The Craft Beer Conspiracy

My personal taste in beer occupies a very wide spectrum. My fridge is almost always a chaotic mix of cheap college beers like Hamm’s and Pabst Blue Ribbon, weird ones like Kenyan beers from international markets or mango flavored impulse purchases, and local craft brews, only when my bank account can handle it. Even as a beer fan, I am continuously confused and overwhelmed by the variety and depth of the beer industry, especially the craft beer industry. One look at a craft brew pub’s menu or a walk past the walls piled high with beer cases at your local grocery store perfectly exemplifies the level of variety, or at least the appearance of it, in the market for beer. This supposed variety, however, is mitigated by the existence of a few large beer monopolies (Davidson 2013) who own and operate multiple popular national beer brands but have recently sought to cash in on craft beer trends and culture by buying up local breweries and taking their products to a larger scale.

In  the purchasing of these small craft breweries, big beer manufacturers often sacrifice quality and move production from its local roots but work hard to maintain the beer’s independent craft image, even if it is deceptive and inaccurate. This is a process, known as craft-washing (Howard 2017) and it allows companies like Anheuser-Busch and MillerCoors to dominate yet another sector of the beer market without adhering to the aspects of craft beer, like its small scale and independence, which put a limit on potential profits. These brands rely on the brand power of successful craft beers and seek to make profits by cutting craft beer associated costs while maintaining the appearance of craft beer culture. The tactics employed by these corporations, as well as a lack of transparency in the market for craft beer, allow for consumers to be mislead and for the definition of craft beer to be manipulated and exploited for the profit of large scale beer monopolies. You may think you’re drinking a craft beer but if you bought if off the shelf of a store in reality it might not be much more than overpriced Bud Light.

The Rise of Craft Beer

While there are undoubtedly countless (and probably eerily similar) stories of the craft acquisitions of big-name beer companies, one that I am personally familiar with is that of Rolling Rock. My parents barely drink but as my brother and I discussed our beer orders at dinner on the last day of Thanksgiving break my mom mentioned the story of Rolling Rock, or what she remembered of it at least from her college years in upstate New York. Rolling Rock started in 1933 as a small craft brewery and became a local working-class favorite with a loyal following in the area surrounding Latrobe, Pennsylvania. It reached other parts of Pennsylvania and New York but for years remained a modest manufacturer with limited distribution.

According to my mom, the Latrobe water used in production was the key to the beer’s superior quality, and thus the brewery’s location in Latrobe was essential to its success as a craft beer and local cultural landmark. In 1987 Labatt (a brand I’ve become lovingly familiar with because of frequent family visits to Buffalo, New York) bought out Rolling Rock and“You may think you’re drinking a craft beer but if you bought if off the shelf of a store in reality it might not be not much more than overpriced Bud Light” agreed to maintain its local Latrobe roots and production. Labatt worked to make Rolling Rock a national name in craft beer but upheld original production standards and quality still in Latrobe. In 2006 Anheuser-Busch purchased Rolling Rock from Labatt and quickly cut costs and increased output by closing the Latrobe brewery to move production to Newark, New Jersey (Eddings 2019). My mom now says that Rolling Rock is virtually nonexistent in Latrobe. The city’s residents overwhelmingly refuse to support this inaccurate and mass produced appropriation of their former beloved beer.

While Rolling Rock’s current brand is heavily influenced by the changes it underwent in the century since its creation, the massive changes in production and ownership are noticeably absent from the current website and branding, which seem to only highlight the seemingly craft components of their now mass produced beer. Looking at their marketing without prior knowledge of their acquisition, you’d likely think that they were still an independent craft brewery, who just happened to stumble upon national recognition or get a little help from a large scale corporation. In reality, this once independent brewery was gutted and exploited in the national quest for big brands to acquire profitable and exploitable craft breweries.

