Making Sense of Anheuser-Busch InBev Buying 10 Barrel Brewing
Chris Cox, Jeremy Cox and Garrett Wales of 10 Barrel Brewing Co. announced their sale to Anheuser-Busch InBev in a video on Wednesday. Photo via Vimeo
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.
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Jeff Alworth is the author of the forthcoming book, The Beer Bible (Workman, 2015). Follow him on Twitter or find him at his blog, Beervana.
Good insight. My gripe is that I enjoy supporting LOCAL breweries that make great beer. I don’t want to lose that to behemoths.
Regardless of intentions or quality of beer now or in 10 years, it’s basically like selling out to Wal*Mart. Which should sadden anyone who has an appreciation for the craft beer or local business movement.
John is absolutely on target. The problem isn’t with the idea that AB-Inbev will or won’t make good beer. It’s that AB-Inbev is a corporate giant whose ultimate goal is profit, and only profit. I and I venture to guess most craft drinkers, drink good beer to support the Local breweries. The “Local” is a critical element of our craft beer community and when someone like AB-Inbev or Miller-Coors comes in and tries to play, it cheapens the experience and damages the idea of “Local.
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Trust me, it’s about profit for the local craft brewers too… if you don’t make a profit, how can you make great beer?
You don’t think local craft breweries aren’t trying to make a profit?
Not on the scale of wanting to own the world as in AB INBEV!WAKE UP
I personally thing very few craft beer drinkers are doing it to support local businesses. I see people drinking a great craft beer from California (I live in Portland Oregon) all the time. Most people drink craft beer because it is a superior product.
Craft brewers want profit also. They want success also and sell lots of quality beer. In the end it is about being in business to make enough money to be profitable to keep doing what you like. If a profit isn’t made the doors will be shuddered plain and simple. Money is just as important to the little brewers as the big guys. It’s just on a different scale.
Im exhausted of the “local” ploy. Define local? Where does it being? Where does it end? How many miles must i drive away from a specific location to no longer be considered local? Calling something local is as much as a gimmick as calling something “triple hopped”, they are all marketing tools, and all relative. Calling something local has no stamp of approval, no certification, no guidelines. We live in a global community, look inside your closet, your fridge, your freezer, tell me what percentage of what you have in there is “local”. Why be so critical if your beer isnt considered local, like your some kind of activist but all other products in your house are not. Why does beer get largely put on this “local” bandwagon? Its a trend, scheme, marketing tool. So tell me this…At what point? At what imaginary number? At what made up size in your head is beer no longer considered local or “big”? You have craft breweries who now have multiple breweries in the country and some in the world. Ie. New Belgium, now in North Carolina, same with Oskar Blues, same with Sierra Nevada. What about Stone opening a brewery in Germany?. Do you still consider these breweries as local? If i live near a Budweiser brewery is that considered local? Sick of the “LOCAL” bandwagon.
Sick of local?Go shop in a Walmart,with your government supplied food stamps,in a bailed-out GM product,and buy a hangover-inducing CoorsMolsonBudweiserMiller pisswater beer and stop whining about how some people would rather interact with actual PEOPLE instead of soulless worldwide corporations.
I dont know what country you live in but local does not mean South African or Belgium
A further fact to keep in mind is that AB is no longer an American owned company and to my disliking has become a political biased company which I no longer choose to support.
What a wonderful article. Being from Chicago, I’ve experienced Goose Islands change first hand. Honestly, their flagship beers like Greenline, 312, and IPA are not as good as they were when they were brewed here in the city (they’re brewed in New York now). But we’ve also seen a wave of new Goose Island beers, brewed here, that we never had before. And they’re really good. It’s going be fun to see what happens to the craft beer industry in the next 10 years.
Sooo,In Bev screwed up all the beers you loved,and the little team left over makes beers you like?Great,unless you don’t like sours,etc.Dude,InBev screwed up your beers.Drop the Goose,and find other,and better brewers in your area.
Goose Island’s 313 Wheat arrived on shelves in Seattle after being brewed in Baldwinsville, NY. Not by the hallowed team in Chicago. You may be getting a 10 Barrel Apocalypse IPA, but chances are good it won’t have been brewed by the award winning team in Bend. Good for them, though. They worked hard to get where they are. There are lots of other breweries and beers that are local, if that is what you seek.
