"Craft" beer sales top Budweiser

[WI_Wino]

I normally hate the term "craft" beer but thought this story was interesting. Note it's just Budweiser, not the rest of the Bud portfolio.

http://online.wsj.com/articles/budw...dales-for-jay-z-1416784086?mod=trending_now_3

 

[GilaMinumBeer]

Da hell is wrong with the term "craft" beer? What possible negative connotations can you derive from a word that denotes skill?

 

[sandyeggoxj]

Da hell is wrong with the term "craft" beer? What possible negative connotations can you derive from a word that denotes skill?

Well, technically big fizzy lager corporations have a very specific skill set of producing the same thing repeatedly, in multiple locations without a noticeable difference. That takes some skill too.

I think that people should keep in mind that things change over time. Right now we are moving from low diversity to high diversity. Is that good? Well I think so. But I am biased. If you read that article you can deduct that annual revenue for regular bud is down to 7.6 billion from 10 billion. That is a good chunk of change. Also, Inbev owns a whole host of brands so while budweiser is dropping some of the brands chipping off it's market share are in-house. Things such as bud light. So while it sounds like a great victory for the little guy it is just how it is phrased. And with that we are back to the idea that things change over time. Welcome to life.

 

[Mike_kever_kombi]

Maybe it's the way the media tosses around the term, without any real set of criteria, ie shock top and blue moon Sam Adams etc getting lumped into the craft beer category, by those who assume if it's not BMC it must be craft beer.

???just a guess???

 

[GilaMinumBeer]

Well, technically big fizzy lager corporations have a very specific skill set of producing the same thing repeatedly, in multiple locations without a noticeable difference. That takes some skill too.

Yes, yes it does. A very respectable skill, regardless of appreciation for the final product. Your point?

 

[lazysunday]

Yes, yes it does. A very respectable skill, regardless of appreciation for the final product. Your point?

Personally, I think the term "craft" beer was at first a subversive stab at BMC, to differentiate between corporate-machine produced lager and smaller-in-scope breweries.

However, as time moves, so does the evolution of the industry. Now "craft" is a buzzword for the uninitiated, which is why Shock Top and Blue Moon are often referred to as such.

Ultimately, I think that the industry is looked at incorrectly. The media, articles, etc. all point to BMC owning the lion's share of the Beer Market (95%+) while "craft" beer and it's many varieties take in the rest (~5%).

However, I honestly think that there are two markets: BMC and Non-BMC. For example, there are beer drinkers who swear by one or the other (Bud Light vs Coors Light) that will never in a million years drink anything else. They may try a Chainbreaker or Pliny and absolutely hate it. Some people do not have the palate for hop oils, roasted malts, yeast esters, etc. Some people just want to buy cheap booze in familiar cans. They prefer the feel, consistency, taste, and nostalgia. Coke Classic.

So, when discussing the "beer market" and how BMC share is slipping to "craft", I read this as a simple shift in the buzzwords, without much impact to the actual market itself. Breweries like Dogfish Head, Russian River, Deschutes, etc. are growing to fill a market that is already close to tapped out. There will never be a day in our lifetime where BMC shares any of the true market with "craft" beer because the core audiences are different. It isn't the same market.

Saying it is would be analogous to saying that beer is just beer. Which goes against what most "craft" breweries are trying to accomplish.

 

[MattyIce]

However, I honestly think that there are two markets: BMC and Non-BMC.

Well put.

 

[hannibalmdq]

Yes, yes it does. A very respectable skill, regardless of appreciation for the final product. Your point?

I strongly suspect that if the BMCs decided they wanted to compete in the American IPA category or really, whatever category they wanted to put an offering in, they have the skill and expertise to turn out an amazing product. It would probably put a lot of local brew pubs to shame. They're decision not to get into that market is probably more a factor of their business model than their personal tastes in beer.

I also strongly suspect that should the BMCs put out a world class hop bomb, there would be large percentage of folks who wouldn't even taste it because, "I don't drink BMC." There would also be a large percentage of their existing customer base wouldn't try it either.

