I object to calling these organizations conglomerates instead of brewers.Let's take that last paragraph first, because it's instrumental to how we think about this issue. I would argue that large beer companies are categorically different from smaller breweries. These companies manage large portfolios of products that they manufacture in industrial plants. They produce a variety of beer that varies little by brand or region, which makes it very easy to create new brands, sunset others, all on a massive scale. Small breweries are associated with single brands and are not optimized to produce consistent beer in large quantities. (As with all things, things get fuzzy in the middle.) I say they are categorically different because the production methods and products of large industrial breweries, whether we're talking about Dutch Heineken, Mexican Modelo, or Chinese Tsingtao, are very similar to one another and very different from cask ale breweries in England, saison breweries in Belgium, or weizen producers in Bavaria. They're optimized to make interchangeable light lagers, and as they acquire and sell brands, that's exactly what they do.
A conglomerate is an entity who's various enterprises are not related. Example: General Electric. Owns TV stations, manufacturers jet engines, offers financial services, manufacture oil equipment.
AB InBev and SAB Miller, by contrast, are more or less exclusively focused on the design, manufacture, and sale of beer. They are highly specialized, with massive expertise in the beer industry. They are practically the precise opposite of a conglomerate.
You many not personally be fond of their methods, or their products, but they are brewers, and to call them otherwise is simply inaccurate.
This distinction is far from unique to beer. Most food and drink markets have an expensive, artisanal end and a mass-produced, industrial end. In a very real sense, they're not the same markets. It's true that Kraft and Rogue Creamery are both in the cheese business, but the people buying American cheese by the slice are never going to spend eight bucks a pound on Oregonzola--and vice versa.
I don't think anyone doubts that many (most?) big beer companies produce impressive products. They're extremely consistent and clean--and therefore very hard to brew. When I was traveling through Britain and Belgium, brewers there made a point of praising Anheuser-Busch to me for their level of accomplishment. But it's fundamentally a different product than what Frank Boon or John Keeling (Fuller's) make.
Now, as to conglomerate, Wikipedia backs up the definition from the commenter. I'm not sure if it's a universal definition, but I think it's linguistically useful. The commenter's right--mostly those companies are in the beer or at least drinks business (like Diageo). But I also think it's important to realize that in using industrial-scale breweries optimized to produce interchangeable light-lager-type beers, they're a different beast than small breweries. So what: agglomeration, maybe?
Nice write up. I think conglomerates are a fair description of the current state of Big Beer. When a certain Belgium owned, Brazilian run company began referring to their product as extract instead of beer, I felt they had lost the title of brewer.
ReplyDeleteBig Beer is definitely a different beast than the small and/or craft breweries. I formerly worked in a Big Beer brewery and learn to make large quantities of light lagers and I could do it proficiently well. I even got to do a few scale ups of new products and use some different yeast strains(which is basically unheard of in Big Beer).
I recently moved to the Portland area and I would love to get back into a brewery, but I am so intimidated by how different the breweries are. The processes are fundamentally the same, but the execution is night and day.
As a reference to what "John Keeling (Fuller's) make" (s):
ReplyDeletehttp://hardknott.blogspot.com/2012/06/english-experiment.html
It's jolly to see us brewery blokes letting our hair down. Again.
That's a bit to much toggle switch for me. Big bag. Wee saintly. Plenty of Munich weiss brewers are producing at scale and now far too many US "craft" brewers, too. There is magically no middle. But we need to be honest. Biggest macro has more to do with big craft than crafty craft has to do with big craft. Ah, for the days of micro-brewing when we didn't have to bother with fine lines.
ReplyDeleteToo much jibber jabber. If its good, drink it. Just don't deny me the choice. I'll be brewing what I want to drink in the meantime.
ReplyDeleteActually, if you look closely at the portfolios of most of the "Multinational Brewers" (how about that for a definition) you'll see that it goes way beyond "light-lager-type" beers. Moreover, those light-lager-type aren't something the multinationals invented, they simply expanded their production because they understood they (at least at some point) were a profitable product. You don't see "light-lager-type" in Germany, Belgium or the Czech Republic, neither in South America or Spain, if I remember correctly, where the average "lager" is always around 5% ABV.
ReplyDeleteThe giant beer conglomerates (that is the right word) can be differentiated from small craft brewers in many ways, but the most obvious are these (in my view):
ReplyDeleteFirst, big breweries make 90+ percent of their profit on light lagers. They likely have other beers in their portfolio, but most of what they make and sell is mainstream and light. They can certainly brew a higher quality product; for the most part, they simply choose not to.
