It was announced this week that Ashville, North Carolina’s, Wicked Weed Brewing is selling (in part or all) to AB InBev. Or, if you want it sugar-coated a bit, the brewery “entered a strategic partnership” with the High End (AB InBev’s craft beer division). Wicked Weed is popular brew pub with 4 locations and was recently named the best brewery in North Carolina by Thrillist for their barrel and sour program. While the news was surprising to many of their fans, the news of another craft brewery being charmed by the money of big beer is becoming depressingly common. Here is the brew pub’s statement from their FB page:
“Just over four years ago, we started out with a simple idea: make great beer. From west-coast IPAs, to barrel-aged sours, we’ve been able to create world-class ales in a city that we love. We’ve grown from a small Brewpub with 60 employees, to a company with 4 locations and over 200 employees. In order to innovate, push the boundaries, and grow, we’ve decided to take on the High End branch of Anheuser-Busch as a strategic partner.
Our founding ownership staff will continue to lead Wicked Weed in their same capacities as we move forward, and into the future. This decision is a large part of the future for Wicked Weed, and will allow our brand, staff, and beers to achieve their greatest potential. We will be releasing more details soon. Thank you for being a part of this journey with us.”
The reaction from their fans was swift and predictable. On this one post, the emojis are evenly split between crying, thumbs up, and anger. Yes, I just reported on FB reaction emojis.
Here were some of the comments from this FB post that sum up people’s feelings pretty well:
- “Ughhhhh…. someone else nailed it simply stating they’re disappointed. I don’t want to say that I won’t spend money on them. I gotta see where the quality takes them b/c of the move. But I’m not at the point to say #fuckwickedweed. I get the backlash and I am disheartened by the move. I’m just not at the point to blow up and cut them out completely. It is what it is at this point….”
- “For the love of God, it’s beer, it’ll either taste the same or it won’t but who gives a rip WHERE it’s brewed if the quality remains. So many beer snobs not happy if it’s not brewed in some quaint location in the hills of Appalachia with a cute little gift shop where you can get a bumper sticker for your Subaru. This is business, plain & simple.
- “I’m a capitalist pig, so hey, if someone offers you millions to buy what you’ve created, I will not fault you at all for selling it. On the flip side, I have choices as a consumer, so if I choose to no longer buy that product, nothing is forcing me to. The great thing about the free market is that there are usually other choices, and in the craft beer industry, there are thousands.”
- As a former employee of the high-end, I find it funny that you think you’ll still be able to lead your brewery. Sorry guys, but you are no longer in charge of the decisions.
- “You’ve expanded 3 times in 4 years and now distribute to several states. Clearly, you weren’t having problems selling beers. Apparently ‘achieving their greatest potential’ is now the PC way of saying we sold out to an enemy of craft beer. Good riddance.”
- “No wonder we never heard from you when we were pushing for HB500. All of us in this state fighting for reform and cutting out the conglomerates. So now it’s your money that paid the politicians to strip our bill and the smaller guys can’t flourish and create more jobs in our local communities.”
HB500
This last comment from a fellow North Carolina brewer really gets to the heart of the issue for many craft beer enthusiasts. Sure, there are tons of beer drinkers out there who don’t care where their beer is brewed or who owns their favorite brewery. There are also people who care about the craft beer community as a whole and understand that getting in bed with the big guys means that the brewery’s interests no longer align with independent breweries. This actually matters in the arena of politics because large companies like AB InBev have a huge amount of influence (ie. money). HB500 was a bill that was going to be up for a vote in North Carolina and would have allowed mid-sized breweries to self-distribute and more flexibility within wholesale contracts.
Here in CA, we have very little restrictions on self-distribution, but in North Carolina, there is a cap on self-distribution. Breweries are allowed to self-distribute if they come under the 25,000 bbl per year cap but are required to enter a distribution contract with a wholesaler if they produce more than that. HB500 would have raised that cap to 200,000 bbls and also would have allowed more flexibility in ending distribution contracts, but the bill was removed from the floor once it was made clear by NC wholesalers that they wouldn’t even talk about the rest of the bill unless these two provisions were taken out.
What does this have to do with AB InBev? Well, they own or partner with 17 wholesalers in the NC. There are only 48 wholesalers in North Carolina so AB InBev has an active interest in 35% of all the wholesalers in NC and their ability to lock down distribution channels. Of course, wholesalers wouldn’t want this bill to pass because not only would it take money out of their pocket by allowing more breweries to grow on their own without entering into contracts with them, but it also would have allowed breweries more leeway to exit these partnerships which are incredibly hard to end in their current state. The pressure came from the big dogs in this one and the general assembly in NC caved. The bill was pulled from the floor because while it might have passed without those two key provisions, it would have been a shadow of its former self and wouldn’t help small, independent breweries in the way it was intended. Having beer distributed by a wholesaler can be a great thing and a needed avenue of growth for many breweries, however, states like California have proven that you don’t have to legislate those relationships for them to be mutually beneficial.
And the issue is…
This is why ownership matters to some craft beer consumers. Wicked Weed didn’t just sell to a bigger brewery, they sold to the biggest brewery in the world and one who has been busted illegally incentivising and influencing their wholesale partners to carry more of their beers and cut out other craft beers. When people are worried about the quality of beer changing when breweries sell out, that the least of concern. AB InBev wants their craft beer brands to succeed so when they have locked down all the distribution channels in small states like NC, they have good beer of their own to supply to the wholesalers. People will be able to say, “Yes they sold out, but their beer is still good!” and move on with their lives. But if distributors whittle down their beer brands to the more inexpensive (scaling, remember) offerings from AB InBev, then ultimately our choice as consumers will be cut out. Right now AB InBev has 10 craft breweries in their High End division with no signs of stopping. What happens when they have 100? What happens when they have bought up more and more distributors further choking the industry down to their own brands?
In the end, smaller breweries will continue to be bought out by or form strategic partnerships with bigger breweries and beverage conglomerates. That’s the way of growth for many and maybe it will allow these breweries to “innovate, push boundaries, and grow.” Sure, all those things all sounds grand, but when you are “partnering” with a mega-brewer that is trying to create a stranglehold on the industry, is it really worth it? I guess it must be…
I will leave you with this FB post from Jester King Brewery that explains the issue perfectly:
