Beer Wars by Anat Baron...
A number of us have looked longingly at the world of craft and micro beers as perhaps a model for rum. I was one of them. It's hard not to visit Total Wine and their hundreds of beers and not take hope that yes, this is possible for rum as well.
This movie may dash those hopes. Anat Baron was a former CEO of Mike's Hard Lemonade. She tells the story of beer's growth and beer's demise, a story of takeover by an ever smaller number of corporations. In the case of beer, the Big Three are Anheuser Busch, Millers and Coors. She discusses the three-tiered system that was put in place after Prohibition to create competition, but which ultimately had exactly the opposite effect.
The combination of brands being taken over by just a few huge mega's, huge advertising budget, and immense marketing clout have led to a situation where the manufacturer develops and controls the consumers' tastes, rather than the reverse.
An excellent example of this was Ms. Baron's taste test - reminiscent of our own vodka/grain alcohol experiment - wherein she set up a tasting station at public gathering which challenged loyal drinkers to identify their must-have-always-drink beer from the Big Three: Budweiser, Millers and Coors. Although all professed to love their favorite and despise the others, the test proved otherwise.
As in all such tests, the samplers expressed head shaking shock and amazement. The power of advertising and marketing cannot be underestimated.
The Three Tier System
The Great Depression and Prohibition ended with the institution of the three tier system. The government was fully aware of the great monopolies of the early 1900's and thus created a system modeled after the three branches of government, with the thought that a separation of powers would encourage competition. The three tiers: brewers, distributors and retailers. No one entity could operate in more than one sector. Did this work?
At first, yes.
By the time I came into consciousness and went to college the number of breweries in the US was amazing. Every town and city had a hometown brewery who developed local products that were loved by local drinkers. Like football teams, most of us took actual pride in our hometown teams and beers. To insult another's beer were fighting words.
I forget the number but in this heyday of brewing, there were perhaps 1800 independent breweries. But after that it was all downhill, as what became the Big Three of Beer bought out and/or simply crushed their competition. As these large entities grew, so did their ad budgets and locals started looking and buying other brands. At the same time the biggies started developing a uniformity of product that wasn't necessarily better, but was the least offensive, least remarkable, easiest and cheapest to buy.
They sought to drive - not reflect - consumer's taste. The power of national advertising and marketing cannot be underestimated.
The same occurred with distribution, as a few huge megas emerged using every trick in the book to pressure and push the market to their needs. And the same for retail as large chains sold most of the product. Along with this domination of all three tiers came tremendous lobbying efforts. Did you know that the beer and alcohol lobbies are among the most powerful in Washington? Although federally regulated it's the states that benefit the most, as the taxes collected are immense.
So: big brewers, big distribution, big retain, big advertising, big lobbying, and big, big, big money! And their loyal drinkers still cannot identify the product they've been led to prefer. So final answer: no.
But isn't craft beer succeeding?
The story of craft beer is one of home brewing, which was left legal. Untold thousands of home brewers who had quite enough of the unidentifiable drivel of the Big Three, decided they could better. And guess what? They could and did, and to the point that some of them believed that like the old hometown breweries they remembered, that they too could perhaps start a micro brewery, but this time run by love, innovation and top quality ingredients.
By 2009 there were perhaps 1500 of them, among which a few were able to get distribution. And today that number is closer to 2500, and is being called a "craft beer bubble". At the same time the Big Three - who are no fools - have begun developing their own new brands that are presented with complete deviousness with local looking labels, local sounding names, and even fictitiously named local breweries.
These invented products are not nearly as good - but merely cheap copies designed basicly as "catagory killers", sold at very low prices and designed to put the micobrewer out of business. It works.
Was this post a spoiler?
Nope. Honestly, this documentary is a must see. We found it on Roku on the Crackle channel, and it is available too elsewhere, including from Ms. Baron at her official "Beer Wars" website:
http://beerwarsmovie.com/
The bottom line is there is only so much shelf space and beer taps and they are viciously fought for by now two megacorporations and their armies of deep pocketed reps. The story of how this works, and how it relates - not only to rum, but capitalisim in general (a question the movie raises) - is a must see.
If you want to understand why and how alcoholic beverages are where they are - and - what is and can be done about it...
