AB InBev‘s Merger Plans Still Leave Big Beer Vulnerable to Craft

While SABMiller has so far snubbed offers from its larger rival, a proposed union of the world‘s two biggest beermakers could create a behemoth with significant operations on every continent, allowing it to ride out slowing sales in any one market. Yet the company would remain vulnerable to competition from the tiny brewers that are winning over drinkers and contributing to that slowdown, at least in the U.S.

Craft brewers, known for serving up flavorful offerings like hoppy IPAs and barrel-aged stouts, held about 19 percent of retail consumer beer sales in 2014, according to data from the Brewers Association. That‘s up from about 16 percent in 2013. By contrast, overall beer volume fell 1 percent in 2014, and the loss came mostly from macrobrewers, heavily reliant on milder, light lagers. An AB InBev-SABMiller tie-up doesn‘t offer a path to reverse that trend and may make it even worse, said Paul Gatza, director of the Brewers Association, a trade group for independent, craft brewers.