Who Is Involved
AB InBev is the largest brewer in the world. Their revenue of 43 billion dollars in 2015 was roughly twice that of SABMiller’s 22 billion. Despite their dominance that includes powerful subsidaries Grupo Modelo and Beck’s, their stock has plummeted 30% over the last month. Some of these losses are attributable to their dominance as the market is expecting tighter regulation in key markets, like the United States and Brazil.
To be 100% accurate, ZX Ventures, a venture capital fund owned by by InBev was the specific company that purchased Northern Brewer on paper. The goal of this fund is to help make quick decisions and capitalize on startups.
By comparison Norther Brewer / Midwest Supply is a bit player with annual revenue of merely 50 million dollars a year. Northern Brewer has two retail locations in Minnesota and one in Wisconsin. Their sister company, Midwest Supplies (acquired in 2013), also has a retail location in Minnesota. A brick and mortar retail presence is critical to succeed in homebrewing because many vendors still refuse to sell to online only stores. I consider this attitude backwards. Others consider it vital to preserving local homebrewing communities. We are both right.
Regardless, of where you stand on the merits of brick and mortar versus retail, you’re likely skeptical of AB InBev’s motivation in buying what many would the biggest perpetrator of mass-produced, low quality beer, watered down, shit beer buy the most promising homebrew store.
What Are AB InBev’s Motivations?
The most obvious answer to what’s motivating AB InBev is world domination. Why else would they be on such a buying spree? When you are as dominate and large as InBev your main job is to squash any competition before they become too viable. If you don’t believe me, look at this list of 8 major craft breweries recently purchased by InBev. Major drug companies, Pfizer, play the same game. These companies no longer have to be good at making new products on their own. They just have to be good at recognizing the trends.
Another answer is that millennials are more inclined to homebrew or drink craft beer as opposed to drinking the watered down slop most of their parents and grandparents put up with.
The most logical concern is that AB InBev might screw up a good thing. Big companies buy smaller companies and screw them up all the time. Here’s looking at you Microsoft. Not to digress but have you used Skype lately. It’s turned into the biggest piece of shit ever created. It’s more than a minor miracle that Conde Nast hasn’t screwed up Reddit. Anyway, we’ll just have to wait and see. The hope is this will be more of a Reddit situation than a Microsoft situation. Fingers crossed!