Local eggs come from hundreds of miles away. The milk for Chobani yogurt doesn’t flow from Chobani-owned dairies. You think Paul Newman makes all that salad dressing himself? Don’t be ridiculous: he’s dead. And when he was alive, he didn’t, either.
The ~35,000 products in the average American grocery store are impossibly diverse, but with few exceptions, they’re all the outcome of supply chains that have been partially or fully contracted or licensed out to other vendors. One of the ways craft brewers challenged the American commodity system for consumer packaged goods was by loudly and repeatedly hammering the idea that they were, collectively, one of those exceptions. Sure, they still bought their hops and barley like macrobrewers did, but they had better relationships with the farmers, and they made the beer themselves, right there in your community. If you found a 6-pack of craft beer on a supermarket shelf or a bar’s tap tower, you knew the place that made it was just down the proverbial road, by the same folks whose names were on the label.
Whether that halcyon “Slow Food but make it beer” vision of American commerce was ever true at a national level is hard to say. Maybe? Regardless, it’s a compelling narrative, and it fueled the craft brewing industry’s boom for many years — right up until it didn’t. With the segment struggling to shore up slipping sales figures in the face of increased competition from other categories and shifting preferences from American drinkers, craft breweries have been uncoupling brands from the brewhouses with which they were once synonymous, shedding overhead costs and further muddying what makes a craft beer craft.
The most recent outfit to wade into these already murky waters is Left Hand Brewery. Last month, the venerable Colorado firm launched a crowdfunding campaign “to build a platform to enable our brand and others to consolidate and streamline packaging and distributing operations while remaining independent, as opposed to going out of business or selling to multinational companies.” As co-founder Eric Wallace told Jess Infante, who first reported on the campaign for Brewbound, the idea is to leverage the “bunch of real estate that we own and control, and a brewery that’s built for speed that can turn out quite a bit of beer” to make other brands of craft beer more cost effectively than their creators — burdened by “bad leases” or a lack of purchasing power or bad equipment or whatever — ever could.
“We can make your beer more efficiently,” added Wallace. “You can keep your brand in the market and maintain its relevance, and try to leverage some of the other relationships that we’ve got out there.” So far, Left Hand has raised $500,000 as a war chest to acquire other brands looking for strength in numbers.
This isn’t straightforward contract brewing, though the Longmont firm famous for figuring out how to bottle its Nitro Milk Stout widget-free does about 15 percent of its annual volume in that business these days, according to Brewbound. It’s not really the Bevana model, either, to the extent that Bevana ever had a model; that platform’s “willfully vague” alchemy of “contract brewing, brand licensing, sales and distribution support, and e-commerce” was a too-good-to-be-true solution to the costly challenges of operating a craft brewery in a softening market, as Kate Bernot reported for Good Beer Hunting in 2023.
On the spectrum of consolidatory scale-seeking, the gambit is probably best understood as a private-equity roll-up à la CANarchy Craft Brewery Collective, minus the predations of the private equity industry. (Wallace told Brewbound they have no interest in selling the platform to “vulture capital.”) Or Brew Hub, but with equity agreements. Or a pre-Asahi version of Octopi Brewing, if the founder of the Wisconsin contractor owned its semi-in-house Untitled Arts brand outright. Or that time Drake’s Brewing Co. acquired the Racer 5 IPA brand from fellow Bay Area brewer Bear Republic Brewing Co. (sans the latter’s brewery), but in Colorado. Or…
You get the idea. There are a lot of ways to skin this cat, and people with varying degrees of gumption and expertise throughout the American craft brewing industry have taken a run at ‘em. The folks at Left Hand have plenty of both, and as they note on the campaign’s WeFunder page, this isn’t their first rodeo — the firm merged with another Colorado brewery in 1998 to weather the headwinds of the craft segment’s “shakeout” circa Y2K. I wish them the best of luck, but rather than evaluate their odds, I want to make a different point here.
Beer production is not innately tied to place. You can do it on any continent, with the exception of Antarctica, and people have for centuries. But beer brands… see, this is trickier. After all, breweries are jobs, and jobs build communities. Communities are innately tied to place, and people in those communities, in the U.S., at least, have taken a lot of comfort in the familiarity and proximity of local beer brands more or less since brands became a “thing” in the late 19th century. (Fun fact: One of the first registered brand marks in the Western world belongs to England’s Bass Brewery in 1876. The brand holds UK00000000001 with the United Kingdom’s Intellectual Property Office to this day.) The outpouring of grief in San Francisco when Sapporo USA abruptly shut down Anchor Brewing Company last summer wasn’t for Anchor Steam as a product. We know from sales figures and reporting that people weren’t buying the beer! But the brand was another matter entirely. A long-running thread in the Bay Area’s civic fabric had been ripped out. Of course they grieved.
