What’s Wrong with the American Craft-Beer Boom?

wolfstreet.com / by Wolf Richter • Apr 22, 2017 

Big Beer, dogged by sagging brands, tries to control the market.

One of my many favorite craft brews used to be Lagunitas IPA, brewed in Petaluma, about 40 miles north of San Francisco. I used to be a regular buyer for home use – though when I’m out, I try beers I don’t know. In 2015, Heineken International, one of the world’s largest multinational brewing conglomerates with 180 or so brands, from Tiger to Tecate, bought a 50% stake, following in the footsteps of other multinational brewing conglomerates: they’re all on an acquisition binge of American craft brewers.

Why? Because craft beer sales have been soaring, even as sales of the big brands, despite costly marketing and Super Bowl ads, have been sagging. The market is tilting toward craft brews, and the conglomerates figured this out too.

Conglomerates are cost-cutters. They buy a brewer and try to make it work by cutting costs. One way they cut costs is by using cheaper commodity ingredients that their other breweries buy, which pushes down costs. This is American corporate theology.

READ MORE

The post What’s Wrong with the American Craft-Beer Boom? appeared first on Silver For The People.