AB/Inbev: Myths, Legends & Lies

To skip directly to the Old Blue Last brewhouse order, please scroll to the bottom.

If you came here hoping for the usual diatribe painting AB-InBev as the great Satan hell-bent on destroying the craft beer industry, you came to the wrong place.

OK, sometimes it looks that way, and sometimes may even be that way. Certainly their distro practices seem to be a bit over the line. But I recently had the opportunity to visit one of Bud’s older breweries in Newark NJ, and I can assure you they are hardworking, decent people just like you and sometimes me.

So let’s examine the various myths that have come up over the years…


Ownership

Don’t buy Bud, buy American!

First off, the idea that this is some faceless, non-American corporation is nonsense on every level. A little over half of the company is owned by various Belgians and Brazilians, that much is true. The remaining shares are truly multinational — and mostly held in the USA.

Next time you’re on your online stock trading program, punch up the ticker BUD on the NYSE. If you lay down the asking price for a share of stock, you can own it too. But if you have a 401k and are invested in any large-cap mutual funds, you probably already own part of it anyway. Franklin Templeton’s Custodian Fund owns about 5% of the company. A variety of Legg Mason, Principal, John Hancock and Dreyfus funds are also among the top shareholders.

But let’s talk about the real Americans…

Workforce

Wikipedia says the US operations employ some 30,000 people. I think the actual number of direct employees is a lot less; have seen numbers like 12,000 and 14,000 bandied about. The Newark NJ brewery employs about 200 souls, and at one time the number was easily double. Now, for every person employed by the brewery, there is probably an equal or greater number of individuals who are employed because of the brewery.  Thus 30,000 US jobs is probably conservative.

These are dedicated, hardworking people.  There is no room for slackers at the Budweiser brewery.  Also want to note that the very first thing you’ll see upon entering the brewery are individual photo tributes to every local employee serving in the military.
wall of heroes at anheuser busch brewery in newark nj

So if you like to badmouth Anheuser-Busch, you’re running down a lot of good people and military veterans who work for a company you probably own part of. 

Quality

Let’s face it, Budweiser usually tastes like crap. Thin, insipid, uninspired, often seems that the only flavor is an off-flavor. But take a quick look around their US website and you’ll see that virtually all of their brewmasters and GMs declare that Budweiser is their favorite beer. This also holds true at the New Jersey brewery.

Are they nuts?

No, and far from it. These people are among the smartest in the industry. Good craft brewers are selling beer at a rate of 40,000 to 100,000 barrels per year. These AB brewmasters are extremely intelligent scientist/brewer/chemist people who produce beer on the order of 40,000-50,000 barrels a week. Keep in mind that they are trying to make an easy-to-drink beer that can be consumed readily and in reasonable quantity. Bud is brewed with an intentional fruity sweetness, and very little bitterness. Consider that this is what they are trying to achieve, and then actually try Bud fresh at the brewery. You’ll begin to understand why they say this.

The batch of Bud I sampled was kegged three days earlier, and served via a fastidiously maintained tap system. For what it is, and what it tries to be, the beer was right on target. It’s not my personal fave, and I don’t go out and look for Budweiser, but I can tell you this stuff was excellent.

Newark Brewmaster Patrick Fagan explained that too many things happen to Bud when it leaves their facility. Storage temperatures, temperature swings, time, and funky taplines conspire to give Bud those off-flavors. It doesn’t have high bitterness, and it doesn’t have the bombardment of hop flavors to counter the damage. Hops — even in moderate amounts — cover a lot of sins in the craft beer and home brew universe, particularly after a beer leaves the brewery.

The Tasting Panel — Fact or Fiction…

Every day the beer comes in from all over the country and St. Louis has to approve it before it can be sold…

Well not quite. Truth is, in order to maintain quality standards and sameness of taste, each brewery pulls a few cases of Bud every two weeks and ships it to St. Louis. There a panel of tasters rates the beer based on a variety of flavor profiles that Bud is supposed to have. They don’t actually “approve” the beer; the batch they’re sampling is already on its way through the distribution channel.

What they do is rate the beer on a number system (which they don’t describe in detail). Newark QC department sez they’re happy as long as it is 7.2 or higher — “but a six rating is still a good beer” — which gives you some insight to their desire to brew to exacting standards. At the time of my visit the posted numbers were 7.1 and 7.3.

Feedback from St. Louis comes in the form of tasting comments, and brewmasters like Mr. Fagan take appropriate steps to adjust the mash accordingly.

Don’t They Destroy Old Favorites?

Anheuser Goose!  And look what they did to Rolling Rock — it tastes like Natty Light!

