AB/InBev to Redner: “I can haz CCB?”
The past 48 hours in the Florida beer world has been an experience in shoddy reporting, mind-numbing knee-jerk reactionism, and ultimately comedy. This is what happens when a hack writer takes an innocuous piece of information, surrounds it with vague claims and speculation, and then releases it under the guise of “industry news”. And then other online sources pick it up and run it again as “fact”. Here’s the gist:
A local newspaper ran a story about AB/InBev, the foreign macrobrew corporation that owns Budweiser and claims to make beer “The Hard Way”, reaching out to Cigar City Brewing about an acquisition. Honestly, that is where the article should have ended, because there is no story here. But the author continued on, referencing the much-bashed Superbowl ad, the recent acquisition of Seattle’s Elysian Brewing, and other potential targets (including the very vocal anti-AB breweries Intuition (Jacksonville) and Due South (Boynton Beach). What gets glossed over is probably the most important part of the article, a direct quote from CCB owner, Joey Redner: “We have been approached about having a more in-depth meeting. There hasn’t been a second meeting.”
Not surprisingly, reaction from the beer geeks in Florida was fast and furious, with vows to never let Cigar City touch their lips again if the sale happened, to the claim that the Tampa brewery’s sale would not have any effect on Tampa Bay’s beer scene “at all”. The venom was prolific, the hyperbole pretty astonishing. And the journalistic merits of the article itself heavily called into question, and rightly so.
But here are some facts for you:
- AB/InBev acquires other businesses as part of their business model. That is not new to anyone who follows the industry. They own Goose Island in Chicago. They have minority ownership in Redhook, Widmer, and Kona Brewing. These are not stupid people running AB/InBev. They see the market trends and the assess how they can profit from them. Like it or not, it is an effective model.
- Cigar City Brewing is successful, well recognized, and in the top tier of Florida breweries in regards to size and perceived value. Of course ABI would be interested.
- Cigar City Brewing is also a business, and Joey Redner is a businessman. A smart businessman listens to business propositions, even if he has no intention of taking any action. One of Joey’s comments about this whole deal was “We talk with private equity folks all the time. You always take the meeting because information is cool.”
So, does this mean Cigar City is next to be gobbled up by ABI? In a word: no. I give you the following quotes from Joey Redner and head brewer Wayne Wambles:
Wayne (in response to the suggestion of Jai Alai national distribution) – There would not be immediate increase in Jai Alai production in such a manner to distribute nation wide. It is impossible to do that and have the beer be true to brand. The big issue is the allocation of hops to produce the beer. Some of the hops are not standard issue. At that point, the brand would out grow the raw material chain. It’s inevitable either way.
Joey – So that meeting took place BEFORE the 10 Barrel and Elysian deals closed. There hasn’t been a second meeting in that time. Draw your own conclusions and remember newspapers can troll too.
Joey – It is a moot point anyway. We took a meeting. It ain’t much of a story.
Wayne (posted on his Facebook wall) – We are not selling to AB. If you read this, please spread the word.
I am humbled by the fact that many people are concerned and have sent me personal messages but everything is fine.
Enjoy your beer and relax.
Is that clear enough for you? Does that mean Cigar City will never be sold? Of course not. Remember that part about Joey being a businessman? I’ll give you one last quote:
Joey – For a hundred million, I’d stop liking beer.
One thing that so many of the beer lovers forget is that while we all like to think it is all about the beer, for the people that do the brewing and run the breweries, it is also about the business. At the end of the day, when they do the books, the numbers better be black. While very few people get into brewing to get rich, none go in to fail.
A word of caution before I sign off: beware articles about the industry written by someone with little knowledge of it. And before you go screaming to the heavens “WHY HATH THOU FORSAKEN MY BEER?!?!” you need to a) gain a little perspective, and b) maybe ask around to get clarity on things.