Category Archives: Macro-brewers

AB InBev, Brewery Closures, Craft Breweries, Macro-brewers, Ownership

The De-Platforming of Platform: A Cautionary Tale

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Between 2011 and 2017, in their attempts to corner a share of the burgeoning craft beer market, AB InBev purchased ten American craft breweries. With each acquisition, craft beer drinkers and supporters of locally owned breweries, such as myself, felt a sense of dismay and disappointment. In 2019, AB InBev purchased yet another craft brewery. For me this one hit a little closer to home. Platform Brewing Company was located in my state, Ohio. Platform’s home city of Cleveland is only two hours west of where I live. To the owners of Platform, the acquisition was greeted as a harbinger of so many good things for the brand. Platform would have access to the vast resources of AB InBev, thus allowing them to build their brand, while retaining autonomy in day-to-day decision making – the best of both worlds in other words. Sadly, less than four years after acquiring Platform. AB InBev did the unthinkable – they announced the closure of their Cleveland brewery. To me this was a tremendously sad announcement, not only because of the inevitable job losses, but also because Platform had delivered so much to the Cleveland craft beer scene.

Platform Brewing Company opened its doors on July 2, 2014. The new brewery was located in Cleveland’s vibrant Ohio City neighborhood. As with many other craft breweries across the country it engaged in adaptive reuse, with the brewery moving into an abandoned space that started life in 1915 as a Czechoslovakian social hall, complete with bar and bowling alley.  In an nod to the building’s history, Platform’s owners Paul Benner, Justin Carson, Shaun Yasaki and Greg Benner reclaimed as much of the building’s original floor as they could and used it for bar tops, flooring and signage. They placed a bowling machine close to the taproom’s entrance.

In addition to brewing and selling beer, Platform’s owners had a much more expansive vision for the brewery. Their desire was that it function as a small business incubator for budding home brewers who had a yearning to commercialize their hobby. Four times a year, one lucky individual got the opportunity to work as a brewer’s apprentice at Platform. From designing the recipe, to brewing the beer, and learning about the business side of running a brewery, the brewery aspired to provide a “platform” from which budding commercial brewers could learn.

Platform was also good for the Ohio City neighborhood. Darren Cross, owner of a nearby Cleveland Brew Shop, a home brewing supply store, credited Platform with being “a catalyst for getting the neighborhood going a bit”.

Within a few years of opening Platform was posting impressive growth numbers, and by 2018 was producing 27,000 barrels of beer. In addition to an ever-broadening distribution footprint, Platform opened up taprooms in both Columbus, OH and Cincinnati, OH. Such was Platform’s success, it was soon on the radar of the behemoth that is AB InBev and, in August 2019, the Belgian-based multinational corporation announced the acquisition of Ohio brewery. This was good news (right?), At least it was to one of Platform’s owners Paul Brenner. Commenting upon the acquisition, Benner had this to say:

“In speaking with the other craft brewery founders in Brewers Collective [A-B’s craft brewery arm], we know partnering with Anheuser-Busch means we will have the resources and the autonomy to bring our vision for Platform Beer Co. to life”

Furthermore, according to Benner:

“Being able to continue leading the day-to-day operations was an important factor in our decision and we have no doubt that this partnership will benefit our loyal staff and passionate customer base.”

In short, AB InBev would bring resources to the brand, while also respecting Platform’s autonomy. Surely this would ensure a bright future for the brewery; sadly, it did not.

In announcing the closure of the Cleveland brewery, AB InBev noted that it would continue to produce three beers that had been part of Platform’s portfolio. Interestingly, these are all IPAs – Haze Jude IPA, Odd Future Imperial IPA, and Canalway IPA. AB InBev did not say where these three beers would be produced. Commenting upon the closure one loyal Platform customer, David Sefcik, stated, “It’s just sad. It’s a sad thing that a big company would close something that means so much to the community”. I have to agree with Mr. Sefcik. It is sad, incredibly sad. A brewery that had once been an integral part of Cleveland’s craft beer scene being gutted by the world’s largest brewer, now reduced to three solitary beers.

So, what happened to Platform (and its beers) under AB InBev’s stewardship. In a highly insightful article published on GoodBeerHunting.com, Kate Bernot provides us with some clues. Among other things, Bernot suggests that AB InBev oversaw a decline in the sale of Platform beers in chain retail outlets such as grocery stores. In 2018, before being acquired by AB InBev, Platform produced 28,000 barrels of beer. In 2021, after the acquisition, the brewery’s production levels had dipped to 22,500 barrels. A major issue, according to Bernot, with respect to AB InBev’s oversight of Platform was “Inconsistent sales priorities and changes within ABI’s craft sales force”. One former post-acquisition Platform employee told Bernot, “Sales priorities changed at Platform pretty frequently and it was hard to get a grip on what our goals were” with the result that “sales team often struggled to maintain focus to build particular brands”.

