Beer Wars is Required Viewing

I just finished watching Beer Wars, and I'll tell you, if you've ever wondered how the beer business works, scratch that, if you've ever had a beer, you need to watch this film. Beer Wars is a documentary that examines the competition in the beer industry and how the sides in that fight compete for your business. The sides in the war are the 3 big brewers and the craft brewers in the US. The film examines how the 3 big brewers strong arm the smaller craft brewers out of the market or at least how they control their distribution. Some means of warfare include competing for space in the beer aisle, creating competition within esoteric niches, and lobbying that takes place with the state and federal governments.

The 3 big brands the film mentions are Anheuser-Busch, Miller, and Coors, or what I call "The Empire". Those 3 brands control 78% of the market, leaving little room for competition in the way of craft breweries such as Dogfish Head, Stone, Boston Beer, New Belgium and over 1700 other microbreweries (Brewer's Association). Having such a large market share gives The Empire significant leverage to place their products where they want on the shelves at the retailer and to push out the smaller microbreweries. When the graphic is introduced that displays how someone like Anheuser-Busch stocks the shelves, it becomes apparent just how little room there is for a smaller brand to shine through. The big brands have the ability to billboard their product on the shelves, leaving small windows in less desirable areas for the less affluent brands. I'm having trouble finding an example of this effect on the internet but I will update this post when I find one. The state of the beer aisle is just one measure of the competition. Other attacks by the big 3 have also made competition in the beer industry difficult.

Many of the craft brewers do a great job of finding and filling a niche in beer styles. Some of these niches include spiced or flavored ales such as Dogfish Head's Punkin' Ale or caffeinated beer such as MoonShot Lager. The Empire will see the success of these niches and set their sights on them. Jack's Pumpkin Spice Ale and B-to-the-E are just two such examples. The point of these reactive products is not necessarily to have a new style of beer take off and be a great source of revenue but instead are intended to edge out the competition; take away revenue so that the microbrewery cannot afford to stay in that niche or is forced to go out of business altogether. While these attacks on niche markets are an effective head-to-head competitive strategy, there are other seemingly devious practices in place that help to keep the craft brewers' distribution capabilities at a minimum.

Lobbying by big businesses is an effective use of money. Whether big oil, insurance, or the National Beer Wholesalers Association (NBWA) money buys support for your position. The NBWA pushes for the status quo 3 Tier System (brewers, wholesalers, retailers) that ensures wholesalers control how breweries distribute their product. I plan to go into more detail with the 3 Tier System in a later post. For now, I want to keep the idea high level. Many of the distributors are the big 3 brands. According to the film, Anheuser-Busch has such a strong share of the market, 49%, that they the refuse to distribute other competitors, leaving the microbreweries to hitch a ride on the truck with Miller and Coors. Miller and Coors have their own brands to distribute, which doesn't leave much room for these craft breweries either. It seems as long as the distribution laws stay as they are, the small companies have little chance to increase market share significantly.

Since choosing a non-major brand beer is at the heart of the drS Beer Club, I find it important to understand which beers are made by the major brands. The obvious brand names are Budweiser and Miller Genuine Draft, but Beer Wars pointed out a number of small names that are currently owned by The Empire. I was already aware that names like Rolling Rock and Grolsch were owned by Anheuser-Busch, but I was surprised to find out that Leffe and Hoegaarden are also associated with The Empire. I decided to look further into what brands found in my grocer's beer aisle are in fact part of The Empire. Making this more confusing and my feelings more conflicted is that InBev is now the owner of Anheuser-Busch. Several brands that I have previously enjoyed like Boddingtons are now mixed in with the Anheuser-Busch family. You'll also notice that some of the beers I list below are made by breweries that aren't "Anheuser-Busch." This is because they has decided to hide their name behind a microbrewery sounding name. One such example is the Green Valley Brewing Company. A trip by the host of the documentary to Fairfield, CA reveals that the only brewery in the town is an Anheuser-Busch brewery. If you look up Green Valley's registration, you'll notice their address is on Busch Drive.

Thank you for sticking with me through this post. Some points I would like to further articulate at a later date. Stay tuned for those entries. Without prolonging this any further, here is a list (likely not inclusive) of brands that Anheuser-Busch has a part.

Ales and Lagers
Ascent 54
Bass
Beach Bum Blonde Ale
Beck's
Boddingtons
Bud
Bud 66
Bud American Ale
Bud Brew Masters' Private Reserve
Bud Chelada
Bud Dry
Bud Extra
Bud Ice
Bud Light Golden Wheat
Bud Light Lime
Bud NA
Bud Select
Busch
Czechvar
Harbin Lager
Hoegaarden
Hop Hound Amber Wheat
Jack's Pumpkin Spice Ale
Kirin
Land Shark Lager (Say in ain't so, Jimmy!)
Leffe
Lowenbrau
Michelob
Natural
O'Doul's
Redbridge
Rolling Rock
Shock Top
SkipJack Amber
Stella Artois
Stone Mill Pale Ale
Sun Dog
Tennent's Ale
Tiger Beer
Wild Blue
Wild Hop Lager
Winter's Bourbon Cask Ale

Other
Bacardi Malt Beverages
Hurricane (malt liquor)
King Cobra (malt liquor)
Tequiza
Tilt (the "flavors" are Green, Red, Purple, Blue, and Watermelon - 'nuf said)
Ziegenbock

Minority ownerships
Fordham
Goose Island
Grupo Modelo
Kona
Old Dominion
Ray Hill
Red Hook
Starr Hill
Widmer Brothers Brewery

Sources:
Wikipedia
Anheuser-Busch
DrinkAmerican.us