The Production of Soulless Beer

The phrase "craft beer" is rightly denounced for its imprecision.  It's hard to say what craft beer is or how it differs from non-craft (size, ownership structure, quality or type of beer?), but this extraordinary article in Businessweek illustrates exactly what it is not--cripplingly soulless beer from which every extraneous cent has been wrung:

For a number-crunching manager like [InBev CEO Carlos] Brito, an old, family-run company like Anheuser-Busch provided plenty of opportunities for cuts. He laid off approximately 1,400 people, about 6 percent of the U.S. workforce. He sold $9.4 billion in assets, including Busch Gardens and SeaWorld. AB InBev also tried to save money on materials. It used smaller labels and thinner glass for its bottles. It tried weaker cardboard for its 12-packs and cases. The old Anheuser-Busch insisted on using whole grains of rice in its beer. AB InBev was fine with the broken kind. “Our purchasing of rice has to do with how fresh the rice is, not whether it is whole or broken,” says Vallis.

And

In a telephone interview from Munich, Willy Buholzer, AB InBev’s director of global hops procurement, cheerfully insists that the company still brews the traditional way with Hallertauer Mittelfrüh. He says the reason that AB InBev stopped buying it was that it has a surplus. “We just have too much right now,” Buholzer says. “We need a break for a couple of years.”

A former top AB InBev executive, who declined to be identified because he didn’t want to get in trouble with his old employer, tells a different story. He says the company saved about $55 million a year substituting cheaper hops in Budweiser and other U.S. beers for more expensive ones like Hallertauer Mittelfrüh.

And of course

So much cash flowed in that by 2011 the company was able to pay down early a significant portion of the $54 billion it had borrowed to finance the Anheuser-Busch takeover. This triggered $1.3 billion in stock-option bonuses for Brito and 39 other executives that year.

The whole piece is a must-read, but--spoiler-alert--as the story unfolds, writer Devin Leonard takes it to its obvious conclusion.  The modern InBev is a shark that makes money by snacking on new acquisitions and wringing savings from them.  That's what motivates InBev's appetite for Modelo and why industry watchers think SABMiller is in their sights as well.  As Leonard points out, the man running the company, Carlos Brito, doesn't make and sell beer, he acquires beer companies.  If you happen to like beer in the portfolio Brito covets, this isn't good news.  (The article details violence done to Beck's and Bass, in addition to Budweiser.)

I don't know exactly how we should think about "good beer" and "macro" or "industrial" beer.  But I do know that we should think very poorly indeed about breweries mishandled like this.  It's a debased, degraded product and it's offered with contempt to consumers.  If you have friends or relatives who still drink Budweiser, forward them the article and tell them to switch to Yuengling or Sam Adams instead.