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The Beer Circle » Anheuser-Busch, Beer Facts » AB InBev: Moving Forward Without The Past

AB InBev: Moving Forward Without The Past

While Hurricane Sandy does its worst to the Eastern US seaboard, I decided to have a coffee and read the internet (yes, the whole internet…who knows how long I’ll have power for, so I wanted to make sure I got it all). I came across a few articles detailing how Anheuser-Busch (AB) InBev came about. As a beer lover, albeit someone who was not old enough to comprehend the rise of such a monster company, I figured it was something I should know more about. What I found was an article titled, “The Plot to Destroy America’s Beer,” by Devin Leonard on Bloomberg Businessweek. The article (while it has a inaccurate title, AB InBev seems to be attempting to destroy, read: control, beer worldwide) focused on AB InBev as an unmitigated financial success, slashing bottom lines while acquiring more brands and exploding internationally, and what that means for American beer. I saw a similar trend, but one with far more interesting takeaways for the craft beer industry. AB InBev is constantly trying to move forward by shedding its history and selling beer as a snapshot of its former self, despite owning some of the most historically significant beer brands.

How exactly did AB InBev come about? Bloomberg had a nice graphic to sum it all up in their “99 Facts About Beer on the Wall.”

Some of the more outlandish moves AB InBev has undertaken after acquiring any number of brands is destroying what made that beer popular in the first place. What we’ve learned is that first and foremost, where beer is made matters…and water has a lot to do with it. Troegs Brewing Company learned quickly that even a move of 14 miles (from Harrisburg to Hershey) presents water issues, and when beer has water issues, beer has taste issues. Brett from Divine Brew was on Troegs’ guided tour in August and got some insight into Troegs commitment to water quality:

“Harrisburg had very special water. In order to replicate this, they built three giant tanks to treat the water so that it would match the mineral content of Harrisburg water.”

Troegs isn’t the only brewery facing water issues. In late 2011, Ommegang threatened to move or close down if Marcellus Shale “fracking” changed the quality of their water. Ommegang’s spokesman has been quoted as saying, “even our strongest beer is 90 percent water, and all of our water comes off the property.” Court papers filed by Ommegang state, “If (Ommegang’s) water were to be contaminated, the Brewery could be forced to move its business elsewhere…”

In layman’s terms, water matters. And craft brewers care.

So why does AB InBev continue to buy beer brands…and move them? It’s simple, to make more money. They can brew more, faster at their warehouses than they ever could at a historical brewery. They’ve moved Beck’s (my namesake) from Germany and Bass from England to the US. Relocated Rolling Rock from Latrobe to Saint Louis and Goose Island’s 312 Urban Wheat Ale to the 315 area code. It closed Boddingtons’ 227 year old brewery in Manchester, UK and Hoegaarden’s brewery in…Hoegaarden, Belgium (although they caved to pressure from the locals and re-opened this one). It’s a staggering list, and all of these closings come from AB InBev’s need to produce beer at mass quantities, which has had another unintended consequence: Using different ingredients.

Picture from Gravy Bread

Never fear, AB InBev promised it wouldn’t change the recipe of Rolling Rock, it was just moving the location is was brewing the beer…right? Well, Budweiser wasn’t so lucky, who’s to say which brand will be next?

One of the first things to change was the use of full-grain rice (I’ll just ignore the fact that Budweiser uses such high-quality ingredients as rice) in Budweiser. AB InBev’s spokeswoman claims that “Our purchasing of rice has to do with how fresh the rice is, not whether it is whole or broken.” Next up, hold on tight to your beers, were the hops. Budweiser, still holding on to its European roots, had used Hallertauer Mittelfrüh hops for as long as anyone could remember…until the merger with InBev. According to a former executive, who spoke to the Bloomsberg journalist under the condition of anonymity, said, “the company saved about $55 million a year substituting cheaper hops in Budweiser and other U.S. beers for more expensive ones like Hallertauer Mittelfrüh. It is hard to say whether the average Bud drinker has noticed. But then, the average Bud drinker is not drinking as much beer.”

So let me get this straight. AB InBev swears that they don’t change recipes when they acquire a new brand…but they’re changing the hops and rice used in Budweiser (their flagship beer). Don’t forget that they dropped the ABV on Beck’s, Budweiser, and Stella Artois from 5% to 4.8%

I might be drunk, but I’m not stupid.

They say over and over that they’re committed to quality, but apparently quality doesn’t mean history, ingredients, or even good tasting beer. In reality, they’re committed to quantity.

My real concern with all of this is what does it mean for Goose Island? It’s no secret that we at The Beer Circle are fans of the Chicago-based brewery that was recently acquired by AB InBev,  and I’ll be the first to admit that some of the new beers Goose Island has released since the merger have been quite good. But, as I said earlier, they’ve already begun farming out production of some flagship beers (312 Urban Wheat Ale) and I’m sure more cost-cutting moves will be made eventually.

To look on the other side, perhaps AB InBev will farm out the flagship beers so that the Goose Island brewers (read: evil geniuses) can continue to push the limits of their specialty offerings. This would create new, delicious, highly sought-after beers that the craft beer drinker will go crazy for, but it sacrifices the overall quality of Goose Island’s product. Again, bucking history for what will make it the most money.

I, for one, like that Otto’s is brewed in State College and always has been, that Mad Fox uses barrels from a local distillery to age their beers, and that Yuengling has been around since 1829. I really don’t like the idea of AB InBev closing down historical breweries, changing recipes honed over centuries, and trying to mass produce beer at the sacrifice of its taste.

From what I’ve read in the various comments sections relating to the Bloomberg article, I don’t stray too far from the masses regarding my opinions of AB InBev. What do you think about the company. Should it be viewed as a financial success…or as trying to destroy the beer that we know and love?

Correction applied to my misnaming of 312 as Imperial Pale Ale instead of Urban Wheat Ale. I blame the homebrew I was enjoying at the time of writing.

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Written by Russ Beck

Russ can trace his beginnings in craft beer to sitting in Zeno’s Pub in State College drinking various craft beer options from across Pennsylvania. Since then, he has never faltered in finding new brews, whether they’re rare, delicious, or hopefully both. Russ will be writing on a large variety of subjects, including but not limited to: reviews, homebrewing, and how to take labels off of beer bottles. He’ll drink just about anything, but prefers a nice Stout, IPA, or Weizenbock. Find Russ Beck on Google Plus

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