107 replies to this topic

[Big Nake]

The way I see it is that they have to make $$ in the business they purchased, so they have to have an idea as to how they can make NB/Midwest more profitable. It seems the best way they can improve the profitability of NB/Midwest are with their ability to get raw materials at a cheaper price. If they can use their purchasing power to purchase raw materials (I am thinking mostly malt and hops, but who knows) they can leave the current pricing structure (or possibly reduce it) and turn a good size profit/ make the whole operation more profitable. It may be small cookies in terms of ABInBev overall but good numbers as considered from the venture capital subdivision of the company that made the acquisition.
 
Buying a business only to shut down availability to home brewers ≠ home brewers buying macro-lager.

What if there is a backlash and homebrewers go to other suppliers because MW/NB are owned by MegaTron, Inc? I'm not the type to base my opinion on things like that and if I were a loyal MW/NB customer and I thought that everything they did was awesome, I'm sure I'd stay. But I could see some people going to other outlets just to avoid the big guys.

[neddles]

I can see there being backlash. However there are apparently a lot of people who pay way too much at NB/MW and are happy to do it. If ABI can drop their costs by say… 10% and drop their prices by 5% they will still improve profitability by quite a bit. And people will say "look, they are good for the business/hobby" And by "people" I mean the people who make up the majority of NB/MW business… people who I suspect are mostly beginners, or dabblers in the hobby, or others using NB/MW as a one stop for a gift.

[neddles]

I just don't know how they wouldn't realize that craft beer and homebrewing enthusiasts aren't fans of theirs. Their plans must be taking that into consideration. 

[HVB]

This news was just posted on my local HB club FB page.  Of the 5 people that commented only 1 knew about this merger.  I think for the casual brewer it will not impact their shopping at all.

[Brauer]

There's also the theory that they are buying an internet retailer in anticipation of setting up a direct to consumer distribution network.

[Big Nake]

I just don't know how they wouldn't realize that craft beer and homebrewing enthusiasts aren't fans of theirs. Their plans must be taking that into consideration.

I think you're right. Even though we're a really small piece of the puzzle, they must know that we're not Bud Light fans.

This news was just posted on my local HB club FB page.  Of the 5 people that commented only 1 knew about this merger.  I think for the casual brewer it will not impact their shopping at all.

Probably right. I know that when I was a new brewer, I didn't think much about where I got my stuff. It's after years that you realize that there are places who get the orders correct the first time, get things shipped out quickly, have competitive pricing, send out fresh, well-packaged ingredients, etc. My guess is that MW/NB won't really suffer because of this.

[No Party JKor]

I can see there being backlash. However there are apparently a lot of people who pay way too much at NB/MW and are happy to do it. If ABI can drop their costs by say… 10% and drop their prices by 5% they will still improve profitability by quite a bit. And people will say "look, they are good for the business/hobby" And by "people" I mean the people who make up the majority of NB/MW business… people who I suspect are mostly beginners, or dabblers in the hobby, or others using NB/MW as a one stop for a gift.

If i know anything about venture capital, my guess is they lower costs using their bulk puchsing power AND raise prices because of MW/NB brand loyalty.

[djinkc]

I've been a NB customer for a few years.  Easier and cheaper to have it dropped on my doorstep.  I doubt that will continue.  I hope I am wrong but my guess is some marketing genius proposed pricing homebrewers out of the market and then they will then buy beer from them.

[ChicagoWaterGuy]

I priced out a bunch of draft equipment from NB and a few other online retailers. Nobody came close to Ritebrew's price. I highly recommend them and Farmhouse for ingredients.

[HVB]

I priced out a bunch of draft equipment from NB and a few other online retailers. Nobody came close to Ritebrew's price. I highly recommend them and Farmhouse for ingredients.

First two places I look.

[neddles]

First two places I look.

Same. I know Ken had the missing length of line issue but I have placed dozens of orders with RiteBrew and never had a problem.

[SchwanzBrewer]

Not all decent homebrewers should start a brewery. Unfortunately a lot have, and they weren't even decent brewers.

[SchwanzBrewer]

You should ask random people that drink your beer, "would you pay $5 for that?"

If everyone says yes then maybe you could/should consider opening a brewery and do some serious homework.

[Bklmt2000]

Not all decent homebrewers should start a brewery. Unfortunately a lot have, and they weren't even decent brewers.

 

I'm a decent homebrewer (I think), and even I know I shouldn't start a brewery.  Always was, and always shall remain, a hobby.

[HVB]

Not all decent homebrewers should start a brewery. Unfortunately a lot have, and they weren't even decent brewers.

Completely agree!

I'm a decent homebrewer (I think), and even I know I shouldn't start a brewery. Always was, and always shall remain, a hobby.

I like the way you think...

Same. I know Ken had the missing length of line issue but I have placed dozens of orders with RiteBrew and never had a problem.

Every place messes up, at least they owned up to it.

[No Party JKor]

I'm really surprised at the estimate of $50M in revenue for NB/MW. That's an order of magnitude higher than i would have expected.

[Big Nake]

Not all decent homebrewers should start a brewery. Unfortunately a lot have, and they weren't even decent brewers.

You should ask random people that drink your beer, "would you pay $5 for that?"

If everyone says yes then maybe you could/should consider opening a brewery and do some serious homework.

With the saturation point being mentioned earlier in this thread, I don't understand how there are still breweries being opened, especially bad ones. I also still see a lot of the same beers being made by these places too and I just don't understand how they think they can stand out. If you were going to ask people if they would pay $5 for a beer, you would have to know that they were telling you the truth... most people would just say OF COURSE! just to get you to stop talking about it.

[positiveContact]

With the saturation point being mentioned earlier in this thread, I don't understand how there are still breweries being opened, especially bad ones. I also still see a lot of the same beers being made by these places too and I just don't understand how they think they can stand out. If you were going to ask people if they would pay $5 for a beer, you would have to know that they were telling you the truth... most people would just say OF COURSE! just to get you to stop talking about it.

 

yeup.  you need to give them a truth serum first.

[ChicagoWaterGuy]

Unfortunately, it's not even always about taste. I was at a brewpub in SW Michigan that has been around for a while and all the beers had a bitter aspirin finish yet the place is always packed. Even some of the locals noted the flavor while continuing to drink the beer. Then you go to some of the newer places with much better beer and they are dead. The first spot had become the local meeting spot and people continued to go even though there were better options.

[Big Nake]

Unfortunately, it's not even always about taste. I was at a brewpub in SW Michigan that has been around for a while and all the beers had a bitter aspirin finish yet the place is always packed. Even some of the locals noted the flavor while continuing to drink the beer. Then you go to some of the newer places with much better beer and they are dead. The first spot had become the local meeting spot and people continued to go even though there were better options.

I'm sure that's true in a lot of cases. People don't always flock to the best place or the best beer. In some cases, maybe the atmosphere is better in one place or the food is better, etc. Why do people drink Corona? Clearly it's a case of excellent marketing and advertising... which is very expensive and most small operations can't afford it. I have wondered about commercial brewing and how places make their mark and stand out and I often think that if you have excellent beer, the rest would just fall into place but that is clearly not the case.