For participation credit, share your thoughts and feelings about the documentary, Beer Wars (available on Netflix Streaming), and what it says to you about the proper relationship between government power and the products you buy.
In related news, Professor Phillip Howard at Michigan State University designed a fantastic infographic illustrating consolidation in the beer industry. Who owns your (assuming you are of drinking age) favorite brand? Double click on the image below to zoom in and explore.
Related: An historical political economy explanation for America's obsession with light beer.
From the graphic, I was most surprised by just how many brands Anheuser-Busch/inBev and MillerCoors control. I went through the movie feeling fairly proud to have largely escaped the Big 2 conglomerates through my purchases, only to find out from the graphic that the big companies have a stake in them after all. Oops. That said, it could speak to the way they choose to market these labels -- perhaps by excluding some brands from their large-scale commercial marketing, AB/inBev and MillerCoors deliberately try to make the consumer believe he or she is purchasing independent products?
ReplyDelete"perhaps by excluding some brands from their large-scale commercial marketing, AB/inBev and MillerCoors deliberately try to make the consumer believe he or she is purchasing independent products?"
DeleteChloe, I think that's exactly what they're trying to do. Most people don't know right away that Blue Moon is a Coors product unless they read the label, or that the Chicago 312 brands (Goose Island, etc...) are run by AB. I think the image of independence is part of how they try to retain "craft beer" status, and thus better address that market.
Ditto, Chloe. Even while I was abroad in England, our go-to beer when we didn't feel adventurous, Stella, is part of Anheuser-Busch. What this highlights for me is a dilemma in consumer choice. The documentary made me eager to be a "beer connoisseur," supporting small and local breweries, but it is hard to forget a favorite, especially one that is extremely accessible. Is it really that easy to determine when purchasing products sold by market dominators is "weak" or quesitonable consumer decision and when it just so happens that the Big 3 are providing what consumers want?
DeleteI am curious if there is something special about the US beer industry that makes it prone to monopolization. For instance, I know in Austria, most breweries are owned by heineken, because heineken bought all the privatized breweries that used to be funded by the government. Is it possible that government control in the past disturbs free competition in the marketplace and helps fuel monopolization?
ReplyDeleteYou can argue that the government laws in place regarding distribution and retail make monopolization easier, but there's no history in this country of state-owned breweries.
DeleteWhat are your thoughts?
If the goal of firms is to maximize profits and they are willing to pour oodles of money into advertisement to maintain and expand those profits, are the firms at fault? Perhaps theoretically they are not, but I would imagine most people watching Beer Wars feel a sense of uneasiness and frustation in regards to the difficulties new companies face in selling their products. I wrote in my critical response that maybe what needs to happen is rexamination/reworking of existing government policies such as distribution laws that prohibit market entry. This would not directly attack major coorporations like MillerCoors but it would potentially keep them from having distributers on a proverbial leash.
ReplyDeleteIt is promising that interest in different beers and the sources of said beers is growing; however, if new, small breweries stand a chance of capturing more of the market, I think that there needs to be a greater sense of satisfaction within organizations - satisfaction in growth and profit without incessantly pursuing market domination. This would be in the interest of consumers who stand to gain more quality choice in beer (even though the US already boasts the largest selection of beers, according to the film). After all, consumers would never be satisfied with two major clothing companies supplying 80 percent of the market. Why should beer so dramatically different? What accounts for the difference? Do Americans in general lack an interest in beer varieties or have beer manufacturers specifically been especially agressive in business? It would be nice if the beer industry didn't have to be such a clear cut zero-sum game. Then again, I don't plan to go into business.
When thinking about the big beer companies, especially Anheuser Busch/InBev, buying out the smaller breweries, I wonder how many of these smaller breweries brew similar tasting beer. I know the main goal of these big beer companies is to maximize profit. I would think that more variety in the tastes of the beers would help make maximizing profit easier. If Anheuser Busch/InBev bought out two breweries with really similar tasting beer, then what is the point? I just find it puzzling and a little amusing. In Financial Accounting, we were looking at the income statements of a big candy company (Hershey) and a smaller candy company (Tootsie Roll). The professor talked about how Hershey bought out multiple smaller candy companies in the 80s and 90s. This included Heath and Skor. The funny part is that Heath and Skor are basically the exact same candy bar but in different wrappers. I guess it does maximize profit, but I still don’t quite understand why a big company would want to buy out two companies with very similar products. This goes for candy companies and breweries.
ReplyDeleteSeth Tillman
I will say this upfront: I do not like beer. I hate the taste, I hate the smell, (and I hate the beer belly effect). All beers taste the same to me--nasty, watered down, and cold and carbonated to cover up the bad taste, until of course it gets warmer and fizzles. That being said, I will always stand by Budweiser because of their marketing. It makes me feel a sense of tradition, of community, that smaller brewing companies do not appear (through marketing) to have. Through the marketing with their Clydesdales, I will always support them and if I had to say it, I would say my favorite beer is Budweiser. It is like Coca Cola to me. In many blind taste tests, many people choose Pepsi over Coke, yet Coca Cola remains in the lead. That's because they sell tradition in their marketing. What was interesting to me in Beer Wars was that it reemphasized how closely beer and politics are connected, and how some companies are able to succeed and sell an idea of what the beer means, rather than what it tastes like, because they have established more political support and receive more money from the government. A quote from the move was something like "if we're a country of beer loving people, our politics need to be beer loving people as well." Local breweries, like the Magic Hat, barely receive a fraction of governmental support than do the major companies, and although there beer may be better quality, they cannot market as intensively, and therefore do not do as well. In other words, if you have a lot of government support, your product becomes a commodity and profits are the only thing in mind, so your product is not as good, but you make a lot of profit--your product is controlled by external forces. On the other hand, if you do not receive much government support, you are not controlled by anything; you have the freedom to be as creative and innovative as you can but you will not make a lot of profit. Its a tradeoff. It really makes you think about all the products that we love (which we usually just love the idea of) are so closely tied to and controlled by politics.
ReplyDeleteAubrey Wells
Re: marketing, I think you hit the nail on the head as to why AB is so successful.
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