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DCBeer Roundtable: Acquisitions and More!

Every so often, us DCBeer folks decide to chat about the movements of the industry or our thoughts on the hot-button issues of the day in beer.

The question:  What are your thoughts on the Wicked Weed and Lagunitas/Heineken deals. Do they feel different? Do you care? If so, why? If not, why not? (Spoiler: tangents included!)

What follows is an email transcript lightly edited for clarity, content, and length.

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Jacob Berg: I have a lot of thoughts here. Someone who builds a business and owns it is allowed to sell it. Period. It's theirs to sell, pending a Department of Justice review. You and I don't own it, even if we feel some sense of ownership and supported them since day 1. But we don't have to be happy for them. Craft beer has spent decades defining itself by what it's not, so when what-it's-not buys it, people feel cheated and mislead. And yet I find this interesting given how promiscuous craft beer drinkers are. I know a lot of people who want to try everything, which means that sense of ownership on their, our, part isn't brand loyalty, it's something else.

And it's not just beer buyers that feel betrayed, either. Look at all the breweries, more than half, that have pulled out of Wicked Weed's Funkatorium Invitational (including DC's Right Proper). That's a sign of the strength of the "against macro beer" ethos that permeates craft, but when it comes to succession planning, that message comes back to bite breweries that sell to macros. That backlash was probably most prevalent with Lagunitas because of all the trash talk from Tony McGee about macros and selling out... right up until he did it. So from where I see it, Lagunitas is a special case. Again, it's Tony's business. He's allowed to sell or "partner" or whatever he wants to call it, but it's also rank hypocrisy, and he should be called on it. Heck, he was probably trash talking Elysian while negotiating with Heineken.

Wicked Weed is a bit different. They expanded so quickly (and were founded with capital from the direct marketing firm that brought us those late night Proactiv ads), adding three additional brewing facilities in as many years, that rumors began swirling about them wanting to sell in the summer of 2016, which is about when they entered the DC market (interestingly, through Reyes Premium, a MillerCoors distributor, which spent a lot of energy to get them to DC). So when people were caught off guard about this sale, I was a bit surprised since I thought it was more or less an open secret. That being said, Wicked Weed is an interesting brewery to buy. Sure, you can make their IPAs anywhere, and ABI probably will do that, as they've done with Goose Island flagships. But the barrel-aged stuff, the funky stuff,... those are interesting styles to try to take national. I know it's been done with Goose Island, but this strikes me as a bit more esoteric, and I'm interested to see how that process works.

Chris Herron from Creature Comforts has a very smart piece about what exactly ABI, and maybe MillerCoors, wants out of these purchases, which involves brand equity, impairment charges, and crowding out smaller, independent breweries on shelves and lines. It's worth a read. Wicked Weed's profits are going, in some part, to support ABI's squeezing out of small, independent brewers.

And I'm conflicted here. I want more beers like Eek!, the collaboration between MillerCoors and Off Color. I want more employee-owned breweries, and breweries with ESOPs (employee stock ownership plans). I want Devils Backbone Vienna Lager everywhere...but not at the expense of tap lines occupied by local, independent, and most importantly, good beer.

Paul Josuns: I agree that people can do with their businesses what they wish. For some reason, I don't see the Heineken/Lagunitas merger in the same light as the Wicked Weed one either. I think a lot of it has to do with ABI vs Heineken and how clear it has been that ABI's goal in these acquisitions is to crowd out the smaller guys. I also wonder how many people actually care versus how loud the people that do are. If I'm sitting at a game and can get a tallboy of Goose IPA for $8 bucks and a tallboy of Flying Dog Snake Dog is $11, that's a pretty hard sell.

Tony Budny: Anybody else here who has sympathies toward organized labor think the window of opportunity for labor to organize in craft is quickly closing? I don't have many organized thoughts on the issue, nor do I have the expertise to see what a plan for that would look like. I just know my gut tells me the past 2-3 years were prime time for it, and, so far, there has been little in headway in the industry. Yes, it’s hard. But I haven't seen much in terms of even chatter in that regard, either.

Mike Stein: Have you considered the unions at macro/mutlinational conglomerates compared to Brewers Association certified craft brewers'?

Berg: The false consciousness of craft beer being a "passion" and 99 percent asshole free rather than labor...

Budny: I have. Which is why I've been curious how that would develop amongst the craft brewers. It just hasn't. Too much competition, I guess, especially when you have brewers asking for volunteer labor constantly.

John Fleury: I'll only add what I said about Springdale (via facespace) seemingly dumping their beer as it touches on this.

Re: Springdale dumping their beer… “There is no shortage of armchair quarterbacks who think they know what's up. I believe the people at WW didn't get to where they are by being dumb. I also believe most people don't consider how much WW probably thought about this... How it impacts their lives, their employees (who I'm sure are a family), and even how it impacts their life's goals and visions. I feel I have no say and honestly think that if they're happy, then that's what matters.

HOWEVER- my issue is with this Springdale brewery. They could've chosen so many other options to deal with the situation. Yet, they choose the ONE option that hurts their customers more than actually hurting WW: the decision to act on spite to dump the beer. To me, that is like a teenager who gets dumped and decides to vandalize the ex's parents house. It is hurting people who didn't do anything wrong and it is poor customer service to the many people who were looking forward to those beers.

So yeah: Springdale can do what they want with their beer and I won't agree or disagree. I just think it's dumb to punish the customers for WW's decision to sell.”

Also: it should be noted that not everyone needs to be an evangelist of independent beer to own a brewery. Some people just want to make beer and get it out to as many people as possible. Not everyone in the game needs to feel it is their obligation to "stand up" to big beer. Kudos to those who do. But like Berg said, I feel so much of this industry is telling people what to do...which I'm sure there is some irony as it seems many people started their own company so they could do what they wanted.

Stein: Good points, Fleury. Getting back to Tony's questions, I don't know that there's a window for organized labor closing so much as there never was one. These are good questions but chatter? There's definitely no chatter. How many pioneers are asked about organized labor in interviews? It's never discussed. It's a political wedge in the US too, considering the conversation can be framed like "we're a right to work state." What if the conversation question was "are you an organized-labor hating state?" I tend to think of it like the marriage equality issue. Change the name from "gay marriage" to "marriage equality" and the vote changed. The drum-beating for war and anti-LGBTQ saber-rattling are getting louder. But there's still not so much as a murmur about organized labor...until now!

We'll done Tony, you've got me off on a nearly-coherent rant!

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