Jonathan Ingram's picture

This full story is available to premium subscribers.

Login / Subscribe
Subscription options for $2, $15 and $25.


 

Is ‘Co-opetition’ At The Core Of Craft Beer’s Future?

I first heard the word that is a hybrid of cooperation and competition during the broadcast of a NASCAR race. Announcer Darrell Waltrip described what was happening in the high-speed draft at Daytona as “co-opetition.” Drivers cooperated with each other to get to the front of the field, he said, then tried to beat each other for the victory at the finish.

Hardly confined to NASCAR, the word co-opetition has been bandied about by business writers for the last two decades because the nature of some business has radically changed. A typical example of change is the shorter life span of tech products, which has put pressure on companies to engage in co-opetition – reducing product development costs by sharing knowledge with companies in the same field while simultaneously trying to beat each other in the marketplace.

But wait. This is a beer magazine. The alert reader has probably already recognized collaboration is second nature in the world of craft brewing. Is collaboration the same as co-opetition?

A recent blog post that emanated from the North Carolina Craft Brewer’s Conference was the first full discussion I’ve seen on the subject of co-opetition in craft brewing. The blog I read at RadCraftBeer revolved around the shared values among independent craft brewers such as hugging one’s competitors in place of “keeping your friends close and your enemies closer.”

To me, the hugging is more about cooperation and valuing the competition of your fellow brewers – as in a rising tide lifts all boats. As so often is the case in discussions about craft brewing, the emphasis is on shared values, cooperation, knowledge-sharing and commitment to community. But are those shared values the same as tech companies sharing knowledge about product development and then competing against one another for product sales in the marketplace? Are the shared values of craft breweries the same as competing car companies using the same, or shared, parts to build their cars before competing for sales in the marketplace?

If the answer is yes, then all craft brewing is a matter of co-opetition – shared values on how brewers operate their businesses, and then competing tooth and nail in the marketplace.

Even without mentoring or direct involvement from existing brewers, new brewers tap into the zeitgeist of craft brewing’s shared values. This process is working well enough that 85 percent of all Americans now live within 10 miles of a brewery, according to the Brewers Association.

To me, this sheds light on the response when a craft brewer sells a percentage of its stock to a private equity company or a macro brewer. It’s sometimes perceived as an act of betrayal, because supposedly shared values have been abandoned. On the other hand, brewers who would raise capital to improve their ability to compete in the marketplace may only be guilty of… co-opetition.

The most recent example of this dynamic was the sale of 30 percent of its stock by Avery Brewing Company to Mahou San Miguel, the Spanish macro brewer. Some folks in the Colorado area and elsewhere responded as if they had a traitor in their midst. A similar purchase by the same Spanish macro of 30 percent of Founders Brewing Company in 2014, interestingly, didn’t seem to raise as many eyebrows. And since then, Founders has continued to be an American success story in terms of growth and excellent beer. Plus, there appears to not have been any significant change in the values that drive Founders, still majority owned by co-founders Mike Stevens and Dave Engbers.

Avery, like Founders, will no longer be considered a craft brewer by the BA, because of the organization’s limit on 25 percent ownership from a macro brewer. To me, that seems as arbitrary as allowing a brewery to sell any amount of stock to a private equity company and still remain a member of the BA in good standing.


Finish reading this article by becoming a premium member.
Visit the store now. Options start for only $2.00!