THE GIST
A Texas-sized showdown is taking place in the Lone Star State, where Spoetzl Brewery, maker of the Shiner family of beers, is calling out the Anheuser-Busch InBev-owned Karbach Brewing Company for a perceived encroachment on its territory—both literal (in Texas) and figurative (in drinkers’ minds).
The standoff pits two breweries moving in opposite directions against each other. Shiner decreased in overall volume by 2.3% in 2018, while Karbach, in its second year under AB InBev, grew by 23%. At the center of the spat is Shiner’s longtime flagship, Shiner Bock.
During the Shiner Music Fest on Oct. 19, signs hung inside the event grounds made a bold claim to passersby: “There’s a new Bock in Shiner.” The tagline was used at beer tents and were created and put up by Del Papa Distributing, an AB InBev-focused wholesaler based in Texas City, Texas, about 150 miles east of Shiner. It was a shot fired directly at the namesake beer of the brewery and city, leading to a full-page letter in the Shiner Gazette by Spoetzl, calling out Karbach, its ties to AB InBev, and claiming that it’s a case of “a huge company with deep pockets seeking to force its way into our town.” Posts on Instagram and Facebook received thousands of interactions from fans.
The signs posted to promote Karbach were part of broader advertising around the music festival, hosted by a local Lions Club International chapter. Efforts also included billboards which, instead of featuring that controversial tagline, were emblazoned with a large image of Karbach’s Crawford Bock. That beer debuted in 2019 as an official partnership with the Houston Astros Major League Baseball team, and has become an anchor for the brewery in its home market.
David Graham, brand manager at Karbach, says it was an “easy yes” to be a part of Del Papa’s efforts around Shiner Music Fest, noting it was “important to our community” to support the event, which raises funds for community service efforts by the Lions Club. It also fits in with how brewery connects with local organizations: a portion of all Crawford Bock sales are donated to the Astros Foundation, which supports causes related to the U.S. military, childhood cancer, and homelessness. Graham wouldn’t share what percentage is donated, citing “nearly” $100,000 so far.
In its letter, Spoetzl/Shiner intimated the move was an attempt to co-op the style in its hometown, noting that Crawford Bock is “not the 110% independent and family-owned Shiner Bock.”
“This is now the third Bock brand released in a very obvious attempt to try and steal share,” says Gregor Mina, national director of marketing for Gambrinus Company, citing ABI-owned ZiegenBock Texas Amber and Michelob AmberBock. “They’re welcome to try to do that, and we have no issues with that, but it’s one thing to do that, and it’s quite another to send a large amount of money into Shiner’s home town.”
“This small town is of no strategic importance to Anheuser-Busch whatsoever,” Mina adds (Shiner’s population is about 2,200). “It’s a very deliberate attempt, and we felt we had no choice but to respond than the way we did.”
WHY IT MATTERS
The war of words comes during a time of increased tension between the two companies in local beer aisles. Lately, things haven’t been easy in Texas—or on the national stage—for the generations-old Spoetzl Brewery.
In the first three quarters of this year, the Shiner collection of brands was down 8.3% (167,624 barrels in 2018, 153,671 in 2019) in Texas grocery, convenience, and other chain stores tracked by IRI, a market research firm. Shiner Bock specifically decreased by 5.1% (107,614 BBLs to 102,089). Karbach’s portfolio, meanwhile, jumped 26.2% (48,518 BBLs to 61,232) in volume during the same timeframe.
According to Mina, total draft and packaged sales of Shiner Bock have shown "low single-digit growth" in the last four months across all its sales, but he wouldn't elaborate on specifics. Instead, he says the brand is "extremely resilient," and that it's rare to see a "legacy, craft, flagship brand" showing any growth, which is true.
“Anheuser-Busch has many brands in their portfolio, and they could have come to Shiner with any one of those brands and sponsored a music festival,” Mina says. “But they specifically chose to do so with their latest Bock, and they deliberately chose to pit one against another.”
