the Founder and President of Renegade

    To anyone who gives a shit:

    Buyouts have been a hot topic lately with the recent purchase of 10 Barrel Brewing and Elysian Brewing by AB InBev. As a small brewery owner, I have reflected a lot on these changes to the industry and here is why these purchases should matter to you the consumer:

    Craft Beer is Independent

    Craft beer, by definition, is independent. We are making more than beer, we are supporting a way of life that is truly American. We are group of rag tag bootstrapped businesses banding together to make something of the highest quality. We are making something in America by American owned businesses and in the process creating good jobs in quality work environments where people are respected and valued. We are saying no to corporate models of making the cheapest product possible and covering it up with advertising.

    The more buyouts that occur, the less independent this industry becomes. This means that we have fewer voices to stand up for legislation that benefits small independent business owners like preventing the sale of full strength beer in grocery and convenience stores in Colorado. This issue could threaten the livelihood of many small brewers and liquor store owners and will certainly lead to fewer craft choices for Colorado consumers. Would AB object to this legislation? I think not.

    Small and independent also means there are a lot of us. We are sprinkled throughout the country in many different communities contributing to many different local economies through sales and excise taxes. Craft brewers also have a rich tradition of generously donating to local charitable causes (every week Renegade donates a portion of sales to a local animal shelter). More consolidation means less impact on local economies.

    Now, I am not unaware that every business owner needs an exit strategy, but craft brewery owners need to find exit strategies that don’t endanger craft as a whole. With fewer independent brewers, the market that is based on creativity and uniqueness will be more based on profit and cost savings, which brings me to my next point.

    Craft Beer is Not a Margin Game it’s a Quality Game

    Craft beer is not a margin game. It is in the sense that you need to have some margin or you will be closing your doors. But, unlike macro brewers, craft brewers don’t compete with each other solely on margin. Craft brewers compete on quality and creativity. This benefits you directly as the consumer. Teaching AB InBev to compete on quality and creativity is a bit like teaching an old dog a new trick. Their corporate structure is based on dumbing down their product to save costs and using marketing to cover up their short comings.

    If AB continues to acquire craft brands, their corporate muscle will allow them to get a six pack price of “craft” beer in their portfolio well below the price that Renegade Brewing or any other small independent brewer can offer. Our margins are so thin I could give you a clean shave with them, but I will never compromise the quality of our product to increase that margin. As the craft uninitiated begins to try these AB “craft” brands, they won’t know that quality has slipped because they are coming from drinking Bud. They will only know that the price of this “craft” six pack is $2 less than my six pack, it has more flavor than Bud, and I must be sitting in my mansion somewhere getting fat and happy of my extra expensive six pack. In reality, I make difficult budget decisions everyday in running my business because we operate off such a small margin.

    Well how big is this craft uninitiated part of the market, you ask? Only a mere 92% of beer  market belongs to the macro brands. Yes, price wars are a serious threat to craft beer. And, if you don’t think that AB will water down quality, consider their latest move.

    Craft Beer Quality Will Be Watered Down by Macro Buyouts

    During the 2015 super bowl yesterday, AB aired an ad that purported that Bud is “brewed the hard way” and that it is “made for people who like beer” and is “not made to be dissected”. One of the lines that craft brewers have particularly latched onto is “let them sip their pumpkin peach ale”. Could AB have been referring to their coffee pumpkin ale? As we all know as of January 23rd AB InBev produces a coffee pumpkin ale called Punkuccino under their newly acquired Elysian line of beers. Or do you think AB is even aware that they now produce this beer?

    You see, not two weeks after acquiring one of the most respected craft brands on the market did they start an ad campaign that is directing at hurting the sales of that company. Now if AB’s motivations were to buy that brand to build it up, why would they launch a marketing campaign to deliberately hurt the brand they just purchased? I would suspect it is because AB’s recent purchase of craft brands is more about watering down the quality and cutting costs and taking the margin that brand has to offer in a short term game. If ultimately the brand dies off and leaves the market, then AB has nothing to lose, they have one less craft beer on the market to compete with Bud, Bud Light and any other low quality macro brand they produce.

    Oh, and if you don’t think the macro brands will lie to you, you need only consult the line “Brewed the Hard Way”. If pushing buttons is brewing beer the hard way, then I don’t know what you would call what we do at Renegade, maybe “Beer Brewed the Purely Stupid Way”. Everything we do is manual. Our brewers touch every single part of the process. We sweat when we work. We are sore the next day. Are we unique? No, this is craft beer, truly brewed the hard way because we care.

    In short, independence is necessary to continue craft beer as you know it. Craft brewers will never out-price or out-advertise AB InBev. But, we can and do, out-do them on quality, creativity and contribution to our local communities.

    Thank you for supporting craft beer,

     

    Brian O’Connell

    Founder and President

    Renegade Brewing Company

     

     

     

18 Comments to "An open Letter on AB Buyouts and Advertising"

  • Dave Potter says:

    February 2, 2015 at 9:16 pm - Reply

    Brilliantly put, thank you for such a thorough analysis of the craft beer buyout situation and last nights absurd commercial.

  • Juan says:

    February 2, 2015 at 9:43 pm - Reply

    I am definitely visiting Renegade Brewing the next time I make it to Denver!

  • Gary Thomas says:

    February 2, 2015 at 9:44 pm - Reply

    An excellent letter. My wife and I plan to open a craft brewery in the next 2 years. We know this process will be difficult and the work long and hard. We will be proud to be associated with other breweries like Renegade. You make excellent beer and have a great staff, keep up the good work!!!

