Struggling with the new realities: The Brewers Association Independence Seal

There’s been so much ado about the new Brewers Association (BA) Independence Craft Brewers Seal released last week. The BA is encouraging it’s member breweries to affix the seal to their labels to distinguish independent brewers, as defined by the BA from breweries that are owned by large brewing conglomerates like AB InBev, MillerCoors and Heineken. The idea is to allow consumers to make an informed choice based on the brewery ownership, as mega-corporations are buying up small breweries to compete in the beer market, as high volume lagers are losing marketshare to more flavorful beer styles brewed by smaller breweries.

Plenty of people like Jeff Alworth, Bryan RothAlan McLeod, and Chris Barnes weighed in on the topic and there’s been plenty of internet chatter over the issue.  I have a somewhat different take on things, so in the spirit of “better late than never”, here are my thoughts.

The concept of identifying independent breweries to differentiate from corporate-owned breweries sounds good, until you start reading the Brewer’s Association somewhat contrived definition of an independent craft brewer.  (That the BA is shifting the semantic debate from craft brewer to independent brewer is telling.)  If you’re wondering why Boston Beer Company, a publicly owned company with a market capitalization of well over a billion dollars pumping out mostly lagers and alco-pops is an independent brewery in the mind of the Brewer’s Association, you’d hardly be alone. Plenty of fine breweries, like Kansas City’s Boulevard, are considered non-dependent due to corporate ownership. And sneer all you want you want at the breweries like 10 Barrel,  Goose Island, Lagunitas, Ballast Point that were recently acquired by mega-corporations as sell outs, they all still brew some mighty fine beer.  So a big problem with the independence seal is that “independent brewer” no longers says a whole lot about the beer, good or bad, inside the package.

The other problem is that consumers of most products really don’t care too much about company ownership, or at least as not as much as beer geeks and brewing industry wonks care about brewery ownership.  Oh sure, people say they love that wonderful locally owned Italian bistro on the corner, but The Olive Garden still does pretty good business. Starbucks has put many an independent coffee shop out of business and most people barely shrug.

Now the BA cites a Neilsen/Brewbound study claiming independence matters most to consumers when making their purchasing decisions.  But as beer writer Bryan Roth has pointed out, Brewbound’s Justin Kendall cautions about taking this finding too far.  “Even though consumers say they understand the terms “independent” and “independently owned,”, Kendall writes, “there remains the question of whether they actually know about ownership changes and if those would actually affect their purchasing decisions.”

So what we’re left with is an Independence Seal for breweries which are deemed independent by the BA for reasons most people wouldn’t understand, and even if they did, might not cause them to purchase differently. The independence seal is basically the old craft vs. crafty argument four and half years later.

I’ve had a few beers these days from independent breweries which may have been brewed with honesty, integrity, and a passion for brewing, but basically sucked. The brewing industry has become too complicated for neat definitions and the BA seems to have little answer to these new realities other than to recycle old arguments which are increasingly less relevant over time. Resorting to a marketing logo to combat some pretty powerful economic and business forces is not very likely to work, and has failed in the past.

Surprisingly, AB InBev felt the need to respond, releasing an odd video in response to the Independent Seal, with six brewers of AB InBev’s High End Craft Beer Portfolio speaking to the camera in talking points, making a bunch of disingenuous arguments against the seal, and calling for breweries to unite together against wine and spirits competition. Needless to say, after hearing the calls for unity from a corporation that’s engaged in all sorts of aggressive, anti-competitive business practices against small breweries for decades.  Watching the video, I  almosted expect one of the brewers to turn to the camera and say “Did you know the word “gullible” isn’t in the dictionary?” .

As laughable as this video is, it highlights a major rift in the brewing industry that doesn’t plague other industries. Plenty of trade organizations in various industries are filled with warring tribes, yet find a way to speak with one voice for the good of the industry without major rifts. In fact, wine and spirits has experienced corporate ownership of small, high end firms for decades and as a result, there’s a lot less business distractions due to these different types of ownerships.  The AB InBev propaganda video contains a nugget of truth and a warning the BA should heed.

 

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ramblingsofabeerrunner

Writing about beer from the California's Silicon Valley.

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