Jack Curtin’s LIQUID DIET

Let us do a Mid-Week Musing about the Event That Shook the Beer World, starting with a “Let’s Pretend” note.

Beer from American craft brewers flowed in Berlin as dignitaries from Germany and the U.S. gathered to open the new U.S. Embassy on the Pariser Platz square. The July 4th event was attended by over 4,500 guests including current German Chancellor Angela Merkel, former President George H. W. Bush, and former ministers of the German government. Today, exported beer from American craft brewers is in demand with over 50% more sales in 2007 than in 2006….

That’s is not really the first step in craft beer moving to the forefront in the wake of InBev’s takeover of Anheuser-Busch (if only because it’s been in the works for a long time), but let’s go with it.

The idea that crafts can use the mega-merger to become more “mainstream” (in the sense of being what Americans think about when they think about beer, not in the sense of dumbing things down and stocking up on rice for the next brew) was expressed by Matthew Reillly at Motley Fool as he expanded on my earlier point about crafts picking up on the “America’s beer” theme:

The takeover leaves a gaping hole in the American beer scene. Anheuser-Busch has always tried to make its name the third corner of a triangle shared by mom and apple pie, and that is going to be very difficult to do now that the company is foreign-owned. The company almost seems to be hiding it, as its press release states “Inbev and Anheuser-Busch Agree to Combine,” which suggests a merger rather than the reality of an outright sale of Anheuser-Busch.

But this is not going to fool anybody, nor will the new name of Anheuser-Busch Inbev. I would not be in the least surprised if a now relatively small brewer takes the American flag that Anheuser-Busch currently wraps itself in, and wins over a number of formerly loyal Bud drinkers. This seems especially likely given that the other significant beer oligopoly participant, MillerCoors, is largely foreign-owned and controlled. One way or another, the American beer industry has been changed forever.

Should you think there isn’t an opportunity there, I give you Vox Populi as represented in a letter to the St. Paul-Minnesota StarTribune:

So the last great American brewer, Anheuser-Busch, decides the money is just too good and hands over its storied institution of brewing to Belgian brewer InBev.

Personally, I’m tired of this. As a proud, naturalized citizen and veteran of the U.S. Navy, I feel blessed by the warm embrace and opportunity this country has given me; thus I do my best to purchase “Made in America” products.

Being a beer consumer with rather “eclectic tastes,” I will say goodbye to Bud — I’ve already said my goodbyes to Coors and Miller — and hello to Summit, Sam’s, Schells and the micros that shall now populate our fridge.

I don’t think I’m breaking the rules (maybe bending them just a tiny bit) by noting a post which appeared in the private online Brewers Forum yesterday: “Now craft/micro/small/regional brewers need to seize their day (Collectively) with a campaign: “Locally Crafted and American Made.”

Meanwhile, taking a farther-down-the-road look in Business Week, Jack Ewing asks “Who’s next” and provides an intriguing (and likely) answer:

A few years from now, after it has digested Anheuser-Busch, InBev joins up with other brewers such as Heineken (HEIN) and Carlsberg (CARLB) and makes a joint bid for giant SABMiller (SAB.L). The companies carve up SABMiller’s portfolio, with InBev taking over SAB brands in regions such as Africa, where it is weak.

The scenario may sound far-fetched, but analyst Gerard Rijk at ING Wholesale Banking (ING) in Amsterdam points out that SABMiller, which markets Miller beer in the U.S., is the one big brewer still vulnerable to takeover. Heineken’s family owners are unlikely to sell, and Carlsberg is controlled by a foundation. The London- and Johannesburg-listed shares of SABMiller, which will lose its status as the world’s biggest brewer after the InBev-Anheuser deal, are widely held. “The big one that’s left that can be taken over is SABMiller,” Rijk says.

Tags: Beer Industry, Commentary //