Disclosure. I do normally gently mention this, but in this instance I’m serving it up as an unsolicited amuse bouche: I work for Diageo Beer Company USA as a consultant. You may think this colors my opinion; I don’t; but you should at least know it.
I recently had drinks with two interesting fellows. One is involved in investment and has a focus on food and in particular the beverage segment. The other runs a specialty beverage distributorship in LA. Both have a growing interest in beer, and we met at a brewery so they could pick my brains.
“I heard that people can be afraid of selling their brewery because of consumer pushback,” one of my companions ventured. Oh brother, you don’t know the half of it.
I regaled them with tales of the current storm about brewery independence; about Wicked Weed; about internet trolling conducted, to quote Jules Winnfield, with great vengence and furious anger. By the time I had told them about the Brewers Association’s Independence Seal and the ABI High End video filmed in retaliation, both of my drinking buddies were sat aghast.
But surely, I stammered, this happens in other sectors? What about, what about when Stumptown sold to Peet’s two years back?
“Well Peet’s isn’t even independent. It’s owned by JAB Holdings, an investment firm out of Luxembourg that owns Caribou Coffee and Douwe Egberts,” I was told. “And of course through Peet’s they also own Intelligentsia, and they recently bought Krispy Kreme, Keurig and Panera Bread.”
Now it was my turn to drop my mouth open. Say what? There’s a shadowy multinational, based out of the country right next to Belgium, that’s basically buying up the American coffee industry? That sounds awfully familiar. So, does anyone…care?
And Intelligentsia?! I hang out in Intelli all the time. It’s goldarn hipster heaven, and the cappuccino is spot on. Half the World Barista Championship entrants work at Intelligentsia. (At least according to the single source of all my World Barista Championship knowledge, which is the movie Barista.)
My companions chuckled gently, and explained that while there’s been some rumbling among coffee purists, no one in the industry seems too peturbed by corporate ownership. Certainly, according to these chaps, it’s no concern when it comes to founders selling up.
“After all,” one of them joked, “it’s not like Snapchat users stopped posting videos just because Snapchat was sold to Facebook.”
This little exchange told me three things about our – perhaps myopic – concern with independent ownership of beer companies:
- People outside of the beer world – and by this I mean people who work in beer, or just care a lot about it – probably have no idea who owns what. I’m a college-educated coffee drinker – enthusiast even – and I had no idea my favorite hipster coffee joint was owned by an international conglomerate. I had even less idea that said conglomerate is on an acquisition march.
- People outside the beer world think it’s a little ridiculous that someone who founds a brewery should be afraid or ashamed to sell it once it’s become successful. The reference to the tech world was salient: everyone who watches HBO’s Silicon Valley knows that people start tech companies to make millions if not billions by selling them. Why should this be different in the beverage sector? Or, indeed, the beer industry?
- Having said that, beer is different. Different even to wine, or spirits. (And wineries and distilleries get bought and sold all the time, and do not experience the troll swarm of a beer buyout.) As Beer Bible author Jeff Alworth often asserts, beer is culture. It’s all very well protesting “Those guys over there don’t care who owns their coffee roaster”; fact is, people do care who owns their brewer. (Some people, at least.)
But, despite the perhaps noble debate Beer Twitter seems to have on a daily basis about brewery independence, the confluence of points 1. and 2. leads me to believe that in the long run, breweries that sell to ABI, MillerCoors, Constellation and the rest will do just fine. The market for beer is far, far broader than the readership of beer blogs. Breweries will continue to sell, despite the hesitations and palpitations of those who founded them.
Anyway, let’s finish up by revisiting my chat about coffee in a brewery.
I recovered from the news that the tattooed dudette who carefully weighs out and grinds the beans for my Intelligentsia pour-over is employed by Big Coffee, and joked, “I guess I’ll have to walk down Abbot Kinney to Blue Bottle from now on, hey?”.
“Blue Bottle!” my investor friend exclaimed. “Blue Bottle was bought out years ago!”
I sipped my stout and sighed.