Brewing company is thirsty for your data
After buying up craft producers, Bud takes new tact
Anheuser-busch Inbev is the biggest brewing company in the world, but it has a problem it can’t shake.
While Bud Light accounts for at least one out of every six beers sold in America, sales of its flagship beers have been slumping: between 2010 and 2016, the value of Budweiser sales fell 17 percent and Bud Light sales slipped 14 percent, according to alcohol market analyst IWSR. Through most of that period, craft-beer sales grew at a double-digit clip.
Back in 2011, when there were half as many American breweries as there are now, AB Inbev responded to surging craft-beer popularity by purchasing Chicago’s Goose Island for $38.8 million. In the process, it loudly announced a new strategy: “If you can’t beat ’em, buy ’em.” Six years and one $100 billion merger with Sabmiller later, AB Inbev controls nine more formerly independent craft breweries, from Seattle’s Elysian to Virginia’s Devils Backbone.
But as sales of hoppy IPAS continue to surge, and sales of Light (and Lite) macrobrews continue to drop, AB Inbev is recalibrating its approach. Rather than buying up as many craft-beer producers as it can, it’s using its vast resources to buy data — tons of it — through a little-known division called ZX Ventures.
Buying data
Launched in 2015, ZX Ventures is charged with “disrupting” the beer industry by developing and investing in businesses that will provide value and improve user experiences — and make more money for AB Inbev — some- where down the road. They’ve invested in e-commerce delivery systems, beer-rating applications and home-brew suppliers, all of which provide data points that can tell them about trends and help them get ahead of the market.
Over the years, as AB Inbev absorbed Elysian, Devils Backbone and North Carolina’s Wicked Weed, the backlash to the announcement has become formulaic: The craft brewery announces that nothing will change despite the new ownership. Fans get angry, call the owners traitors and sellouts, and swear they’ll never drink the beer again. (Those are the nice ones.)
But as a result of AB Inbev’s 2016 merger with Sabmiller, snapping up small brewers has become harder. The U.S. Justice Department’s settlement prohibits AB Inbev from acquiring any craft brewer “without allowing for department review of the acquisition’s likely competitive effects.”
So where are the growth opportunities? That’s where ZX Ventures comes in. According to its mission statement, “ZX Ventures is hopelessly dedicated to creating and analyzing the data necessary for determining our ideal strategies, products and technologies. We believe that the more we know and learn about our consumers and products, the better chance we have of anticipating their needs in the future.”
Translation: They want to know everything about purchasing patterns and decisions. What are customers looking for? What are influencers thinking? How can they make it easier to get AB Inbev’s products into the hands of people who might want beer?
ZX Ventures’ broad portfolio includes last year’s purchase of Northern Brewer Homebrew Supply and Midwest Supplies, two of the largest home-brewing businesses in the country. It also has a minority stake in Picobrew, the countertop home-brewing system that uses Keuriglike “Picopacks” to make beer in a certain style or mimic the recipe of an existing brand.
In October 2016, ZX Ventures purchased a minority interest in Ratebeer, a 17-year-old international beer-rating site that has grown to become one of the largest online databases of crowdsourced beer, brewery and bar rankings in the world. But neither Ratebeer nor ZX Ventures publicized the deal until June 2017, when beer website Good Beer Hunting published a story about the move. ZX Ventures did not respond to requests for comment for this article.
Ratebeer audience
Some beer lovers feared that AB Inbev would try to goose its notoriously bad ratings on the site — 10 of the “top” 20 slots on the “Worst Beer in the World” list are AB Inbev products, including Natural Light at No. 1 and Natural Ice at No. 2 — or get preferential placement for reviews, which seems silly: Ratebeer’s audience, which gives its highest praise to imperial IPAS or rare Belgian beers, probably isn’t looking for Bud Light Chelada. What seems more likely is that the ZX Ventures team is interested in access to a large number of data points: The most popular and trending beers, styles and search terms in any region around the world.
Are more people giving high ratings to saisons in London than Los Angeles? Are Bavarians searching for IPAS available to them? What are the most highly rated beer bars in the Southeast? Which beer styles have grown the most in the past year, in terms of average ratings or the number of searches, and where?
If certain cities are rating sour beers higher than the norm, for example, Elysian’s sour pineapple seasonal or a new wild saison from Wicked Weed could be given extra promotional play in those markets.
Strangely, compared to AB Inbev’s purchases of breweries and home-brew suppliers, there hasn’t been much blowback about the Ratebeer purchase from the American beer community. There were about 50 requests for account removals immediately after the acquisition was made public, says Joe Tucker, the founder of Ratebeer, but in August, “we set all-time records for total ratings and unique users, and our unique users were up about 100 percent year-to-year.”
This doesn’t surprise Kate Bernot, a writer for the Takeout and former beer editor at Draft Magazine. “I always got the impression they were the older, quirkier beer drinkers,” she says. “It was always the real dorks’ rating site. Their reviews and descriptions always sounded higher caliber than Untappd or Beer Advocate.”
And when users have spent years compiling hundreds or thousands of reviews of local Pilsners or imported IPAS, and forged a community in Ratebeer’s user forums, they might find it hard to quit. “Are people so used to giving up information on the Internet that this didn’t rattle them, probably because you sort of expect your online info to be exploited?” Bernot asks. “If I was a Ratebeer user and I had data there, I’d think that’s just part and parcel of using Internet services.”