Does Everyone Have a Price?

That's probably the most cynical headline I'll ever write, but this article from the San Diego Tribune yesterday brings to light a topic in craft beer that's almost never discussed until it actually happens, which is...

Does everyone actually have a price in the beer industry?

It's worth mentioning that today's beer economy is absolutely bonkers. In one corner, you find our favorite beer giants going blow for blow in the beer version of a household Monopoly game. Buy as much as you can, as fast as you can, and then leverage the system to maximize ROI and crush your competition into the dirt. As you probably saw, AB/Inbev is going to purchase SABMiller for over 100 billion dollars. Regulatory, anti-trust, and other legal and geopolitical hurdles aside, this is going to consolidate around 50% of the world's beer production under one roof. 50% of global beer production will be made by one company. The world is a huge place, and this is the sort of nightmarish business environment that one reads about in your business school case studies, highlighting Standard Oil's monopolistic overtures and explaining why it shouldn't be allowed to happen again. The free-market should be free, but not that free. Less is more and all.

In the other corner, you find a burgeoning craft beer scene that's slowly spreading to the furthest corners of the earth. It's an understatement to say that local beer is booming here in the US. Breweries are opening up at a breathtaking pace, consumers are flocking for great beer, and we're seeing sustainable demand for their products. It's a win-win if you're making great beer right now and you're in the game for the right reasons.

Dan Selis, founder and owner of Mission Brewery in San Diego, is quoted in the Tribune article as saying that he probably wouldn't sell to a massive domestic producer like Miller. But...he states that "everyone has his price". I won't comment on whether this is good or bad, but I'll say that this attitude, along with the rapid global consolidation of beer, outlines a dynamic landscape littered with unseen market forces and an emerging attitude on what it means to be a stakeholder in the craft beer business.

Golden Road, Lagunitas, Saint Archer's, Elysian, Blue Point, Magic Hat, Goose Island...the list goes on and on, and all these brands have succumbed to the domestic takeover in some capacity, whether they wanted to or not. The complexity of business decisions like this are enormous, and I don't want you to think that I'm minimizing the level of thought that went into them. In reality, and in most cases, I'm ambivalent to the actions of domestic brewers. I just don't care what they choose to do with their money or their time. I don't care if Budweiser makes another crappy-a-rita malt drink that actually tastes like you mixed Listerine with Hi-C. I don't care if Coors continues to market their beer on how chilly it is. They can do whatever they want, as is their prerogative. And on balance, they're not evil people at AB/Inbev. Honestly they're not. They just see beer as a means to an end, in this case...increasing shareholder value.

What I do care about is the implication that you can buy whatever you want. It's a frightening idea when you think about it. No matter what you say, and how firmly you espouse your beliefs, you will sell out given the right set of circumstances and the right financial incentive. Is Dan Selis right?

I don't know the answer to this one. Craft beer is made, marketed, and sold on the intention behind the liquid as much as the liquid itself. It's sold as a package deal. It's a great experience and a delicious beer. It's an ideal, and a representation of an alternative way of doing business in the consumer economy. We love local because it resonates with us. It's important that we find relevance in our communities, and we like businesses that do the same thing. We love the human story, and the warm feeling that comes along with that story. It's addictive, outrageously fun, and in my own opinion...better. It's a better a way of doing beer and a more interesting take on what it means to live in that world. Whatever...I can get romantic on this stuff. 

But money talks. It's the loudest talker in the room actually. The best, and worst, things in the world are done for the sake of money. Craft beer is a business. It operates on cash flow like the rest of us do. The only difference, as I see it, is the intention behind the cash flow, and the reason to be in the business at all. Great breweries make great beer, and sell it for a price, so that they can make more great beer. They don't sell it to make as much money as possible and build huge, soulless efficiencies in their business. They evolve, and change, and grow, and do all the things a successful business should do, but the right intention is always there.

I know the world is changing, and we're going to see that pace of change accelerate. I hope Dan Selis is wrong. I hope we don't have a nation of entrepreneurs willing to give it all up for the sake of a paycheck. I'm not judging them if they do, because I know what it means to grow something, be proud of it, and reap the rewards of your hard work.

I just hope that hard work doesn't always come to down to the price. I could be wrong, but I think you'll sacrifice a lot more than your brewery if it does.

- Chris






FeaturedChris McClellan