Bernot uses some interesting language to capture AB InBev’s attitude towards Platform. Phrases such as “minor irritation”, “lost in the shuffle”, “a footnote, and left “by the wayside” indicate, to me at least, an owner who was not fit for purpose and negligent in their duty of care. It wasn’t that AB InBev were incapable of making Platform a success in the marketplace. It was quite simply that they did not seem to care enough to do so. Platform was just another brand in its a huge portfolio of 500+ brands; a brand that was both dispensable and expendable.

International, Macro-brewers

Guinness: Brewed in America

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A few weeks ago, I travelled to Maryland. The reason for my trip was to attend a memorial service for my step-Father-in-Law, who had passed away unexpectedly earlier this year. My wife and drove to Maryland on a Thursday. As we were picking up my oldest daughter, who was flying in from Cincnnati, OH the next morning, we stayed at a hotel right next to BWI Airport.

In preparation for the trip, I googled breweries near to where we would be staying. I was pleased to discover that Thursday night’s hotel was only a couple of miles from the recently opened Guinness Brewery. Opened in 2018, it was the first Guinness brewery to operate in the United States since the last one closed in 1954. That brewery was near New York City and had been opened primarily to quench the thirst of soldiers returning from World War II. Guinness had figured American soldiers who had served in Europe would have a craving for the stout they’d tasted overseas. It appears that Guinness had overestimated consumer interest in their product and the brewery closed in 1954 due to lack of demand.

I had visited the Guinness Storehouse (immersive experience) in Dublin, Ireland in 2015, so I was keen to visit the Baltimore brewery. The brewery is not actually located in the city of Baltimore, but rather in nearby Halethorpe, about 10 miles southwest of downtown Baltimore.

Before visiting the brewery, I had dinner at a well-known chain restaurant next to our hotel. As it was the evening before St. Patrick’s Day, I decided to have a Guinness Stout. When my bottle of Guinness arrived, I noticed that it was brewed in Dublin. I had hoped that it would have been brewed at the nearby brewery, but as I was to later discover later the iconic brew is not produced at the Baltimore facility.

In an interview with NPR, Peter Simson (head brewer at Guinness’s Dublin brewery) stated “I think Guinness stout is such an iconic stout, it has such strong links back to Dublin and back to Ireland, that it would feel wrong to take it away from Ireland and to brew it over here”.

Some of the beer’s available at the Guinness Brewery in Baltimore

While not brewing Guinness Stout, the Baltimore brewery does brew an impressive range of other beers. These included a Blonde Ale, a Honey Ale, and several IPAs and Stouts. On my visit I opted for their Galaxy IPA (brewed with Australian Galaxy hops) and a brew from their Hop Exploration Series, a French IPA (brewed with French malt and hops).

Exploration and discovery are very much part of the brewery’s modus operandi. The brewery has a 10-barrel pilot system, which is used for smaller experimental batches. As noted on the brewery’s website, “We focus our attention on putting our spin on classic styles, introducing new ones, and utilizing both historic and new age ingredients and processes to create an exciting, ever-changing beer program”. A 100-hectoliter brewing system allows the brewery to produce larger batches of selected beers for off-site distribution. This is the second pilot initiative started by Guinness. In 2015, they opened the Guiness Open Gate Brewery, in close proximity to their main brewery in Dublin, where you can sample “experimental beers you won’t find anywhere else”. In producing experimental beers that you can only taste on-site, Guinness is functioning in similar fashion to a craft brewery.

Guinness is no longer a stand-alone company. In 1997, it merged with Grand Metropolitan, a leisure, manufacturing and property conglomerate headquartered in the United Kingdom, to form a new company called Diageo. Diageo spent $90 million to convert the historic Calvert distillery (1933-2015) into the present-day Baltimore brewery.

Diageo spent $90 million to convert a distillery into the Guinness Brewery

As you enter the grounds of the brewery, there is a sign that says “Welcome to the only Guinness brewery in the USA”. While true, that sign will soon need to be removed. In the summer of this year, Gunness will open its second brewery, which will be housed in a former Pennsylvania Railroad Terminal building in Chicago, Il. From available media reports, it appears that the Chicago facility will not be as large as that in Baltimore. It will have a small pilot brewery, which will produce small batch and experimental brews. It will also have a taproom, restaurant, and outdoor patio space.

The Baltimore brewery is a multi-level facility. From what I could tell, brewing is done on the ground level, with the taproom and gift shop on the second floor. The taproom is spacious and the staff attentive. The gift shop has all the usual items you might expect – t-shirts, ball caps, refrigerator magnets, etc. The brewery also offers a number of tours and experiences, including a barrel-aged tasting experience and a guided tour of their pilot brewery.