I beg you. You MUST find and watch it...
Documentary: Beer Wars vs Rum?
-
Capn Jimbo
- Rum Evangelisti and Compleat Idiot
- Posts: 3550
- Joined: Mon Dec 11, 2006 3:53 pm
- Location: Paradise: Fort Lauderdale of course...
- Contact:
Documentary: Beer Wars vs Rum?
Last edited by Capn Jimbo on Fri May 09, 2014 10:20 am, edited 1 time in total.
-
Capn Jimbo
- Rum Evangelisti and Compleat Idiot
- Posts: 3550
- Joined: Mon Dec 11, 2006 3:53 pm
- Location: Paradise: Fort Lauderdale of course...
- Contact:
You can see it free, here...
http://www.hulu.com/watch/235712
Rule One: if you fail to watch this documentary now, you're either an ass or the Preacher. Or both...
Rule Two: watch this trailer...
http://www.imdb.com/video/withoutabox/v ... _=tt_ov_vi Then see Rule one.
http://www.hulu.com/watch/235712
Rule One: if you fail to watch this documentary now, you're either an ass or the Preacher. Or both...
Rule Two: watch this trailer...
http://www.imdb.com/video/withoutabox/v ... _=tt_ov_vi Then see Rule one.
I'll have to be an ass, Can only be viewed from within the USA.Capn Jimbo wrote:You can see it free, here...
http://www.hulu.com/watch/235712
Rule One: if you fail to watch this documentary now, you're either an ass or the Preacher. Or both...
Rule Two: watch this trailer...
http://www.imdb.com/video/withoutabox/v ... _=tt_ov_vi Then see Rule one.
*******
Capn's Log: If you download the TOR browser (free), it's possible to make you appear from a US IP address, and you can watch it free. Or you can rent it from Amazon for $2.99 in SD, $3.99 in HD.
https://www.torproject.org/projects/torbrowser.html.en
http://www.amazon.com/Beer-Wars/dp/B003 ... 390&sr=1-1
-
Capn Jimbo
- Rum Evangelisti and Compleat Idiot
- Posts: 3550
- Joined: Mon Dec 11, 2006 3:53 pm
- Location: Paradise: Fort Lauderdale of course...
- Contact:
An update from 2009...
I urge you to visit the film makers site (OP), which includes a discussion of what happened since the film. One of the more interesting things that developed....
1. In 2009 there were 1400 new micro and small distillers. Even with all these new, small, tasty and high quality brands their share was barely 5% of the market, with 95% of sales being dominated by the Big Three, who still dominated distribution and retail.
2. Since then the number has grown to about 2500, and sales are over 10% and growing. The Big Three are NOT growing, though they still dominate. What they have done is to take note.
3. Some of their techniques: setting loose their army of store reps to find the few retail outlets that are carrying a micro, then offering incredible special deals for exclusivity (kicking out the micro).
4. Another is to create a lookalike, invented brand (eg. "Pumpkin Ale" whose packaging and presentation looks like a micro, including even a made up microbrewery name. These are called "category killers" - totally deceptive and sold at half the price of the real micro pumpkin ale.
Mind you these lookalikes aren't nearly as good as the micro they are targeting and thus will likely fail - but - that's the idea! If the lookalike succeeds, the Big Three win; if it doesn't it ruins the category and the real micro is driven out of business.
5. Another tactic is to simply buy the brand, and allow it to wither away or simply close it, on the same premise.
This documentary is absolutely amazing as yes - it will reveal the strong arm, mafia tactics of the Big Three - but at the end the issue the film maker raises is really how capitalism now works to destroy competition and quality through brute force.
Last - there's even internecine warfare among the micro's...
Among the "micro's" there are a precious few who have actually succeeded enough to grow out of the category: Boston Beer Company (Sam Adams), Sierra Nevada, and New Belgium. A sort of mini-Big Three of micros. They have grown so big that the micro brewers association has felt forced to increase the largest size allowed in as members.
At the same time the real Big Three have developed a number of specialty beers like Blue Moon and Shock Top. Along with the min-Big Three, these mega specialty beers have continued to put the squeeze on most of those 2500 micros.
