Lots of Responses to Pete Coors' Letter to the BA

FILED MAY 8, 2018

Dear Client:

We received an overwhelming number of emails from readers offering their thoughts on Pete Coors' open letter to the Brewers Association [see BBD 05-07-2018]. The vast majority were favorable to the letter (with "spot-on" being the most common refrain).

BA chief Bob Pease said in an email to BBD: "The Brewers Association has the utmost respect for Pete and the Coors family and if/when we do receive his communication, we would look forward to sitting down with Pete over a beer and discussing his concerns." (We understand the two connected yesterday afternoon after Bob's email to us).

Here are a few of the responses we received:

A. DISTRIBUTOR: As volume has gotten tougher to come by, craft brewers are getting more and more frantic, wanting to blame everyone in the system (large brewers, distributors, retailers) other than themselves. Did they really believe that there was no limit to the sheer number of brewers that could be successful in the marketplace? I'm just worried about how hard they're going to be attacking the three-tier system going forward as more and more of their members begin to hurt from excessive debt and over capacity. It's always easier to find someone to blame for your troubles rather than just looking in the mirror...Great letter from Pete Coors, spot on.

AN ALERT READER. Part of this whole predicament is the big brewers own making...

For the past ten years, the price hikes led by the US Beer Duopoly have helped pave the road for small brewer success. With each Fall price increase, less efficient small brewers grew more successful and more confident.

Also, let's not forget who started playing dirty. Industry infighting is part of the big brewer legacy. How quickly we forget the 2005 Miller Lite ads for "unbeermanlike" conduct. Read this excerpt from a 2005 AP story:

"Critics say there are several problems with the ad campaigns: Some of the Miller commercials make unsubstantiated claims about its rival's products, while the Bud spots include unlawful acts.:

"To some degree, it has become unusually personal," said Hoag Levins, editor and executive producer of Advertising Age magazine's Web site, AdAge.com. "Some of the advertising is really petty."

What ultimately brings it all home is the realization that many ‽retired” AB, Miller, and Coors employees are a big part of the small brewing Industry today. The tactics they once used will continue to be played out in the Industry tomorrow.

"Unbeermanlike" conduct is rampant among small, medium and large brewers alike. Unfortunately for the category, it will never go away. Even if a few Industry leaders step up to the challenge, it's unlikely the rest will follow.

AN INDIE BREWER: I love this letter from Pete Coors! How is it the BA announces their diversity commitment in the same breath they seek to define who is allowed into their club?

But more importantly we keep losing sight of the share of ethanol issue beer has - and that is not a craft vs macro issue. It is a beer vs spirits/wine issue and I challenge anyone to find the infighting in the spirits industry. Imagine if all the energy and time we spend infighting was directed at promoting brand beer and we picked up 1% share of ethanol as a result. What would that mean for brand beer? How many more breweries could that support?

A. DISTRIBUTOR: I think Pete Coors made an excellent and often overlooked point about how non independent brewing enables distributors to carry independent Craft brands. Without that scale or a wine and spirits division to help carry the load, many small beer-only distributors without a national big beer brand simply can't compete in today's market.

Mr. Coors mentions visiting multiple accounts who don't carry any "big brewer" products. This is true, but big beer can absorb the losses of the corner Craft bars who support only BA defined Craft breweries. What is disturbing is the attitude of exclusivity regarding even independent breweries trickling down to the on premise channel; the "super geek beer bars" not wanting to carry a particular independent Craft brand because "I poured that brewery last month." This hyper intensive search for the "shiny new thing" makes it very difficult to build small, independent brands.

A. IMPORTER: As a European specialty importer, I find it interesting that one segment of the industry that is exclusively built on copying product styles of European heritage, (wheat, stout, porter ales, etc.) would call out another for "… deceptive marketing and unfair trade practices." When are we going to stop going to war on each other and start working together to build back beer relevancy, image and opportunity. Jeez guys, the enemy is out there, not in here!