Even with their market share dwindling a little, they know what their doing. If they need to, they'll make an adjustment.

 

[GilaMinumBeer]

I strongly suspect that if the BMCs decided they wanted to compete in the American IPA category or really, whatever category they wanted to put an offering in, they have the skill and expertise to turn out an amazing product. It would probably put a lot of local brew pubs to shame. They're decision not to get into that market is probably more a factor of their business model than their personal tastes in beer.

I also strongly suspect that should the BMCs put out a world class hop bomb, there would be large percentage of folks who wouldn't even taste it because, "I don't drink BMC." There would also be a large percentage of their existing customer base wouldn't try it either.

Even with their market share dwindling a little, they know what their doing. If they need to, they'll make an adjustment.

This. In fact, BMC puts more skill into every aspect of their craft than most any other brewery BECAUSE they strive for the quality control in consistent duplication.

 

[flars]

Maybe it's the way the media tosses around the term, without any real set of criteria, ie shock top and blue moon Sam Adams etc getting lumped into the craft beer category, by those who assume if it's not BMC it must be craft beer.

???just a guess???

Media might be getting the terminology "more correct". Yesterday morning, CBS news, covered Florida law suit concerning half gallon growlers. Positive "pro" stance. Last week covered increased % sales of true craft beer breweries and decreased % sales of the traditional breweries.

 

[Ferde357]

AB should be focused on putting out a product that the consumer wants. Not trying to convince the consumer to drink a beer that's totally different than what they typically choose to drink.

I don't buy the fact people wouldn't drink it because it's put out by AB. If it's a quality product it would be well received.

However the days of a single brand/type of beer dominating are over.

 

[GilaMinumBeer]

AB should be focused on putting out a product that the consumer wants. Not trying to convince the consumer to drink a beer that's totally different than what they typically choose to drink.

Your last statement goes against the entire premise of marketing in general, for any product. the whole point of marketing is to convince consumers to sonsum,e products they wouldn't typically choose.

I don't buy the fact people wouldn't drink it because it's put out by AB. If it's a quality product it would be well received.

If this weren't true then they would not put the effort they do into branding. The AB boycott is all too real and rediculous to the point of sport.

 

[hannibalmdq]

AB should be focused on putting out a product that the consumer wants. Not trying to convince the consumer to drink a beer that's totally different than what they typically choose to drink.

I don't buy the fact people wouldn't drink it because it's put out by AB. If it's a quality product it would be well received.

However the days of a single brand/type of beer dominating are over.

I'm gonna disagree with this. Brand perception is a huge thing. I appreciate that you feel that beer folks would be immune to it, but I'm not so sure.

If Toyota decided they wanted to make a 200k luxury car there are a bunch of engineers on their staff who would be fighting to get on that project. I'm sure they could design and build something super nice and roll off the factory floor as an appealing automobile.

The second they slapped that looped T on it's under a huge handicap. The largest reason for that handicap would be that the average type of person that buys 200k luxury cars just doesn't drive a Toyota.

 

[agrazela]

But LeBron drives a KIA, the TV showed me!

 

[hannibalmdq]

But LeBron drives a KIA, the TV showed me!

I've been driving a Lincoln....well....since.....[queue South Park]

 

[sandyeggoxj]

Yes, yes it does. A very respectable skill, regardless of appreciation for the final product. Your point?

Oh, I thought it was more obvious. It is the nasty C-word. AKA corporation. That is the negative. Corporations are crafting consistent beer.

Down with the corporate craft beer! Down with the corporate craft beer!





All joking aside. I just see beer with flavor and change verses beer that is always exactly the same and doesn't satisfy my desire for beer. The reality is that about half of the "craft" breweries that I go to do not satisfy me at all. Just having a small brew house and brewing something outside of light american lagers does not mean that you are crafting great beer. Typically these joints have a half-assed attempt to sorta follow the boring end of bjcp beers. An amber, porter, pale and stout that are mediocre and can easily be beat by homebrew don't deserve any glamour.

