What happens when craft beer sells out? Virginia's largest craft brewery is about to find out. (Photo by: Stephanie Breijo)
Every few months, the beer nation gets saddled with the same issue: Big Beer buys Little Beer, and tears ensue from those involved, from those who have nothing to do with beer, from those who didn’t even know which company owned said brewery to begin with. But just how bad is it, and what does it mean? The latest in the acquisition stream is Devils Backbone Brewing Co., the largest craft brewery in Virginia, which produces more than 60,000 barrels annually. The Roseland-based brewery, which opened in 2008, announced today that it will be acquired by Belgian-headquartered Anheuser-Busch InBev.
This isn’t new territory for the beer behemoth, the company behind Budweiser, Busch, Michelob, Corona and others. In December of 2015, it acquired Colorado's Breckenridge Brewery, and before that purchase, it scooped up Seattle's Elysian Brewing Co., Chicago-based Goose Island Beer Co. and Patchogue, New York's Blue Point Brewery, now all pieces in the company's ever-expanding “craft focused” division, The High End. This is in addition to its $107 billion merger with the London-based brewery and beverage company SABMIller.
Steve Crandall, owner and founder of Devils Backbone, says in a statement that Devils Backbone will keep its autonomy and will continue with its own authentic DNA within AB InBev’s The High End framework. The acquisition looks to be smart one for AB InBev. Devils Backbone was already nearly 100 percent dispersed through AB InBev distribution houses, which should make this transition easy. (In fact, according to the National Beer Wholesalers Association, most of the country’s beer distribution, craft or not, flows through companies with agreements to either sell AB InBev or MillerCoors.) And Devils Backbone's flagship, Vienna Lager — which comprises roughly 60 percent of the brewery's sales — stands to be a viable competitor to both Sam Adams Boston Lager and Yuengling, a foothold AB InBev has tried to gain multiple times and failed.
The Brewers Association defines American craft breweries as "small, independent and traditional." "Small" is defined as an "annual production of 6 million barrels of beer or less"; "independent" is defined as at least 75 percent owned or controlled by a craft brewer; and "traditional" is defined as brewing in which at least 50 percent of the beer's volume consists of "traditional or innovative" ingredients.”
By this definition, Devils Backbone — now stripped of its "independent" qualifications — no longer falls into the craft beer category.
Correction: This story previously stated that Devils Backbone produces more than 60,000 gallons of beer annually. In fact, it produces more than 60,000 barrels. This piece has been updated to reflect this.