Article Explaining BMC Buying Strategy

[BlackDuck]

I found this very interesting. Well written by the CEO and co-founder of Creature Comforts Brewing. A timely article with the recent AB/InBev purchase of Wicked Weed.

Watch the Hands, Not the Cards - The Magic of Megabrew

[Beer-lord]

Truly an eye opener! I had thought about parts of what he says before but he found things most of us would never, ever think about and it makes damn good sense. It's almost like a conspiracy to take down 'the other guys'.
The only thing to like here is if the craft beer I drink comes down in price but as he points out, it will be at a huge cost in the not so far future.

[John Sand]

A very interesting article, but it won't work.
The flawed premise is that if craft beer were cheaper, Bud Light would be more desirable. The accountants and marketers at INBEV may think so, but they are wrong. It might have been true if the new beers were introduced at a similar price point, but that ship has sailed. There's an even more significant problem in the theory: Bud Light doesn't taste good. Having tried craft beer and liked it, few people will go back to Bud Light at any price. Indeed, lowering the price of craft beer will only sell more craft beer.
The rest is probably solid, as big companies can influence a market in which they participate.

[MrBandGuy]

Wow. Good read. I know very little about business, but am captivated by articles like this.

I do think we are already seeing a lot of this. Besides the obvious Goose example, I noticed two things while browsing through my local Kroger the other day. 1) All Day IPA was on sale for less than $1/can, and 2) Carson's (out of Evansville) had a sixer hidden in the corner and barely noticeable.

Now, I've noticed the beer section at Kroger is mostly all AB before, which is precisely why I check it out on occasion. I look for shelf space to see if it's grown. The Carson's find was surprising for this reason, as I hadn't seen them here before. The All Day was notable because you can see that they are positioning themselves as the go to summer beer, and a similar price point to the AB choices. I took it as intentional, but maybe it is reactionary. Interesting indeed!


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[mashani]

Some consumers may even start trading back down from craft, as they perceive the quality of the AB InBev’s premium brands to now be more closely aligned with that of craft brands given the closer price parity.

All that lowering the price of craft beer would do for me is maybe get me to actually buy more 6 packs of craft beer. It certainly won't get me to buy InBev's "premium" brands. I think most anyone who drinks craft beer is doing it because it tastes better, not because it's "more premium" based on price. I'm very certain if I drank one of their premium beers, I would not "perceive" it to be just as "premium" as the craft at a similar price. So I think this argument fails.

The hipsters around here already drink PBR instead of craft beer, because... because... I don't know why, they are idiots. They aren't going to switch to some other InBev "premium" beer just because craft beer gets cheaper. They will just keep drinking their PBR as long as its cool and they remain idiots.

[FedoraDave]

I agree that, as a long-term solution, it won't work. But it seems to me the article was talking more about the short-term. I'm with MrBandGuy, in that my cat probably understands business practices better than I do, but let's not forget that no-one ever went broke underestimating the intelligence of the American people. Perception can often be reality, and not everyone who tried a craft beer is going to notice or appreciate the difference, so a more equitable price gap between Budweiser and craft could mean a difference in enough buying decisions to be significant to AB Inbev's bottom line.