A Consolidation Dialectic (or Why Buy-Outs Do Sort of Suck)

A funny thing happened on the way Elysian's public flogging.  There I was, bracing for another round of "Judas" called collectively from the internet.  If 10 Barrel Brewing, a nice outfit but certainly nothing like the beating heart of Bend, could generate a week's worth of existential angst, then authentically beloved Elysian would surely cause Facebook to crash.  Instead, a somewhat large group went immediately on AB InBev defense--or made something like the "meh" argument.  I saw comments like this everywhere, but I'll single out the estimable Jordan St. John, who wrote one of the more entertaining versions on my blog Facebook page.

People buy the narrative of small underdog companies vs large companies and they are intended to do so because it plays on their innate acceptance of binary narrative even though it is patently not the reality of the situation which includes thousands of parts moving independently in a finite market.
Go look at the language in the comments of various websites who have reported this and tell me that the sudden hatred of Elysian on the part of long time loyalists is a rational reaction to the potential that the beer may shift in quality two years from now. It simply isn't. The craft beer narrative of the hero's quest and the idea that the "underdogs" must be the hero because there is an empire that they are up against is collapsing because the lines muddy when faced with what has always been a generational industry. It's the reaction to a hulk hogan heel turn or Anakin turning to the dark side. It's not the reaction to a potential quality shift that may or may not happen eventually.

You don't want AB InBev to own this brewery.  Really.

This leaves us in an interesting place.  The default position holds that buy-outs are bad for diversity, bad for the bought-out brewery, and bad for beer.  But there's a second sentiment, like Jordan's, which argues that it's all business and who cares who owns a brewery so long as the beer is good.  Can these views be reconciled?  In philosophy and logic, there's a concept known as "dialectic," which indicates a train of reasoning that flushes out bad thinking and gets at the truth.  There are many different versions of dialectics (it goes back to the Greeks), and it seems like we need one to interpret consolidation.  Allow me.

1.  AB InBev is not evil, it's just a company.

It's true.  AB InBev is a large company that (like small breweries) sells beer. Beer companies are morally neutral entities, and what they do is sell widgets.  To associate moral value with any brewery is to make the argument that there is a higher way to sell beer, and that's obviously not defensible. 

2.  Little breweries are not virtuous; like multinational conglomerates, they're just companies.

For reasons I shouldn't have to enumerate, I love beer.  But the notion that little companies are doing something categorically different than multinational conglomerates by making and selling beer is absurd.  They're breweries.  Smart people have decided to quit the idea that there's craft beer and then some other, lesser category.  There's beer and then there's, well, beer.  It's all made in breweries of malt, hops, water, and yeast (and increasingly, other things).  Companies that make this substance sell it on open markets.  Some are big companies, some are wee. 

3.  You can't judge the quality of beer by the size of the brewery

Fans of American craft beer take it as gospel that big companies make "crap" and little breweries make good beer.  This is not true.  Big breweries make beer that millions buy.  It may not be the beer I love, but that doesn't make it crap.  In many cases, mass market lagers are the cleanest and most consistent beers on the market.  One of the common stories told back in the 1980s was that big breweries used "additives" and chemicals to their beer--it was one of the arguments in favor of small-scale brewing.  I dunno, maybe some did (I'm no historian).  But as far as I can tell now, that's total hogwash.  Oh, and plenty of little breweries make pond water.  Like, literally.  I'm pretty sure I recall finding a pollywog in an ESB once.  Little breweries make plenty of crap.

4.  Big companies have a lot of power in the marketplace and don't love competition.

You have to be willfully forgetful to acquit Anheuser-Busch of being a malignant force in beer diversity in the 21st century.  There were 700 breweries following Prohibition, and A-B (and other giants) ran almost all of them out of business by 1980, when there were only 80 breweries left.  They did this by being bigger and more efficient, sure, but they also used bare-knuckle business tactics to dominate distribution, rig local laws in their favor, and buy out everyone they couldn't drive out.  Given a choice between competing against a few other companies in a stable market and competing against a hugely fragmented competition in a volatile market, they would--they have --chosen the latter.

5.  Local breweries keep traditions alive.

Companies are people.  Here in Portland, I know the majority of brewers in the city.  They're my neighbors and members of my community.  They employ my neighbors and other members of my community.  That alone is reason enough to at least be prejudiced toward local breweries, but there's a much more important reason.  Beer is one of the most varied products on earth, and that diversity comes from the preferences of locals who, say, favor dark ales in Dusseldorf and light lagers in Munich. There was a mass extinction following the Second World War when cheap, commodified beer displaced more expensive local styles.  Dozens of funky, interesting types of beer vanished from the earth.  Here's Frank Boon telling Belgium's story (from an interview I did with him):

“Forty years ago, this was a time when breweries were closing and all the local styles were disappearing.  Everywhere in Belgium.  Louvain white disappeared, Peeterman disappeared, [ascot beers?] disappeared.  In the 1950s and 1960s they switched to cheaper and technically better beer.  In every village and small town, brewers said the only thing we can do is sell the brewery.  There is no future for small breweries.  If gueuze had disappeared in the 1960s, nobody would ever have imagined to make such a beer.  It’s an absolutely crazy way to make beer.” 

There are cases in which the existence of one or two single breweries--Dupont, Schneider, Schlenkerla and Spezial--kept a beer alive.  These are never multinational conglomerates, but family breweries keeping traditions alive.  The more breweries there are--particularly funky little breweries that can make a living by selling niche beer--the more diversity that will survive.  Sometimes people denigrate the support for local breweries as mere sentimentality, but the consequences for losing them are not insignificant.


To finally get off the ramble, here's the upshot.  Like Jordan says, it's best to avoid thinking of these things in moralistic terms. It's clarifying to recognize that beer is beer. However, that doesn't mean that one beer is as good or valuable as the next.  In the aggregate, we want a market where lots of breweries are competing to make the best beer.  Recent history has shown that consolidation isn't good for good beer.  Each brewery is a node in the diversity of the ecosystem--and some are more important than others.  10 Barrel?  Meh.  I'm not sure that they were really doing anything to increase biodiversity.  But Elysian, which was early on the scene with botanicals, which helped launch (God help us) the annual pumpkin frenzy, and which could make beers like this, had its own, unique flavor.  Those kinds of breweries are important, and it's perfectly reasonable to lament their absorption into a multinational conglomerate.