The flip side is not so straightforward. The communities that lose beloved beer brands have a lot of skin in the game, but it’s not clear that American drinkers writ large are particularly upset at, say, Stella Artois brewed in St. Louis, or will be to drink Peroni from Albany, Ga., when Molson Coors fully shifts production of the Italian brand’s U.S.-sold beers there next year. Maybe they should be, but if they are, it sure isn’t showing up in the numbers.
There’s even an argument that they shouldn’t be. “Just as American beer brands that are consumed in Mexico are produced in Mexico, I believe that the Mexican beer brands that are consumed in the U.S. should be produced in the U.S.,” Salvador Corrales, Ph.D., a professor focused on cross-border commerce at El Colegio de la Frontera Norte, told SevenFifty Daily earlier this year, arguing Mexico should do more to protect its scarce water resources from exploitation by Constellation Brands, Heineken, and other multinational brewers. “There are no technical restrictions.” How many people would stop drinking Modelo Especial if they learned it was brewed domestically? I bet it’s fewer than you’d think.
Craft brewers are in a bit of a prison of their own making on matters of provenance. They have poured an enormous amount of time, energy, and Brewers Association dues into convincing the American drinking public that a brewery’s “craft” essence is tied to who owns it, and where. This has always been a bit of a double-edged sword: In the mid-’90s, Boston Beer Company was hoisted by its own petard when big, bad Anheuser-Busch convinced Chris Hansen, then the anchor of “Dateline,” to critically cover its practice of — gasp! — contract brewing. (Boston Lager, made in Cincinnati? Quelle horreur!)
More recently, the idea that breweries must be independently owned and located nearby to produce craft beer has run into harsh commodity logic that it once stood against. It makes sense that firms are seeking to consolidate to endure difficult market conditions; it even makes sense that not all consolidations are created equal. On this, the BA and I draw different lines: According to the trade group, Tilray Brands and Monster Beverage Corporation are craft brewers because they weren’t beverage-alcohol industry members before acquiring their respective positions in the segment, while New Belgium Brewery and its portfolio-mate Bell’s Brewery are not because they are owned by a subsidiary of Kirin, a Japanese macrobrewer. Regardless of where I’d draw the line, though, I think a brewery like Left Hand is within it. I’m persuaded by the calculus Wallace puts forth that his brewery is a better home for struggling compatriots than private equity firms or macrobrewers — and not just because those formerly common buyers have cooled to the craft segment lately, either.
And what of the emotional and social connection that craft breweries’ communities have formed over three or four decades to the beer brands that remind them of home? When breweries consolidate, they become something other than “local.” I try not to make a moral judgment on that, for two reasons. First, local has never been synonymous with “special,” or even with “good,” in the beer aisle or any other. More importantly, craft brewers are consolidating because they have to, not because they want to. What else would you have them do?
🤯 Hop-ocalypse Now
Just a couple weeks after lumbering bourbon behemoth Brown-Forman Corporation cut bait on its diversity, equity, and inclusion (DEI) initiatives, Molson Coors Beverage Company is doing likewise. Bloomberg reported that the firm sent a memo to employees Tuesday announcing its abandonment of various hiring and procurement programs that conservative critics derided as “woke,” as well as its participation in the Human Rights Campaign’s Corporate Equality Index. This, after MC promised to “always support and stand by [the] work” of its employees just last year when those same right-wing charlatans briefly targeted its ad campaign with comedian Ilana Glazer repudiating its brands’ old sexist ads. It’s almost like… “rainbow capitalism” is just… a transparent performance of allyship, rather than actual solidarity? Hmm. (MC did not respond to Hop Take’s request for comment.)
📈 Ups…
Halfway through the first major court proceedings over the Kroger-Albertsons merger, the Federal Trade Commission has been dropping the antitrust hammer… All right, Molson Coors’ former craft breweries are officially Tilray Brands’ now that the deal has closed… A Numerator survey found beer was the most popular beverage-alcohol purchase for Labor Day weekend, according to people who may or may not have lied to Numerator…
📉 …and downs
10 Barrel Brewing Company’s co-founders resigned, and Tilray Brands has laid off an unknown number of staffers at the Oregon firm… Good lord the craft segment took a beating in the National Beer Wholesalers Association’s Beer Purchasers Index last month… Constellation Brands told investors its beer division is slightly trailing its projections (meanwhile, its wine & spirits businesses are racking up impairment charges)…
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