In Shiner, a battle is brewing over Texas’ niche beer market
Houston’s Karbach moves ad blitz into bock-maker’s home
A Houston beer brand. The world’s largest brewer. Texas’ best-known craft brewer.
Add some fighting words and you have a marketing clash that is taking on overtones of the Texas Revolution.
The battlefield is Shiner, the home of Shiner Bock, where signs at a recent music festival blared, rather indiscreetly, “There’s a new Bock in town.” Billboards around the tiny town (population 2,171) also showed up to promote Crawford Bock, a beer launched by Karbach Brewing, a once-independent Houston brewer now owned by Anheuser-Busch InBev, or ABInBev.
To the Spoetzl Brewery, the maker of Shiner Bock, and local craft beer connoisseurs, the advertisements were a direct attack on their home turf — and the Texas craft brewing community at large. Spoetzl last week moved to rally its supporters with a reminder of another fight that pitted Texans against a powerful foe, publishing an open letter in the local newspaper that recalled the Battle of Gonzales, the opening skirmish of the Texas Revolution where a famous flag in the war for independence from Mexico was flown.
“This is a huge company with deep pockets seeking to force its way into our town,” Spoetzl said in its advertisement. “To the drinkers who love Shiner, we say, ‘Cheers,’ and to the giant breweries, as our friends down the road once said, ‘Come and Take it.’ ”
The marketing feud is part of a battle over the niche market for bock beer, a strong, dark lager. Spoetzl, a subsidiary of the San Antonio brewing company Gambrinus, has dominated the market in Texas and across the country with Shiner Bock for more than 100 years, and Anheuser-Busch, the U.S. subsidiary of ABInBev since its 2008 merger with the Belgian company InBev, wants a piece of it.
The market for bock beers is relatively small, according to Bart Watson, the chief economist at the Brewers Association, a trade association, and likely represents around only 2 or 3 percent of the total U.S. market for beer. Texas is likely by far the largest bock market in the country, he estimates.
But within that niche market,
Shiner Bock represented 93 percent of sales over the last year, according to an analysis of industry data by the Brewers Association. The bock market is worth around $94 million per year, Watson estimates.
Although a small share compared with the billions the overall industry rakes in, the market potential for different types of beers — beyond lagers and light lagers that dominate the U.S. beer market — has grown along with craft brewing.
“There’s a lot of little pockets that are very valuable,” Watson said. “It makes sense that (Anheuser Busch) would be targeting niche markets with acquired brands they can scale up.”
Anheuser-Busch did not respond to a request for comment. Karbach Brewing said in a statement that the company is deeply invested in Houston and Texas, noting that Crawford Bock is a collaboration with the Astros to support the franchise’s charity, the Astros Foundation.
“It’s a part of our brewery’s DNA to give back and support our home state, where we brew 100 percent of our beer,” wrote David Graham, brand manager at Karbach Brewing.
New tactics
Karbach, founded in 2011, was acquired in 2016 by Anheuser Busch for an undisclosed price, provoking resentment, frustration and a social media backlash by craft beer aficionados. Some bars and restaurants that feature local craft beers stopped carrying Karbach once it became part of AbInBev’s global empire.
Throughout the years, Anheuser-Busch has made a few attempts to produce a competing bock, such as ZiegenBock, to sway customers away from Shiner, industry experts said. But this time the brewing giant is using a familiar local name to try to break Shiner’s hold on the bock market.
“They’re trying to take a run on it with a former craft brewery’s name,” said Charles Vallhonrat, the executive director of the Texas Craft Brewers Guild, a trade group. “Anheuser-Busch has been trying to attack Shiner Bock since the ’70s and ’80s.”
At the heart of the battle for beer lovers in Shiner is the loyalty consumers feel to independent craft brewers, which account for about 24 percent of the U.S. beer market. Comments have flooded the official Shiner Beer Facebook page from people taking sides in the turf war, most supporting the local brewer.
A company’s identity as an independent craft brewer is powerful, industry experts said. Many consumers seek out craft breweries because they have more flexibility in production, take more risks and generally produce more varieties.
The Texas Craft Brewers Guild defines a craft brewery as one that produces no more than 2 million barrels per year. Gambrinus, which also owns a small brewery in California, produces a total of about 530,000 barrels a year, with Spoetzl accounting for about 500,000 barrels of that production.
Spoetzl is by far the largest craft brewer in the state, with most brewing fewer than 10,000 barrels a year. Spoetzl Brewery managers said they were concerned that consumers would think Karbach is still a craft brewery and buy the new bock without knowing that its ownership had changed.
“Society today is trying to follow small companies and support local craft brewing, and pitching themselves as a small company has a lot of people fooled,” said Julie Boehm, the procurement and logistics manager at Spoetzl Brewery. “They’re trying to make an image of Karbach being a craft brewery.”
A music festival
Karbach Brewing said in a statement that the advertisements were a partnership with one of their distributors, Del Papa Distributing, to promote the Shiner Music Festival on Oct. 19, and that the distributor, not Karbach, created the advertisements.
“When we got the call from Del Papa Distributing in Shiner asking us to help them support the Lion’s Club Shiner Music Fest, the partnership was an easy ‘yes’ from us,” said David Graham, brand manager at Karbach Brewing in a statement.
But managers at Spoetzl Brewing said Karbach has many beers that it could have chosen to promote.
“It's one thing to sponsor the festival; it’s another thing to do a marketing blitz, especially in Shiner,” said Gregor Mina, head of marketing at Spoetzl Brewing. “They chose to come to Shiner.”