It’s easy to see how one might reach these conclusions. Compared to even large regional breweries such as Harpoon or Long Trail, AB Breweries resemble some sort of monolithic industrial age monstrosity.  Assumption that they’re all about quantity and  can’t possibly do any variety is dead wrong.  The truth is, these AB/InBev breweries are all about quantity, quality, and precision.

The snarky nickname “Anheuser Goose” is fun  — I say it myself — but again the fact is that AB took the original Chicago recipe and, after a lot of trial and error, ramped it up to production scale that is uncannily close.

As for the once-beloved Rolling Rock, the truth is probably stranger than fiction.

Can you handle the truth?

The glass lined tanks of old Latrobe perhaps yielded good beer, but whatever happened between tank and tap made crappy beer.  Skunky, nasty, vegetal beer.  Anheuser Busch bought the brewery and the brand, and they sold the brewery for a dollar.  So you can imagine how valuable that was.  Today the Latrobe brewery produces Red Stripe, speaking of beer brands that taste like they lost their soul.

Regardless of how bad it was, Rolling Rock was tasty in its own imperfect way.  So Anheuser Busch took the original recipe — exactly — and adjusts water to match that of south central Pennsylvania.  And on top of that, they actively maintain the Rolling Rock yeast strain! Brewmaster Fagan, who by coincidence calls Latrobe his hometown, started his career in the Latrobe brewery and attests to AB’s commitment to the original.

The water, malt, hops, yeast, and brewing process are virtually identical, yet the beer tastes little like it used to.    The problem — as far as I can tell — is that Rock is now brewed without the flaws that made it unique.  And it’s not for a lack of trying — the Newark brewery intentionally retains volatile gasses during the Rolling Rock boil to try and impart the vegetal flavor the beer is known for.  This is akin to the homebrewer who unknowingly keeps the lid on during the boil.  AB doesn’t do this for any other product at the Newark facility.

It’s a Marketing Machine!

Again, some of their marketing and distribution strategies may be tough for the competition, particularly with the Goose Island brand.  Some practices may indeed be underhanded.  I can’t comment accurately on that, only on what I was able to glean from my visit and discussions with management, and from history.

What I can tell you is their marketing savvy isn’t all it’s cracked up to be.  Their attempts to build brand buzz are often ham-fisted, such as the SuperBowl “peach beer” commercial a couple years ago.  Even the “America” branding is regarded as a bit jingoistic by all but the extreme backwoods rube.

Currently they’re trying to build hipster following for a new beer called “Old Blue Last,” a quasi lager/gose that is only available in very specific locations.  The idea is that people will see the beer at these desirable spots and associate it with good memories.  Then sometime down the road, after desire builds, boom — they’ll launch nationwide.  We’ll see how this pans out.

For the sake of whoever’s neck is on the chopping block for Old Blue Last, let’s hope they do a better marketing job than they did with Budweiser American Ale (which was actually good).  Or Bud Dry (which was ok).  Or Beck’s Sapphire (which no amount of marketing could cover for).  Or maintaining the Michelob Lager brand.  Remember Budweiser Black Crown?   Need I go on?

Fact is AB has been losing market or flat for many of its products for years now, and routinely failing at new product introductions.   So it’s kind of hard to swallow the idea that their marketing practices are steamrolling the competition.

Takeaways

So what of Bud?  How does the craft beer drinker or micro brewer or homebrewer wrap their head around this mammoth of beer?

First off, I met a lot of decent hardworking people.  They are dedicated to quality and to each other, and some of them are serving our country.

Secondly, the wacky myths about how they brew stuff are indeed wacky myths.  They make very good beer.  It may not be your type of thing nor mine, but they don’t sell a gazillion gallons of beer by making garbage.  When they do make garbage — see Beck’s Sapphire, above — the marketplace doesn’t buy it.

Finally, the idea that Bud is a giant machine that wants to roll over the little guy is simply not accurate.  Indeed, some of what they do is very heavy-handed for the up-and-coming brewers, and some may be quite questionable and monopolistic.  Business is business, nobody says it’s easy.  Disruptive innovation could destroy AB, but so far the new brewery scene is more about innovating and far too small to disrupt.

On the other hand, if AB could ever figure out how to get shipped/stored/retailed Bud to taste as good as brewery Bud, they would be a far more formidable force.

 



Here’s the brewhouse log for Old Blue Last, the new hipster gose/pils that is being marketed in super-select places under the Blue Point brand name. If you can do the math and get this down to five gallons, you may want to fill out an application…

brewhouse log for old blue last