So What is Beer Wars?

By Jim Cohen | February 27, 2010 | 2 Comments |
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Many of our twitter followers and facebook fans have seen us post about Beer Wars over the past couple of weeks. However, we probably need to explain ourselves a bit better. This article is a discussion about the impending Beer Wars in the U.S. and the documentary that you can grab in iTunes, NetFlix, Blockbuster, etc. called Beer Wars, by Anat Baron (@BeerWarsMovie).

See, at Beer Universe, we have a bit of a bias – we love beer (duh!). We don't just love the mass marketed beer industry (Budweiser, Coors, Miller, Corona, etc), we love it all. In particular, we are taking about your local microbrew pub and the growing craft breweries around the nation that are inspiring a large beer movement.

The documentary aired live on April 19, 2009 – we were part of the lucky audience that was able to view it.  In short, you can think about this documentary as cataloging the daily David vs. Goliath battle that many breweries are fighting across the nation. Goliath, in this situation, is "the big 3," which we classify as Anheuser-Busch, Miller and Coors. During the making of this movie, Miller & Coors started a joint venture and InBev purchased Anheuser-Busch—only making these giants even larger.  David, on the other hand, characterized the small craft / micro / home brewers from around the country. In particular, the movie focused on Charlie Papazian, Stone Brewing Company, Dogfish Head Brewing Company, and New Century Brewing Company. You also get to see glimpses of Jim Koch from Sam Adams (still considered a craft brewery even with $400 million in annual revenue). 

In particular Baron highlights how the big 3 breweries have dominated the industry for decades. They take up prime real estate in grocery stores by utilizing shelf space that most consumers see first, spend more than $1 billion on marketing (in 2007), and corner lobbyists in Washington D.C., who are advocating on their behalf to keep the current distribution system in place. All of those may make sense to a new beer lover, except the distribution system.

The three-tier distribution system was put into place after Prohibition in the 1920's. Essentially it puts a layer between breweries and the outlets that sell them. Distributors are heavily in corner of the big 3 and it is increasingly difficult to partner with them to distribute a craft breweries product around the nation. Baron's approach in the movie was Michael Moore-esque by confronting lobbyists and trying to point out these flaws.

However, even with the big 3 stronghold on the industry, craft breweries and the general craft industry are doing momentous things. At Beer Universe, we often highlight how the overall beer industry is shrinking or growing marginally at 1% a year; however, the craft brewing market is growing 10-15% a year. Consumers are recognizing there is a choice to beer and have substituted some local brews for their mainstream counterparts. The big 3 have recognized this. For example, you may think Blue Moon is an independent label, but little did you know that it is actually a product of Molson Coors. Similar tactics have been taken by Anheuser-Busch and SAB Miller.

Beer Wars, while at times can be intense on the side of craft brewing, certainly opens up the eyes to the general public of the quiet beer war that is going on before you take a sip of your cold brew.  We definitely recommend taking a look at Baron's work and spending 90 minutes to learn a bit more of the beer industry. If you have seen the movie already, we'd love your thoughts on our forums or as comments to this article!

2 Comments · So What is Beer Wars?

  • I enjoyed the film for the most part, but the film maker is just plain annoying.

    She is blatantly biased, doesn't even drink beer, and claims to have broken into the beer industry by working for MIKES HARD???

    She just loses all credibility with that one.

  • I haven't seen the movie, but will add it to my Netflix queue.

    These are the kind of articles I find interesting. A little bit of economics with your beer anyone? It is stories like this that will help bring more choice to the market. Then the consumer wins.

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