You see it in the news with surprising frequency: Big beer company becomes the major shareholder in a craft beer company. Most recently, the craft division of MillerCoors announced it would become the major shareholder in Terrapin Beer Company of Athens, Georgia. It was a big deal to craft brew lovers.
In response, many craft beer lovers launched into what has become a common refrain when a small brewery sells to to a major one: "You sold out. We'll take our business elsewhere."
The feeling by many (but certainly not all) craft beer supporters is that once a craft brewery is no longer financially controlled by the little guy, it's no longer craft beer. But is that really the case? I took my question to Tara Nurin, founder of the New Jersey-based Beer for Babes and a writer who contributes beer and liquor stories to Forbes.com.
A lack of definition
First off, Nurin explained there's no legal definition for craft beer or a craft brewery. There are legal size divisions for federal tax purposes, but the government doesn't give those categories names. Any brewery can call itself a craft brewery and say it brews a craft beer, though that doesn't mean the craft beer community will accept it.
Those in the craft beer community generally accept The Brewers Association's (BA) definition of a craft brewery. Their definition states a craft brewery should be:
- Small. Have an annual production of 6 million barrels of beer or less.
- Independent. Less than 25 percent of the craft brewery is owned or controlled (or equivalent economic interest) by an alcoholic beverage industry member that is not itself a craft brewer.
- Traditional. A majority of its total beverage alcohol volume in beers whose flavor derives from traditional or innovative brewing ingredients and their fermentation.
Nurin notes the associationg has changed the definition over the years. This is the definition currently used to determine if a brewery is eligible for membership in the BA.
Terrapin fell under that definition before its current partnership with MillerCoors, which has owned a minority portion of the brewery since 2012. But under the new agreement — using the industry-accepted definition of a craft brewery — Terrapin is no longer one. A message on the brewery's Facebook page assures fans that they still have "the same beers coming off our packaging lines, brewed, packaged, and marketed by the same folks who have been with us for years." The only "structural change is in upper management. Terrapin co-founder John Cochran will be departing after 14 years," according to Beer Street Journal.
The beer should be the same as it's always been, but will it still count as craft beer? That's a loaded question, concedes Nurin.
What is craft beer is increasingly becoming a matter of opinion. With no legal definition of craft beer and the lack of a specific definition from The Brewers Association, which defines a craft brewery but not a craft beer, craft beer lovers and those in the industry are left to create their own definition. It might seem logical that industry professionals would define craft beer as beer brewed by a craft brewery, but that logical definition may be changing.
"As more and more venerable craft breweries do take outside investment and get out of the 'craft brewing fold,' I think increasing numbers of people — especially those in the industry — are becoming more willing to let go of the definition," said Nurin. "They see the brewers they've grown up next to and know have the heart and soul of a craft brewer still making the same beer, even if the brewery is no longer considered a craft brewery."
In other words, if a brewer is doing all the right things and continues to create the beer the same way, there's a case for still calling it craft beer.
But not that many hardcore craft fans will look it that way — at least not any time soon.
"I don't think the majority of craft beer consumers see the difference," said Nurin. "If that brewery has 'sold out,' and the brewer is no longer a craft brewer, then what they are making will not be seen as craft beer in many drinkers minds."
Drink what's enjoyable
My belief is that you should drink what you like. The day after interviewing Nurin I unexpectedly had the opportunity to try my first Terrapin beer at a beer festival. It may have just been a coincidental lull, but at a festival that celebrated craft beer, there were no drinkers at the Terrapin booth when I made my way around to it. (I thought about asking the pourer if he felt a chill from festival goers on the 97-degree day, but decided not to bring it up.)
Instead, I simply tasted two Terrapin beers. The first was Maggie's Farmhouse Peach Ale, and I made a note in my guide that it was refreshing next to the smiley face I drew. (The smiley face is part of my sophisticated festival rating code. It means "yes, I would seek this out.") The other was Terrapin's Anniversary Ale, a Belgian red ale. There's a smiley face next to it in my notes, too.
If these two beers continue to be as enjoyable as they were this past weekend when I sampled them, I'm not so concerned about the nuances of labeling them craft or not craft. I'll drink them. I fully understand there are many who will take their beer dollars elsewhere to support a "true" craft brewery.
And speaking of selling out. For those who believe Terrapin has sold out, just who did they sell out to? They sold to 10th & Blake, the craft division of MillerCoors, which is part of SABMiller. But SABMiller is about to merge with Anheuser-Busch InBev in what will be the largest beer merger in history. So who will be the major stakeholder in Terrapin when all is said and done? Most likely not the merged Anheuser-Busch InBev/SABMiller.
Nurin explains in her Forbes piece that one of the many conditions of the merger is that the London-based SABMiller must spin off all its MillerCoors holdings in the U.S. That means 10th & Blake will be spun off and not acquired in the merger. For more details about the conditions of the merger, I recommend you read Nurin's Forbes piece.