Sorry, that ought to be 312 Wheat.
“The truth? Beer is beer. Except for a few relatively small differences in production methods … all beer is made the same way, and even beer made in small batches is automated to the extent the brewer can afford.”
This statement is patently false. What about breweries like Jester King, Allagash, New Glarus, or 3 Floyds that experiment with spontaneous fermentation?
“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.”
Also simply untrue. See Stella Artois vs. Cantillon or Carlsberg vs. Mikkeller or Peroni vs. Birra del Borgo
And you’re the guy writing the Beer Bible? I’ll take a pass on that one!
To some extent he’s right, the likes of Schneider, Duvel-Moortgat and Fullers are all big operations that make well regarded beer.
I do agree that Europe has a wealth of small breweries (traditional and modern) that are world class too but there are also some that are not so great too.
The “beer bible” was already compiled by Garret Oliver!
EXACTLY Adrian! Sounds like Jeff hasn’t even been to Europe or is perhaps trying to justify his craving for a cold CL!
They want it all. I have only to remember the sad saga of rolling rock. Although, not a craft beer, ab aquired it, promptly shut down the old Latrobe brewery and brews it out of St. Louis. The beer is not the same. They only wanted the label. They will aquire these craft breweries, cut costs and use their might to run the other breweries out of business. They want it all.
i enjoy good beer but my real passion is wine. We have seen the same type of acquisitions of small artisanal wineries by large corporations in the wine world and the result is always negative. Corporations lack passion and are profit motivated. That is why they acquire. The outcome of the 10 Barrel purchase will not be positive except for the wallets of the sellers.
Well said Adrian. For someone to say “Beer is beer” regardless of who makes it and where, is naive. Macro breweries might be “creating” beer that tastes similar to your go-to craft beer when it brewed locally, but it’ll be done in a way that is the cheapest and most profitable. That’s why Miller/Coors and Newcastle Brown use dye to get the color in their beer. It’s not toasted barley. Who know what AB In-Bev is doing to theirs currently. Apololyps may be created in a lab by scientists in the future. It all comes down to pleasing shareholders at the end of the day and they are about the bottom dollar. Jerks.
“The truth? Beer is beer.”
Sounds like you’re taking advertising from InBev.
Sure, AB-InBev will do the right thing—just as they did when they bought one of the most hallowed breweries in America: Rolling Rock. They took a great little brewery, which for generations had sent forth its delightful beer “…from the glass-lined tanks of Old Latrobe…”—and MOVED IT TO NEW JERSEY! Can you imagine it?
I’ll never buy another AB-InBev product again—not until and unless they re-establish Rolling Rock in Latrobe, PA, where it belongs.
In that case you might as well just drink water. Even good beer like Bass Ale and the like are now owned by AB-Inbev.
“Craft beer fans—and 10 Barrel fans in particular—were unsettled by the news, worried that beer quality would decline.”
Sort of, but not really. Yes there were jokes about Swill-a-Rita and such on social media, but locally–here in Bend–what has people worried and angry has nothing to do with beer quality and everything to do with feeling betrayed, and angry that such a local company would have quietly arranged a sale with the largest brewing corporation in the world, one that is (in)famous for its deceptive and underhanded market practices and that only seems to care about its bottom line. It’s worry that money will leave the local community, bound for an international corporation.
And it’s not just random “haters”… judging by the comments and posts I’ve seen online, it is not a popular move with the other brewers here in the community either. However it all turns out, here in Bend it’s not a quality-of-beer issue or a “good beer vs bad beer” issue, it’s a sense that 10 Barrel has betrayed the community on multiple levels and that they have compromised themselves to do it. Ideally–things will only get better for them and everyone. But in the short term at least, they will have a serious image problem and a lot of (local) ill will.
Its pretty simple.They sold out.They went for the money.There really isn’t anything wrong with that.BUT…they now have lost all credibility within their community and with craft beer drinkers.Anyone who drinks one of “their” beers is now paying InBev salaries.
Look at Goose Island.All their beer is now outsourced to InBev breweies around the country,and their brewers have their old brewery to experiment…in other words,they are no longer brewing Goose Island,InBev is.
I am glad boys that your are now very rich men. I will no longer buy your beer as it is now not local craft beer.