 

[Ferde357]

Your last statement goes against the entire premise of marketing in general, for any product. the whole point of marketing is to convince consumers to sonsum,e products they wouldn't typically choose.

You have to market to your segment. Craft beer is a different segment. Just like you wouldn't market an economy car to someone in the luxury car market. Not going to convince them no matter how much money you throw at it. That's referred to as strategic marketing.

 

[lazysunday]

All joking aside. I just see beer with flavor and change verses beer that is always exactly the same and doesn't satisfy my desire for beer. The reality is that about half of the "craft" breweries that I go to do not satisfy me at all. Just having a small brew house and brewing something outside of light american lagers does not mean that you are crafting great beer. Typically these joints have a half-assed attempt to sorta follow the boring end of bjcp beers. An amber, porter, pale and stout that are mediocre and can easily be beat by homebrew don't deserve any glamour.

And I think this is where the change in markets occurs. This is why there are two beer markets.

To an average beer drinker, the "boring end of bjcp" may represent 100% of the beer diversity. You could quite literally drink every Porter made by every "craft" brewery and not quite taste the same beer, yet to a certain audience (you) these are half-assed attempts to sorta follow the boring end of bjcp.

What's more, these can "easily be beat by homebrew" and "don't deserve any glamour". This is what makes corporate "craft" beer a perfect angle for InBev, because it allows the perception of diversity to their audience who isn't looking for anything more than what they already have.

You (and, by identity deference, the greater homebrewing community) will always be more impressed with the "outside-the-box" brews from some completely underground, regionally known brewery who produces by-batch differences in some crazy way; the "Red (Ale) Herring" by "Two Dudes and a Dog Brewing Company" which infuses pink peppercorns, wild yeast, and herring into their red ale.

This isn't a real beer or a real company, but you get my drift. I honestly think part of the reason so many homebrewers-gone-pro stories are stories of woe and failure is that, commercially, you have to produce for an audience average.

Which, at it's best, is going to taste like a half-assed attempt to sorta follow the boring end of bjcp beers.

 

[lazysunday]

You have to market to your segment. Craft beer is a different segment. Just like you wouldn't market an economy car to someone in the luxury car market. Not going to convince them no matter how much money you throw at it. That's referred to as strategic marketing.

Exactly. Doctors make the worst patients. Brewers make the worst consumers.

 

[sandyeggoxj]

Lazy, you have interesting musings. We should get a pint sometime.

Back on topic, I will agree that it is not possible to show up with red-herring beer (did you see what I just did there?) and make it an overnight success and beer revolution. I know that when I compare the "boring end" to good beer I'm not necessarily looking for some outrageous beer. I am just looking for really good beer. Now, there is a certain audience that is putting habanero into everything and aging in oak because oak instantly makes every beer good. That is a small world of beer drinkers.

We have brewery here that produces amazing beer. Some beers are traditional and to style and some are a little different. They are amazingly successful and can't grow fast enough. They identified what would sell in this market and delivered. They also pushed the market at the same time. No one made a good IPA until they started. I am comparing the mediocre breweries to places that produce consistent, amazing beer. That is a generalization. I think Stone makes great beer but their smoked porter should be thrown away. Some people love that beer and I have no idea why. That person and myself are different segments of a growing market. And Stone meets both of our needs. I see too many "micro-breweries" that just have safe beer and never try anything new. They don't have a seasonal tap or rotate in a different safe beer. There is nothing to get excited about and I get bored. I have also been accused of having a short attention span...

Another of my favorite Arizona breweries has a flagship farmhouse ale that is 8% and fermented with a in-house cultured wild yeast they collected. They can't keep that in stock. They are into weird belgian things and breaking in sours. Those are not run-of-the-mill beers that boring places are brewing.

The way I see the dividing line in craft beer is like the dividing line in homebrewing. When you home brew but don't pitch enough yeast, aerate well and ferment without temp control you can get lucky and make decent beer that your friends will like. But say you aerate well, pitch a healthy starter and finely control the temperature of the fermentation then you reach a new level of quality.