In 2019, Karbach’s Crawford Bock quickly became one of the more popular beers in the state in IRI-tracked stores, selling almost as much in this year's first nine months as established brands from Shiner's seasonal portfolio (all combined) and Revolver Brewing's flagship Blood and Honey American Ale. Crawford Bock moved about 11,000 BBLs through the end of September, the size of a small, regional brewery. For comparison, Austin’s Live Oak Brewing Company produced almost 16,000 BBLs in 2018.
That 11,000 BBLs for Crawford Bock isn’t close to what Shiner Bock moves, selling almost twice that amount in Houston alone (20,546 BBLs), and about 102,000 BBLs in all Texas IRI stores through the end of September.
However, in a competitive market that has forced companies to focus on the importance of locality, and even reconsider what kind of alcoholic beverages they make, it’s easy to understand why a long-tenured brewery like Spoetzl—one of the largest Brewers Association-defined “craft” producers in the country—might see its multinational-supported neighbor as a threat. Despite high raw numbers of sales, Shiner has had declines on a state-wide basis. In Houston IRI stores, it lost 10.7% of volume versus last year’s Q1-Q3, including an 8.1% decline for Shiner Bock. Karbach was up 42% while selling slightly more in the city than Shiner’s portfolio in that nine-month period.
The controversy also comes at a time when Gambrinus Company, the parent business that owns Spoetzl and California's Trumer Brauerei, has not had an easy road. Gambrinus closed Portland, Oregon's BridgePort Brewing Company at the start of this year after years of declines, one of several challenges for the business over the last 20 years. Karbach’s strong growth, aided by funds and distribution from the ABI network, pits the two breweries distinctly against each other.
Among the complaints lodged against Karbach in Spoetzl’s open letter was that Crawford Bock isn’t even brewed locally, unlike Shiner Bock, which is made at a brewery that “has been providing jobs and giving back to our community since 1909.” Karbach’s ascension “was part of A-B’s larger scheme to acquire craft breweries around the United States and use its huge plants to produce the former craft beers they now own,” the letter reads, adding that “A-B does not want you to know that Karbach is produced at the formerly craft Karbach brewery and at its large, low-cost A-B plant in Houston.”
Graham doesn’t deny that Karbach beer is produced at ABI’s facility in Houston, but also points out that its Love Street Kölsch (up 12% in Texas through Q3 2019) and Crawford Bock are brewed in both Karbach’s and AB InBev’s facilities. He adds that Karbach is getting delivery of six new 720-BBL fermentation tanks this month to ramp up production at its own location.
“Our team has the great fortune of being close to the process at the Houston [ABI] facility, which is only a short car ride away,” he says.
Still, Karbach’s promotions were met with some skepticism, per local media coverage. “Probably a waste of money" is how Kori Landman, a Shiner resident interviewed by KENS5, described it to the TV station.
“There wouldn’t be a town without the brewery,” Landman told the outlet. “They do so much, between giving scholarships every year, and I think more than anything, they give so many employees jobs. I think everyone really supports Shiner.”
By sheer volume, it’s clear there are plenty of Texans who adhere to that sentiment. Selling hundreds of thousands of barrels of beer in the state is an incredible feat, but those numbers have been falling since 2015 as the pace of smaller, nimbler breweries has picked up. There have been more than 100 brewery openings in Texas in the last four years, and Karbach’s own popularity, matched with its backing from AB InBev, may have set the two breweries up for an inevitable showdown.
In a state known for its history of showdowns and Old West lore, this shapes up to be another fight indicative of “craft” vs. “crafty” and whether the value of “small and independent” actually matter to consumers.
“To the drinkers who love Shiner, we say ‘Cheers,’” Spoetzl wrote in its open letter, “and to the giant breweries, as our friends down the road once said, ‘Come and Take It.’”
Words by Bryan Roth