Stories like that of Rolling Rock are deceptive and destructive to the legitimate craft beer industry and the culture of craft beer but they persist because they can be valuable economic decisions for major beer companies looking to corner another aspect of the beer market. The craft beer industry in particular has been on the rise in recent years. In 2018, craft beer

alone made up $79.1 billion in the US economy and provided close to half a million jobs (Morris 2019). It’s no surprise then that MillerCoors and Anheuser-Busch InBev, two of the biggest national beer producers and the notable owners of most of America’s most well-known cheap beer brands, would begin to seek creative opportunities to sell consumers a mass produced imitation craft beer that infuse their production capabilities and capital with the qualities of craft beer, even if they are faked.

In an article for CraftBeer.com, Julai Herz identifies one way companies produce so called craft beer, known as “craft-washing”, or  the acquisition of craft breweries by major beer producers in order to emulate and mas produce their products. A key element of craft-washing is deception. Craft-washing’s success often relies on the obstruction of the relationship between the craft beer name and the beer monopoly that owns it. Craft-washing and the acquisition of craft breweries by large corporations purposefully attempts to mislead customers and provide them with misinformation about the production and origins of what they believe to be quality craft beer. This use of information asymmetry increases profits for MillerCoors and Anheuser-Busch InBev but misleads consumers and disadvantages legitimate craft breweries.

What Makes a Craft Beer?

While there is extreme variability in understandings of craft beer, the Brewer’s Association defines an American craft brewer as ” a small and independent brewer” (Craft 2019) . They cite that this means the brewer produces less than 6 million barrels each year  and that less than 25 percent of the craft brewery is “owned or controlled by a beverage alcohol industry member that is not itself a craft brewer”. This definition, and others like it seek to make distinctions about craft beer based on ownership and production, but the label of craft beer has an equally relevant social identity. Craft brewers are known specifically for their innovation, tradition, community engagement, independence, and integrity. The social definition of “Craft-washing’s success often relies on the obstruction of the relationship between the craft beer name and the beer monopoly that owns it”craft brewery is reliant on the combination of input and understanding of craft brewer organizations, individual brewers, and consumers. Organizations like the Brewer’s Association create definitions  to regulate the industry and unify groups of similar brewers. By setting numerical standards they are also guiding the social identification of what is and isn’t craft beer.  It is in their best interest to create a standard for craft brewers, especially on the basis of production and ownership, in order to ensure that their time and energy benefits small, genuine, and independently owned breweries.

Consumer definitions of craft beer are variable and reliant on experience and interest. Seasoned fans of craft beer can likely easily notice (and taste) the difference between Upland and Budweiser and have a deeper understanding of what goes into the production and labeling of craft beers. Novice consumers, however, face far more challenges in craft beer differentiation and identification. To the average consumer, qualifications about ownership and production are insignificant in the first assessment of what constitutes craft beer.  Brands like Leinenkugel, now owned by MillerCoors, use classic American imagery and styles in their packaging and could easily be mistake for a craft brew to a buyer scanning shelves of beer cases.  Other brands like Elysian incorporate colorful graphics and cartoons, a stark contrast to a boring solid blue or white case of cheap beer, to associate with craft beer imagery and ultimately confuse customers on the qualifications of craft beer.

To consumer understanding among novice beer fans and average buyers I spoke to some of my friends over drinks to see what they thought of the beer industry and what they knew about craft- washing.  Among them I am by far the most interested in the beer industry but they range from a slight familiarity with local beer to total aversions to anything labeled IPA. When asked about what defines craft beer most of their responses were fairly standard. Some said that it was beer locally produced and independently owned, often sold at higher prices, and marketed towards a specific crowd of upper middle class, flannel-wearing, hipsters. When asked to name beer that they though fit the craft label they listed an equal mix of legitimate craft brand and corporately coopted ones. Some of their guesses included New Belgium (owned by Lion), Rhinegeist (independent), Elysian (owned by Anheuser-Busch InBev), and Upland (local to Bloomington, IN and independent).

After telling them that brands like Elysian were in fact mass produced they agreed that it no longer deserves to be titled a craft beer but was successful in making craft-like beer more accessible to consumers. While production like this may arguable bring diversity in beer to a crowd only familiar with Bud Light,  Beck Groff noted that “craft beer is a community experience” as he mentioned that on every family vacation in his childhood his parents would seek out a new local craft brewery to visit and that he keeps up this tradition now when he travels now. This conversation cemented that there is ambiguity and subjectivity in defining craft beer and that information, something often hidden by national manufacturers in their acquisitions, can often be the key to clarity.

