Are You a Beer Snob?

Blue Moon Bottle
The beer industry has been steadily consolidating since the end of prohibition. While microbreweries have spiked in popularity the traditional mass producing firms, once at about 421 firms in 1947 has fallen to under 24 today. Part of this reason has been the changing preferences from the domestic type beer such as Budweiser, Coors Light etc to craft beers with variations such as IPAs and wheat beers. At this point almost 80% of the domestic beer market is held by Anheuser-Busch InBev (Anheuser-Busch was acquired by InBev of Belgium in 2008) and MillerCoors (Miller and Coors who merged in 2007) and these two make, which some assume, a duopoly of the market.

Traditionally within the beer market the different areas are segmented into three groups starting with the domestic mass-producing breweries, then the micro craft breweries and finally the foreign imported beers. Though more recently the lines are getting hazy between the segments. This is because the increased demand for higher quality beers, or “craft beers” has caused the mass production companies to come out with brands that mirror the look and taste of beers produced by microbreweries. Screen Shot 2014-10-15 at 10.54.12 PM Blue Moon and Shock Top, made by MillerCoors and Anheuser-Busch InBev respectively have quickly come to dominate the market for specialty beers in a national way. Blue Moon, which is a Belgian-style white beer had sales in 2009 of about 15% of the 13.2 million barrels of craft beer sold in the U.S. These bigger mass production companies have taken the increased demand for higher quality, or seemingly higher quality, beer and created these brands that can be widely distributed across the nation without the Busch or MillerCoor name attached. They are essentially, “the craft beers for people who don’t really know craft beers”, as some beer acificandos would say. However, this distaste projected by the beer snobs, or just the true microbrewery supporters, does not stop the two brands from being wildly successful.Busch and MillerCoors are able to get these beers on the shelves across the nation due to their distribution and production capabilities. Overall, this type of strategy, unbeknownst to many consumers, is not uncommon in the world of consumer goods. Other examples of companies using this same type of structure in order to target different markets with separate lines are Toyota and their luxury brand, Lexus, and Hallmark’s separate brand Shoebox.

2 thoughts on “Are You a Beer Snob?

  1. I would love to see if that graph includes the microbrews that Sam Adams and Blue Moon have acquired (separate from their label). It is a well known fact that the big players are buying up a lot of the little guys so this would be a more interesting graph if it specified if that was the case or not.

  2. A couple questions, none of which are likely to be ones that you can answer. First, to what extent does (in this case) Blue Moon cannibalize AB InBev’s sales of Bud? Second, how much of a cost penalty is there for a large firm to brew such beers? I suspect that such beers are made in plants that had been mothballed – they’re not brewed at volumes high enough to run in a regular plant. Third, can they charge the same premium price as “true” microbrews? My memory is that local establishments charge less for such beers than for (say) one from Devil’s Backbone.

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