Summaries

Synopsis

Beer Wars is a 2009 documentary film about the American beer industry. In particular, it covers the differences between large corporate breweries, namely Anheuser-Busch, the Miller Brewing Company, and the Coors Brewing Company opposed to smaller breweries like Dogfish Head Brewery, Moonshot 69, Yuengling, Stone Brewing Co., and other producers of craft beer. Also covered is how advertising and lobbyists are used to control the beer market, implying that these things harm competition and consumer choice.

Beer is America's beverage. Everything that is important in America, revolves around beer.

USA loves beer and increasingly consumers are shifting from mass produced beers to the artistic, custom brews. US today has the biggest selection of beers globally. The total market in US is $97 Bn big. This represents 6 billion 550 million gallons of beer consumed in the US.

Anat Baron was typical corporate stooge before she started her own consultancy and then in 2003 took hold of Mike Beer co, and that's how she got into the beer wars. Thats how she got unique insights into how 3 companies cornered a major part of the US beer market. 3 years later, she gave up and continued to be intrigued by the developments in the beer market and decided to make a documentary on the same.

The beer majors want to win the market at all costs, but the smaller players are adamant in challenging the status Quo. Anat meets with bigwigs of the beer industry at the annual National Beer Wholesalers Convention in Las Vegas. Her past connections got her an invite. All the action was at the booths of the smaller, Artisanal breweries.The domestic bigwigs are fighting against the onslaught from imported beer brands and the Artisanal trends.

The big three firm's owners came to the US in the 1800s. They build a vast empire (1800 of them) of breweries in 1900s, which got dismantled in prohibition and got rebuilt again in the 1950s. They used huge marketing budgets to kill local and regional brands. Since 1970, 35 local brands have been shut down. By 1978, only 45 brewers were left in USA. Doing this, they emulated what the tobacco companies have been doing for generations.AB today has 47% share, Miller 18% and Coors 11%. The big 3 together own 78% of the market.And for a product that no consumer can reliably tell apart in a blind taste test, it's all about the advertising. The best-selling variant in the "light" version of beer, which constantly needs to be re-expressed to the consumer. Total advertisement spend is $1.5 Bn.

Today there are 1400 independent breweries that make up less than 5% of all beer sold, with 60 product variants. They are driven by the passion for their craft and their ability and desire to produce a beer that excites its drinkers. Their combined total production is equal to the industrial waste from the packaging lines of the big 3 beer producers. The consumers are helping as they don't want the bland beer being sold by the corporate behemoths and are looking for a distinctive taste that appeals to them.Brewing a new flavor is like being in a chef's kitchen, trying to add all the spices in just the right proportions. Many times, the small breweries struggle for a while before getting the right taste profile at the right price point.

Every new brewery has to learn how to seed a brand in this new century. Its hand-to-hand combat in the stores and the bars to understand consumer reaction. The big brewers fight with their marketing dollars, while the artisans fight with the flavors inside the bottle.

While the big players simply introduce new products (that still taste the same), just to crowd out the competition at the retail stores where 80% of the beer in USA is sold. The big retailers let the beer companies decides how to stock shelves and each category has a captain, and for beer that's typically an executive from AB or Miller/Coors. They decide how each beer shelf in a store is stocked, even if it's not their store. Thats because the store has 350 other categories, and they believe the category leader would know more about maximizing sales than them.

Beer is actually consumed at room temperature. But in ads the big 3 always talk about a chilled beer as at that temp it's difficult to make out the taste between a mass produced and a custom beer. Leave advertising. AB spend $ 300 MM on sports sponsorship every year. They even sponsor the Presidential debates.The small brewers then started their own Great American Beer Festival in Denver Colorado, where beer lovers every year to taste new beers and their makers. Then AB takes advantage of their huge scale to keep prices low on their craft beers (similar in flavor to the better selling small competitors), to crowd them out at the turnstiles. They also mask their products to sound like they are from small sounding Breweries that actually don't exist.

Throughout the film there is a theme that the smallest breweries have next to no chance to compete due to the sheer volume of advertising and outdated beer distribution laws. The original laws demanded a three-tier system to separate the powers of selling beer. The law demands that the beer brewer cannot deliver directly to the consumer, supposedly creating a separation of powers resembling the US government's legislative, judicial, and executive branches.

The film claims these laws are now inhibiting growth of smaller brewers and therefore allowing the largest brewers (Coors, Anheuser-Busch, and Miller) to maintain an oligopoly on beer. Thats cause today 70% of AB distributors will only carry their product, shutting out all competition from the market.

The beer industry now has a lobby group that outspends the gun and tobacco lobby combined to ensure that the 3-tier system remains in place which ensures the dominance of the big brewers.Big became bigger when Millers and Coors merged. InBev bought out AB to make the world's largest beer company.