Making Sense of Anheuser-Busch InBev Buying 10 Barrel Brewing
The beer world woke up on Wednesday morning to the news that Bend, Oregon’s 10 Barrel Brewing Co. released an offbeat video—replete with outtakes—announcing it had been acquired by Anheuser-Busch InBev.
Editor’s Note: The video was later removed from Vimeo.
But the homespun quality of the video did not soothe the hearts of many craft beer fans who registered their outrage on Twitter and Facebook. It’s Anheuser-Busch InBev’s second purchase of the year (New York’s Blue Point Brewing Co. was the first, in February), and the two join Goose Island, Anheuser-Busch InBev’s first major craft-brewery acquisition, in a growing portfolio of craft breweries.
What’s it Mean?
Craft beer fans—and 10 Barrel fans in particular—were unsettled by the news, worried that beer quality would decline. But that misses the real point: the global giant isn’t acquiring craft breweries in trouble—they’re trying to find some of the most respected breweries in the country. In recent years, 10 Barrel has managed to lure brewers Jimmy Seifrit from Deschutes Brewery, Tonya Cornett from Bend Brewing Co. and Shawn Kelso From Barley Brown’s, assembling one of the most-lauded teams in the country (Kelso and Cornett have a pile of Great American Beer Festival medals between them).
Anheuser-Busch InBev has no intention of lowering quality—it wants to enter the craft beer segment with the kinds of products people are already scrambling to buy. 10 Barrel is smaller than both Goose Island and Blue Point, but it nearly doubled last year and sales in 2014 are growing nearly as fast—all in the ultra-competitive Pacific Northwest. The brewery makes great beer, and that’s the reason it was a prime target.
If beer fans want to worry about anything, it’s that Anheuser-Busch InBev is busily assembling a very well-financed fleet of mid-sized craft breweries that will compete on quality. Because the global brewer has such deep pockets, it will spare no expense to make the best beer. Shortly after the Goose Island acquisition, I was emailing with incoming head brewer Brett Porter (who was also poached from Deschutes). He wrote, “Imagine what a brewer(y) can do with unlimited technical and raw material resources (I’ve got to pinch myself sometimes).” In the years since, Goose Island has gone on to build the largest barrel-aging program in the United States. Craft breweries acquired by Anheuser-Busch InBev can use those resources to make a serious charge at the most admired segments of the industry—something it would be very hard for St. Louis to do in-house.
Blurred Lines of the Future
The United States currently enjoys a crisply delineated market visible even on supermarket shelves: on one side is beer sold in large packages of tin cans with German names on the labels, and on the other, bottles of “craft beer” with whimsical titles and art. Some people hold the view (strongly encouraged by smaller breweries) that one category of beer is made lovingly by hand while other beer is synthesized in industrial vats, presumably by robots. The truth? Beer is beer. Except for a few relatively small differences in production methods (Google “high gravity brewing” and “mash filter” for more), all beer is made the same way, and even beer made in small batches is automated to the extent the brewer can afford.
The sharp lines in this delineation are about to get fuzzy. As the market matures, larger companies will buy up smaller ones. Some of the smaller ones making that “handcrafted” beer will grow obese. (Lagunitas, New Belgium, Stone, and Sierra Nevada are busy following Anheuser-Busch’s lead and building additional plants across continents or oceans.) There’s nothing macro or micro about beer styles, either, so soon the big companies will be making saisons and the small companies will be making light corn lager soon enough. (Indeed, it’s already happening.) If you harbor sentimental notions about craft brewing this may be alarming, but it’s the future. Or, as the 10 Barrel acquisition suggests, the present.
The United States has had the luxury of seeing these two categories of beer as distinct, but it’s a quirk of history. In Europe, where the beer markets are much more mature, there are small, independent breweries making mediocre-to-poor beer, while large, national brands make world classics. Our categories are not stable, and as the market matures, they will bleed together. It may seem dispiriting to some, but this is only the beginning of things.
If you want a silver lining, though, it’s this: in buying 10 Barrel, Anheuser-Busch InBev is signaling a commitment to good beer. They realize that the craft segment is the future of beer, and they want a piece of it. In buying 10 Barrel, Anheuser-Busch InBev is signaling what we already knew in our hearts: good beer has won. That’s not so bad.