Budweiser is losing to craft beer, but for some reason the company appears to be in denial about it. There are lots of different kinds of being wrong but they all kind of fall under two categories: Deception or Ignorance. When you say something that isn’t true, you either know it isn’t true or your don’t. If you don’t, that’s OK. You can find out and correct yourself. If you do know you’re being deceptive, usually you think you have a good reason. As sales of ABInBev products continue to flatten out, they continue to claim that craft beer isn’t the enemy. The enemy, they say in the following article, are the wine and spirits industry. Next year maybe the “real” war will be with cannabis.
Craft beer and big beer are engaged in a ‘civil war’ – but they may have a bigger problem to worry about
Budweiser’s parent company says that it’s worried about wine and spirits – not craft beer. Beer lost 10% of market share to wine and hard liquor from 2006 to 2016. One craft brewer that was acquired by AB InBev said that the craft versus big beer debate is simply a distraction from the coming war with wine and spirits.
Bud Needs Someone to Blame
The problem for AbInBev is that they’re running out of reasons for their failure. No one believes for a second that the largest beer company on the planet will ever be obsolete, but there already are signs that they will have to get used to new, lower levels of revenue. But their continued losses have much more to do with the rise of craft beer and they have to know it. Craft beer is a little more expensive but also a lot more tasty. People drink less of it because it is more filling and (often) a lot higher in alcohol. So although it is true that overall beer sales are down 1 percent from last year by volume, craft beer is up something like five percent.
Put simply, so many more people are drinking fewer Budweiser products that it makes the industry as a whole look smaller when, in fact, the scales are just tipping to other places. Brew Pubs are on the rise and people generally are making the effort to stay and drink at their local brewery. Also, more people have local breweries as the number of Independent Craft Breweries topped 6,000 in 2017.
My new favorite thing is the brewpub. I feel as if it’s the best way to sustain quality beer and innovation in the long run. Recently, I spoke with I guy I know about bottling. For small breweries, it is getting tougher and tougher to get shelf space.
But as long as the folks at Bud keep feeding them oddly disingenuous statistics, outlets will keep making inferences. According to another Business Insider story, beer sales are down 10 percent because millennials prefer wine and spirits to craft beer. This is where we have to wonder whether they really don’t know or are being intentionally deceitful. Beyond the headline, it is worth mentioning that the “10 percent drop” is in the decade from 2006 to 2016. There were 1,400 craft breweries in 2006 and more than 5,300 in 2016. The math doesn’t change. Again, AbInBev was down so dramatically that the rise of craft beer actually softened the falloff.
There’s Probably No Budweiser Conspiracy
I’ve spoken with lots of craft beer folks who see this as a kind of smear campaign that is part of a larger conspiracy. I think that’s a tough sell. There are two really interesting takes on what’s going on that might reveal that AbInBev is just suffering from the kind of market incompetence that only a company its size can provide. The first is that Budweiser’s Craft Beer Arm, The High End, laid off about 3,000 workers as part of an 18,000 company-wide worker dismissal earlier this year. That means the people selling Budweiser’s versions of “craft” beer took the brunt of the cut, much of it in the sales end.
I think this is more about recognizing that muddying the line between independent craft beer and craft-y beers is simple enough, and because the distributors are happy to do Budweiser’s dirty work for them. The point is, the conglomerate is behaving like a conglomerate, making big-picture assumptions about little picture issues.
The second is part of articles like the one above, riddled with barely defendable misinformation that’s enough to distract from the fact that craft beer continues to hand Big Beer losses. This year, craft beer is up 10 percent in dollar sales while overall beer sales are flat. Maybe people are leaving Bud in greater numbers for wine and spirits as well as craft beer, but independent craft breweries still are on the rise and no amount of press release obfuscation is likely to change that.