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Author Topic: Elysian Just sold to Anheuser-Busch  (Read 9039 times)

Offline HoosierBrew

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Re: Elysian Just sold to Anheuser-Busch
« Reply #60 on: January 28, 2015, 03:57:11 pm »
Expectations can be managed, consumers can be 'educated' and are everyday. It's why the majors have bigger marketing budgets than production budgets. They are in the business of getting more people to eat/drink more of their product period.

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Offline BrewingRover

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Re: Elysian Just sold to Anheuser-Busch
« Reply #61 on: January 28, 2015, 04:59:21 pm »
Expectations can be managed, consumers can be 'educated' and are everyday. It's why the majors have bigger marketing budgets than production budgets. They are in the business of getting more people to eat/drink more of their product period.

Anyone know just how big the marketing budgets are?

I checked their filings and ABInbev as a whole spent $5.2 billion on sales and marketing expenses in 2012. Cost of sales was $16.4 billion.

A deal like this is about the brands and the intellectual property of the brewery acquired, not the revenue.
It's such a fine line between stupid and clever.

Offline klickitat jim

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Re: Elysian Just sold to Anheuser-Busch
« Reply #62 on: January 28, 2015, 08:09:48 pm »
From what I can tell from research, the "dumbing down" of American beer started around WWII, when women were doing much of the shopping.  Supposedly, breweries wanted to make less challenging beer to appeal to them.  The invention of the 6 pack supposedly happened around then to make it easier to carry beer home.  Maybe urban legend, maybe not...

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Offline pete b

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Re: Elysian Just sold to Anheuser-Busch
« Reply #63 on: January 29, 2015, 08:04:59 am »
From what I can tell from research, the "dumbing down" of American beer started around WWII, when women were doing much of the shopping.  Supposedly, breweries wanted to make less challenging beer to appeal to them.  The invention of the 6 pack supposedly happened around then to make it easier to carry beer home.  Maybe urban legend, maybe not...

"There are no urban legends in the beer world"
Benjamin Franklin
Nice one, Jim. No explanation needed this time. ;)
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Offline nateo

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Re: Elysian Just sold to Anheuser-Busch
« Reply #64 on: January 30, 2015, 09:09:50 am »
It's why the majors have bigger marketing budgets than production budgets.

I really respect your opinion on a number of topics, but that statement is complete nonsense.

http://www.ab-inbev.com/media/annual-report-2013.html

Pull up the full report, scroll down to the consolidated income statement.

Cost of sales for 2013 was $17,594m, while sales and marketing expense was $5,958m. That figure includes undisclosed amortizations for distribution and supply relationships they may have purchased, as well as distribution software and equipment, etc. So it's hard to determine exactly how much they spend on "marketing" in terms of the common usage of the word. Most logistics operations get rolled into the "sales and marketing" category.

In any case, production is a way bigger number.
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Offline pete b

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Re: Elysian Just sold to Anheuser-Busch
« Reply #65 on: January 30, 2015, 09:28:52 am »
It's why the majors have bigger marketing budgets than production budgets.

I really respect your opinion on a number of topics, but that statement is complete nonsense.

http://www.ab-inbev.com/media/annual-report-2013.html

Pull up the full report, scroll down to the consolidated income statement.

Cost of sales for 2013 was $17,594m, while sales and marketing expense was $5,958m. That figure includes undisclosed amortizations for distribution and supply relationships they may have purchased, as well as distribution software and equipment, etc. So it's hard to determine exactly how much they spend on "marketing" in terms of the common usage of the word. Most logistics operations get rolled into the "sales and marketing" category.

In any case, production is a way bigger number.
I don't think this takes away from the point that big corporations use their massive marketing budgets to create demand beyond what the quality of a product might warrant. The smaller you are, the more you rely on the quality of your product. Being big doesn't mean you can make a crappy product but you sure have more wiggle room to cut back on expensive ingredients.
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Offline morticaixavier

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Re: Elysian Just sold to Anheuser-Busch
« Reply #66 on: January 30, 2015, 09:31:42 am »
It's why the majors have bigger marketing budgets than production budgets.