Same here, Chris. I will avoid 10 Barrel from now on. So will most of my friends.
Not only do we drink local brew to support our communities, but its a fact – locally brewed, “craft” beer is fresh and just plain tastes better than mass produced, homoginized stuff.
This article stinks of “damage-control” propaganda.
Jake, I love local beer, too, and also love to hang out with the brewers who make it. But remember, they’re selling beer to make money, too. Brewing is actually a business. Many local breweries got into the business as a labor of love, but all of them are keenly aware of the realities of the market. (If you have a chance to talk to brewers, ask about the business–most brewers light up at the question. For them, giving customers what they want and selling beer is a big part of their thinking.)
Adrian,
Of course beer is different; even without talking about baroque processes like spontaneous fermentation, beers like helles and imperial stout are marvelously diverse. But if you go to New Glarus, 3 Floyds, or Jester King, you’re going to find gleaming stainless-steel brewhouses that, except for scale, look remarkably like those in St. Louis.
There are a few quirky breweries left in the world making beer using pre-industrial methods: Cantillon still uses turgid mashes in a steampunk brewhouse; Schlenkerla still has a kiln in which they finish their smoky malt. Their are a few styles of beer we could consider pre-industrial, like lambic. But keep in mind that there are about 10,000 barrels of lambic made in the world every year. Even in American breweries where they have traditional coolships like at Allagash, the beer is a *tiny* minority of production. The rest of Allagash’s beer is made on that same, shiny brewhouse.
One thing many people don’t stop to appreciate is that brewers love those modern brewhouses. It gives them precise control over the process so that they can produce beer exactly the way they want, batch after batch.
As for small breweries, you misread my sentence. I didn’t say *all* small European breweries made bad beer–*some* do. And some breweries, like Moortgat in Belgium, Fuller’s in England, and Pilsner Urquell in the Czech Republic make spectacular beer. If you travel around Europe, you see that connection between size and quality is far weaker.
There is a nanobrewery in the Ecuadorean Andes making beer with freshly roasted malts made on premises. Look at fb “Sol del Venado”. Truly artesanal, and difinitely pre-industrial. Delightful beer.
what’s peoples take on the quality of beers like hooegarten, bass, etc since InBev took them over?
My issue isn’t with the quality changing for better or worse, it’s with A-B buying craft breweries to enter the craft market instead of using their “deep pockets” to actually create good beers with A-B branding. A-B is not about making great beers, they are about buying a product that will create profits for them. I’m not saying that’s a bad thing, but let’s not blow smoke about A-B being in it for the craft beer.
The great thing about our country is that if you can build a business and sell it to a larger entity, for a profit, good on you.
The only problem is that you are going to rustle up resentment among those that have been your customers and patrons up to that point without a doubt.
I am part owner of a microbrewery located in southern California and while we do it for profit we also do it for the art of the brew.
We are expanding into a production facility that has a brand new and locally produced brewing system, not one from China, that has the capacity to brew ten barrels at a time. This is up from our original system that produced one barrel.
We are in it for the long haul and want to honor our craft offer a true craft beer and have minimal expansion plans in the future.
Our followers and customers know about that commitment and would undoubtedly feel betrayed if we were to sell out to a big brewer.
This helps calm fears of some for sure, but my main problem with these acquisitions lives exactly where Brett Porter is excited, those vast ingredients available to make beer. I purposely seek out craft beer for not only the taste, but the ingredients used to make it in the first place. Anheuser Busch uses GMO laden ingredients, that’s why they have such a vast collection in fact. That’s likely why brands like Kona and Goose Island are all of a sudden priced much lower, they are always the cheapest in the craft beer section now n I am uninterested in craft beer being made with BS ingredients, I stay away from GMOs in my food, I plan to do the same with my beer. It’s an overall unfortunate trend in the beer world.
A lot of brewers probably use products with GMOs in them. Malt/wheat/grain/rice/adjuncts are purchased from the same places, it’s just that AB is able to buy ingredients on a much larger scale and negotiate/demand lower prices. Bulk = lower prices. Many small brewers can’t even come close to the volume that AB buys even on a weekly basis. The reason Kona and other brands are able to offer a lower price is not because of GMO, rather it is because their scale. Notice how Sierra Nevada and Sam Adams products are a lot cheaper than your small local brewery? Same scale.