Flat Ass Bottom Line
Per the film maker, the doubling of the micro category, both in numbers and in sales is not necessarily a success. A bubble has been created that may well burst. Even the category is being challenged from within by the mini-Big Three, and from without by the real Big Three.
With the amount of shelf space and taps relatively fixed and already extremely difficult for a micro to penetrate or to remain if they do, it's hard to imagine a doubling of micro brands to make this any easier.
Just the opposite. Think of it this way: if the sales have doubled along with the number of micro's, then it's clear this is not real growth for any one of the hopeful new brewers. Not only must they continue to struggle, but now are faced with more competition from other micro's.
That distant rumble in your ears, is the approaching herd of micro cattle being driven toward a cliff. What will happen?
I urge you to visit the film makers site (OP), which includes a discussion of what happened since the film. One of the more interesting things that developed....
1. In 2009 there were 1400 new micro and small distillers. Even with all these new, small, tasty and high quality brands their share was barely 5% of the market, with 95% of sales being dominated by the Big Three, who still dominated distribution and retail.
2. Since then the number has grown to about 2500, and sales are over 10% and growing. The Big Three are NOT growing, though they still dominate. What they have done is to take note.
3. Some of their techniques: setting loose their army of store reps to find the few retail outlets that are carrying a micro, then offering incredible special deals for exclusivity (kicking out the micro).
4. Another is to create a lookalike, invented brand (eg. "Pumpkin Ale" whose packaging and presentation looks like a micro, including even a made up microbrewery name. These are called "category killers" - totally deceptive and sold at half the price of the real micro pumpkin ale.
Mind you these lookalikes aren't nearly as good as the micro they are targeting and thus will likely fail - but - that's the idea! If the lookalike succeeds, the Big Three win; if it doesn't it ruins the category and the real micro is driven out of business.
5. Another tactic is to simply buy the brand, and allow it to wither away or simply close it, on the same premise.
This documentary is absolutely amazing as yes - it will reveal the strong arm, mafia tactics of the Big Three - but at the end the issue the film maker raises is really how capitalism now works to destroy competition and quality through brute force.
Last - there's even internecine warfare among the micro's...
Among the "micro's" there are a precious few who have actually succeeded enough to grow out of the category: Boston Beer Company (Sam Adams), Sierra Nevada, and New Belgium. A sort of mini-Big Three of micros. They have grown so big that the micro brewers association has felt forced to increase the largest size allowed in as members.
At the same time the real Big Three have developed a number of specialty beers like Blue Moon and Shock Top. Along with the min-Big Three, these mega specialty beers have continued to put the squeeze on most of those 2500 micros.
Flat Ass Bottom Line
Per the film maker, the doubling of the micro category, both in numbers and in sales is not necessarily a success. A bubble has been created that may well burst. Even the category is being challenged from within by the mini-Big Three, and from without by the real Big Three.
With the amount of shelf space and taps relatively fixed and already extremely difficult for a micro to penetrate or to remain if they do, it's hard to imagine a doubling of micro brands to make this any easier.
Just the opposite. Think of it this way: if the sales have doubled along with the number of micro's, then it's clear this is not real growth for any one of the hopeful new brewers. Not only must they continue to struggle, but now are faced with more competition from other micro's.
That distant rumble in your ears, is the approaching herd of micro cattle being driven toward a cliff. What will happen?
The problem with those "fake craft brands" is that once someone who knows good beer tastes them, they realize they suck and never go back. I always check ratings on ratebeer before buying something I've never heard of, and this has saved me from many such bad purchases.
The kind of people who are happy drinking Blue Moon or think Stella Artois is really a Belgian style beer will likely never be swayed to better beer, just as my friend would not ditch his Captain even when I told him about Brinley's (which is cheaper in PA).
Craft beer drinkers are a different breed, and really not subject to cannibalization by the big companies. I am a perfect example, prior to 2006 I never bought beer for home because I found it boring (there was a 6% ABV cap here in NC.) They raised the limit to 15% and that opened up a new world - I tried Dogfish Head 90 minute IPA at a bar and was hooked. A couple months later I was spending $200+ a month at a local beer geek store trying out all the stuff I could get that was on ratebeer's top 50 lists. I am the type of buyer that has driven the craft beer revolution, not Joe 6 pack of Budweiser who has suddenly discovered IPAs. He will be buying Budweiser Black, Michelob Amber or whatever newish sounding marketing crap the big three comes up with next.