Entrance to the Guinness Brewery in Baltimore
Inside the Guinness taproom in Baltimore

Just as I was about to post this blog entry, a friend texted me a link to a news story that Guinness was going to close part of its Baltimore production facility. Seventy-nine workers will be laid off. On the positive note, the taproom, restaurant, and the pilot brewery will stay open, thus retaining approximately 100 jobs. A spokesman for the company said, “After careful consideration and analysis of our supply footprint, we have made the difficult decision to permanently close our manufacturing facility” in Baltimore. Furthermore, “in order to ensure long term sustainable growth for Diageo, we are optimizing our existing operations across North America to meet evolving consumer preferences.” The two most interesting phrases from that statement are “supply footprint” and “evolving consumer preferences”. The flagship beer of the Baltimore brewery is Baltimore Blonde. Baltimore Blonde has been brewed in Baltimore since the opening of the Guinness facility. The brew has been around since 2014, however. Back then it was called Guinness Blonde and was brewed in Latrobe, PA. It may not be doing as well in the marketplace as Guinness had hoped. The owner of a Baltimore liquor store noted that Baltimore Blonde is not a top seller. On the popular beer rating site Untappd, it has a rating of 3.56, which is below 3.71, the average Untappd rating found by one study. So perhaps the brewery was not selling enough of its flagship beer to justify a dedicated brewing facility. Although Baltimore Blonde will no longer be brewing Baltimore Blonde, local economic development agents are keen to make sure that its producton remains in Baltimore. Continued production of the Lager will likely be sub-contracted to another brewery, with Baltimore’s Heavy Seas brewery being mentioned as a possibility. While the downscaling of production at Guinness’s Baltimore brewery may leave a bad taste in the mouth of local economic development officials, keeping production local might soothe some of their disappointment.

Guinness: Brewed in America

History, Macro-brewers

Folds of Honor

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I was in my local Kroger supermarket the other week. As I made my way down the beer aisle, a carefully placed display of beer caught my eye. I usually don’t pay too much attention to the beer selection at Kroger; it does not change much and I pretty much know what they have. But what caught my attention on this particular occasion was a display of a beer named Freedom Reserve Red Lager.

Freedom Reserve Red Lager on sale at my local Kroger

Freedom Reserve Lager is a new beer produced by the brewing giant, AB InBev. Released in May 2018, it is the second beer in AB InBev’s Reserve Collection. The first in the collection, released in October 2017, was the limited-edition 1933 Repeal Reserve Amber Lager. Freedom Reserve Lager is inspired by a 1757 recipe for beer that was hand-penned by George Washington.

As I reached the display, I reached down, grabbed a six-pack, and put it in my cart. Why did I, someone who normally buys beer brewed in small-scale, independently-owned, craft breweries, purchase a beer brewed by a large multinational brewer? It wasn’t because I anticipated that this beer would be particularly good. In fact, I expected to be quite underwhelmed by it. No, I bought it because on the side of the six-pack carton it noted that for every case of this beer purchased, AB InBev donate one dollar to Folds of Honor.

Freedom Reserve Red Lager bottle cap

You see, I am huge supporter of the U.S. military. I am highly appreciative of the men and women who serve our country; and of their families who sacrifice in different ways, but in equal measure.  Folds of Honor is a not-for-profit organization, which provides “educational scholarships to spouses and children of America’s fallen and disabled service-members.” During the calendar year 2016, Folds of Honor scholarships totaled almost twelve million dollars. So knowing that twenty-five cents of my beer purchase was going to such a worthy cause was enough to make me part with some of my money.

The name, Folds of Honor, refers to the process of folding an American flag. It is a process that is ingrained with tradition and respect. A properly-folded American flag has thirteen folds – each one representing the thirteen original colonies. According to the Smithsonian National Air and Space Museum:

”when the flag is completely folded and tucked in, it takes on the appearance of a cocked hat, representing the soldiers who served under George Washington, the sailors and marines who served under John Paul Jones, and the many who have followed in their footsteps.”

In addition to partnering with Folds of Honor, AB InBev have a number of other initiatives and programs that support our veterans. Since 1987, Anheuser-Busch have donated close to $11 million to military charities including USO, Intrepid Fallen Heroes Fund, Hispanic War Veterans of America,  and the Korean War and Vietnam War Memorials. They also helped found the U.S. Military Sports Association, an organization that has donated over eighteen thousand pieces of sports equipment to U.S. troops in Iraq and Afghanistan.

A bottle of Freedom Reserve Red Lager

The men and women of Anheuser-Busch have also stepped up and served in the trenches, so to speak. Since World War I, more than 5,500 Anheuser-Busch employees have served in a variety of U.S. military campaigns. After serving their country, many of had the opportunity to return to work with Anheuser-Busch. Indeed, Freedom Reserve Red Lager is brewed by brewers who themselves are veterans. Anhesuer-Busch’s military connections date back to the Civil War, when both of the company’s co-fonders Adolphus Busch  and  Eberhard Anheuser enlisted in the Union Army’s home guard, which was stationed in St. Louis, MO.

As to the ‘quality’ of Freedom Reserve Red Lager, I will not comment. I rarely do. Taste, in my opinion, is such a personal thing. What I, or others for that matter, think of the beer is irrelevant. Taste it for yourself – you decide whether it is ‘good’ beer or not.