I think Jeff is rather out of touch on this one. My much more gloomy take on the matter and what this means for the industry: http://newschoolbeer.com/2014/11/anheuser-buschs-purchase-10-barrel-can-ruin-industry.html
You might want to fact check that bit about Brett Porter being poached from another brewery. Word in the brewing community is he was fired.
Agreed Rebecca, the agricultural implications to these acquisitions are certainly a very important aspect of this issue…
Not to mention the “tax haven”: .08 % per gallon production tax & no sales tax…what company wouldn’t want to own the second fastest growing brewery in Oregon… ??
Dare we speculate on further impact to Oregon’s 7.1 % unemployment rate?
Or the “income” being siphoning away to another Country?
http://www.taxadmin.org/fta/rate/beer.pdf
This article is way off: supporting local craft brewers and the wonderful product they make is not the same thing as buying watered down Pilsner from a corporate behemoth. In this instance, “beer is not beer.”
Beer giants want to get in on the fastest growing segment of their industry so buying up micros makes sense. A potential benefit is that some brewers will get extensive budgets to build better breweries–with the end result hopefully being that quality goes up, hopefully. But that is not guaranteed when as others have mentioned, the corporate giant’s ONLY concern is profit. Bottom line still matters.
I do not think that the author’s point of view is shared by many who consider themselves part of the craft beer community.
Jeff, I think history tells us that, sooner or later, styles and products in the brewing industry tend to gravitate toward the lowest common denominator. That is why craft brewing found a niche. Granted, in the US, Prohibition, a real godsend to big brewers, wiped out the regional producers or nearly so. And, home brewing gave folks a start to brewing commercially. No doubt that A-B InBev can and will brew great beer. But, the long play for the big brewers is brand and shelf space and the actual product in the keg/bottle/can is often less important than the label and the advertising.
Jeff – I agree with your line of thinking.
This type of backlash reminds me of the music scene, where the little band you started watching in a dive bar is now going on a stadium tour. You knew them before anyone else and they were cool, doing it for the love. Now they’re corporate sell outs, only in it for the money. It doesn’t matter that the music is better/worse/same. It’s that you could claim to have access, to know them, to claim a little bit of their success as yours.
Now you don’t know the owners of 10 Barrel, that coolness of association is gone.
In the end, who cares what A-B does with these once proud micro-breweries? Great for ten barrel. They made money and obviously that’s what truly drove them. Another great brewery will step up. Maybe someplace like Greenbush. I see it as an opportunity for the next one in line to be recognized.
Here is my issue… Goose Island and the like have now crowed out shelf and tap space everywhere here in PA. The muscle of InBev pushes our the true local micros and strong arm them out of space. Our choices get SMALLER when these buy outs take place. Big Boo on this one. No 10 Barrel for me.
They can’t stop laughing because of the huge check they just got for selling their souls. Farewell.
Absolutely no shortage of quality, local, indie competition in Bend. 10 Barrel will likely do fine into the future servicing all the tourons from Lake Nonegro and California.
For me, my choice to not drink 10B is not about hating them for selling out and trying to hurt them. I would only be ever-so-slightly hurting inbev at this point. It’s basically that 10B will be fine w/out my support now. I would rather help the little guys, because I want the little guys to stay around. As in ecology, diversity is more important than the quality/quantity of any one brewery’s output.
This is not craft beer anymore. The definition by the brewers association says that it can only have 25% owned by a larger company. By calling this craft beer it dilutes the idea of real craft beer from local breweries.
Sorry I didn’t loop back around and respond to some of the comments.
Ezra (Samurai Artist), we’ve already discussed this a lot on Facebook–I think you actually have quite a bit wrong there. It’s instructive to look at other countries where there are mature markets if we want to see the future. People reflexively imagine that if A-B gets going, it’ll be 1974 all over again–which takes me to Mark’s comment:
“Jeff, I think history tells us that, sooner or later, styles and products in the brewing industry tend to gravitate toward the lowest common denominator.”
Actually, history tells us nothing of the kind. The US was always a pretty bad beer country and long before prohibition we’d become largely a pale lager country–even when there were hundreds of breweries. What’s more remarkable is that there are still three dozen or so extant styles that survived world wars and the mass market industrialization of food products. Variety is here to stay.