It might seem crazy but I have been to nano-breweries that open their doors without the ability to control temperature or put a bunch os 3bbl plastic conicals in a room that is 68 degrees to ferment away. Around here we know that is a bad idea. ACtive fermentation clearly raises the internal temperature quite a bit. But they are selling that crap. I've seen stuff like that over and over from "pro-breweries" and it blows my mind.

I think that moving into the future the growth of new breweries will slow and we may even see attrition in the industry as the poor performers are culled. I don't wish people poorly, but I have a small list of breweries that would be better off gone.

 

[Brettomomyces]

It might seem crazy but I have been to nano-breweries that open their doors without the ability to control temperature or put a bunch os 3bbl plastic conicals in a room that is 68 degrees to ferment away. Around here we know that is a bad idea. ACtive fermentation clearly raises the internal temperature quite a bit. But they are selling that crap. I've seen stuff like that over and over from "pro-breweries" and it blows my mind.

I think that moving into the future the growth of new breweries will slow and we may even see attrition in the industry as the poor performers are culled. I don't wish people poorly, but I have a small list of breweries that would be better off gone.

I'm a recent Denver transplant and I see a lot of that around here. There are several small breweries that I feel just wanted to get in on the craft beer wave and a lot of really mediocre beer. Some better financed than others. But the market out here is crazy compared to what I was used to on the east coast, and a lot of them are packed all the time, mediocre beer or not. It's become trendy, and I think that is a huge part of the consumer drive.

A ton of the "BJCP stuff" too, pale, wheat, amber, stout, IPA and maybe a couple interesting things makes up most of the tap lists. But while you, me and almost everyone on HBT loves variety and exploring new things, there are WAY more folks that just want a "burger and fries" cause they know what they're getting into. I'm a chef and love to get adventurous with food and through my relatively short career (I'm still young) get burned by this all the time. When it comes to food, the majority of people want what they know and new is scary.

 

[dnslater]

AB should be focused on putting out a product that the consumer wants. Not trying to convince the consumer to drink a beer that's totally different than what they typically choose to drink.

I don't buy the fact people wouldn't drink it because it's put out by AB. If it's a quality product it would be well received.

However the days of a single brand/type of beer dominating are over.

Do you have an iPad or other tablet pc? Apple has made a lot of $$ convincing consumers to compute in a totally different way than they typically choose to. Should they have just focused instead on only making laptops and PC's better?

 

[Ferde357]

Do you have an iPad or other tablet pc? Apple has made a lot of $$ convincing consumers to compute in a totally different way than they typically choose to. Should they have just focused instead on only making laptops and PC's better?

Yes, but iPad was not only a new product, it was a different paradigm in computing. With AB the only thing changing is the marketing approach. The product is unchanged so that's not a valid analogy.

 

[jbob7171]

A very interesting reddit AMA thread with a BMC scientist. Delves into a lot of the posts on this thread about BMC making swill vs. "craft" beer and why the do so.

http://www.reddit.com/r/beer/comments/1ck2no/beerit_ama_week_i_am_an_anheuserbusch_employee/

 

[lazysunday]

Lazy, you have interesting musings. We should get a pint sometime.

I would never turn that down!

Back on topic, I will agree that it is not possible to show up with red-herring beer (did you see what I just did there?) and make it an overnight success and beer revolution. I know that when I compare the "boring end" to good beer I'm not necessarily looking for some outrageous beer. I am just looking for really good beer. Now, there is a certain audience that is putting habanero into everything and aging in oak because oak instantly makes every beer good. That is a small world of beer drinkers.

True, and I meant no disrespect. I more meant to highlight the difference between beer drinkers who know the process, who understand what makes a truly good beer, and those who think all beer is the same.

I think Stone makes great beer but their smoked porter should be thrown away. Some people love that beer and I have no idea why. That person and myself are different segments of a growing market. And Stone meets both of our needs. I see too many "micro-breweries" that just have safe beer and never try anything new. They don't have a seasonal tap or rotate in a different safe beer. There is nothing to get excited about and I get bored. I have also been accused of having a short attention span...

