Craft brewers, this bud’s for you
Aficionados are targets as beer merger mania continues to bubble
Anheuser-Busch Inbev is telling beer drinkers “This Bud’s for You.” It’s just not mentioning Budweiser.
The world’s largest brewer is aggressively buying up some of the globe’s most storied beer brands, including craft beers typically gulped down by connoisseurs who normally sniff at mass-produced brews. AB InBev’s acquisition spree reached new levels Tuesday after finally winning a battle to advance its $104 billion buyout of SABMiller, which has been buying craft brewers, too.
The proposed deal brings together the No. 1 and No. 2 largest brewers in the world, Richard Peterson of S&P Capital IQ says. AB InBev is valued at $179.5 billion, and SABMiller is valued at $89.5 billion.
Bold moves to buy up beer brands, especially smaller craft beers, make perfect sense as overall beer volume growth stagnates. Overall beer volume in the U.S. grew just 0.5% in 2014, the Brewers Association says.
Imported beer is doing slightly better, growing 6.9% in 2014.
But craft beers are where the real action is, jumping 17.6% in 2014 and now accounting for 11% of the overall beer market by volume.
Craft beers are appealing to consumers due to the variety of flavor, often more robust than the lagers sold to the mass market by large brewers. Consumers also gravitate to the stories and com- mitment of the founders of craft beers.
But lately it seems many craft brewers are committed to cashing in.
Just this year, AB Inbev has announced 12 buyout offers, five of which have been of smaller craft brewers, S&P Capital IQ says. Most recently, in early October, AB Inbev bought Canada’s Mill Street Brewery, a beer celebrated for its local allure with Canadians.
That purchase comes just after Southern California’s Golden Road Brewing was bought by AB Inbev in a deal announced in September. Washington State’s Elysian Brewing announced it was being bought in January.
SABMiller has been buying craft beers, too. It bought San Diego’s Saint Archer Brewing in September and London’s The Meantime Brewing Company in May.
But no matter how fast AB InBew buys smaller brewers, they are cropping up even faster, giving consumers who want it plenty of choice. The number of craft brewers jumped 19.4% last year to 3,418, the Brewers Association says.
Just keep in mind that the brew you think is independent very well may not be.