If you are a small, specialty brand, does belonging to a big corporate prevent you from remaining unique? At The MBS Group, food & drink is our bread and butter! Lately there has been so much in the news about brewing companies being snapped up and passed around by the major players in the industry – just this past Monday, Japan’s Asahi Group put in a bid to acquire brands Peroni and Grolsch from SABMiller, and only a little over a month ago, Heineken assumed a majority shareholding position in India’s United Breweries. But recently, more of the companies involved in these deals are local breweries – the ones that often appeal to “hipster” and local crowds. The discussion regarding these acquisitions should not be disregarded, but from a business perspective, one mustn’t ignore the significant benefits that these acquisitions can have on smaller, local companies.
The marketing and distribution capacity of global beer conglomerates – such as Heineken, Diageo and Anheuser-Busch InBev – makes it simple to see why getting on board could be tempting to smaller brewers. Camden Town Brewery, very local to us here at the MBS offices, was acquired by AB InBev in December, an exciting partnership. I find it exciting that such a loved local brand now has access to a huge market, allowing the brewers at Camden to have their craft spread beyond their current market in the UK, Sweden, Australia and Japan.
Camden Town was only one of the three craft breweries that AB InBev acquired in December, joining Arizona-based Four Peaks Brewing and Colorado’s Breckenridge Brewery. And AB InBev hasn’t been alone in its ventures – just less than a year ago, SABMiller acquired Meantime Brewing Company, a London-based craft brewer, with plans to expand the sale of its brands nationally and to possibly begin exporting to Europe.
Some have been quick to refer to these deals as “sellouts”, saying that divesting a local brand to a global conglomerate takes away the charm and benefits that exist from keeping a brand local to its roots and to its community. But, as history has often shown us, that doesn’t always have to be the case. When Coca-Cola acquired full control of Innocent Drinks in 2013 after its partial ownership since 2009, its founders were adamant that they were not selling out – almost the opposite. They wished to be able to carry its ethical values to the world’s consumers, while taking advantage of Coke’s marketing and buying power. And in the nearly three years since the acquisition, Innocent has remained true to its original brand image – but now has access to a whole world of marketing capacity. For example, their sponsorship of the London Olympics as the official smoothie would not have been possible without Coca-Cola.
It sometimes appears to me that the media portrayal of the interactions between craft breweries and global beer conglomerates can be that of David and Goliath – one versus the other. But that needn’t be the case. Craft breweries can continue producing and being significant in the local community while taking advantage of the significant marketing tools and distribution channels that global giants offer, while larger companies to further innovate their portfolios. We’re very lucky to work in such a dynamic industry, and look forward to seeing what the next partnership will be!
What is your favourite local brewing company? Let me know at moira@thembsgroup.co.uk, and have a great weekend.