AB-InBev may be done with buying US craft brewers
“Creative destruction” is one of those buzz terms corporate leaders like to pay lip-service to. But for AB-InBev it’s a modus operandi. In early September 2017 the industry was shocked to read that AB-InBev had laid off around 90 percent or 380 sales force employees from its High End division in the US, which is the arm of the company that deals with import brands like Stella and Leffe as well as its US craft brewery acquisitions.
Like its rival MillerCoors and its Tenth and Blake division, AB-InBev’s corporate strategy since 2015 entailed clubbing its high-end brands into one unit where these high-margin brands would receive the tender love and care they require.
But sooner than MillerCoors, the world’s number one brewer saw that the acquired craft breweries and their sales teams were doing a better job at pushing brands than any High End salesperson ever could. It’s easy to imagine that the title of “Wicked Weed sales person” holds more clout with distributors than “High End sales person” ever could, it was pointed out. It’s for the simple reason that these people enjoy greater credibility, authenticity, trust, and reputation. Hence the turnaround in strategy and the redundancies.
All in all, the cuts affect about two percent of AB-InBev’s 18,000 overall North American workforce. Understandably, the employees being let go certainly were not happy, with one telling the website Good Beer Hunting that “it’s just crazy that they created all of that structure just to destroy it in two and a half years. They just let go of 50+ Cicerones at once.”
Perhaps of greater interest, though, are several lines that were revealed by a piece in Forbes magazine on 7 September 2017, which was summarising the layoffs. According to author Tara Nurin, who interviewed the President of the High End unit, Felipe Szpigel, earlier in the week, Mr Szpigel revealed some major intent in terms of the company’s future plans, saying AB-InBev “would no longer focus on acquisitions, and would instead pivot to growing its ground-up model.” Mr Szpigel was quoted as saying: “Our plate is full. We have ten amazing craft partners. Our focus is going to be organic.”
The craft beer industry may be relieved to learn that, if this was meant to be taken literally, AB-InBev would no longer be looking toward the acquisition of craft breweries.
Instead, the presumed course of action would involve growing all of those existing brands on multiple levels, which could most visibly include brewery expansions or new locations in cities where there are yet no AB-InBev-owned craft breweries.
Maybe soon we will see Elysian brewpubs in the Midwest, or a Wicked Weed Funkatorium on the West Coast? Who is to say?
Is AB-InBev’s plate really full? Craft brewer acquisitions in the US since 2011
