Last week Blue Point Brewing Company, Long Island’s largest brewery, announced that it had been bought by Anheuser-Busch. Craft beer fans have reacted with anger, to say the least, but most in the beer community are accepting of the news. As Paul Leone, executive director of the New York State Brewers Association, told BeerUnion last week, “We think consolidation like this is inevitable given the continued growth of craft beer around the country. We’re confident that the folks at Blue Point made this deal with the best intentions, they obviously make a quality beer, otherwise this opportunity would never have come to them. It’s really the only way big beer can curb the tide.”
Brooklyn Brewery Co-Founder, Chairman and President Steve Hindy wasn’t surprised about the sale, having heard rumors that Anheuser-Busch was in talks with brewers on the East Coast. He called it “An intensification of a struggle that we’ve been engaged in for almost four decades.”
Having founded Brooklyn Brewery with friend Tom Potter, Hindy was making craft beer before many even knew what craft beer was, and has been witness to this ongoing battle with big beer. “The large brewers have been trying to figure out the craft beer revolution for a long time. I mean, they’ve been creating craft-like beers since back in the mid-’80s. And I think for Anheuser-Busch, they’ve been most successful with Goose Island. They seem to be concluding that their best way to play in the craft category is to buy craft brewers.”
The Blue Point sale will most certainly change the landscape of beer in Long Island and greater New York State, Hindy told BeerUnion. “Anheuser-Busch has an inordinate power in the marketplace to place a brand front and center on the grocery store shelves, and to push a brand into restaurants and bars. They’re doing that with Goose Island here in New York. I think that we expect they’ll do the same thing with Blue Point,” he explained. “I do not underestimate their ability to compete. In most markets, either Anheuser-Busch Inbev or Miller Coors are what is called the ‘category captain’ in chain stores. They determine what gets on the shelves. While they argue that these decisions are made objectively, there’s not much doubt that brands like Goose Island and Blue Point will be given special treatment in those stores. So they have a lot of tools and a lot of market power, and I don’t underestimate that.”
Hindy expects that we will continue to see big beer purchasing craft breweries, especially as older craft brewers transition out of the business. “I would not be surprised if Anheuser-Busch and Miller Coors acquire more craft breweries. Because – particularly for my generation of craft brewer – unless a craft brewer has a succession plan for the next generation of the company, they’re faced with a very difficult decision of possibly selling the company, selling part of the company and continuing to work with the company, or just dying and allowing the company to kind of fade out of existence. I guess it looks that Mark [Burford] and Pete [Cotter] could not come to any kind of agreement on next generation and decided to take the money. It does not surprise me.
“For years I think the big guys thought that we were a fad that would go away eventually. And then they kind of grudgingly realized they had to get involved in this category. And that resulted in things like Blue Moon and Shock Top, and Anheuser-Busch investing in Red Hook, Widmer and Kona,” Hindy continued. “In the last five years when craft beer has really taken off and when the large brewers have lost an astounding volume of beer – 17.6 million barrels have been lost in the last five years by the big two – I think they realized that they had to vigorously compete in the craft category because it’s now more than 10 percent of the business in dollars and they have no choice but to get involved.”
But buying up craft brands is a double edged sword for big beer, noted Hindy. Turning beer drinkers on to different, flavorful beers could cause them to choose “crafty” brews over the companies’ main brands, increasing their decline. When it comes down to it though, it’s all up to the consumer. “The beer drinkers are going to determine whether they want to support independent, small brewers, or whether independence and community involvement doesn’t matter. And you know they’re going to drink beers owned by the big brewers. That’s sort of part of the battle. It has been going on for 30 years, and I think it’s becoming more intense,” he said. “Everyone knows longtime Busweiser, Miller Light or Coors Light consumers who now drink craft beer. Once you get turned on to craft beer you not only drink it, you to talk about it. That’s part of what is wonderful about it – the enthusiasm that our consumers have for craft beer.”
Hindy is pictured above at the New York City Brewers Guild Founders Bash in 2012