Selling Out. Buying In. Business Schmiznis in BeerLand.

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Selling out. Buying-in. Value this. Value that. Impatience. Private Equity. Big Beer. It’s a never-ending circle of good-beer-loving-folk beating the shit out of each other over something outside their control that’s pointless, right? It is just beer after all? Why is there even a fuss over craft breweries selling to Big Beer Inc? Who cares? The arguments get deeper, more frequent & it’s all leading somewhere a little too familiar.

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I’ve always known I was an outsider. In my younger days I tried desperately to ‘fit in’. Whether it was hiding my love of comics, or pretending my social anxiety didn’t exist. And ultimately, it ended in my down deep unhappiness. I am a nerd. I am a geek. I have my socially awkward moments. And I’ve embraced them, because they are a part of who I am. I realised I do best amongst my fellow misfits, & I am proud to have many good friends around me who too bare similar burdens.

As someone who loved micro brewing before it became ‘a thing’ or even a movement, it was to me about liberty, choice & small business standing up to claim its place in the market. I’ve never been so dewy-eyed or ignorant to understand that a business’ first duty is to its shareholders. The generation of revenue & profit is what pays wages, keeps the lights on, allows it to grow. Similarly, I don’t think I’ve ever been radical enough to tie myself to ‘What’s wrong with just having a small business that does okay, pays the bills, the wages & puts out a consistently good product or service?’

Businesses are like children. They grow up. They evolve. They have their ups & downs. They sometimes need a firm hand to rein them in. Sometimes they just need to ‘be’ to evolve into whatever they are to become. You can’t just will a million or even a billion euro business into existence.

Today, as I drove through my hometown across from my favorite cafe, the Rye River Cafe, it appears the small town of Kilcock is getting a Costa Coffee. And I felt angry, & annoyed that its presence could hurt the Rye River Cafe. And when I tried to understand why I felt this, it dawned on me. Rye River Cafe source locally. The owners live local. They are a part of the local eco-system. Costa will buy nothing locally.  They will be a vampire coming in, sucking money out of the local economy, without any of it going back into it.

And this is one of the reasons why people feel so aggrieved when a craft brewer sells out to ‘the man’. If they run a brewpub, they pride on their local sourcing, & local relationships. The money constantly rejoins the circle. When they’re acquired & open elsewhere using their access to global money, it stops becoming local-supporting-local.

But, it’s not just that. A number of the craft brewers who have ‘sold out’ previously have espoused such pride in independence & not being ‘the man’, that they’ve built businesses from the loyalty of that marketed forefront authenticity. Many have previously ranted quite publicly about ‘the man’. Then, cash is flashed, a business decision & a chance to realise their investment appears, & a deal is struck. It’s this switch from an aggressively marketed position that comes across as ‘dishonest’ to those who bought into it.

And then, there’s those on the opposite side who take the ‘Hey, it’s just beer. Enjoy good beer‘.  And, they have a point. It is ‘just beer’. However it stops being ‘just beer’ when big boys swallow up smaller breweries, they also swallow up distribution space, tap space & can engage in practices like we’ve seen in Ireland such as tap-lock-outs on smaller producers, white labeling macro beers as locally produced micro brews & worse still, shelf space in supermarkets getting less available, which people in the industry here should remember from what happened in Virginia in the USA.

And then we slowly wander back towards a battle of the big three or four once more, just like it happened previously. Bigger breweries swallowing up smaller ones. Beers disappearing. Individuality of choice & difference also disappearing. Local economies becoming homogenized. And so we march onto scenarios like in Stallone’s ‘Demolition Man‘.

Think about it. Look around Dublin city next time. Starbucks, McDonald’s, Burger King, Costa Coffee, KFC, Subway, Pizza Hut. Now, look at a craft beer shelf in many supermarkets. How many Diageo ‘crafty beers’ are on that same shelf alongside craft beers from independent brewers? And as more of those craft beers are acquired, you see that balance switching heavily in the wrong direction.

Tony Magee in 2014 was interviewed by TheHopReview.com, & gave his view on homogenization in beer & that the only place it leads to effectively, is dead brands:

My view of the world is that the Buds, Millers, Coors and even Guinness for that matter: these brands have all run their course. There’s a lot of talk in the industry whether or not brands have life cycles. And I think they do. Those brands have lasted since the 1870’s, they’ve lasted 150 years. Now, they’ve changed a lot during that time, but they’re the survivors of that early late 1800’s birth of breweries in the New World. First of all, they had WWI – it interrupted their business, the world.

The world came back home and found those beers, so the brand gets a restart. Then the Depression: the brands get a restart. Prohibition: the brands get a restart. WWII, same thing. It could be that the reason some of those breweries lasted as long as that did, was because of all of these weird ‘resets.’ And that may or may not happen again. Maybe that world has gotten so stale that they won’t change the landscape the way that they did. The world’s different now.

Those brands, they’re all done. Maybe the next Budweiser will be a Corona or Modelo or something, and craft beers will occupy the same space that current imports do. That’s a huge market share. Maybe half the beer sold in the United States will be sold by little guys like us.

Aleholes/Beersnobs should never begrudge someone who started a business, put in hours you’d never dream of doing, probably risked their family home & financial security on of realising their investment into something tangible for their family to enjoy the fruits of many sleepless nights, long hard backbreaking days filled with slammed doors, being told ‘no’ to stocking their beers, along with cruelly written legislation that favours international conglomerates unfairly.

At the same time, craft brewers who are in it to ‘sell out’ should be honest, not jump on the ‘bash the man/brag independence’ wagon to sell beers, & they should certainly be mindful of how they present themselves in the craft beer VS big beer narrative, unless you fancy doing epic backpedaling like Tony Magee from Lagunitas.

A lot of breweries got very aggressive and selfish…stupid, greedy and in a big hurry. It’s that impatience that really hurts them. It’s all about that impatience. And today, when I see breweries taking private equity money as a way to grow more quickly: I see impatience.  Patience is an ephemeral thing – it’s hard to put a value on it.

– source: TheHopReview.com

Roll forward to the last few days, & Magee’s blog explaining his ‘buy-in’ to the Heineken corporation full-blast:

Some who don’t fully understand it all may say it is selling out. Truth is that we did then, and are now ‘buying in.’ Money has value and equity has value too.

It leaves me wondering where the value of impatience went to. Answers on a postcard please.

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