I really respect your opinion on a number of topics, but that statement is complete nonsense.

http://www.ab-inbev.com/media/annual-report-2013.html

Pull up the full report, scroll down to the consolidated income statement.

Cost of sales for 2013 was $17,594m, while sales and marketing expense was $5,958m. That figure includes undisclosed amortizations for distribution and supply relationships they may have purchased, as well as distribution software and equipment, etc. So it's hard to determine exactly how much they spend on "marketing" in terms of the common usage of the word. Most logistics operations get rolled into the "sales and marketing" category.

In any case, production is a way bigger number.

I am, on occasion, prone to hyperbole and I apologize. However, that cost of sales is a compound number. it is ingredients, labor, packaging. so marketing is roughly 30% of the cost of everything else involved in making beer. Still pretty high no?
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Offline nateo

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Re: Elysian Just sold to Anheuser-Busch
« Reply #67 on: January 30, 2015, 09:36:35 am »
I don't think this takes away from the point that big corporations use their massive marketing budgets to create demand beyond what the quality of a product might warrant. The smaller you are, the more you rely on the quality of your product. Being big doesn't mean you can make a crappy product but you sure have more wiggle room to cut back on expensive ingredients.

"Marketing" is why dumb people buy stuff you don't like. "Quality" is why you buy stuff you like. I think it's pretty condescending to tell people "You don't actually like that, you're just a rube."

Maybe other people like Bud even more than their marketing might "warrant"? Maybe you like Dogfish Head more than the quality "warrants"? There are tons of small breweries that are successful because they position themselves well (we're the cool guys, anti-corporate, local/whatever) and make pretty bland, middling beer.

However, that cost of sales is a compound number. it is ingredients, labor, packaging. so marketing is roughly 30% of the cost of everything else involved in making beer. Still pretty high no?

Cost of sales includes depreciation on property, plant and equipment as well. "Marketing" includes basically anything to get the stuff from the warehouse to the consumer. Beer is heavy and perishable, logistics for such products are very complicated on a global scale, so there are a lot of expenses incurred under that category that don't have anything to do with Super Bowl commercials or Clydesdales.

Edit: technically receiving and storing beer in warehouses can be capitalized into the cost of sales. So inbound logistics, handling, and the appropriate amount of warehouse overhead would rolled into the cost of sales, and all outbound logistics would be part of the selling expenses.
« Last Edit: January 30, 2015, 09:41:23 am by nateo »
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Offline denny

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Re: Elysian Just sold to Anheuser-Busch
« Reply #68 on: January 30, 2015, 09:43:06 am »
I don't think this takes away from the point that big corporations use their massive marketing budgets to create demand beyond what the quality of a product might warrant.

I would have to say that if you think only big corporations do that, you must have not been involved in the marketing world.
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Offline morticaixavier

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Re: Elysian Just sold to Anheuser-Busch
« Reply #69 on: January 30, 2015, 09:49:30 am »
I'm not calling anyone a rube or implying that people aren't capable of making decisions for themselves. I also am not saying other companies don't use marketing.

Are you saying that marketing has no affect? because that seems just as specious to me.

the idea that consumer desire is the only driver of change in any industry is also specious. particularly in an industry that is more or less saturated like beer.

Regardless, I think this is an argument of philosophy and unlikely to be resolved. I'm going to bow out of the discussion. Time will tell if the ABI acquisitions maintain the level of quality and flavor that their fans have come to expect or not.
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Offline pete b

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Re: Elysian Just sold to Anheuser-Busch
« Reply #70 on: January 30, 2015, 09:53:37 am »
I don't think this takes away from the point that big corporations use their massive marketing budgets to create demand beyond what the quality of a product might warrant. The smaller you are, the more you rely on the quality of your product. Being big doesn't mean you can make a crappy product but you sure have more wiggle room to cut back on expensive ingredients.