This is interesting to me. I think you're right, you and the person who loves stone are two segments of a certain market. I would contest that it's growing, though. To me it feels extremely saturated, as more breweries like Stone (breweries with a good rotation and sense of creativity) hit the market with good traditional beers and often-not-good creative ones. I think there is only so much you can do with a traditional style before you only technically have beer.

Another of my favorite Arizona breweries has a flagship farmhouse ale that is 8% and fermented with a in-house cultured wild yeast they collected. They can't keep that in stock. They are into weird belgian things and breaking in sours. Those are not run-of-the-mill beers that boring places are brewing.

The way I see the dividing line in craft beer is like the dividing line in homebrewing. When you home brew but don't pitch enough yeast, aerate well and ferment without temp control you can get lucky and make decent beer that your friends will like. But say you aerate well, pitch a healthy starter and finely control the temperature of the fermentation then you reach a new level of quality.

Another good point, and I don't think sours get the attention they deserve. If there is room for growth in this market I would say it is in a "beer styles of the world" type movement.

It might seem crazy but I have been to nano-breweries that open their doors without the ability to control temperature or put a bunch os 3bbl plastic conicals in a room that is 68 degrees to ferment away. Around here we know that is a bad idea. ACtive fermentation clearly raises the internal temperature quite a bit. But they are selling that crap. I've seen stuff like that over and over from "pro-breweries" and it blows my mind.

Off topic a bit, but I firmly believe any brewer trying to go pro needs 3 partners: Financial, Human Resources, and Microbiology. Someone to run the business, run the people, and understand the science at a micro-level.

I think that moving into the future the growth of new breweries will slow and we may even see attrition in the industry as the poor performers are culled. I don't wish people poorly, but I have a small list of breweries that would be better off gone.

I'm with you there, and I'm excited for it.

 

[betarhoalphadelta]

I don't buy the fact people wouldn't drink it because it's put out by AB. If it's a quality product it would be well received.

Did you try Black Crown? Really solid lager. I actually brought a 12-pack of it to a club beer tasting where we had things like verticals of Black Tuesday and other great beer, and honestly people were very complimentary to the Black Crown.

I wouldn't say it's been well-received. And although I enjoyed it, I've never actually bought it again.

Branding is important. I don't even "hate" BMC and I haven't bought it again.

Maybe it's the way the media tosses around the term, without any real set of criteria, ie shock top and blue moon Sam Adams etc getting lumped into the craft beer category, by those who assume if it's not BMC it must be craft beer.

???just a guess???

In the context of this article, I think they were using figures from the Brewer's Association, so that would not have included things like Blue Moon & Shock Top, nor even breweries like Goose Island.

 

[betarhoalphadelta]

Another good point, and I don't think sours get the attention they deserve. If there is room for growth in this market I would say it is in a "beer styles of the world" type movement.

I agree in principle, but to some extent look at wine. The bulk of the market is controlled by Gallo [BMC]. Outside that, everyone who *doesn't* know wine ends up with Cabernet Sauvignon [IPA] or Chardonnay [Blue Moon / Shock Top equivalents].

It falls into the well-known "80/20 rule" principle where the bulk falls into a few very large categories and then there's a long tail of little players.

As much as I'd like to see beer drinkers embrace beer in all its shapes and forms, I think it's unlikely.

Off topic a bit, but I firmly believe any brewer trying to go pro needs 3 partners: Financial, Human Resources, and Microbiology. Someone to run the business, run the people, and understand the science at a micro-level.

Agreed. I was talking to one of my coworkers today about technology startups. You need the "idea guy" and the "business guy", because if you let the "idea guy" get distracted with the business stuff, he'll never have time to work on the idea. And with most technology startups, the idea is *everything*.

 

[lazysunday]

Did you try Black Crown? Really solid lager. I actually brought a 12-pack of it to a club beer tasting where we had things like verticals of Black Tuesday and other great beer, and honestly people were very complimentary to the Black Crown.

I wouldn't say it's been well-received. And although I enjoyed it, I've never actually bought it again.

