Craft beer and big beer are engaged in a 'civil war' - but they may have a bigger problem to worry about
- Budweiser's parent company says that it's worried about wine and spirits - not craft beer.
- Beer lost 10% of market share to wine and hard liquor from 2006 to 2016.
- One craft brewer that was acquired by AB InBev said that the craft versus big beer debate is simply a distraction from the coming war with wine and spirits.
The world's biggest beer company says that craft beer isn't the rival brewers need to worry about in 2017.
"Wine and liquors ... Basically, they're my competition," Felipe Szpigel, president of AB InBev's craft line The High End, said in a call with reporters this week.
According to Szpigel, one of the biggest opportunities for the company's craft beer brands is to replace spirits and wine. For example, Budweiser's parent company AB InBev wants to convince people to dine on beer and cheese - not wine and cheese.
Szpigel has a point.
Sarah Jacobs/Business Insider
In late July, Goldman Sachs downgraded both Boston Beer Company and Constellation Brand based on the data that younger consumers prefer wine and spirits to beer, as well as the fact that they're drinking less alcohol than older generations more generally.
The beer industry has been plagued by millennials' relative lack of interest. Beer penetration fell 1% from 2016 to 2017 in the US market, while both wine and spirits were unmoved, according to Nielsen ratings.
Beer already lost 10% of market share to wine and hard liquor from 2006 to 2016.
As a result, while major brewers like AB InBev are acquiring craft beer brands, they want the focus of their attacks - at least publicly - to be on wine and spirits companies.
"I think the exciting thing about beer now is it doesn't need to be taking down the big guys any more," Walt Dickinson, a cofounder of craft brewer Wicked Weed, which was acquired by AB InBev in May, told Business Insider. "It's not a civil war here."
Instead, Dickinson and his partners at AB InBev say that the beer should be preparing for a battle with wine and spirits.
"This armada of boats is coming across the Atlantic to crush us and we are shooting each other with, you know, muskets and slingshots," Dickinson said in a video made by AB InBev about the squabbles between craft beer and major brewers.
The Future of Retail 2018 by the BI Intelligence Research Team.
Get the Slide Deck Now »
- I spent $2,000 for 7 nights in a 179-square-foot room on one of the world's largest cruise ships. Take a look inside my cabin.
- Saudi Arabia wants China to help fund its struggling $500 billion Neom megaproject. Investors may not be too excited.
- Colon cancer rates are rising in young people. If you have two symptoms you should get a colonoscopy, a GI oncologist says.
- Audi to hike vehicle prices by up to 2% from June
- Kotak Mahindra Bank shares tank 13%; mcap erodes by ₹37,721 crore post RBI action
- Rupee falls 6 paise to 83.39 against US dollar in early trade
- Markets decline in early trade; Kotak Mahindra Bank tanks over 12%
- An Ambani disruption in OTT: At just ₹1 per day, you can now enjoy ad-free content on JioCinema