Yesterday was a rough day for many of the employees at The High End, AB InBev’s craft beer division. The night before, around 10 pm, The High End district managers and sales people started getting calendar invites for a conference call the next day. By the end of that call, approximately 360 employees or 90% of the national sales force were let go. According to Alex Medicis, the Vice President of Sales for AB InBev North America, the cuts were made in the name of efficiency. It makes sense too. After acquiring 10 craft breweries in the last few years, they added quite a few people to their payroll. Most of these breweries came with their own sales team and since sales people are often the face of the brewery to accounts, it makes sense that they would want to keep the “craft beer faces” around vs. the corporate sales employees. AB InBev is stressing to the media that this is not a big cut for AB InBev since it only amounts to 2% of their North American work force, which tops out around 18,000 workers.
What does this mean for the future of The High End? AB InBev said that it didn’t lay off anyone that worked directly with the craft breweries, so it sounds like they just went through a good ol’ efficiency downsizing. Interestingly enough, Forbes sat down with Felipe Szpigel, the president of The High End, on Wednesday, the day before the layoffs, and a few things came up.
First, Szpigel said that they would no longer focus on acquisitions. Does this mean they are done with their big, buying spree? Craft beer is still a bright spot on their less than stellar American sales record (of course they are doing just dandy internationally), so aren’t getting out of the craft beer game. Szpigel then stated that AB InBev would now “pivot to growing its ground-up model.”
As an example of this “ground-up model” Szpigel offered up the new Vesa Sur brewpub in Miami, “a first-of-its-kind partnership between AB InBev-owned 10 Barrel Brewing in Bend, OR, and Colombia’s Bogota Beer Company.” Just an FYI, AB InBev also owns Bogata Beer Co., so they are really just partnering with themselves.
Now, this pivot is making sense. AB InBev is good with the 10 American craft breweries it already has. With the acquisition of these craft breweries, not only did they get a whole league of local sales people, but they got years of craft brewing experience. They don’t need to buy any more breweries because now they can create completely new craft breweries with the people they already have bought out. If you go to the Vesa Sur facebook page, things look great at the brewery. Who wouldn’t want to go to a new beautiful brew pub with Colombian inspired craft beer?
AB InBev has finally done it. They have managed to almost completely obscure their involvement in this new venture because it goes through 10 Barrel and Bogata. It’s just another degree of separation that will confuse consumers and people who don’t know about all the shadiness AB InBev has pulled in the industry over the last number of years. The more degrees of separation they create, the more likely people who aren’t specifically invested in the craft beer scene (ie. the majority of beer consumers) won’t have any idea that they own these new ventures.
The people over at AB InBev are definitely crafty. With the Vesa Sur venture, they have essentially leveled up when it comes to obscuring their involvement within the craft beer industry. In a few generations of opening breweries and brew pubs using these sorts of partnerships, people won’t be talking about AB InBev at all. They don’t need to buy any more breweries because they now have enough ammo to blast through the craft beer market one collaborative venture at a time.