Branding is important. I don't even "hate" BMC and I haven't bought it again.

I agree. I think on some level too there's a David and Goliath feeling to seeing stacks and stacks of BMC next to one or two six packs of smaller brewery stuff.

Tyson sells chicken that will taste just as delicious on the grill as any other (if I'm grilling ) but I'd rather support local farms with different ways of doing business.

Much the same, I'd rather see a regional brewery take the profit, even if it's another light American lager.

Edited to respond:

I agree in principle, but to some extent look at wine. The bulk of the market is controlled by Gallo [BMC]. Outside that, everyone who *doesn't* know wine ends up with Cabernet Sauvignon [IPA] or Chardonnay [Blue Moon / Shock Top equivalents].

It falls into the well-known "80/20 rule" principle where the bulk falls into a few very large categories and then there's a long tail of little players.

As much as I'd like to see beer drinkers embrace beer in all its shapes and forms, I think it's unlikely.

While disappointing, you're not wrong. It will most likely follow the same principal you outlined with wine, or unique types of food.

Agreed. I was talking to one of my coworkers today about technology startups. You need the "idea guy" and the "business guy", because if you let the "idea guy" get distracted with the business stuff, he'll never have time to work on the idea. And with most technology startups, the idea is *everything*.

Yes exactly! I saw an awesome video lecture done by a microbiologist who has worked in several breweries, and some of his insights to yeast and the nature of alcohol production in specific environments was pretty fascinating. I'll see if I can dig it up and post it.

 

[grizzly2378]

I also strongly suspect that should the BMCs put out a world class hop bomb, there would be large percentage of folks who wouldn't even taste it because, "I don't drink BMC." There would also be a large percentage of their existing customer base wouldn't try it either.

There is definitely some truth to this. As a personal example, I shied away from Goose Island beers for a long time because I knew they were owned by InBev and I never had their stuff before they got bought by InBev. Finally tried their IPA one day because it was the best choice on tap and, lo and behold, it was pretty damn good. I had unfairly let my impression of InBev affect my perception of Goose Island.

On the other hand, what if InBev did release a new, Bud branded American IPA? Yeah, a lot of hardcore Bud drinkers wouldn't try it or wouldn't like it if they did. But, there would also be a percentage of people who would try it and discover they enjoy IPAs and then start trying others, probably from craft breweries since that's the only choice. Essentially, InBev would be creating a gateway for some consumers to further separate themselves from the BMC beers. That's why they're better off purchasing craft breweries like Goose Island and 10 Barrel and leaving the non-American lager segment of their business under those brands.



Sent from my iPhone using Home Brew

 

[lazysunday]

That's why they're better off purchasing craft breweries like Goose Island and 10 Barrel and leaving the non-American lager segment of their business under those brands.

That's true. This is an interesting perspective, whereas before I viewed two markets, neither of which would grow or intersect (BMC and Non-BMC). However, with InBev's strategy of diversifying their umbrella of different brands, the BMC market may actually start to envelop the non-BMC market by merely diverting profit away from smaller independent breweries. 10 Barrel being a good example.

 

[GilaMinumBeer]

That's true. This is an interesting perspective, whereas before I viewed two markets, neither of which would grow or intersect (BMC and Non-BMC). However, with InBev's strategy of diversifying their umbrella of different brands, the BMC market may actually start to envelop the non-BMC market by merely diverting profit away from smaller independent breweries. 10 Barrel being a good example.

After reading the link, I have an even deeper respect for the BMC craft. The employee basically indicated that, with the Goose Island brand the mainstream products went macro scale while the Goose Island founders are left to craft the seasonal offerings at the original GI brewery. That, IMO, is genius!

 

[lazysunday]

After reading the link, I have an even deeper respect for the BMC craft. The employee basically indicated that, with the Goose Island brand the mainstream products went macro scale while the Goose Island founders are left to craft the seasonal offerings at the original GI brewery. That, IMO, is genius!

That is genius. It's a good business strategy, and nothing changes for the Goose Island crew, except now they have unlimited resources.