This is going to be a long post for me, so fair warning. It will be a little bit of a rant, and I am going to throw in some family history to boot, but this is important for me to say and I feel like the events that have unfolded this week in the beer world warrant some reflection, a chance to fall back and assess the damage as it were.
I want to start this off with a story that affected Jim and I very deeply when we were kids. Our Dad was a corporate executive in mid-management for the majority of his career. Dad moved around quite a bit taking promotions and climbing the corporate ladder. It was about 1978 when he went to work for American Chain and Cable Corporation in Fairfield, Connecticut.
This was a huge move for our family because we had never lived anywhere but the midwest, i.e. Chicago and Milwaukee. So we made the leap and dad was climbing, always climbing. He wanted to be a Corporate Vice President, that was his dream job. An opening came up and ultimately he was passed over. When he asked why, they said because he never had any field experience actually running a division of a company before. This is where things got weird…
Well that meant that dad needed take the next General Manager position that came available so he could get his experience and get his promotion. The wheels were set in motion, and Jim and I ended up moving to Fairfield, Iowa. That’s right we went from Chicago to Milwaukee to the New Your Metro region to Fairfield, IA, population 8000. It was actually a good move for our family and it seemed that all the kids really liked a more rural lifestyle. Things went well there, until they didn’t. What had happened in the three years that Dad was in Fairfield, Iowa was the American Chain and Cable Corporation was bought out by a British firm. The Brits began to systematically dismantle the entire company. Fate came calling all the way to Iowa, and dad’s position was eliminated. Oh, I could tell you that Dad took over an operation that was loosing money every year and built it into a $7 million profit center in just 2 years, or that the decision to consolidate operations in York, Pennsylvania was ill advised and they ended up bankrupting the whole company, but that is really neither here nor there to this story.
I tell you this story because there are parallels that can be drawn to what we have seen this week in the beer world. My dad was a casualty of European expansion into corporate America. And it seems like we all are feeling a bit of the bite this week with the latest movements that have happened in the beer world.
I remember when InBev took over A-B the talk was about how this could bring European know how to American Lager production, and perhaps this would be a great thing, that maybe beer in America would benefit from one of “The Bigs” being bought out by a company that owned better beers in Europe. All the while I was hoping what has happened wouldn’t happen.
See when Anheuser Busch was an American giant, they were at least our giant, and we knew what to expect. They played hard ball, and some would say that they were underhanded, but it was a known quantity with uniquely American corporate sensibilities. My family’s experience with the European model is far more dastardly, and I’m afraid that there are some true colors showing. This bull is rampaging through the china shop and mayhem is beginning to surface. This is not new, and it should have been expected.
Big Beer with their new distinctly European sensibilities is trying to embrace the craft beer community with one hand to pull it in closer so they can strike a death blow with the other. Ruthless and predictable in its unpredictability. But my family’s experiences have taught us that this disarray is to be expected. I don’t know if it is because they are poor managers or that they are simply too far away to keep a lid on things or perhaps it is simply some sort of management style that keeps people off balance and fearful of what they will do next. Whatever the case may be this is our new reality. It is unpredictable as to what may happen next, but predictable that it will not be good.
They are unpredictable, but I am going to make a couple of predictions:
- If it hasn’t started already, AB InBev will begin to shed employees like yesterday’s clothes.
- The Old A-B management will be replaced with a European Management Team.
- Lesser producing facilities or just smaller facilities will be merged into other operations. (See Rolling Rock Brewed in Newark, NJ)
- Quality will suffer because they don’t understand supply chain management.
- Goose Island as we know it is gone.
- Even Bud will get worse.
A little gloomy, but probably the truth. Think of it. This week we have had a lawsuit, a buy out, and a backstab. Who says beer isn’t interesting?!