Major brewing news came from the annals of the world’s largest beer company on Tuesday, as Budweiser parent, AB InBev, announced plans to invest $2 billion in U.S. facilities in order to save its American brands and improve distribution throughout the country. The capital will be spent over the course of the next three years, with a cool half billion dollars being doled out upfront for projects including: new distribution centers in California and Ohio, investments in growing its presence in craft brews and imports, and ventures into low-ABV and non-alcoholic beer.
The announcement received attention from most major media outlets, as that much in projected capital expenditures is no drop in the bucket. What has largely been missed in all that reporting is the more than $11 million that AB InBev (ABI) has reserved for upgrades at its Merrimack, New Hampshire brewery. According to local WCAX.com, that money will be used to add fermentation tanks for brewing craft beer.
What is most striking about WCAX’s alert, is the capacity it says ABI will devote to production of new “craft beer” and ales. That number is 400,000 barrels (12.6 million gallons), and it is quite significant. For perspective, out of the nearly 4,000 craft breweries who reported 2015 production data to the Brewers Association in 2016 (overall 2016 data is still unavailable), only six reported amounts over 400,000 barrels. In fact, a whopping 94 percent of America’s small and independent breweries produced fewer than 50,000 barrels that year, and over half produced fewer than 1,000 barrels.
Brands who will qualify under ABI’s craft beer terminology for production at the upgraded New England facility will likely come from a pool of acquisitions all listed under its The High End division. Those ten former craft beer companies are: Goose Island Brewing (Chicago, IL), Blue Point Brewing (NY), 10 Barrel Brewing (OR), Elysian Brewing (Seattle, WA), Golden Road Brewing (Los Angeles, CA), Breckenridge Brewery (CO), Four Peaks Brewing (AZ), Devil’s Backbone Brewing, (VA), Karbach Brewing (Houston, TX) and ABI’s most recent acquisition, Wicked Weed Brewing (Asheville, NC).
Implications for what these speculative plans could mean to the areas where The High End breweries are located are numerous. For one, it is reasonable to assume that the centralization of major beer production in an already existing ABI facility will siphon off expected growth in areas of both economic impact and job creation in ten different states.
In the case of a brewery like North Carolina’s Wicked Weed, it could allow the existing brand to take advantage of a loophole in the alcohol laws of its home state. Currently, North Carolina places major restrictions on any brewery that produces over 25,000 barrels of beer in the state annually. If Wicked Weed is able to shift its production growth outside of North Carolina, it can theoretically keep its craft brewery privileges inside of NC, while also reaping the benefits of drastically expanding its national distribution footprint.
One can only speculate about why ABI has chosen to put so much craftiness into the Merrimack location, but it is worth noting that it is billed on Google Maps with the very touristy name, Budweiser Brewery Experience. Fully rigged with a Biergarten and Beermaster Tours, ambassadors will educate visitors from “Seed to Sip.” The brewery is also located within a relatively short, scenic New England drive of one of America’s most popular beercation destinations.
I reached out to a contact at The High End for a response and will update this post if I receive further information.