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Independent Craft Breweries vs. Macro Breweries

Connoisseur's Corner: The Question of Passion (Issue 21)

Denver, Colorado Is it possible for a large corporation to acquire passion and, as a result, market share when it comes to making beer?

That was a key question at this year’s Great American Beer Festival where hundreds of brewers driven by passion and thousands of their beers vied once again to earn a medal by combining the classic and creative.

The night before this year’s doors opened to welcome 60,000 festivalgoers, GABF founder Charlie Papazian recalled the first festival in 1982 at a hotel in Boulder, which drew about 800 people. When the hotel’s owners first found out about that inaugural festival, he said, they tried to cancel it. It was one of many battles to come with corporate culture.

 A guest on the Brew Night Show hosted by Marty Jones, Papazian also recalled one of the classically creative beers from earlier days. “Odell made an IPA that won the GABF gold in 2007 and then came back and won it again at the World Beer Cup in 2008,” he said. “That was the first IPA that had that hoppy and floral quality to it. That really started it all when it came to IPAs.”

The new methods and approaches to making IPA have been growing steadily just like the crowds at GABF, the popularity of IPAs and the craft beer segment in general. But is it possible for a macro brewer to acquire the sort of passion behind recipes like the one that sprung from the minds at Odell and helped fuel a revolution?

In private discussions and at the Brewers Association’s media luncheon Q & A, the ongoing acquisition of smaller craft breweries by macro brewers was a hot topic. The purchase of SABMiller by AB InBev was in the air, but the acquisition of smaller American brewers was much more on people’s minds.

Paul Gatza, director of the BA, pointed out that the acquisitions in the previous 12 months by macro brewers was but one of several ways brewers are seeking growth or paying back original investors. He cited private equity, partial buyouts, buy-ins by other craft brewers and employee stock ownership plans as the more predominant alternatives.

But the high profile of recent deals, which include noted IPA makers 10-Barrel Brewing Company, Elysian Brewing and Golden Road Brewing, still posed a looming question. Can a passion for brewing creativity be acquired in a way that results in a significant increase in market share for the buyer?

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