There are large beer companies and then there’s Big Beer. Late last year, Brazil- and Belgium-based Anheuser-Busch InBev reached an agreement to buy the world’s second-largest beer conglomerate, U.K.–based SABMiller, in a deal worth more than $100 billion.
When this transaction is completed at the end of this year, 400-plus labels will come under one company’s umbrella. The new behemoth will have a 30-percent global market share.
Numbers like these might surprise aficionados of Vancouver’s craft breweries, which are utterly tiny in comparison. But don’t think that the big guys haven’t noticed the growing market share for breweries that produce fewer than 160,000 hectolitres per year. In B.C., it has reached 20 percent, according to the provincial government. It’s likely far higher in East Vancouver.
Last October, one industry watcher, Money writer Brad Tuttle, listed some tactics being used by large beer companies to remain on top. He noted that large corporations are creating their own “quasi-craft brands” and buying craft breweries.
Tuttle also mentioned that the big guys are merging to “overwhelm the marketplace” and trying to control distribution. (This isn’t as easy in B.C., where the Liquor Distribution Branch has a monopoly.) And in some cases, Big Beer is defending “macro brews” and choosing to “bash craft beer snobs”, according to Tuttle.
During the U.S. Super Bowl broadcast, Budweiser ran a macho advertisement with thumping music, declaring that it’s “not a hobby”, “not small”, “not sipped”, “not soft”, “not imported”, “not a fruitcup”, “not following”, and “not backing down”.
Business Insider reporter Kate Taylor interpreted the message as a direct snub against craft beer. The implication was that craft appeals to effete tastes.
Even as craft beer appeals to urban millennials, Anheuser-Busch’s most recent quarterly financial results showed that its global-brand revenue was up 5.9 percent. Revenues rose 3.1 percent in the quarter.
The company also reported that volumes rose one percent in Canada, along with “good growth” for Stella Artois, Goose Island, and its “craft partners”. The major sore spot was Brazil, where macroeconomic factors are having a negative impact on consumers’ disposable incomes.
Anheuser-Busch claims that it is reaching millennial consumers, in part through—you guessed it—the development of craft beer. And in its 2015 year-end results, the company declared: “Our near beer offerings are responding to consumer demand for more choice and excitement.”
Meanwhile, the world’s third-largest brewer, Heineken N.V., reported earlier this year that its sales volume rose seven percent in its last quarter, vastly exceeding analysts’ expectations.
This came after it bought a 50-percent stake in California-based Lagunitas Brewing Company, which is the fifth-largest craft brewer in the United States.
Heineken has also distinguished itself with its environmental record. It has worked with another Dutch company, SolarAccess, to install photovoltaic panels on five of its Heineken breweries as well as at its Tiger brewery in Singapore.
Solarplaza, a private company that supports solar-energy initiatives, recently noted that Heineken could be called the “king of solar beers” because of its efforts in this area. It markets some of its beers as being “brewed by the sun” to appeal to environmentally conscious millennials.
The largest single installation of solar power in the beer industry is at the MillerCoors brewery in Irwindale, California, according to Solarplaza. At that spot, there are more than 10,000 photovoltaic panels over a four-hectare site, but Heineken and Lagunitas still have seven of the top 10.
Steam Whistle is a smaller Canadian brewery that also plays up its environmental credentials, relying on green energy from Bullfrog Power since 2007. Its green bottles are heavier than brown beer bottles, and according to the company, they last three to four times longer.
In addition, Steam Whistle markets itself through a fleet of electric-powered vintage trucks. Many Vancouverites have spotted the “Retro Electro”, a 1958 Chevrolet Apache pickup driven by company representative Mike Kiraly. It's powered by 24 lithium-ion batteries.
Delivery trucks run on environmentally friendly biodiesel, carrying beer made entirely from natural, GMO–free ingredients.
Although microbreweries like to talk up the fact that they hire local people and pay local taxes, breweries from outside of town—big and small—have shown that they won’t give up without a fight. This battle ain't over yet.