The end of craft?

12 May, 2017

If you want to know where the spirits industry is headed, you could do worse than look at beer.

Despite the apparent health of craft beer (now around 13% of the US market), segment leader Samuel Adams last month decried the hegemony of AB-Inbev and SAB Miller. Its founder Jim Koch warned that the US government has given the green light to foreign conglomerates to eat up craft brewers. “If we continue down this path, we may be witnessing the beginning of the end of the American craft beer revolution,” he said.

Meanwhile British firm Brewdog, for years known for its marketing bark more than its corporate bite, has started to show its teeth, threatening lawsuits over trademarks. One over the use of ‘punk’ – which seems at odds with the very movement it describes – another connected to its Lone Wolf distillery venture (there can be only one!). The company is acting every bit big business (has it forgotten Budweiser’s legal pursuit of Budweiser Budvar?) which is not surprising – it is. Just a few weeks ago Brewdog announced it had been valued at £1bn, Martin Dickie and James Watt having sold a 22% stake to TSG Consumer Partners. Between them, they’ll still own 47%, so one imagines they, their new private equity partners and their crowdfunding shareholders could one day be in for a heck of a payday if the company is fully bought out.

The spirits industry is a few years behind in terms of craft’s impact on the market, but similar trends have emerged. We saw cult gin Monkey 47 head to Pernod Ricard. The French group more recently took over West Virginia craft whiskey maker Smooth Ambler. William Grant & Sons has followed up its purchase of the Hudson Whiskey brand by buying the New York state distillery at which it is produced. Diageo, of course, is hedging its bets with cunning craft incubator Distil Ventures. These moves seem like early markers.

So is this the beginning of the end for craft? Perhaps, but more likely an evolution. One thing will surely remain true – no matter how the behemoth groups swing it, it’s hard to be both big and small.

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Nick Strangeway

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