Anheuser-Busch
Brutal day as Anheuser Busch lays off hundreds of employees in “The High End”
Anheuser Busch made some major cuts in their “High End” today, eliminating nearly 400 jobs.
Sometime around 10 pm last evening, representatives for The High End, including High End district managers started getting calendar invites for phone conferences with Budweiser Human Resources. This morning, the ax started to drop.
In a conference call with Alex Medicis, the Vice President of Sales for AB InBev North America, (concluding just after 3:45 pm this afternoon) most of the employees working with The High End have been let go.
According to Medicis, Anheuser-Busch is rethinking the business model surrounding the High End, centering more on efficiency. Cuts were made coast to coast.
Per Mike Seabaugh, High End Sales Rep, AB’s explanation centered around brewery acquisitions. “Basically, they’ve bought quite a few breweries and with those purchases came a bunch of employees. They don’t have room for us anymore”, he said.
The High End won’t comment on the exact number of employees, speaking on background “that less than 2% of the 18,000 employees have in North America were impacted.” According to that math, that’s around 360 employees.
It was also mentioned that after meeting with various wholesalers around the country, the general consensus is that the employees and managers for The High End were superfluous.
Beer Street Journal is told that employees that work directly for breweries purchased for Anheuser-Busch’s High End portfolio – Goose Island, 10 Barrel, Elysian, Blue Point, Wicked Weed, Four Peaks, Devil’s Backbone, Breckenridge, and Karbach, will retain their positions at the respective breweries.
Editors Note: A representative with The High End contacted Beer Street Journal about the above piece. More information has not been provided. (4:45pm)
This is a developing story. This article will be updated with more information as it becomes available.
In new TV spots, craft beer is overwhelming so drink Bud Light
When in doubt, take a shot a craft beer. That seems to be Anheuser Busch’s mentality in the latest advertising spots for Bud Light.
In the upcoming TV spots, if you are overwhelmed by craft beer’s extensive and “unusual” concoctions, Bud Light will be waiting, with its four ingredients – water, rice, barley and hops. No need to look for fruit, spices or even lobster here.
The new TV promos titled “Bottle” and “Complex” will air on August 10th during the Denver Broncos and Chicago Bears preseason game. The push promotes Bud Light as “America’s Light Lager.”
This latest marketing approach comes as big brand light beers like Bud Light are in decline. According to Beer Marketer’s Insights, Bud Light was down 8.4% for 12 weeks thru July 16 in IRI multi-outlet and convenience in a Q2 conference call. Despite the downturn, the company states the beer is considered an “underdog” in beer circles, yet A-B states 20,000 Bud Lights are sold every minute, every day of the year.
This may not be the Peach Pumpkin Ale brouhaha of the Super Bowl in 2015, but it’s still interesting to see a company that spends over a billion dollars acquiring craft breweries take a shot at the beers they create.
These spots, and other creative content focus on the quality and simplicity Bud Light delivers with its four essential ingredients. The new creative takes consumers to the heart of the brewing process, showing how Bud Light takes the time to make sure every beer goes down smooth and crisp, so it can be shared and enjoyed among friends.
Despite declining volume this summer, Bud Light is still the number #1 beer sold in America, followed by Coors Light.
AB InBev South African hops vs. Craft breweries (A new drama)
Today some American craft breweries took to social media to voice their concerns about another Anheuser-Busch maneuver. This time it has to do with hops.
We have verified the facts amidst the social media outrage. The news emerged in a memo from ZA Hops, an independent hop distributer. ZA Hops previously had access to and sold surplus South African hops, grown by farms under the SAB umbrella. Confirmed by Paul Gatza of the Brewers Association, ZA Hops was informed that surplus hops from SAB Hop Farms in South Africa would no longer be sold outside of the AB InBev network. The memo they sent out included the statement:
I was informed by SAB Hop Farms (part of ABI’s purchase of SAB-Miller) that ABI are commandeering all the hops that were to be allocated for distribution to North American craft brewers. The goal is to sell the hops internally to their acquired (former) craft breweries, even though they have not been able to sell all the hops as of yet. Regardless, they refuse to let US craft brewers buy any CY 2017 hops believing this will afford them a competitive advantage in an increasingly competitive marketplace. – ZA Hops (Full memo below)
This isn’t entirely surprising since the acquisition of SABMiller, including SAB Hop Farms, occurred in the fall of 2015 thereby giving ownership to AB InBev. However, many breweries have lashed out today at the news that they will not have access to purchase SAB grown South African hops this harvest.
