Tuesday, July 16

How and Why the AB InBev-SABMiller Merger Is Terrifying for Craft Breweries

Glass of light beer on a dark pub.Just when the world thought Anheuser-Busch InBev couldn’t gain any more control of the global beer market, it happened: AB InBev reached a deal with SABMiller, thereby uniting two of the biggest competing beer manufacturers under one beer behemoth of a corporation.

Collectively, the two companies brought in about $70 billion in revenue during 2014, and together (though technically still separate), they held one-third of the entire international beer market, according to U.S. News and World Report.

The deal was struck to the sweet, golden, bubbly tune of $105 billion paid to SABMiller after the company rejected four other proposals from AB Inbev, stated Bloomberg Business.

But one question remains for American craft beer lovers: what’s going to happen to the substantial industry of microbreweries that have found such great success? All too often, independent craft breweries are edged out of the industry by bigger companies (ahem, AB InBev) and are forced to decide between struggling on their own or selling out to the big guys.

In one of the most infamous cases, AB InBev purchased a small Seattle brewery called Elysian in January of this year. Dick Cantwell, a co-founder of Elysian Brewing, was upset about selling his brewery but saw no other choice; the brewers could continue making the same beers they had been making since 1996, but AB InBev would ultimately have control over what the brewery would produce and where it would distribute.

Not too long after selling Elysian, AB InBev took a shot at the craft beer market with a new ad campaign that mocked the bizarre flavors microbreweries often produce: “Let them sip their pumpkin peach ale, we’ll be brewing us some golden suds,” the commercial said.

“We made a pumpkin peach ale,” Cantwell said. “They called us out specifically in a mocking tone to show just how ridiculous craft breweries were, and they called out a specific beer we made.”

Craft beer supporters were just as outraged by the commercial, Fortune reported, just as they were outraged by Elysian “selling out.”

The Pumpkin Peach Feud probably doesn’t mean much outside of the craft beer market, but it does show the power of provocative content marketing — and it also shows that bigger corporations can afford to take bigger risks when advertising, even to the point of mocking smaller businesses they’ve recently purchased.

Not only do these small businesses have to try to find the finances for a marketing campaign, but they have to find a way to keep their brand consistent and positive, even when being mocked.

“Larger corporations will inevitably have a bigger budget for marketing, including digital marketing, but that doesn’t mean that the smaller businesses can’t leverage the internet to help brand their company without spending a fortune,” says Suzanne Jeska, President, MRN Web Designs. “Digital marketing begins with a website that looks sleek and clean-cut no matter which device you’re using. Even more important, your website needs to be found by your clients; onsite optimization is key for success. This means going through each of your webpages with a fine-tooth comb to fill in tags, index the pages, add contact information, and design the pages so that users can navigate it with ease. An internet marketing plan that delivers a positive ROI (Return on Investment) can be affordably managed with the right web team that focuses on the small business owner.”

The AB Inbev – SABMiller merger is likely going to be the biggest beer marriage in international history — there’s no doubt about it. It’s also likely to have an effect on how smaller breweries operate and market their products. The question now is, will the smaller breweries be able to pull through without sacrificing the brand that makes them unique?

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