Billboards that shill beer usually don't have much to communicate beyond "Get drunk and party." But there's one advertisement perched above Interstate 880 as it weaves through downtown Oakland that offers something more: a peek at the future of beer in America.
It's a promotion for a brew called Wolf Pup, by Golden Road Brewing, which is based in Los Angeles. The pink and blue can design and the style of beer — IPA, of course — target twenty-something drinkers, who tend to prefer a craft beer in hand instead of a corporate lager such as Budweiser.
The catch, however, is that Golden Road is not an independent craft brewery. It's owned by Budweiser.
In the past 12 months, Anheuser-Busch InBev — the overlord of dozens of popular brands, from Bud to Corona to Stella Artois — has doubled its portfolio of smaller craft and independent breweries by acquiring new companies such as Golden Road, which was founded in 2011.
Why? Sales of traditional corporate beer are trending downward, while sales of beer of craft origin are surging into double digits, up nearly 13 percent in 2015, according to the national Brewers Association.
Craft beer now makes up more than 20 percent of the $106 billion in annual national beer sales — and this booming market is gnawing at the bottom line of so-called "Big Beer."
AB InBev isn't the only one snatching up independent breweries. In the past year alone, MillerCoors paid an estimated $35 million to acquire St. Archer, a San Diego-based craft outfit; The Heineken Company bought half of nearby Lagunitas Brewing Co., for $500 million; and Constellation Brands, which brews Modelo, acquired Ballast Point Brewing Co. for a cool $1 billion.
To top it all off, AB InBev will fork over more than $100 billion to gobble up a chief competitor, SABMiller — which owns Miller and Fosters and even bottles Coca-Cola — in an acquisition that the Department of Justice antitrust officials finally (perhaps inconceivably) approved this summer. Now, AB InBev controls more than 30 percent of the global beer market.
Big Beer is a veritable monopoly monster — complete with foaming at the mouth and wild, sloshed eyes.
Perhaps it's no surprise that the craft-beer industry is wary of this mutating corporate-beer beast. Or, at the very least, the sentiment is as Alex Tweet — brewmaster and co-owner of Berkeley's Fieldwork Brewing Co. — told the Express recently: "I think it's a little silly to pretend that big beer has our best interests at heart."
Tom McCormick more than agrees. The executive director of the California Craft Brewers Association, which represents statewide indie breweries, hosted the largest beer-industry event of the year this past weekend in Sacramento. Inside a sprawling exhibit hall, legendary brewers and their beer-guzzling faithful rubbed elbows with everyone from artists that design labels to craft-beer attorneys.
The only beer people who weren't part of this industry shindig? Bud, Coors, and Miller.
McCormick, a player in the beer world since the early Eighties, was frank about the Big Beer menace. He's worried about more mergers and acquisitions, and how these will squeeze out indie brewers. And he's also anxious of this new AB InBev animal's infinite coffers, and possible future spending on legislative campaigns to damage smaller craft producers.
"If you were to ask me the greatest threat to our industry now, that is far and away it," he said of macro beer. "And it is clear now what their strategy is:
"If you can't beat them, buy them."
The Modern Beer Boom
Craft beer's popularity seems to increase with the tapping of each new keg. But even the most ferocious "beer bro" probably doesn't fully grasp the industry's unprecedented and historic growth.
Bart Watson is the chief economist for the Brewers Association, a national trade group with nearly 2,000 beer-producing members. He also earned his PhD at UC Berkeley, so he knows a thing or two about East Bay brew. This past Friday morning, Watson held court in front of a standing-room-only crowd of several hundred inside the Sacramento Convention Center, part of last weekend's summit. To his right was a giant projector screen, and on it a PowerPoint slide that documented the stunning upswing in the number of American craft breweries.
As an example, Watson zeroed in on 2011, when there were just 1,813 breweries. Then, he pointed to what he called the "current explosion" — a line between 2011 and 2015 shooting toward the ceiling — and the number of breweries as of last year:
You have to go as far back in time as 1873 for a moment in history when there were as many U.S. companies brewing beer as today.
The interim 150-ish years, however, weren't so hot for beer. Breweries shuttered and consolidated. And there was Prohibition, so for a while they completely disappeared. What's interesting, though, is that brew in post-Prohibition America never really emerged from the ashes. Even as recently as 1987, there were just 150 breweries in the entire country.
At this time, the industry was dominated by Budweiser, Coors, and Miller, what with their steady rotation of TV ads featuring majestic Clydesdales, bull terriers in sunglasses, and women in the latest swimwear. Generations grew up thinking that watered down, mass-consumption faux-lager ales were not only the only beers out there, but that they also equaled getting laid.
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