President Obama and the Beer Industry

Yesterday President Obama, Professor Gates and Sgt. Crowley met over a beer. As others have written about, they initially each chose a "foreign" beer - Budweiser (ABI - Belgian/Brazilian), Blue Moon (Miller - London/S. Africa?), and Red Stripe (Diageo - Jamaica). Of course, those in the craft beer movement were annoyed and made a lot of noise about how none of the gentlemen were drinking a local beer. However, I think it was an insightful expression of how dominant the macro lagers and imports are in the American palate, how strong big business is, and the advantage held by companies with large marketing budgets.

Anheuser-Busch holds a nearly 50% share of the beer consumed in the US (with Bud Light alone 20% of the market), Miller/Coors approximately 28% of the market, imports ~14% and craft ~4% (I assume remainder is other such as Pabst, Yuengling, etc?)

So with the choice of Bud Light, Blue Moon and Red Stripe, they selected the three most dominant beer segments by volume. Shouldn't really be a surprise, right? Why would a small 4% share expect a dominate seat at the table?

But also interesting is that a major staple in America, an iconic product and a major industry is over 95% foreign owned. Can you name another industry with this same dynamic? I think the auto industry could be an interesting example if not for recent government intervention (Foreign name plates such as Toyota on cars made by Americans in American factories, purchased and driven by Americans).

As it turns out, Professor Gates ultimately settled on Sam Adams Light from the Boston Beer Company - a small player in the US beer market but a company that holds a dominant 20% share of the craft segment. Of course this meeting is a small sample but I think it provides an instructive example that while craft is growing rapidly and makes a lot of noise, it is still small relative to the total. Furthermore, it's a good example of how dominating your market, however it is defined, is strategically critical for any business.