Bud American Ale: the Triumph or Demise of Craft Beer?

I finally got my hands on Bud's American Ale, which seems simultaneously to be: 1) over-compensation for a company that's no longer American, 2) an acknowledgement that new products, not just new ads, are the only way to grow in the US market, and 3) a legitimate beer.

Let's start with the third point first. This is a real craft beer, not just a marketing gimmick. Bud has made a beautiful amber ale with a nice caramel malt note and a lightly citrusy hopping. They have dry-hopped it with Cascade hops (whole hops, apparently). I wouldn't call it a transcendent beer, but if you did a blind taste-test with this beer and several other craft ambers, I suspect it would finish in the middle of the pack. It is, for example, Fat Tire's superior--by quite a margin. I'm not a huge fan of ambers, but if I went to a party and this was in the fridge along with Corona, Widmer Hef, and Fat Tire, I'd be happy to grab the Bud Ale. And I'd enjoy it, too.

It's not surprising that Bud has made a good beer. I don't doubt that if Bud wished, its brewers could instantly produce a dozen excellent beers, and probably a world-class lager or six. The best, most well-trained brewers in the world work for Bud. They don't brew world-class beers because they don't wish to, not because they can't.

Three questions spring to mind: why a craft beer, why an amber, and what does it spell doom for craft breweries?

The answer to the first question seems obvious. While the macro market is flat or in decline, the micro market continues to grow and grow. The US beer market continues to grow slowly, but all the growth is in the craft segment. Bud can continue to buy up smaller breweries piecemeal to get a part of that growth, or take the plunge with their own brand and try to bring the market under the Bud name.

Okay, so why an amber? No doubt there's an easy, flip answer--the focus groups liked it best. (And actually, I bet they did. I bet Bud tried a bunch of ales and came up with this one. I would have loved loved loved to have been among the focus groups so I could see what was in the mind of the giant.) But it also makes sense. If you want to build a market for ales, you want to actually brew an ale. The craft market has proven the enduring popularity of the style, particularly as an introductory beer for new ale drinkers. It's nothing like Bud. Amber ales are especially fruity and ale-y. They exhibit a sweetness totally unlike light lagers--and which totally beguiled an early generation of Oregonians. Add a little dry-hopped Cascade citrus, and you introduce drinkers to the flavor of hops without risking turning people off with bitterness. If you want to create a market by priming the palates of for ales, this is a great way to go.

All well and good, but does it spell doom for craft breweries? If Bud makes a great (and cheaper) amber, will people quit drinking Full Sail's? I would love to hear the beer-economist reflect on this question, but my sense is that it's just the opposite: Bud can reach 100 million consumers who will never otherwise consider a craft beer. And once they've begun drinking Bud's ale, they may well enjoy Black Butte Porter or BridgePort IPA or Roots Heather. If Bud's experiment is successful, they will expand the market for craft beer--one they won't ever be able to dominate in the way they dominate the single-product macro market.

I love that Bud has made a serious beer. It looks to me like a trojan horse that millions of Americans may unwittingly invite into their refrigerators. And once dry-hopped ales get in there, they may never leave.

Update. Maureen Ogle points out an obvious analogy (one I nevertheless missed) to the scenario above: the Starbucks phenomenon.