Good Beer Hunting

Faulty Ivory Towers — Like Others, Anheuser-Busch InBev Hopes to “Elevate” Industry


Following a set of layoffs in the sales arm of the High End group this past September, one of its biggest structural changes to date, Anheuser-Busch InBev is bringing some more optimistic changes to its High End stable of craft brands in an effort it says is meant to establish a brighter future for the beer industry at large.

Through the aptly-titled “Elevate” campaign, launched Tuesday, ABI specifically says its craft brands will make four “measurable commitments” with an eye toward “developing the category.” Laid out, the company says those brands will:

  • Deliver better beer to the marketplace by labeling products with “best consumed by” date codes

  • Diminish their environmental footprints by reducing water usage by 20% and embracing 100% solar and wind renewable electricity by 2020

  • Become better community stewards by collectively donating $2 million to local organizations

  • Help the broader industry by providing safety and quality seminars to other local beer businesses

“Everything we do, today and moving forward, is about good beer,” says Felipe Szpigel, president of the High End, in a statement. “How can we help the industry progress?”

Indeed, the company hopes the industry, ever rife with in-fighting for which it’s been both the assailant and the victim of at times, can at least agree on some aspects of what everyone, regardless of size or ownership, should be doing in the name of all beer. As such, they’re focusing on a “common agenda,” Szpigel says, rather than “differentiation.”

The approach hearkens back to the High End’s video released earlier in the year in response to the Brewers Association launch of the Independent Seal, which took aim at differentiating craft brewers apart from corporate-owned breweries at the shelf. In that video, amidst a few other looser messages, ABI’s High End brand leaders made a general call to fight for the beer category against the continuing competition from wine and spirits—not each other. In this most recent communication, the group has noticeably sharpened its focus and its pitch.

It’s also worth mentioning, however coincidental it may be, that the BA’s #TakeCraftBack campaign, one aimed directly at ABI, ended at the same moment this initiative was announced this week.

Taking aim at a clear Brewers Association weakness, ABI is focusing the consumer on freshness and clear date-coding with a best-by date. While the BA does preach quality and freshness to its member base, it has focused its outward marketing priorities on pushing back against corporate beer with the indie seal and #TakeCraftBack, the latter of which it used to raise fake money through a fictitious crowdfunding campaign. The BA also released a series of videos meant to poke fun, all in an effort to raise awareness for what it said consumers care about—independence. While independence does show up on the surveys they cite (mostly significant among self-described craft drinkers), those same surveys also show that consumers care a lot more about flavor, aroma, and freshness than anything else. ABI chose the more obvious route with its top priority.

But why best-by and not “born on,” which the company was previously famous for? In a follow-up event held in Goose Island’s Chicago taproom for a presentation largely aimed at their staff, I asked about the date-coding initiative. In survey after survey, ABI says they found that best-by dates were preferred by consumers, largely because other foods and beverages used best-by dates, and that born on dates were consistently being misread as best-by dates anyway. It was confusing, and so the entire operation is switching to best-by to align with consumer expectations.

Of course, that doesn’t tell a consumer how fresh something is, just that it’s “not old” by the producer’s standards. When pressed about having both dates available to the consumer, there were mixed responses from different members of the team. Some agreed that a second data point could be helpful, either a born-on or a days-old reference point. Others didn’t see the value in complicating it for the consumer. And still others felt that the mainstream market would never care about additional data if they could be confident the beer tasted the way it was supposed to, which is the point of the best-by choice in the first place.

“The best-by date is great,” said John Hall, the original founder of Goose Island, and still-serving member of ABI’s craft advisory board. “Then we just get to work keeping the beer as fresh as possible against those dates.”

Of course, many craft brewers date code their beer as well, for a variety of reasons. The Brewers Association provides guidance to brewers in seminars and on its website on the benefits and ways in which this can be done. But it’s worth noting that the BA has largely tiptoed around the issue when it comes to calling for consumer-facing codes that help discern freshness. Most of the recommendations made public to their members speak more to recall codes or Julian date coding that help the value chain of distributors and retailers determine freshness, not consumers. And a lot of that initiative is a result of the federal Bioterrorism Act, which requires traceability of consumer packaged goods.

In response to this ongoing debate, Four Pure Brewing out of London shared their coding practices as evidence of how traceability and consumer-facing date codes could ideally work, with minimal impact on the brewer. It really is that simple.

As Greg Hall, John Hall, and returning Goose Island President Todd Ahsmann spoke about each of the four initiatives, in almost every case, they tied the strategy back to things that Goose Island itself already did long before the buyout in 2011.

“We’ve always had date-coding on Goose Island’s beers,” John Hall said when asked about the new freshness mandate. And the same was true of the environmental initiative. “Back in ‘97 or ‘98, we were trying to do put an anaerobic digester in. We put in a system with Commonwealth Edison up on our roof to try and convert everything. They spent all the money, and we worked with them on it. It didn’t work, so it came off. But we tried to do it way ahead of their time.”

Indeed, it sounds like, without Goose Island’s push for tangible energy generation on-site at the breweries, the initiative would have been largely about compensating for ABI’s immense power use through other means typical of large corporations, such as purchasing offsets.

“AB overall has a goal of being 100% renewable a little later on,” Greg Hall said. “They are doing projects that they haven’t announced yet that basically compensate for their energy production and usage in the whole North American zone. Breweries, wholesalers, everything. But we said, ‘Listen, we need the actual solar panels on the roof. We need them here at our place to generate stuff onsite.’ And they said, ‘OK, we can do that.’”