A. DISTRIBUTOR: I understand that the small breweries want to be seen differently, and be separated from the big breweries, but it's also important to recognize the importance of the big guys - Pete is right, all brewers started out small, but it's the big guys that are usually the ones helping to teach the little guys. Think about the history of beer… ‽big breweries” are credited with inventing certain styles - the world's first pilsner (Pilsner Urquell); Wit Biers (Hoegaarden); Hefeweizens and Trappist Ales, etc. Going back to beer's roots brings to the surface the fact that "all brewers have the same passion and commitment to their business" - as Pete states - so, it doesn't make sense to be on opposite sides of the tracks.

A. HIGH END BREWER: Pete Coors touches on some valid points in his most recent letter to the BA. While I understand the BA's support for small and independent brewers as important their approach is to malign their competition, which is always suspect and in this case intellectually dishonest. The way you win is thru a superior product, support of your employees and communities and the quality of your brand. The craft ethos has always been one of collaboration and support of one another and the loss of this tenant is unfortunate. Acquired brands are almost always better for their employees, communities, fans, and quality of their beer. If you don't believe that you should visit some and see the amazing results. Beer should be celebrated and never denigrated. #beerpositive.

A. DISTRIBUTOR: I met Pete on a number of occasions and was always impressed with his intellect and passion for beer, including him attending one of our events where his products were not available and he graciously consumed a Michelob Ultra. He truly cares about our industry and his words echo daily conversations that we all have within all levels of our business. I have always been taught that you never look good trying to make someone else look bad. As a long established Wholesaler, we take great pride in our supplier partners being recognized as was [a few of their brands] at the most recent WBC, so it would seem reasonable to expect that the vast majority of BA self-defined Suppliers that have built their brands very successfully within the three-tier system would be doing more on behalf of it?

A. SUPPLIER: Pete's letter was awesome and glad he took the time to put pen to paper. Most of the craft brewers do a great job and have added a lot to the category, but when times get tight, the knives come out. How many of them over-valued their worth and hoped one of the big four (ABI, MC, Constellation, HUSA) would buy them? How many over-leveraged themselves building a second brewery too quickly? Many large suppliers spend hundreds of millions of dollars on R&D, new products, innovation and the sales force that helps develop and work with the retail channel to fight for and keep both warm and chilled space for beer. We've been fighting the same battle for fifty years that they are fighting now. Space to sales is still the gold standard.

A. DISTRIBUTOR: Harry, I think Pete makes some great points.

As a distributor that sells the everything from Coors Light/Heineken/Corona all the way down to every national and local craft beer you can imagine, I think that some of the craft suppliers out there, and the end consumer as well, really need to think about where our industry would be if the efficiencies and the investment that the big breweries put into the system diminish, and what that means to the whole industry. The distributor that I work for provides local jobs for over 130 families in our little corner of the world and without the big breweries that would not be possible.

#1 - Our industry as a whole is the most important thing. We need the whole thing to grow for it to continue to support all the people and families beer provides for. It doesn't matter how much craft grows, if the losses of the big brewers off set that growth. Local livelihoods depend on the industry as a whole, not any 1 category inside of it.

#2 - Pete's comments on access to market are spot on. The new kids on the block are getting a discounted ticket to ride the machine that the big brewers allowed us as distributors to build. Delivery frequency, support staff, merchandisers to help sell your beer, sales routes with actual time to sell, promo teams…. None of that happens without the efficiency of some big brands to sell.

#3 - No beer style is any better or worse than any other. Everyone has a right to brew what they feel their consumer wants and consumers are free to prefer whatever type of beer they want for whatever occasion that beer is satisfying at that moment. It really doesn't help anyone who works in the beer business to pit one segment of the business against another. Anyone who actually cares about the beer industry and the people who work in it should know that. I imagine that Pete has seen some of his brewers devote their entire adult lives to mastering a craft and watched them put in countless hours and late nights at his facilities. Standing up for those employees and the hard work they have given him is a worthwhile endeavor.

Very thoughtful emails, and I appreciate taking the time to respond.

Until tomorrow,
Harry, Jenn, and Jordan

"If only we'd stop trying to be happy we could have a pretty good time." - Edith Wharton

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