"Marketing" is why dumb people buy stuff you don't like. "Quality" is why you buy stuff you like. I think it's pretty condescending to tell people "You don't actually like that, you're just a rube."

Maybe other people like Bud even more than their marketing might "warrant"? Maybe you like Dogfish Head more than the quality "warrants"? There are tons of small breweries that are successful because they position themselves well (we're the cool guys, anti-corporate, local/whatever) and make pretty bland, middling beer.

However, that cost of sales is a compound number. it is ingredients, labor, packaging. so marketing is roughly 30% of the cost of everything else involved in making beer. Still pretty high no?

Cost of sales includes depreciation on property, plant and equipment as well. "Marketing" includes basically anything to get the stuff from the warehouse to the consumer. Beer is heavy and perishable, logistics for such products are very complicated on a global scale, so there are a lot of expenses incurred under that category that don't have anything to do with Super Bowl commercials or Clydesdales.
I don't think people who buy bud are dumb. I think some have tried other beers and just like bud the best. I think a whole lot like to drink beer but don't really give it that much thought. They are the ones susceptible to marketing. I'm not very swayed by marketing because I'm into beer and think about it critically. I might be susceptible to marketing for say,toilet paper. (even more if I watched tv). I buy scott bathroom tissue. Probably marketing. I have a vague idea its better and it doesn't seem to make a difference to my ass even if quality has gone down a bit over the years. I don't think that makes me dumb. If I had a hemorrhoid problem I would likely be really into toilet paper and get some locally sourced artisanal toilet paper that has a ph that is just right because it was harvested in the forests of my childhood.
I share Bill Hick's views on marketing btw: https://www.google.com/search?q=bill+hicks+marketing&sourceid=ie7&rls=com.microsoft:en-US:IE-SearchBox&ie=&oe=&gws_rd=ssl
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Offline pete b

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Re: Elysian Just sold to Anheuser-Busch
« Reply #71 on: January 30, 2015, 09:56:15 am »
I don't think this takes away from the point that big corporations use their massive marketing budgets to create demand beyond what the quality of a product might warrant.

I would have to say that if you think only big corporations do that, you must have not been involved in the marketing world.
I don't think that only big ones do it but they can do it to an exponentially higher degree. I've never seen a local brewery advertise on the super bowl.
Don't let the bastards cheer you up.

Offline redbeerman

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Re: Elysian Just sold to Anheuser-Busch
« Reply #72 on: January 30, 2015, 01:54:21 pm »
I'm not calling anyone a rube or implying that people aren't capable of making decisions for themselves. I also am not saying other companies don't use marketing.

Are you saying that marketing has no affect? because that seems just as specious to me.

the idea that consumer desire is the only driver of change in any industry is also specious. particularly in an industry that is more or less saturated with beer.

Regardless, I think this is an argument of philosophy and unlikely to be resolved. I'm going to bow out of the discussion. Time will tell if the ABI acquisitions maintain the level of quality and flavor that their fans have come to expect or not.

That's better  8)
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Offline BrewingRover

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Re: Elysian Just sold to Anheuser-Busch
« Reply #73 on: February 03, 2015, 01:37:45 pm »
There's a very good background piece on this at Brewbound

http://www.brewbound.com/news/inside-b-inbevs-acquisition-elysian-brewing
It's such a fine line between stupid and clever.

Offline homebrewgamecock

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Re: Elysian Just sold to Anheuser-Busch
« Reply #74 on: February 03, 2015, 03:02:44 pm »
To people like us, beer is important.  Craft beer, homebrewing, quality, etc.  In all honesty, most beer drinkers probably don't care what they drink.  We struggle to understand that because we are passionate about beer.  The average beer drinker is probably fine with BudMillerCoors products.  That is beginning to change more and more thankfully.  If Elysian beer still makes a high quality product, I will buy it again.