This move by AB InBev opens an interesting discussion however. While they are completely within their rights to use their own assets (hops in this case), within their own breweries, and restrict competitors (North American craft breweries), it has incited the industry into some interesting reactions.
The biggest chord struck seems to be a general fear at the shear size and power of AB. Following the shocking news this week about Wicked Weed, the craft beer industry has to feel like no one is safe. To follow that purchase with the loss of previously accessible hop varieties, once again to AB, can’t feel good.
It seems a scary pattern of vertical integration becoming clearer and clearer each year. Distributers, craft breweries, even home brew supply shops to name a few. Now they have cut off an entire hop region from anyone outside of AB InBev.
We find ourselves asking, how far will this go? Will AB InBev try to vertically integrate even further and expand their North American hop sector as well? This week has made it pretty obvious that even those we thought would never sell, do.
America’s craft sector has made amazing leaps and bounds with hundreds of new craft breweries founded every year. In fact this year, the U.S. hit over 5000 craft breweries during a generation that is encouraged to “drink local” and “drink craft.” It’s become pretty clear that AB has noticed and is waging war. They started quietly at first, but this week has been pretty loud to the ears of craft beer lovers.
At the end of the day, the news has been rough on craft beer this week. It has raised a lot of anger, fears, and questions. But frankly, what did we expect from AB? For them to lay back and watch their percentage of the beer market shrink year after year and say, “well its only fair, at least the people have choices?”
No, this move is exactly what should be expected from Anheuser-Busch. It falls right in line with historically how they do business. How they grew so large and became such a powerhouse in the first place. It’s smart business. As a publicly traded company, their responsibility is to their shareholders, not their competitors.
But does it suck for the breweries we know and love? Absolutely. Does it suck for all who support independent craft brewers and loved those yummy South African hopped beers? Absolutely.
UPDATE: AB InBev makes a statement on South African hop allocation.
FULL: ZA Hops Memo:
“Along with the news late last week of ABI buying Wicked Weed, I was informed by SAB Hop Farms (part of ABI’s purchase of SAB-Miller) that ABI are commandeering all the hops that were to be allocated for distribution to North American craft brewers. The goal is to sell the hops internally to their acquired (former) craft breweries, even though they have not been able to sell all the hops as of yet. Regardless, they refuse to let US craft brewers buy any CY 2017 hops believing this will afford them a competitive advantage in an increasingly competitive marketplace. So unfortunately, there will be no CY 2017 hops available from ZA Hops. Whether they decide to sell to the craft beer market independently is unclear at this point should they not be able to allocate all the hops internally. This is a shocking turn of events, though commensurate with ABI’s business practices, and devastating to my company – yet another blow to craft beer.”
Image: Beer Street Journal/ Elk Mountain Hop Farm
Wicked Weed Brewing acquired by Anheuser-Busch
This might come as a shock for some. Asheville, North Carolina’s Wicked Weed Brewing has been acquired by Anheuser-Busch.
Walt and Luke Dickinson, along with Ryan Guthy, started work on a plan that would eventually become nationally known Wicked Weed in 2009. The brewery started as small brewpub in downtown Asheville and eventually expanded into the all-oak wild and sour “Funkatorium.” Shortly after that build, the brewery added a full production facility just outside of Asheville. Then in 2016, Wicked Weed announced a second sour facility located near Asheville’s airport. That’s four facilities in nearly 4 years.
“This is an exciting time for the entire brewing team. Our ability to create a wide range of really well executed beers that are focused on creativity, quality and drinkability is what makes Wicked Weed great. We have chosen to partner with The High End to position ourselves to make Wicked Weed what we imagined it could be when we first sat at a craft beer bar and talked about opening a brewery. As a brewer, giving our team more resources to continue innovating our portfolio and the ability to reach more craft drinkers, allows us to keep putting the beer and the people first.” Co-founder Walt Dickinson
Today Wicked Weed Brewing becomes the next multi-million dollar acquisition by the world’s largest brewery Anheuser-Busch. Their purchase expands A-B’s “High End” division which includes Goose Island, Blue Point Brewing, Breckenridge Brewing, Golden Road, 10 Barrel Brewing, Elysian, and Four Peaks Brewing.
Plus… they just dropped over $104 billion on SABMiller.
