How industry consolidation affects you: beer

Beer! Microbrew this and craft-brew that, how can beer be victim to consolidation?

The business of hops, yeast and malt is still fairly unconsolidated, but it has come together rather strongly in the past decade, to the point where the most famous American beer brands are all owned by foreigners. Anheuser-Busch InBev is the world’s largest beer manufacturer, with 21% of global sales. Don’t let the storied names out of St. Louis fool you; AB InBev is a Belgian-Brazilian company headquartered in Brussels.

In second place is SABMiller, founded in South Africa, headquartered in London, and owner of the Miller-Coors brands that hearken back to the Colorado Rockies. SABMiller sells roughly 44 billion pints of beer each year. SABMiller just made an offer to buy Heineken, a brewing conglomerate of similar size, which the Dutch company has so far rejected; should a deal go through, the combined firm would also control 21% of the beer market. The Economist also suggests that InBev may just buy SABMiller, creating a behemoth with combined production of nearly 600 million hectolitres (or, in practical terms, 125 billion pints) of beer per year.

Despite this consolidation, local and regional brewing continues to thrive. From mid-size producers like Sam Adams and Brooklyn to do-it-youself brewpubs, a wide variety of beers exist alongside the majors—some 3000 commercial entities in all, ensuring some diversity in a consolidating field.

Update: Flowing Data made a nice beer family tree that visually represents the industry.

This is the latest in a series of summaries of industries whose corporate consolidation has led to a small number of players controlling the majority of a sector, creating oligopolies in the mass market. Previously

What the watch industry is missing

I’ve been following the Watch reaction since its unveiling last week, and I keep coming back to the short-sightedness of the luxury watchmakers’ reaction.

Mostly, the watch industry has been complimentary, in its way, of the Apple Watch. They are right to compartmentalize it as fundamentally different from their products, and to appreciate it on its own level. Sample quote: “I do not believe it poses any threat to haute horology manufactures, I do think the Apple Watch will be a big problem for low-priced quartz watches, and even some entry-level mechanical watches.” (Monday Note has a good roundup.)

But here’s the thing: anyone who buys an Apple Watch is going to stop buying other watches, regardless of price point.

I keep thinking about my own use case. I’ve been a daily watch wearer since elementary school. I wear a watch with a great degree of pride, as the accessory I rely on. My watches are carefully chosen, and whether an inexpensive Swatch, an oversized Nixon or a finely crafted Breitling, they are a fixture in my life.

Of course, I’m also a daily Apple user, and an early adopter of their products. I own the first-generation iPod, the first iPhone, the first iPad. I undoubtedly will buy the Watch, even though I’m not a rabid message-sender, even though I’m not a jogger, even though I’m not yet 100% certain where the new device journey will lead me. It’s a new Apple gadget and it’s a watch—I’m powerless to resist.

And once I have the Watch, I’m going to wear it regularly. I will tinker with it, find its ideal use cases, answer a thousand questions about it, be proud of it as I was my other first-gen Apple products and every one of my watches. As with the iPhone, I expect it to become part of my daily routine.

And once I’m doing that, well, my other watches don’t stand a chance. Because as the Watch assimilates itself to my life’s rhythms (or, perhaps, vice versa), not wearing the Apple Watch will feel like something’s missing. The vibrations and alerts and shortcuts that aren’t offered by my quartz Zodiac will be glaring omissions. Before long, I’ll be strapping on the Watch every day, just as I put my iPhone in my pocket.

If the Watch works for me, my workaday watches will slowly get relegated to my nightstand drawer, and future watch purchases will shift from investing in the next object of beauty and personal expression to saving a few bucks for Watch 2. And Apple will then own a thirty-year habit of mine, just like they came to own my music and phone habits, too.

Frankly, I’m not even sure I’m happy about this. But I’m going for it. I expect millions of folks like me will, too, and when they do, the disruption to the watch industry will not be pretty.

What I did this summer

It’s been quiet around here because I spent July recovering from my concussion and August catching up from a month of not working full speed.

That said, everything is great! I came out of the trauma fog in time to find lots of fun this summer, including a full 11 days of vacation, which I’d travelblog in this space in detail had we not basically repeated our trip from 2006 to great satisfaction. Shorthand version: Cape Ann; Bass Rocks Ocean Inn; Roy Moore Lobster Co.; Martha’s Vineyard; incredible car ferry reservation luck; Atria and Among the Flowers; Larry David’s ex-wife; ball in the yard with my two growing sons; beaches, starry nights, bunny rabbits, grasshoppers, jellyfish, three-year-olds eating salads, six-year-olds reading 200-page books in one day, an outdoor shower, a flat tire, two more trips to the local playground than we’d made in our previous nine Massachusetts vacations, and a single fish caught with a kids’ rod and reel for the second straight year. Oh, and lots and lots of ice cream. More like this, please.