On a side note - in regards to marketing driving taste preferences. My friend, who is now assistant brewmaster at a local brewery, went to Seibel Institute in Chicago. As part of his studies he spent 6 weeks in Europe and worked with major brewers there. One of the heads at Heineken told them that the reason they ship those green bottles to the US - which everyone knows causes skunking - is because skunked beer is what the "American palate" has always thought "imported" beer should taste like. Sad, really.
The kind of people who are happy drinking Blue Moon or think Stella Artois is really a Belgian style beer will likely never be swayed to better beer, just as my friend would not ditch his Captain even when I told him about Brinley's (which is cheaper in PA).
Craft beer drinkers are a different breed, and really not subject to cannibalization by the big companies. I am a perfect example, prior to 2006 I never bought beer for home because I found it boring (there was a 6% ABV cap here in NC.) They raised the limit to 15% and that opened up a new world - I tried Dogfish Head 90 minute IPA at a bar and was hooked. A couple months later I was spending $200+ a month at a local beer geek store trying out all the stuff I could get that was on ratebeer's top 50 lists. I am the type of buyer that has driven the craft beer revolution, not Joe 6 pack of Budweiser who has suddenly discovered IPAs. He will be buying Budweiser Black, Michelob Amber or whatever newish sounding marketing crap the big three comes up with next.
On a side note - in regards to marketing driving taste preferences. My friend, who is now assistant brewmaster at a local brewery, went to Seibel Institute in Chicago. As part of his studies he spent 6 weeks in Europe and worked with major brewers there. One of the heads at Heineken told them that the reason they ship those green bottles to the US - which everyone knows causes skunking - is because skunked beer is what the "American palate" has always thought "imported" beer should taste like. Sad, really.
-
Capn Jimbo
- Rum Evangelisti and Compleat Idiot
- Posts: 3550
- Joined: Mon Dec 11, 2006 3:53 pm
- Location: Paradise: Fort Lauderdale of course...
- Contact:
Yank, very interesting...
One observation and one question. The observation: while I have no doubt about craft beer drinkers not being swayed by the lookalikes, the Big Three are betting that their drinkers won't know the difference, won't be willing to spend double the price, or will be so turned off by the lookalike that they'll never try the real thing. Not to mention using special deals to dominate shelf space and taps.
And the question: forgive me, but what is skunking?
One observation and one question. The observation: while I have no doubt about craft beer drinkers not being swayed by the lookalikes, the Big Three are betting that their drinkers won't know the difference, won't be willing to spend double the price, or will be so turned off by the lookalike that they'll never try the real thing. Not to mention using special deals to dominate shelf space and taps.
And the question: forgive me, but what is skunking?
The simple answer - open a bottle of Heineken, take a whiff and you will know what skunked means.Capn Jimbo wrote: And the question: forgive me, but what is skunking?
Light is the enemy of beer, it breaks down hops and destroys the taste and aroma, resulting in a rancid taste and skunk-like odor when the bottle is opened. This is most noticeable in light colored beers, not so much with dark ones. Brown bottles protect from UV light, green and clear ones do not.
There are some good breweries, such as Samuel Smith, that use clear bottles (mostly dark beers) and though there is some skunky smell when you open them, the taste doesn't really seem to be affected.
If you listen to your beer it'll talk to you.Dai wrote:I'll have to be an ass, Can only be viewed from within the USA.Capn Jimbo wrote:You can see it free, here...
http://www.hulu.com/watch/235712
Rule One: if you fail to watch this documentary now, you're either an ass or the Preacher. Or both...
Rule Two: watch this trailer...
http://www.imdb.com/video/withoutabox/v ... _=tt_ov_vi Then see Rule one.
*******
Capn's Log: If you download the TOR browser (free), it's possible to make you appear from a US IP address, and you can watch it free. Or you can rent it from Amazon for $2.99 in SD, $3.99 in HD.
https://www.torproject.org/projects/torbrowser.html.en
http://www.amazon.com/Beer-Wars/dp/B003 ... 390&sr=1-1
OH Ye after five or six it talks to me alright. Say's a load of bollocks but, it talks to me.