Wicked Weed’s lineup will join the brewery’s ever expanding “High End” portfolio. Wicked Weed Brewing employs more than 200 people across their four facilities. According the brewery, the founding ownership will continue to lead the brewery.
Interestingly, the downtown brewpub is closed until 5pm today for “Staff Training”.
The sum of the deal was not disclosed.
Asahi buys five European AB InBev brands for $7.8 billion
Leuven, Belgium based AB InBev is selling five eastern European brands to Asahi.
Five brands are involved in the deal, including Pilsner Urquell (Czech Republic), Tyskie and Lech (Poland), Dreher (Hungary), and Ursus (Romania).
Each of the brands were owned by SABMiler before AB InBev’s $100 billion takeover, finalized this fall.
Besides their brands that bear their own name, Asahi Breweries purchased Tsingtao from AB InBev in 2009, and London based Meantime Brewery, Grolsch and Peroni from SABMiller earlier this year.
Asasi has apparently been shopping the eastern European market for years. The purchase is the largest to date by Asahi, who seeking to become a stronger player in the global beer market.
AB InBev acquires Northern Brewer
Anheuser-Busch InBev acquires something a little different this week. Homebrew supplies. The global brewery has acquired Northern Brewer.
Northern Brewer was founded 23 years ago by Chris Farley (not the actor). Since then the homebrew supply group has grown to one of the largest in the United States, posting $10’s of millions in annual revenue.
Farley has confirmed that Northern Brewer has been acquired by ZX Ventures, the “global disruptive growth unit” of Anheuser-Busch InBev. The details of the transaction have not been disclosed.
Farley states in a message on the Northern Brewer site:
First, nothing will fundamentally change as the result of this deal. Our entire leadership team will remain intact and our company will continue to be independent. Our staff of dedicated employees will continue to serve our customers and help our industry innovate. Our culture will remain as it is today: vibrant, energetic, fair and dedicated to our mission and to you.
From here, Farley goes on to say this sale will bring “unparalleled opportunities.” What those are exactly, have not been divulged by the company.
Northern Brewer’s leadership will remain intact, as will all the current employees – for now.
What ZX Ventures, and AB InBev will do with Northern Brewer remains to be seen.
Developing…
Anheuser Busch acquires Italy’s Birra del Borgo
Anheuser Busch has reached terms to acquire Italy’s Birra del Borgo, making the large Italian brewery the second craft brewery acquired by A-B Inbev this year (Devil’s Backbone was the first earlier in April).
Founded in 2005 by Leonardo Di Vincenzo, the Borgorose, Italy based brewery is one of the most widely distributed Italian craft brewers and has collaborated with other well known breweries such as Dogfish Head (with My Antonia) and Cantillon (in lambic blending with Duchessic).
Di Vincenzo will retain his position and decision-making capacity after the acquisition and has termed the deal a “partnership” rather than a “purchase” or a “takeover”:
“Our voyage since we started in 2005 has been a great adventure. Today the beer sector has become very competitive and it necessary for us to make a next step to ensure that we can continue to evolve in terms of brewing techniques and in terms of the complexity and taste variation we can offer to consumers. We believe partnering with AB InBev is a great opportunity to do exactly that: it will allow Birra del Borgo to grow in a sustainable way while staying true to our unique identity and the philosophy that we have followed since the very beginning.
The partnership with AB InBev will bring us many advantages, from technological improvements and access to scientific research to the possibility to grow from a commercial point of view. Moreover, this partnership also means that we will be able to focus much more on what we enjoy most and do best: creating and experimenting with exciting new beers and pushing the boundaries of beer evolution in Italy.”
Birra del Borgo produces 10 beers in a year-round capacity and will continue to produce at their Borgorose facility.
Country Director Simon Wustenberg provided the explanation for why Birra del Borgo was a target for acquisition from Anheuser Busch:
“We have been very impressed by what Leonardo and his team have built since 2005. They have been at the forefront of redefining beer in Italy, bringing a unique mix of inspired innovation, quality and consistency. Leonardo’s vision for beer and his passion for brewing will be great inspirations to our whole team, and we’re very excited about partnering up and growing together. As a challenger on the Italian market, we have been successfully developing our business with a great portfolio of premium and specialty brands in the last few years. Today, that portfolio becomes even stronger with some of the best of ‘Made in Italy’.”
Terms of the deal were not disclosed. However, with this purchase, Birra del Borgo is now a fully owned subsidiary of A-B Inbev.
