Differentiating in a macro-driven market
Macro brewery sales reign supreme. With it’s last acquisition of SABMiller Ab InBev now accounts for 30% of the world market volume, 60% of the world market’s profits, and has more than 400 brands under the same corporate umbrella. As sales of macrolagers are declining, these breweries are increasingly looking for new ways to remain profitable and continue their growth. From 2011 through the end of 2016 their main goal for growth was achieved through acquisitions. The most recent of which was Wicked Weed back in May of this year (Note: graphic below goes through October 2016). In case you’re wondering if your current beverage is one of the 400 owned by Ab InBev, check out a site like https://isitbigbeer.com/ to determine who makes the beer you’re drinking.
Despite the short-term success of these acquisitions, AB In-Bev continues to have problems with its core brands. For instance, nearly half of Americans below the age of 27 have never drank a Budweiser. While the company is focusing efforts on partnering with celebrities like Jay Z (heard of his Made in America tour), to try to modernize its flagship brands, they are increasingly turning to other avenues to boost overall sales.
"Ab InBev owns or controls more than 500 of the 1,000 active distributors."
- Julia Herz, Craft Beer Program Director,
In their words they are now pivoting to “growing its ground-up model”. But what does this mean? Ab InBev has shifted its focus from brand expansion to increasing its control of the entire beer vertical. They own hop & grain growers and limit sales of their products, use their distributors to influence shelf space, and bought a rating website to try to gain an end-to-end monopoly. They are even going so far as to buy up large homebrew suppliers to influence the tastes of consumers.
By influencing both the retailer and consumer Ab InBev is hoping to limit consumer choices, steer them away from smaller competitors, and have their brands become accepted as viable alternative to macrolagers.
The Brewer’s Association, and small independent breweries like us, are beginning to fight back. With the campaign www.takebackcraft.com and the new “Independent Craft” label craft breweries are trying to differentiate themselves in an increasingly biased market. So the next time you go to buy a craft beer at the store look for the certification. We’ll be sure to get ours as soon as we’re up and running.