Anheuser-Busch InBev is the biggest brewing company in the world, but it has a problem it can’t shake.
While Bud Light accounts for one out of every six beers sold in America, sales of its flagship beers have been slumping. Between 2010 and 2016, the value of Budweiser sales fell 17 percent and Bud Light sales slipped 14 percent, according to alcohol market analyst IWSR. Through most of that period, craft-beer sales grew at a double-digit clip.
Back in 2011, when there were half as many American breweries as there are now, AB InBev responded to surging craft-beer popularity by purchasing Chicago’s Goose Island for $38.8 million and loudly announced a new strategy: “If you can’t beat ’em, buy ’em.” Six years and one $100 billion merger with SABMiller later, AB InBev controls nine more formerly independent craft breweries, from Seattle’s Elysian to Virginia’s Devils Backbone.
But as sales of hoppy IPAs continue to surge, and sales of Light (and Lite) macrobrews continue to drop, AB InBev is recalibrating its approach. Rather than buying up as many craft-beer producers as it can, it’s using its resources to buy data — tons of it — through ZX Ventures.
Launched in 2015, ZX Ventures is charged with “disrupting” the beer industry by developing and investing in businesses that will provide value and improve user experiences and make more money for AB InBev. It’s invested in e-commerce delivery systems, beer-rating applications and home-brew suppliers, all of which provide data points that can tell it about trends and help it get ahead of the market.
Over the years, as AB InBev absorbed Elysian, Devils Backbone and North Carolina’s Wicked Weed, the backlash has become formulaic. The craft brewery announces that nothing will change despite the new ownership; fans get angry, call the owners traitors and sellouts, and swear they’ll never drink the beer again.
But as a result of AB InBev’s 2016 merger with SABMiller, snapping up small brewers has become harder. The U.S. Justice Department’s settlement prohibits AB InBev from acquiring any craft brewer “without allowing for department review of the acquisition’s likely competitive effects.”
So where are the growth opportunities? That’s where ZX Ventures comes in. According to its mission statement, “ZX Ventures is hopelessly dedicated to creating and analyzing the data necessary for determining our ideal strategies, products and technologies. We believe that the more we know and learn about our consumers and products, the better chance we have of anticipating their needs in the future.”
Translation: They want to know everything about purchasing patterns and decisions. What are customers looking for? What are influential people thinking? How can they make it easier to get AB InBev’s products into the hands of people who might want beer?
ZX Ventures’ broad portfolio includes last year’s purchase of Northern Brewer Homebrew Supply and Midwest Supplies, two of the largest home-brewing businesses in the country. It also has a minority stake in PicoBrew, the countertop home-brewing system that uses Keuriglike “PicoPacks” to make beer in a certain style or mimic the recipe of an existing brand.
In October 2016, ZX Ventures purchased a minority interest in RateBeer, a 17-year-old international beer-rating site that has grown to become one of the largest online databases of crowd-sourced beer, brewery and bar rankings in the world.
Strangely, there hasn’t been much blowback about the RateBeer purchase from the American beer community. There were about 50 requests for account removals after the acquisition was made public, says Joe Turner, the founder of RateBeer, but in August, “we set all-time records for total ratings and unique users, and our unique users were up about 100 percent year-to-year.”
This doesn’t surprise Kate Bernot, a writer for the Takeout and former beer editor at Draft Magazine. “I always got the impression they were the older, quirkier beer drinkers,” she says. “It was always the real dorks’ rating site. Their reviews and descriptions always sounded higher caliber than Untappd or Beer Advocate.”
And when users have spent years compiling hundreds or thousands of reviews of local Pilseners or imported IPAs, and forged a community in RateBeer’s user forums, they might find it hard to quit. “Are people so used to giving up information on the internet that this didn’t rattle them, probably because you sort of expect your online info to be exploited?” Bernot asks. “If I was a RateBeer user and I had data there, I’d think that’s just part and parcel of using Internet services.”