Walmart Joins Big Beer to Bet on Millennials

It’s been over a year since Walmart purchased Bonobos and ModCloth. Initially, it was hailed as a bigger deal than Amazon buying Whole Foods, since it positioned Walmart as a real contender for the Amazon empire – finally.
For months after the acquisition, the industry and general public at large debated whether these trendy boutiques had squandered their hip clientele through this alliance with the low-priced behemoth. 
The truth is: it was a smart move by Walmart. They weren’t really in the market for new business; they were in the market for a new market. It’s one year later, and ModCloth and Bonobos customers are still shopping. In fact, sales are up.
This isn’t a new business tactic. It’s an old trick the Big Beer industry – lead namely by Anheuser-Busch InBev and MillerCoors – have been perfecting for years. The responses have been largely the same from craft consumers.
An extensive timeline of craft beer acquisitions shows that Big Beer has been buying out small, craft breweries for over 30 years, but the number of acquisitions each year has dramatically accelerated from one every few years to as many as 16 in a year. 
2015 was a record year for acquisitions, and the beginning of the consumer revolt. Elysian Brewing’s sale to Anheuser-Busch despite the ‘nay’ vote from one of the three founders sparked a Seattle-based upheaval that is growing nation-wide.
Almost all of the acquired craft breweries have continued to produce their ales, lagers, stouts, and more with the continued use of ‘craft’ in their marketing, hoping to capitalize on the ever-growing craft enthusiast audience.
As a response, the Brewer’s Association actually created a new seal to designate truly independent breweries as ‘craft’. To deserve the term and earn a seal, a brewery must produce fewer than 6 million barrels of beer each year, use traditional or innovative brewing ingredients and fermentation, and remain independent with less than 25 percent being owned or controlled by an entity which is not itself a craft brewery.
The seal was spurred on after a failed movement called Take Back Craft, in which the Brewer’s Association launched a crowdfunding campaign that attempted to raise $213 billion (yes, billion) to purchase Anheuser-Busch InBev. The colossal beer empire owns over 30% of the Craft Brewing Alliance. Much like Walmart’s strategy of reinvigorating their brand with millennials, Big Beer has been boosting their bottom line with the same audience.
The biggest concern for both the Big Beer industry and the Big Box store will be navigating the buying triggers of their newly minted millennial market. This market seeks out brands they are able to associate themselves with. Typically that means they provide experiences, share their values, and innovate with purpose. The customers who complained about Walmart’s employment ethics and treatment of small businesses are the same craft beer enthusiasts who throw out terms like imposter craft’ and call for Big Beer boycotts.
With so many small breweries owned, at least in part, by larger companies, it’s becoming harder to tell which are truly craft. Craft has been defined for years as culinary advancement, unique ingredients, and innovation that happened to be made in small batches by primarily independent breweries, but with the new seal and increase in acquisitions, how should it be defined now?
Craft beer will likely continue to follow in the footsteps of the ‘organic’ industry. While the definitions of organic and craft are still being refined and redefined by various organizations, companies of all backgrounds and intentions use the terms for marketing purposes. Why? Because it’s incredibly effective.
At the end of the day, it’s a free market driven by thirsty consumers. Many believe the majority of drinkers simply won’t care where their favorite brews come from or who’s P&L statements they’re listed on. 
While early adopters may complain that the acquisitions are at odds with the values of the companies they bought into, Big Beer is betting that most consumers just want a delicious and interesting beer to drink. If Walmart’s growth this year is any example, Big Beer is on the right track.
By | 2018-09-07T18:29:57+00:00 September 7th, 2018|Adam's Blog|Comments Off on Walmart Joins Big Beer to Bet on Millennials