Unless you’re a craft beer nerd (or into rather obscure creative-industry conferences) you probably know nothing about True Craft – the $100 million investment fund proposed by Stone Brewing CEO Greg Koch at the e.g. Conference last month. The fund is designed to help maintain the integrity of independent breweries.
“Some people start companies to sell out. Some start companies because they are compelled to follow their passion. True Craft is for the latter,” said Koch in a statement announcing the venture. “Craft beer needs an alternative model to the one that requires founders to sell their company in its entirety. In a world in which there are constant forces toward homogenization and fitting in, I specifically want to foster a world of uniqueness, depth and character.
There has been a long battle between so-called “craft” breweries and companies like Anheuser-Busch InBev, the world’s largest brewer and home to brands like Budweiser, Corona and Stella Artois.
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The fight is fairly one-sided.
Budweiser alone sells about as much beer as the entire craft-beer industry, even as the demand for craft beer grows (by 12.8 percent in 2015, according to one info graphic from the Brewers Association).
Still, these large companies see the value in what the smaller craft breweries are doing and have begun buying into the market by acquiring partial or full ownership in breweries. A short list includes Goose Island, Elysian Brewing Company, Ballast Point Brewing, Lagunitas Brewing Co., Widmer Brothers Brewing, Redhook Ale Brewery, 10 Barrel Brewing and Kona Brewing Company.
For the small breweries, it can make for a big payday. Ballast Point Brewing’s sale to Constellation Brands Inc. brought in $1 billion.
For fans of craft beer these deals reek of opportunism, as if the only value these large companies see in craft beer is the dollar. And it does feel like these corporations are securing marketplace, buying craft breweries while working with distributors to keep craft beers off store shelves.
At the very least, they work to pit beer drinkers against each other by portraying craft-beer fans as snobby hipsters (if anyone saw the Budweiser Super Bowl commercial last year, or its follow-up this year).
This kind of ideological battle is not new or contained solely to craft beer. In the ’90s, there was a surge of craft culture. It went under a different name, of course. We called it indie or alternative.
There were indie-films and art and alternative rock. What bound them was an artistic integrity and that they existed outside the typical corporate structures. Independent record labels were scene-specific and released albums from obscure bands, distributed directly to the fans. Indie films were created with super low budgets and screened at film festivals to trump up hype so they could maybe be picked up by independent studios, like Miramax Films. (Miramax was eventually sold to Disney, if you are looking for more parallels.)
Even then, those companies and artists that jumped the indie-barrier were often marked as sellouts.
When Green Day left the indie-label Lookout! for Reprise Records, some longtime fans (and punk-rock purists like myself) felt the band traded its integrity (and possibly artistic vision) for success. The band’s first major label release, “Dookie,” was No. 2 on the U.S. Billboard 200 and sold some 20 million copies.
In the same way, many fans of craft beer feel almost offended when their favorite breweries get bought up by large corporations. There’s even a nifty term to describe those breweries: Buyout beer.
$100 million has been secured from independent investors to acquire “minority, non-controlling” stakes in craft breweries.
To be fair, corporate “craft” can exist.
One could argue that Apple, while a mega-corporation, understands craft and has built its legacy on the idea that design and aesthetics and functionality are as important (perhaps more important) than price point. In-and-Out Burger is arguably a craft brand. As is Sub Pop Records, which started as an independent label before partially selling to Warner Music Group in 1995.
And there’s the rub – the reason a thing like True Craft is important. All too often, those who truly care about their craft face an eventual financial reality with little alternative other than “selling out” – for good or bad. True Craft offers that alternative – a way to do business that sustains indie ideals, in an industry where those ideals are often at odds with the bottom line.
It’s something toward which more business owners and industry leaders should strive.
“By investing in True Craft now, we can be confident that our vision is locked in beyond our professional lifetimes,” Stone Brewery co-founder Steve Wagner said in the project’s official announcement. “We feel privileged to help others in our industry do the same.”