The Challenges of Craft Breweries

Fortunately, Bloomington, Indiana has no shortage of legitimate, independently owned craft breweries. One, founded in only 2014, is Switchyard Brewing Company, defined by “hand-crafted, small batch beer” and a commitment to community engagement and innovation (Our Story). I spoke with Kurtis Cummings, the founder and president of Switchyard  to ask him about his understanding of craft beer and craft-washing as a professional in the practice. Kurtis made an important distinction in his responses, which was the definition  of independent craft beer, rather than craft beer. To him, independent craft beer is craft beer not owned by a national brand and in the age of craft-washing this insertion of the word “independent” is increasingly important in minimizing confusion among consumer definitions of craft beer. When discussing the specifics of craft labels he asked “is Eysian Space Dust craft beer, even though AB InBev owns them, or is it just like Bud Light Platinum?”, which well summaries  the ambiguity in craft brew labels, not just among consumers but producers as well. He argued, however, that mass produced beers inherently defy the label of craft beer on the basis of production. Craft beers, according to him, are supposed to be local, independent, and hand crafted, as the name implies. This definition runs contrary to social and cultural definition of craft beer which might include brands like Eysian, Goose Island, or even Blue Moon, based on their style and their beginnings as craft breweries. Kurtis also specified that while these big manufacturers are producing a different product than what is genuinely craft beer they are the most important competition.  These larger corporations have much more money for marketing and can easily reach a wider audience than even the most successful independent craft breweries. With this marketing power and increased capital, they also have the means to buy out small breweries, which they do frequently to capture the profits of the craft beer sector.

This act of acquiring small, independent, and often extremely successful craft breweries is the driving force for the jumbled definition of craft beer and when beer transitions away from its craft label. Craft beer is defined in many ways economically.  Craft beer is synonymous with independent production and local or family autonomy over business. Craft beer also has a significant social and cultural role. Craft beer is ‘better’ beer. Craft beer packaging is trendy and cool. Craft beer is often unique seasonal creations, IPAs, or references to local culture. Craft beer is built on history and tradition but at what point does it loose its label? As long as beer is a viable economic opportunity for national beer manufacturers and its murky definition can be exploited for economic gain consumers will be forced to broaden their definitions of craft beer to include craft-washed creations or redefine the beer market.

References

Allyn, M. (2019, July 22). The Complete List of Fake Craft Breweries and Their Real Owners. Retrieved December 10, 2019, from https://www.mensjournal.com/food-drink/is-that-really-craft-beer-21-surprising-corporate-brewers-20150923/.

Craft Brewer Definition. (2019). Retrieved December 10, 2019, from https://www.brewersassociation.org/statistics-and-data/craft-brewer-definition/.

Davidson, A. (2013, February 26). Are We in Danger of a Beer Monopoly? Retrieved December 10, 2019, from https://www.nytimes.com/2013/03/03/magazine/beer-mergers.html.

Eddings, B. (2019, July 16). Why Isn’t Rolling Rock as Good as It Once Was? Retrieved December 10, 2019, from http://www.thespruceeats.com/rolling-rock-review-352942.

Herz, J. (2018, March 5). Craftwashing in American Beer. Retrieved December 10, 2019, from https://www.craftbeer.com/craft-beer-muses/craftwashing-happening-american-beer.

Howard, P. H. (2017, December 26). Craftwashing in the U.S. Beer Industry. Retrieved December 10, 2019, from https://www.mdpi.com/2306-5710/4/1/1/htm.

Morris, C. (2019, September 25). Craft Beer Added $79 Billion to Economy in 2018. Retrieved

December 10, 2019, from https://fortune.com/2019/09/25/craft-beer-2019-economic-impact/.

Our Story. (n.d.). Retrieved December 10, 2019, from http://www.switchyardbrewing.com/ourstory.