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One world, one beer company?

We'll be talking brews tonight on Marketplace, and there's nothing wrong with that. Today, Heineken announced plans to buy the Mexican brewery that makes Dos Equis, Tecate and Sol. Are we heading for the day when all the world is drinking the same beer brand?

The mass-produced beer business has been rife with consolidation. The Brazilian company Ambev merged with Belgium's Interbrew to create Inbev which bought Missouri's Anheuser-Busch, otherwise known as Budweiser. Canada's Molson merged with Colorado's Coors which merged with Milwaukee's Miller which had merged with a South African brewery. Keeping up so far?

What does all this merging do to the small beer companies? Is it like Wal-Mart -- the little guy gets crushed? Actually, it may be the opposite. From Minyanville:

Despite the recession, the upper end of the market, including craft beer and imports, grew about 5.5% in 2008 and now represents about 20% of the US beer market.

"In the long term, we think that the category has further room to grow as we expect consumers to drink less mass-produced beer and switch to higher-priced, better-quality products," Philip Gorham, an analyst for Morningstar, says in a research report.

Ah-ha. Our reporter Amy Scott says in 2009, microbrews saw another 5.5% pop in growth. And Marketplace senior editor Paddy Hirsch backs this up with anecdotal evidence (I mean, beyond beer tasting). Paddy recently visited Stone Brewing Company near San Diego, and they told him they loved it when the big companies merged. The mergers turn off beer-drinkers, perhaps in principle but also because something bad seems to happen to the flavor of a decent beer when it gets swallowed up by a mega-corporation. People start looking for alternatives.

Like Stone's Arrogant Bastard, perhaps?

That's our theory. You buying it?

Apparently, President Obama is not.

About the author

Greg Koch's picture
Greg Koch - Jan 11, 2010

Paddy came by? Let me know next time! I'm a huge Marketplace fan (daily listening either live via KPBS, or via podcast), and I'd like nothing better than to be able to buy a Marketplace team member a beer!

Does it really "help" craft brewers when the big guys consolidate? Maybe, maybe not. We've never really paid all that much attention (short of making sure we have access to market). The world of big, mega-international conglomerate brewers is not our world. And we prefer it that way....

I'm happy to report that things at Stone Brewing Co. are indeed growing quite well. We grew 19% in 2009 in volume (and 24% in revenue), making for an average annual growth percentage of 45% over the last 13 years (yes, you read that right).

And that was just on the brewing side...our restaurant, the Stone Brewing World Bistro & Gardens, grew 40% in revenue in 2009.

Cheers,

Greg Koch, CEO
Stone Brewing Co.
Stone Brewing World Bistro & Gardens

Scott Jagow's picture
Scott Jagow - Jan 12, 2010

Thanks, Greg. We'll definitely let you know next time we're in the neighborhood. Glad to see things are going well. You guys make great beer.

Justin 's picture
Justin - Jan 12, 2010

I think Greg hit it right on the head. As long as craft brewers have access to the market, they shouldn't care what the macrobrewers are doing.

The success of the craft beer market also has a lot to do with the type of consumers they serve. There is a closer relationship between the craft beer drinker and brewer than macro consumers and producers. As Scott refers to craft brewers as the "high end" of the market there is an attempt by the consumers to avoid the exclusivity and snob effect. The result is the beer geeks (me included) are out proselytizing not discouraging more to expand their palette beyond macro lagers. In essence, word of mouth and recruitment play a more sustainable role in developing the craft market than mergers.

I am big fan of both Marketplace and Stone!

cheer,
Justin, just a dude who loves beer and news about beer.

P.S.
I may have squealed like a teenage girl at a Twilight movie after reading THE Greg Koch of Stone Brewery listens to Marketplace just like me! OMG!

Scott Jagow's picture
Scott Jagow - Jan 11, 2010

A couple of reactions I've gotten so far on Facebook:

"I'm buying it. The craft and micro breweries will win out because they pay closer attention to what ingredients go into their beer, not mass-produced assembly-line brews like Bud and Miller. I used to enjoy Rolling Rock, but after Anheuser-Busch bought it in 2006, the taste just got bland. I'll take a Great Lakes brew any day."

"I do not buy the theory about the big guys benefiting the micros... no way.. all marketing hype via the Big Boy Network."

Ryan's picture
Ryan - Jan 11, 2010

http://beerwarsmovie.com/

great doc about this struggle in the world of beer.