Industry consolidation is not only a problem in the wine business. Craft beer also suffers from the monopoly practices of big beer companies buying out independent craft brewers. The National Beer Wholesalers Association reports that Anheuser-Busch InBev, MillerCoors, Constellation/Crown Imports, Heineken and Pabst control 80 percent of the U.S. beer market.
Goose Island, Blue Point, Karbach, Golden Road, Devil’s Backbone, Elysian, Ten Barrel, Breckenridge, Four Peaks, Wicked Weed, Terrapin, Lagunitas, and Ballast Point are among the former craft breweries now owned by the conglomerates.
The result is a lot more bad beer on the market. LIke most big wine companies, big beer companies are focused on profit and minimizing costs rather than quality. Large companies don’t have the personal stake in quality that drives independent winemakers and brewers to seek constant improvement and to avoid shortcuts. And they lack incentive to preserve the individuality of products that may be less profitable. Furthermore, they have the market power to force smaller producers off the shelves. Industry consolidation threatens to send us back to the bad old days when beer was a homogenized product with a few producers making identical brews that differed only in their marketing.
The problem is you often can’t tell the craft brews from the corporate swill by looking at the bottle. This new initiative by the independent brewers trade group seeks to change that:
More than 800 breweries — including Sam Adams, Sierra Nevada and New Belgium — will soon begin printing seals on their beers that identify them as “Certified Independent Craft.” The initiative, which was spearheaded by the trade group for independent craft brewers, is intended to differentiate “true” craft beers from those made by the likes of MillerCoors, Anheuser-Busch and Heineken.
To qualify to use the seal, breweries cannot be more than 25 percent owned or controlled by any alcohol company that’s not itself a craft brewer. Its annual production also can’t exceed six million barrels.
This is certainly a step in the right direction. The problem is that Sam Adams, Sierra Nevada and New Belgium are not exactly small, and they have some of the same negative incentives that compromise quality among the conglomerates. The 6-million barrel limit seems arbitrary given that most craft brewers produce a fraction of that amount. That figure seems tailored to getting Sam Adams et al under the limit perhaps in order to give their trade group more financial and political clout.
Sam Adams, Sierra Nevada, and New Belgium may be independent but they are not “craft” or “artisan” in any meaningful sense. If including the big independents makes the category “craft” beer meaningless little will have been achieved.