That kind of demand from the High End craft breweries for more tangible action against the initiatives and, in some cases, the initiatives themselves, became a theme. “Todd and I pitched this a couple of times to the board,” Greg Hall said. “And we got it kind of going. We are very excited that all the brewery partners in the High End are going to have solar panels by next year. We had a number of different purveyors come out and look at that, but at Virtue we will be 100% solar-generated. And we can produce more than we need because we have the room for it, so that is really cool. Goose is going to have solar panels, and every single brewery in the system will.”

To that end, there are a number of national craft brewers and smaller local operations alike who have been vocal over the past few years about their commitments to creating a more environmentally viable industry—New Belgium, Bell’s, and even smaller players like Maine Beer Co, for example.

But for Goose, while it’s getting more of what it wants from ABI, there’s now a good bit of lobbying internally to get the green light. “We pushed them faster on the whole thing,” John Hall said. “We’ve got smaller units so it is easier to do so. Why not make a statement and let’s do it?”

Perhaps its most underdeveloped piece of the puzzle is the commitment to spend $2M in community development this year. In the video, it was unclear if this commitment was per-brewery, or system-wide, but in GBH follow-ups it was confirmed that it’d be spread across the craft breweries, of which there are 12 nationally. More money and more detail is to come, we’re told, but on its face it seems like a lot of money representing a small sacrifice for a corporation the size of ABI.

With that in mind, it once again behooves us to revisit Goose Island’s already-generous activity in this arena in the city of Chicago. Ahsmann was eager to point to the Halls’ history of civic contributions:

“John sat on the board of the Bloomingdale Trail, which turned into the 606,” he said. “That was a long effort that came to fruition. We turned Green Line donations into helping the 606. What we brought to the table was awareness for the project and the hard work going into it. Another board that John sat on was the ICNC, The Industrial Corridor of Northwest Chicago, which is this region here, which I believe, when [John] started, only had a couple of manufacturers in the neighborhood. And last I heard we were up to about 285 manufacturers within the community here where this brewery sits.”

The playbook for these initiatives was slowly being revealed as Goose Island, more or less, was making its way inside ABI. Following up with John Hall about the role he plays on the advisory panel, and the leverage he’s helped create in the system, he cites longevity (they were the first acquisition) as the reason he thinks they’re being heard. “I would say that we’ve been talking about it longer and we might have a little more confidence in giving the message,” he elaborates.

As for how that $2M might be handled, John Hall is convinced each brewery will have some autonomy. “Absolutely, we make the decisions on where we are going to spend the money, just like I made the decisions,” he says. “You’ve got so much money to spend. And the point is, if you are going to spend some, part of the whole deal is we want to make it a better community.”

The one area where Goose Island can’t lay claim to being the predecessor is safety. One of the biggest changes to the physical brewery following the ABI acquisition was in the facilities, including major safety upgrades to try and bring it in-line with ABI’s own practices.

“Safety is a huge, big issue,” John Hall says. “We didn’t devote the resources to it. Again, when you have money to spend on marketing and everything else, unfortunately, you don’t—you spend what you think you have to. The first thing AB did was spend $70-100K right away making changes here, and then they all put some programs in place where part of your compensation is safety. And that’s elevated everything. That made a big difference.”

In the opening presentation, Ahsmann gestured to a brewery employee who came in from the floor to observe the presentation.

“We are at about 865 days without any time loss injuries” he said.

“There are no downsides to implementing these things, right?” Szpigel asks. “And we’re not looking for the credit.”

Knowing there’d be some skepticism as there usually is in corporate commitments to things like community development and sustainability, the High End says they’re giving audit control to a third party to track and report on their progress.

That said, ABI will likely always struggle to reach certain members of the industry that view the brewing giant’s interests as inherently anathema to their own. For some, it’s ideological. For others, it’s systemic. For others still, it’s quite personal. So the company is trying to convince smaller brewers that its fight isn’t against them, but against wine and spirits, which Szpigel says were responsible for 75% of losses suffered by the company’s craft brands over the last 52 weeks.

The campaign itself is the latest in a seemingly growing number of stunts by powerful players in the beer industry in an effort to establish clarity and guidance. And while Szpigel might say he doesn’t want credit, he most certainly wants credibility in that pursuit. The BA has been more active this year than ever, spending a large portion of its marketing budget on its seal of independence and the #TakeCraftBack campaign, as well as initiatives like investing in hop research to try and guard against corporate interests in its agriculture.

Meanwhile, the Beer Institute, a separate lobbying group currently in the mix working for the excise tax relief that would benefit craft brewers, announced that by 2020 its members will “voluntarily disclose the ingredients, nutritional information, ABV, and freshness dating for all beer,” which many craft brewers have major concerns about implementing, not to mention how it might affect sales.

And so these seemingly benevolent forces all supposedly working on behalf of craft brewers and consumer interests continue to pull the market in sometimes opposing, sometimes complementary directions. In ABI’s mind, it seems they’re the ones trying to rise above it all for the good of the category. For those they look down upon, it’s perhaps a position no one asked them to assume. But from either direction, high or low, friend or foe, there seems to be more eye contact between the parties, and a reluctant acquiescence to the greater good.

—Michael Kiser, with additional reporting by Dave Eisenberg