Wednesday, September 23, 2015

Corporations, Independent Producers, and the “Soul” of Wine – is there a wine market anymore?

Part 1 -- Beer

Never take a straight path when you can meander—me, just now.

I'd been kicking the ideas for this piece around my head for a few days when a friend asked me what I thought about a looming takeover of a small, independent beer producer by the largest beer producer in the world. I think it's sad, that's what. But it also highlights how beer production is different than wine production, most of the time, anyway.

When the “craft” beer scene took off in the '90s, big brewers ignored the problem, then tried to muscle the problem aside by creating their own “craft” brands, and finally gave in and started buying those brands. I'll never understand why they thought they could ignore the problem. I suppose they imagined they could strongarm the small brands out of existence by the dual power of their marketing and distributing strength. In what appears to be a violation of Post-Prohibition tied house laws, Anheusuer-Busch its own distributors. At many grocery and liquor stores, the sales reps for these distributors all but own shelves, determining where the Bud products go, and where everything else goes. If the store objects, well, no more Bud for them, and how do they like that?

So the bigs figured they could keep the smalls out, and to make up for it, they invented their own “craft” brands, such as Millers's Plank Road Brewing (I have never understood the branding behind that one). Those interested in beers with flavor were not impressed, and apparently had the clout to prevent the bigs from muscling the smalls out of markets entirely.

The bigs started buying. The first big purchase that I remember was A-B's buying Redhook Brewing Company. There are two paths a company can take when it buys another—keep things more or less the same, or change things. As I recall, A-B mostly tried to keep things the same with Redhook. Quality took no apparent hit, and the product line grew—in mostly uninteresting ways for me—with offerings such as a branded Starbuck's Espresso stout.

We can turn back to wine for a moment for contrast. When the big (mostly liquor) company Heublein bought Inglenook long, long ago, they changed everything about the winery. The wines were no longer made from Napa grapes, no longer varietally designated... the only thing the new wines had in common with the old was the name. Why did Heublein think that people who had been paying real money for a bottle of Inglenook Napa Cabernet Sauvignon would buy a jug of Inglenook “Rhenish”, and why did they think that people looking for an inoffensive jug wine would be impressed by, or even aware of, the hallowed name Inglenook? I have no idea, but Heublein sure drove that brand into the ground quickly.

Here's an important way that beer is different than wine. Given a good water source and an intelligible recipe (here's where Heineken may run into trouble with its recently purchased Lagunitas), beer really can be mde to order. In fact, a number of recent lawsuits express consumer outrage that their “imported” Bass, or Tsingtao, or any number of brands, were actually made in the US. To me, these consumers might have a case on misleading packaging, and should certainly demand that the prices for these beers fall since no import duties or import costs are associated with them any more, but they should not complain that the beers are any different, because they are not.

In Part 2 we'll finally get to the point. We promise. Unless we get distracted again.Never take a straight path when you can meander—me, just now.

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