Responses to Devils Backbone sale taking on political tone, notes VCU expert

By Leila Ugincius

On Tuesday, Virginia-based Devils Backbone Brewing Company announced it was selling to global giant AB InBev for an undisclosed price. The sale has met with outcry from craft beer purists who suggest that the company is selling out and the product will suffer. But others insist InBev knows what it is doing.

Robert Kelley, Ed.D., assistant professor of management in the VCU School of Business, noted that AB InBev has been on a craft brew buying spree as of late.

“In 2011, they made a strategic decision to enter the craft brew market by purchasing Chicago-based Goose Island. With the Devils Backbone acquisition, they now own nine craft brew companies.   

“Steve and Heidi Crandall founded Devils Backbone in 2008, and over the years they have built quite the loyal following. The founders recently decided they needed a new financial backer to support their growth strategy and AB InBev emerged as the winner. 

“The online responses to articles posted about the sale have taken on an almost political tone, with many people criticizing the Crandalls for ‘selling out’ to big business while others have taken a stance of ‘more power to them!’  The logic associated with the latter position is ‘Why shouldn’t the Crandalls be rewarded for their hard work as well as the risks taken?’ There appears to be a consistent belief from both sides that the quality and taste of the beer will eventually erode. Why is this? 

Perhaps the real heart of the issue is that loyal craft brew consumers feel that their trust has been violated.

“First, there is a growing distrust and distaste for larger enterprises by people at every age level. We see this played out every night on television as the political season heats up. Second, and perhaps the real heart of the issue, is that loyal craft brew consumers feel that their trust has been violated. The fundamental perceived brand promises that craft beer represents not only connote ‘quality and uniqueness’ but also ‘fierce localness and independence.’ Interestingly, some millennials will admit that they don't even like the taste of craft beer, but drink it because they want to support the local community in which it is made. Thus, when a brand that customers deeply support makes decisions that are perceived to be a violation of the promises they have grown to respect and love, they will understandably lash out.    

“In the end, Devils Backbone will more than likely experience a significant net gain in customers, revenue and profit as the supply chain power that AB InBev brings to the partnership is leveraged. Equally, the revenue associated with InBev’s Devils Backbone acquisition combined with all its craft brew acquisitions will also help its stagnating growth. But one interesting and unanticipated outcome could be more active support by consumers for the craft beer brands that have signed their own version of what consumer reporter Meghan Daniels calls the craft beer ‘Declaration of Independence.’”

 

Subscribe for free to the weekly VCU News email newsletter at http://newsletter.news.vcu.edu/ and receive a selection of stories, videos, photos, news clips and event listings in your inbox every Thursday.