All About Beer Magazine - Volume 37, Issue 5
November 1, 2016 By

The centennial observations of World War I remind me that while some of the causes of this global catastrophe are still relevant today—arms races, flawed governments, stunted diplomatic communications—one ingredient is largely absent: imperialism. Great Britain’s established empire, the African aspirations of France and Belgium, and Germany’s fear of being left out of the carving up of the world contributed much to the tensions of the times. But independence has prevailed: Imperialism is all but dead.

Except in the beer market. I’m not talking about massive brewing internationals clashing for chunks of the Chinese and African markets, and I’m not talking about imperial vs. session beers.

It’s about the production moves by the big players in the regional sector. Established regional brewers are looking to expand and support their national sales by building second breweries in new markets. Sierra Nevada Brewing Co., Oskar Blues Brewery, New Belgium Brewing Co., Lagunitas Brewing Co., Stone Brewing, Green Flash Brewing Co., Deschutes Brewery, Atwater Brewery, Ballast Point—even Scotland’s BrewDog—have or are building large facilities in markets that must look underexploited to them.

A few of those are being funded by big brewer money, but that misses the point. This is about brewers moving into underdeveloped markets in a big way, brewing huge volumes of fresh beer and supporting it with well-trained, substantial sales teams in new territories.

Make no mistake, when a brewer builds a large new brewery over 1,000 miles from home, it’s designed to do one thing: sell a LOT more beer there. Those sales are not going to come out of former light beer drinkers, either. The brewers are targeting the people who are already drinking the kind of beer they’re selling: IPA (both the fruited and the plain), imperial stout, wheat beers, even gose, God help me. They may be doing collaborations with local brewers, but on the shelves and in the bars, it’s all about stealing shelf space and taking taps.

OK, this is the beer business, and that is how it works. But look how much it’s like good old-fashioned imperialism. These are outside powers (established brands with solid name recognition) with advanced technology (centrifuges, sophisticated packaging systems, cutting-edge brew houses) and professionally trained troops (experienced, tech-supported sales teams) moving into unexploited territories (markets without a dominant regional brewer) to create a new and profitable market for their products, on terms that favor them over any local firms (economies of scale and the state and local tax incentives most of these expansions have received). They’ve moved in, they’ve built, and they’re not going away.

Is that good, or bad, for us, the beer drinkers? Well, I have to be honest: Six years ago, I would have said that anything that meant more fresh Sierra Nevada Torpedo in my local market was an unalloyed Good Thing. Then one day, after three delicious helpings of Torpedo, I looked in a mirror and asked myself, “What about your local brewers, Lew?” And my eyes filled with tears.

Well, that didn’t actually happen. But I did start to think about what this could lead to, and you should as well. The major difference in the U.S. brewing category in the past 40 years is an increase in variety: a huge number of new brewers offering thousands more beer choices. Variety has been good for the consumer, almost without exception. Don’t like that beer? Choose another!

Imperialism is not good for variety. It may be good for quality, or hoppiness, or prices for the drinker, but it is not good for variety. It’s not supposed to be! It adds one variety to a local beer market: the big outsider’s line. But the big outsider will also bring sales muscle and lower prices, which leads to hard competition and hard choices for small brewers.

That’s how this works. Unless they pick up sales from a large number of light lager drinkers changing their preferences—something that sales numbers seem to indicate is slowing—it’s inevitable that large breweries producing established brands in new territories will mean small, local brewers going under from the uneven competition.

So should you stop buying Stone, or Deschutes, or New Belgium? Should I stop drinking Torpedo? No, that’s nuts. They’re good beers, and they’re fresher if they’re brewed closer. Just remember your good local brewers: Support variety. That’s what this whole thing is about. Keep it fair, keep it varied. We don’t need a war to solve this.