Final Project – Capstone

Appalachian Mountain Brewery: A Local Look at “Big Beer” Acquisitions

Bars in Boone, North Carolina, group regional taps — Appalachian Mountain Brewery, Booneshine Brewing Co. and Lost Province Brewing Co. — but one may need to move down the bar to accompany the domestic offerings.

In November, Anheuser-Busch InBev bought the remaining 68.4% of the Craft Brew Alliance, which added AMB to its seven former craft breweries in 2018.

In a joint press release Marcelo Michaelis, president of Anheuser-Busch’s Brewers Collective, said the beer industry is more competitive than ever before. 

“CBA’s diverse portfolio of regional breweries and innovative lifestyle brands is an excellent complement to our family of craft partners and would continue to help fuel the growth of the craft beer category,” Michaelis said.

The Brewers Association, a national organization which advocates for the rights of independent brewers, defines a craft brewery as having no more than 25% of the brewery owned or controlled by a non-craft organization and producing less than 6 million barrels of beer per year. 

AMB, now a subsidiary of InBev, no longer produces “craft” beer.

AMB head brewer and co-founder Nathan Kelischek describes the CBA acquisition as a continued “partnership” between the organizations.

“I would say that the partnership with CBA is great in a lot of aspects where now every single one of our full-time employees have access to 401Ks and health insurance and supported with days off and paid time off,” Kelischek said. “It’s something that we really couldn’t provide as a small company.”

However, the ties between CBA and “big beer” organizations, like InBev, go deeper. Eight of the fifteen CBA executives currently work or have worked at InBev, MillerCoors or Heineken.  

In 2007, the Brewers Association kicked CBA’s founding brewery, Widmer Brothers, from the trade group after it sold 31.8% stake of CBA to InBev.

“Our partnership with CBA goes back many years and we look forward to supporting CBA as they continue to bring great products to beer drinkers across the U.S.,” said Michel Doukeris, CEO of Anheuser-Busch in November’s press release.

Big beer acquisitions of craft beer have been on the rise for the past 10 years — in 2017 North Carolina’s Wicked Weed became InBev’s 10th craft brewery purchase. The Wicked Weed acquisition came shortly after a Department of Justice investigation into InBev, which continued to allow InBev to acquire smaller breweries, but under “careful scrutiny” of any future acquisitions, according to the DOJ’s full statement.

“If you look at Anheuser Busch InBev’s purchases in the U.S., they’re purchasing breweries that are in specific regions that are not next to the region of the former purchase,” said Julia Herz, craft beer director at the Brewers Association. “They’re also purchasing breweries that have existing brew pubs or very robust tap rooms, so they can infiltrate their way into the beer culture in that region. That is a big move and a big play.”

While Brewers Association research indicates increased competition in small regions with “big beer” acquisitions, fellow local brewers said they plan to lean on community values to keep their breweries viable with AMB’s expansion.

“It’s obvious that (AMB is) giving back to the community and trying to be a part of the community, they’re just doing a different model than we’re doing,” said Carson Coatney, co-owner of Booneshine.

A graphic describing the economic impact of craft beer in NC

Executive Director of the N.C. Craft Brewers Guild Richard Greene said big beer is far from taking over the craft beer industry, but they have bought their way into the market for “higher quality, better tasting beers,” making it an uneven playing field.

“Are they going to take it over? No. Will we always have local? Yes. Is that a constraint on somebody becoming the next Budweiser? I’d be hard pressed to say that that could happen. But, will there be companies that can grow and be sustainable and make a difference on national landscape? Yeah, it’s gonna be harder,” Greene said.

View this graphic for an overview of Boone residents’ thoughts about local beer and acquisitions.

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