  • Vince says:

    February 2, 2015 at 10:03 pm - Reply

    Right on. Well said. Stick it to them.

  • Jeff says:

    February 2, 2015 at 10:24 pm - Reply

    Very well taken points. This letter could and should be written to address customers about ALL small locally owned businesses. Otherwise there will only be the “Marts” of the world in which to buy mass produced crap.

  • Bear says:

    February 2, 2015 at 11:54 pm - Reply

    Anyone ready to take to twitter with hash tags #TheHardWay and use it to highlight our favourite local crafts?

  • Josh says:

    February 3, 2015 at 12:43 am - Reply

    As I watched the Bud commercial last night (and laughed and agreed with some of the twitter outrage that immediately followed), I couldn’t help but decide to drink even less Budweiser than I already do although this probably doesn’t matter to Bud as that amount is minuscule today. Thank you for putting into words all the hard work and creativity which goes into the process Brian. That variety is exactly why I tour around Denver visiting all the different breweries not to mention talking to the brewers themselves about what inspires them so I can create better beer myself in my carboys at home. On this cold day I am looking forward to drinking a 5:00 in the sun once Spring rolls around, but maybe I’ll stop by and hopefully raise a glass of Hammer and Sickle with you soon.

    Na zdorovye!

  • Bobbie says:

    February 3, 2015 at 1:27 am - Reply

    I have noticed several breweries today announce they are brewing up a Peach Pumpkin Ale. My goal is every craft brewer that brews a PPA i will visit and have a pint. I’ll visit many others to but just to show AB that I dont drink their stuff but will try a Peach Pumpkin Ale any day of the week.

  • Ceebus says:

    February 3, 2015 at 2:57 am - Reply

    “first they ignore you,
    then they laugh at you,
    then they fight you,
    then you win.” -Ghandi

    Congrats to the craft beer industry. With their childish Super Bowl ad, macro “beer” has advanced to step two. Raise a glass to steps three and four!

  • Debbie says:

    February 3, 2015 at 5:36 am - Reply

    Thank you. As an actual human, who likes to drink beer, I cannot drink AB products. They give me heartburn and they taste awful. I was insulted by the Superbowl commercial that ridiculed craft beer. AB is a bully with a bad product. I love my local brewers. They are awesome people, who live in the community and support the town, the local teams, the people who live and work here. They employ locals. They love our town and we love them.

  • Sudz Terkel says:

    February 3, 2015 at 1:32 pm - Reply

    Well stated, Brother McConnell to which I’d only add, “Let us lift our glasses [a Redacted, of course] to the triumph of creativity over mediocrity.”

  • Seth Somers says:

    February 3, 2015 at 1:41 pm - Reply

    How do Boston Beer Company, Yuengling and others fit your description. Do you think that quality is guaranteed because a brewery is small? There is so much poor quality beer in craft, I would be more worried about that than what ABI shows on TV. This letter smacks of ego and naivety.

  • Shaun says:

    February 3, 2015 at 6:59 pm - Reply

    Great article. Very well said. Big businesses generally do not care about local economies, because the people who run them do not live in the communities in which they operate. Small business, like local breweries, add value to our community and economy.

    To the comment from Seth, your experience isn’t mine. Every local brewery I’ve been to around the country has consistently produced better beer than Budweiser, Coors, etc. Those latter beers are consistently mediocre, but hey, they are consistent! Oh, and those beer makers are consistently making tons of dough because of their volume and market share. Most beer drinkers I’ve met would much rather drink an IPA or Stout from a local brewer than drink what their parents and grandparents grew up drinking.

    Oh, and Seth, not sure how the article is egotistical. In fact, I’d say the author tapped into his Superego. The article is about how better beer is produced, and about how buyouts hurt the industry in the long run. Big corporations don’t value their products the way that small businesses do. They are removed from the work that goes into their “craft.”

  • Marc says:

    February 3, 2015 at 8:27 pm - Reply

    Stick with Renegade period. I cannot drink any water beer any Budweiser or mega beer like coors or InBev. No thank and very poor quality beer. I love triple IPA E3 and Hammer and sickle imperial stout and much more seasonal beer beets. I love it.

    I’m distract any products from CoorsMillers or InBev or other corporation.

    Go Renegade and any true craft beer.

  • Will says:

    February 3, 2015 at 11:28 pm - Reply

    so brilliantly said, I wonder if the craft brewers are cutting into there pockets and they don’t like it? Bo Whoooo!!!!! I will always buy, drink and love craft brewing as I’m homebrewing myself and a deer friend is starting up…..I say F AB…….long live crafting……

  • Laura says:

    February 4, 2015 at 12:37 am - Reply

    Thanks Brian, Your message is well written with the passion that all craft brewers and craft beer appreciators feel. (Check my last name matching a brewer at Elysian) … I get it :-) and I appreciate the time you took to explain this situation. Next time I am out in Denver for the GABF, I will stop in and buy a round for those nearby.
    Cheers,
    Laura Luke

  • beerwoborders says:

    February 5, 2015 at 7:30 am - Reply

    You know who doesn’t have to make a Peach Pumpkin beer? Elysian. ‘Cuz they already did…
    https://untappd.com/b/elysian-brewing-gourdgia-on-my-mind-pecan-peach-pumpkin-amber/834072

    Personally, I’d prefer to wait for the Shock Top Peach-Pumpkin-a-Rita to come out.

  • Arvada soap says:

    January 8, 2016 at 7:13 am - Reply

    so sweet

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