Once upon a time, women would brew beer at home to sustain her family. Any excess would be sold to her neighbours, to provide a little cash.
It’s a far cry from the £69 billion deal that could see one company brew 27.8% of the world’s beer – 542.9 million hectolitres.
54290000000 litres. Or enough beer to fill Sydney harbour and still have 4290000000 litres left over, or about 14 pints for every man, woman and child alive.
Big beer is getting bigger it seems, but where did it come from? Click the image below to see the origin story of this beerhemoth about to be born.
The merger will see the world’s two largest brewing companies become one, defending their dominance over closest rival Heineken, who wallow at only 8.8% global beer production.
It put’s a question mark over the fate of MillerCoors. The joint venture was formed in 2007 to combine SABMiller and MolsonCoors’ US operations to better challenge AB InBev’s dominance. SABMiller owned 57% of the venture, which is now likely to be wholly owned by MolsonCoors. So it may become totally redundant. Or, another player may step in – perhaps Snow from China – to challenge the American megabrewer on its home turf. That is yet to be seen.
It’s a huge deal. £69 Billion could buy you Real Madrid, the most valuable team in the most watched sport on the planet, 20 times. It could buy you 200 BrewDogs, the darling of UK craft brewing who have valued themselves at £300 million in a crowdfunding offer.
Why though? I can hear the hipsters yelling “Craft beer, obviously! The little guys are sticking it to the big man and scaring them shitless! They’re running scared and ganging together. Craft beer! Craft beer! Craft beer! Down with capitalism with Craft beer!”
Not so fast my bearded friends. Craft beer has only just broken double figure market share in the US. And once you consider the fact that the US is craft beer’s stronghold, with few other nations being captured quite so much by the trend, craft beer’s market share is hardly going to terrify the fat cats from the big players.
Craft beer might have put a small dent in big beer’s profits, but not enough to force a multi billion pound merger. Take a look at the image above – mergers like this have been happening regularly since the 80s. The new company will become the fourth generation in a line of megabrewing conglomerates, grouping together to streamline operations, acquire business in new markets and maximise profits. The rise of the craft brewers is a minor problem. The economy of scale is a larger motivator.
The net result on the industry as a whole is close to nothing. Craft brewers will continue to do what they do and the megacorporations will do the same. As it stands, the greater threat to both is declining total beer consumption.