Do You Understand How Business Works?

Guys. This isn't something I would normally discuss here. But I think a point can be made with this article. 

Tired of seeing headlines about Big Beer gobbling up your favorite craft breweries? Then you’ll want to be part of the movement to Take Craft Back, a new crowdfunding campaign to buy Anheuser-Busch InBev (AB InBev).

Take Craft Back has a ginormous goal: crowdsource $213 billion (yes, billion) to buy AB InBev, flipping the script on the global company that’s purchased 10 small U.S. breweries in the last six years.
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The Brewers Association (BA), publishers of CraftBeer.com, announced the campaign Monday on behalf of the independent brewing community. The BA is very clear about the real dangers of beer consolidation, including narrowing access to raw ingredients and a heavy influence on distribution, which squeeze beer from your small, local brewers off store shelves and off draft lines.

Read more: https://www.craftbeer.com/craft-beer-muses/take-craft-back-crowdfunding-buy-anheuser-busch

For those who may not know what AB InBev is, it is Anheuser-Busch, the company that makes Budweiser, Bud Light, etc. 

AB InBev, if I have followed their story well enough, is actually owned by a group out of Belgium. It started out as a small American business and grew into "the king of beers." They have, in fact, bought a bunch of craft breweries in recent years, in an attempt to cash in on the craft beer craze. 

What this group wants to do is buy AB InBev to prevent the purchase of more craft breweries by large beer manufacturers. It will apparently take $213 billion to do that... which they want to crowd fund. 

I like craft beer, but I don't $213 billion like craft beer!

​Now, on the post I found this, it doesn't appear they have a whole lot of support for this idea, but I could be very wrong. What people post in the comments section isn't always how they act. 

What I did notice was lacking was a general understanding of how this works. AB InBev isn't stealing craft breweries. They are purchasing them... openly, fairly, and without twisting arms. These craft breweries are selling out to these manufacturers of their own free will. They are not being forced to sell out. 

I spent two years working for a beer distributor. I wasn't high up in the food chain, but I was friendly enough with enough people in upper management that I got some of the inside scoops. I even got friendly with some people in high places in one of the big manufacturers (one company, that's how distributors work). 

I won't name names, but several of the craft breweries we handled were chomping at the bit to get bought out. That was the ultimate goal. They weren't struggling, they were in no trouble, the owner just wanted the pay day that came along with selling his entire brand to a big beer manufacturer that has money coming out of their ears. Some of them had succeeded before I left that company, and some are still trying. But these breweries wooed these people all the time in an attempt to seduce them enough that they'd make an offer on their brewery. Now, yes, there are craft breweries out there - a lot of them - that do not want to sell out. Those aren't the ones getting bought out. The ones getting bought out are the ones where the owner wants to sell.

So AB InBev isn't wantonly buying up all your favorite craft breweries and putting Americans out of jobs because it's fun. They are buying because the craft breweries are selling. Period. 

And you can't get mad at the craft breweries, either. Well, you can. But why? Who goes into business without big dreams? And in many cases, those big dreams include big dollar signs, and there is nothing wrong with that. If the way these people can make their millions - or billions - is to sell their craft brewery to a big manufacturer willing to buy... then do it! Retire young and live the dream!

Bottom line: this happens every single day in business. It doesn't always make headlines, but big companies buy small companies every day. I'm sure not 100% of those were completely amicable, but the vast majority of small businesses that sell out to larger ones do so because they want to. 

And if this group manages to crowd fund enough to actually buy AB InBev, it's no guarantee they'll sell. Even if they do, what then? You just crowd funded a huge beer company with a butt load of employees, and that business spills out to a bigger reach than you can imagine (those distributors? They aren't owned by these beer companies, but they can't function without them, and the amount of say they have with those distributors means they basically own them). Their customer base is massive. If you can't keep up - which you mostly won't be able to - the company will go under. That means a ton of distributors across the country and elsewhere will also go under. And if the distributors go under... that craft beer you love so much? They'll all go under, too, because those distributors pick them up to sell along side the big manufacturers. If the distributors vanish, the craft beer doesn't get to restaurants and bars. They won't die immediately. Some of the distributors will hang on for a few months. But the vast majority of what is purchased is the big beer company, the craft stuff is an after thought to 90% of their customers. So if the distributor isn't selling a big beer brand, the customers don't have the time to order from them or deal with the bs that comes with dealing with it. The customers will stop coming. And unless the craft breweries can get out of those distributors and into one still handling a big name beer company, they won't last long, either. 

How about you think this out a little bit more there, Skippy? Crowd funding a big beer company isn't going to be all rainbows and unicorn farts. It could mean disaster for the craft breweries you seem to think you are saving. 

This is business. It is also capitalism. It's just how it works. As I said, the companies getting bought up are the ones that want to sell. And you can't blame them for that. Sure, it sucks to see your favorite craft beer get sold out to a big company and know that in a few short months it's going to be basically flavored water. But at the end of the day, those breweries are there to make money. And if what they want is a fat pay check and early retirement, I don't blame them for that at all! Get a ridiculous amount for your brewery and live your days out on a beach somewhere! That's excellent!

The dream of this group is out of hand. If they can do it, again, more power to them. Get a piece of that pie and make your own billions. But know what you are getting into and what the outcome could be, good and bad. 

​And realize, before blowing a gasket, that your favorite small business of any kind could one day sell out to a bigger brand. It might not be what is best for you, but it is for the owner if that is what the owner wants. That's business. That's just how it works. 

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