Anheuser-Busch InBev and Boston Beer both released positive mid-year reports last week, reflecting overall growth for Q2 2018. AB InBev has grown almost 5 percent to more than $14 billion, with gross profits for Q2 near $9 million. Boston Beer is no slouch, either — its net revenue is up more than 10 percent to more than $273 million, and mid-year net revenue clocks in at almost $464 million.
Both attributed growth to increased innovations, which sounds really nice.
Here’s the thing, though: It’s not beer they’re innovating. While shares of Samuel Adams continue to decline, demand is increasing for Boston Beer’s cider, tea and hard seltzer offerings, including its Twisted Tea, Truly Spiked and Sparkling, and Angry Orchard brands, the latter two of which have released seasonal flavors like berry and rosé.
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AB InBev, meanwhile, is putting more focus on non-beer and even non-alcoholic beverages. The company recently appointed a chief non-alcoholic beverages officer, Lucas Herscovici, who will oversee AB’s non-alcoholic division, which already comprises over 10 percent of the company’s sales by volume.
Americans aren’t drinking Bud and Bud Light like they used to, so craft beer fans have that to rejoice about. AB InBev’s U.S. revenues declined around three percent both year-to-date and in Q2.
The Brewers Association (BA) also released positive mid-year numbers this week, saying that growth for small and independent brewers remained “stable” so far this year. Production volume increased 5 percent, and the current craft brewery count stands at 6,655, up from 5,562 last year.
Although the announcement goes on to name 2018 the year we’ll see the highest number of brewery openings to date, it also says we’ll witness the highest number of closings. BA chief economist, Bart Watson said in a press release, “New players looking to enter the space should be aware of the constructs of the current landscape, work to differentiate themselves and will need to make quality beer to succeed.”
But Watson missed one thing. Differentiation is key, but it’s not just about the beer. Instead, maybe it’s time for craft brewers to look at what their macro counterparts are investing in and consider non-alcoholic offerings in their taprooms. It may seem counterintuitive — breweries are for people who want alcohol, after all — but non-alc beverages are a legitimate market and a growing segment, even among beer drinkers. Beer fans are getting more health-conscious, turning to healthier options like kombucha and spiked seltzer. Millennial beer fans are also getting older, starting families and fighting for kid-friendly taprooms. It’s often the case now that not everyone at a tap room is looking to consume alcohol.
The craft beer consumer base is growing and changing. Breweries need to change with it. If that means taking a page out of Big Beer’s book (and that of bigger craft brewers like Sam Adams) by diversifying their portfolios beyond beer, so be it.
Toppling Goliath Is Suing a Former Brewer for Leaving for His Brother’s Brewery
Joining the family business can be hard, especially when you’re getting sued for doing so.
Former Toppling Goliath brewer Chris Flenker is being sued by his former employer for going to brew at Thew Brewing, which is owned by his brother Travis. Toppling Goliath is suing because Thew, located in Cedar Rapids, Iowa, lies within a 150-mile non-compete radius of Toppling Goliath, which is located in Decorah (and, in fact, put that town on the beer map).
A hearing is scheduled for Aug. 31, Good Beer Hunting reports.
Brewing, like writing, is not a glamorous job. For many of us, we’re doing what we love, at companies we love, for as long as we can. But though we hold onto these positions dearly, as Flenker likely did at Toppling Goliath, sometimes life circumstances change and it’s time to move on.
Brewers move around all the time — ask brewers where they got their start, and they’ll likely rattle off several companies that they amicably left. Unfortunately, in this case, Flenker taking his skills elsewhere is not only frowned upon, it’s violating his contract and therefore illegal. Toppling Goliath has every right to sue and is understandably concerned about its “trade secrets,” particularly since it is regularly regarded by beer fans as producing some of the best beers on the planet.
But come on, Toppling Goliath, it’s his brother, for Pete’s sake! Let the man move on. Craft beer itself is a family; if Flenker violates the circle of trust, he’ll get his.
In any case, it’s another cautionary tale for craft brewers. It’d be wonderful if brewers didn’t have to sign non-competes, but it’s a dog-eat-dog world out there. It would be nice if there were exceptions made, though, like going to work with family. Word travels fast in the beer world, and although Toppling Goliath is within its rights here, the optics don’t look great.
Anheuser-Busch Releases Free Stock Photography Reflecting More Diverse Beer Scene
In more diplomatic news, Anheuser-Busch InBev has launched a project as part of its Elevate initiative that will help publishers and marketers better represent the craft beer consumer. In partnership with two stock photography platforms, Pexels and Unsplash, the company has released photos reflecting more diverse beer drinkers, like woman and people of color, as well as more diverse beers.
As a beer writer, I find this awesome. Writers, and our art directors, regularly shop for stock photography to accompany the latest news and trends on tight deadlines. It’s extremely frustrating to find different versions of the same bearded white guys every time we search for “beer drinker” or “brewer.” (The brewers are also always wearing aprons. I’ve literally never seen a brewer wear an apron.)
Granted, many of the images showcase AB InBev-owned brands. But the effort is valid and couldn’t come at a more appropriate time. According to AB InBev, 25 percent of craft beer drinkers identify as female and 40 percent identify as non-white. Would it kill stock photographers to take a photo of someone other than Brad, Greg, or Todd?
Diversity is the name of the game lately, and in the case of AB’s new stock photos, this is as much a savvy corporate move as it is a necessary change. It doesn’t stop at the human race, either: The photo galleries will also be inclusive of the many shades and shapes of beer and its glassware, so the world isn’t mislead into thinking beer only comes in yellow, and in frosted mugs. I’ve gotta give it to them for this one.