Jeff,
You seemed to have skipped right past the history of AB dabbling in the purchase of controlling interest in both Redhook and Widmer Brothers long ago. While the sales numbers for both remain strong in the NW it could be easily argued that both benefit from the “aggressive” pricing strategies both brands enjoy in corporate supermarkets and corporate restaurant chains. You’ll also find any number of older craft beers fans who will swear the recipes change over time – to the negative. Likely it’s not the recipes per se but the scale of production that impacts what they once loved.
Alas, 10 Barrel did what they thought was best for them – not you. Perhaps they will find some new fans but hey, when six packs are consistently marked down how could they not? When marketing money appears in large black bags how could they not?
As in all consumer goods – spend your money where it means the most.
I think we all know, if it tastes good, people will drink it and it will do well. I’m a small business owner, though. And if it comes down to supporting a small brewery vs a corporation and all other things being equal, I choose the small brewery. Every time.
Peter,
It’s true–a lot could be said about A-B’s dealings in the last two decades. This is quite a different kind of move–a 21st century move. Having a minority stake in a regional brewery is different than owning a brewery and (attempting) to turn it into a regional brewery.
(FWIW, I live 5 miles from the Widmer Brothers brewery and have been writing about it for 17 years. They have endured a fair amount of criticism over the years, but no one locally that I know personally has ever accused them of changing Hefeweizen’s recipe. I *have* heard people accuse Full Sail of changing Amber’s recipe–but that’s because their palate has changed since 1988, not the beer.)
I don’t care who owns 10 Barrel, or any other craft brewery. What I would hate to see is production closed out at the original location and moved to one of the huge AB breweries. That’s what happened to Rolling Rock, among other brands, and it had a negative impact on the beer.
Craft brewers seem to start out with the attitude “I’m passionate about beer, and I’d like to make a thriving business of it,” while brewing conglomerates start out withe the attitude “I’m passionate about money, and I want to make more of it.”
There’s always the possibility that 10 Barrel will still be produced in Bend, Boise, and Portland, but history doesn’t make me optimistic about that.
For me it’s about market manipulation and dishonest advertisement of an inferior watered-down product that kept craft-breweries beaten down. Part of that came from the Beer Wars (see the documentary). It’s about losing local breweries to In-Bev, like losing divisions of an Army to the enemy. It’s about profit not going to real workers but instead to shareholders and foreign owners. It’s about not liking your beer company versus admiring it.
Very well said. I feel the same way.
I was at the oregon state vs university of oregon tailgate last Saturday. Ten Barrell set up a big tailgate area and they gave out free specially brewed bottles of IPA. That was nice of them until they eventually ran out and started handing out free bottles of budweisers. Those two beers do not go together. I’ll never buy another 10 barrell again and I’ll never step foot in their brew pub when I visit Bend. There are plenty of other non AB owned breweries to spend my money at.
Hallelujah!Speak the truth!
I’ve never heard a reply from any of these pro InBev commentators about the question of what happened to Bass after the InBev acquisition? To Becks, Rolling Rock, Redhook, St. Pauli Girl, Hoegaarden, the Goose Island Core no longer brewed in Chicago, but in NY (312, IPA, Honkers)? All of these beers have had long time drinkers who would swear on their mothers’ names that their (previous) favorite beers have changed for the worse. Will the same happen to 10 Barrel, Blue Point, etc, over time? Why don’t these AB/InBev supporters reply to these concerns? It’s a question that keeps on getting ignored as far as I can see.
no more 10 barrel for me. I ONLY support local breweries. That is part of the entire enjoyment factor
Ide like to point out the part “goose island is now home to largest barrel aged program” craft does NOT mean LARGE it means CRAFT
I’m not a real beer lover, but reading all these comments makes me want to go get a beer now.
Have you ever realized that by supporting brewers like InBev that you are also supporting good paying jobs, some union jobs,
at Anheuser Busch breweries across the country. Good paying jobs in Baldwinsville NY, Newark NJ, St Louis, New Hampshire, Virginia, California etc. Some of those breweries have close to 300 employees. Just saying, it is great to support local, but there you can also support national good paying jobs across the country, shipping and sales jobs also.