Second, because their products are so similar, the macros put a lot of money and effort into creating brand identities based on image. The people drinking this stuff are supposed to identify with the imagery in the ads, not the taste of the product. Smaller and even mid-sized craft brands don't have the money for extensive image campaigns; they make their money with unique, quality products.
In many respects, the big brands have been engaged in a race to the bottom since the 1950s. They've reduced the amount of hops and grains used to brew their beers while focusing increasingly on building brand image and loyalty via ad campaigns.
PF, this is another matter of nomenclature:
ReplyDeleteYou don't see "light-lager-type" in Germany, Belgium or the Czech Republic, neither in South America or Spain, if I remember correctly, where the average "lager" is always around 5% ABV.
In the US, we would refer to Stella, Estrella, and Corona as "light lagers." I acknowledge that some people draw a distinction between an all-barley 5% lager and a corn or rice lager of 4.5%. We can have that disagreement, but in the US market, they occupy the same space. You can make those two styles of beer in the same industrial plants. They aren't optimized to make cask ale or saisons, though. That's the distinction I'm drawing.
Good to see craft brewers are above all that imagery, Pete...
ReplyDeletehttp://www.youtube.com/watch?v=adcXYBVConQ&feature=plcp
I don't drink macro beer if I have the choice, and I'm not defending them. But I'm getting tired of us all pretending that small brewers aren't in it for the money too. It turns out there's a group of people who are willing to spend money on "high quality" beer--in other words, a market.
How many craft brewers would there bee if they couldn't earn a living at it?
What kind of beer would AB make if everyone wanted to drink over-hopped ales?
What's wrong with "industrial breweries"? Isn't that just what they are?
ReplyDeleteI think the views here are really limited to the "US experience." In Europe there are very large breweries, which, taken in the local context, might be called "industrial". In Germany, for example, Paulaner produces close to 3 million hectoliters per year. That is close to 3 million US barrels. Or Augustiner, "only" 1.9 million hectoliters, yet they produce one of the tastiest beers you can get in Munich (and, often served directly from the barrel).
By "local context", I mean that Germany has less than one-fifth the population of the US, so, multiply the output by five to get some idea of the comparable size in the US.
And, all those who think that the small breweries in the US or in Europe, are in it for fun, not money, please stand up.
Charlie, I certainly never said that. Indeed, over at Stan's place, I made that very point.
ReplyDeleteMike, I would say your comment is applicable only to Germany and the Czech Republic. Markets in the rest of the world are dominated by multinational beer companies making mass-market lagers--including Belgium and Britain. They are the exceptions--and the only ones, so far as I can tell--not the rule.
Jeff, I live in Europe and travel around drinking beer. You have been here once? Twice?
ReplyDeleteThe beer situation in the US is far different from how it is here. US beer culture (in its current form) is 30 years old? 40? Here it's hundred of years old.
There are big breweries here that produce outstanding beers (Moortgat, for example) and whose products are very widely available in their countries. Heineken, for example, produces what I assume is a crappy product for the US and other markets, yet, since the mid- 1990s has produced a superior product for distribution here in the Netherlands.
Reading only English and visiting some place foreign for a couple of weeks can easily give one the wrong impression. Your response, unfortunately, reflects that.
Jeff, my comments were at Pete's comments. Actually, he is merely a victim--an excuse for me to bring up the Maiden video again.
ReplyDeleteMike, once again you've taken an off-topic grievance and used it to whip me for not being or speaking German. The irony is that through your constant whingeing about how Americans are blinded by parochialism, that's exactly what you reveal of yourself. There are 180+ countries on the planet, and the vast majority of those producing beer do it in large industrial breweries. Your obsession with Europe makes you read everything as evidence of your thesis.
ReplyDeleteConsider this a coda to my comments to your comments. I get it: I'm an ignant American who because he doesn't live in Europe can't possibly reflect on the beer made there. Let me stipulate for the record that I hear you. And that henceforth it won't be necessary to relitigate the argument.
Funny, I assumed the Heineken available in Holland would be the same crappy product available in the States. I guess I should try it next visit?
ReplyDeletePeople won't care if the beer distributor is a brewer or a conglomerate, as long as it taste good and get them drunk, it's good. That's all it takes for the consumers to be satisfied. Am I right or not?
ReplyDeleteJesse, Heineken changed the local product to all-malt in the 1990s. It's still not a great beer, but it's certainly drinkable.
ReplyDeleteAn even better lager is Brand UP, also brewed by Heineken. Brand was an independent brewery until Heineken bought them over 20 years ago. You might also like the Amstel 1870, another Heineken beer.
Jeff, I've never been to Portland and have no plans to go there. But, how would you like it if I corrected you when you said Pub B was on XYZ street?
ReplyDelete