With an investment in Ratebeer.com, global beer giant Anheuser-Busch InBev may be showing a craft-focused digital media strategy to accompany its growing stable of craft brewery acquisitions.
In addition to buying at least a dozen breweries in the U.S. and abroad in the past couple of years, the company has quietly assembled and invested in a pair of web sites that provide beer industry content.
But that hasn’t been without its controversies: Revelations that the company is involved in both beer journalism and a ratings site have quickly led to criticism that the company may be presenting a biased view of the craft beer marketplace, potentially confusing or unduly influencing consumers, and at the very least, creating the appearance of a conflict of interest, an ethical concern in journalism circles.
For its part, ZX Ventures, an A-B InBev venture capital arm that invested in Ratebeer.com, has a strong data focus and maintains that it will remain unbiased. But in the wake of the deal, some industry stakeholders believe that A-B InBev will now have access to information that could be used in the global brewer’s fight to recapture market share lost to a growing contingent of small and independent craft beer makers over the last decade.
In a statement posted to the Ratebeer.com forum, owner Joe Tucker said the focus of the agreement would be on “maintaining Ratebeer’s value as an unbiased beer authority, retaining our operational independence, informing a whole new group of global consumers and keeping them excited about the beer.”
Tucker did not respond to multiple requests for comment, but wrote in a weekly newsletter that RateBeer had “implemented an additional measure so that other brewers, industry watchers, journalists and others can view cumulative scores and ratings on a regular basis.”
“Through our open API, RateBeer is offering the same access to data that AB InBev will have,” he wrote.
In a conversation with Brewbound, Guilherme Lebelson, ZX Ventures’ vice president e-commerce, said the company was “interested in solving problems for the consumers.”
“To solve problems, you need to understand the consumer. You need data,” he said. “That is where Ratebeer sits. It helps us to be better informed about the marketplace and solve additional problems.”
Lebelson told Brewbound that A-B would be able to tap into consumer insights, such as trending beer styles, and noted that it would be able to access other user-contributed data.
However, he stressed that A-B would not have access to “personally identifiable information,” while conceding that the company could tap into certain geographic and demographic statistics supplied by users.
“If a user is allowing access to his or her location, we are able to see where he or she is reaching the platform from,” Lebelson added.
Investments
Since launching in February 2015, ZX Ventures has made a bevy of investments: Last month it was part of a $4 million series A funding round for Owl’s Brew, makers of tea-based cocktail mixers and a tea-and-beer Radler line. Additionally, ZX has made a number of international brewery acquisitions — including Belgium-based Brouwerij Bosteels, Italy’s Birra Del Borgo, London’s Camden Town Brewery, Cervejaria Colorado in Columbia, Cervejaria Wäls in Brazil and Cerveza Bocanegra in Mexico, among others — and purchased a stake in an alcoholic kombucha company, Kombrewcha.
On the data, media, and innovation side, it has created the Brazilian-based “beHoppy” beer locator and ratings mobile application, acquired United Kingdom-based online beer retailer Beer Hawk, purchased two major U.S. homebrew ingredient and supply companies, made a minority investment in PicoBrew Inc. (a homebrew appliance) and helped fund another beer website, October.
“We look at great opportunities,” Lebelson said of ZX Ventures’ investment strategy. “And if it connects to developing great things and great people, we will probably try to raise funds and make the investments.”
But as it spends millions of dollars to better understand the high end beer market, and connect with consumers purchasing those products, ZX Ventures also has put a premium on data. On its website, ZX lists “intelligence, innovation and access” as three pillars of the operation, stating that it is “hopelessly dedicated to mining insights and innovation using the latest technology and trends available.”
With its Ratebeer investment, A-B will now be able to dive deeper into consumer taste preferences, react more quickly to emerging beer styles, identify regional trends and keep a watchful eye on popular competitor products.
According to a ZX Ventures spokeswoman, there are currently more than 500,000 beers listed on Ratebeer.com and over 8 million reviews for those products. The website, which has a large following in Europe, receives approximately 1.4 million unique visits per month, she added.
Backlash
Since the deal with Ratebeer was announced, a number of well-known craft breweries — including Dogfish Head, Harpoon Brewery and Karl Strauss, among others — have come out in opposition to the investment, and have asked to have their ratings removed from the site.
Part of the reason why those companies are protesting is because the deal between A-B InBev and Ratebeer was kept secret for eight months. It was only made public when Good Beer Hunting — a hybrid brewery consultancy and beer-focused blog founded by Michael Kiser, who himself has ties to ZX Ventures through the October publication — broke the news after fortuitously stumbling across a LinkedIn profile that hinted at a possible connection between the two entities. That has riled the competitive set in both craft brewing and craft beer ratings websites.
“The entire story behind the deal has yet to be told, and the fact that Tucker was apparently trying to hide the deal for the good part of a year is shady,” BeerAdvocate founder Todd Alstrom wrote to Brewbound in an email. “At the end of the day, his integrity and Ratebeer’s data have been compromised. He’s also betrayed his user’s trust and greatly undermined the community that helped to build his business.”
But it’s not just the Ratebeer investment that has drawn the ire of craft brewery owners and other industry stakeholders around the U.S. Two other websites — October and The Beer Necessities – are also partly or wholly owned by A-B InBev and have led some industry stakeholders to question the level of ownership disclosure as well as the editorial decisions.
October was launched by ZX Ventures, Pitchfork (Conde Nast), and Good Beer Hunting in late January, and is designed to “help the growing audience for craft beer, and beer in general, navigate the constantly shifting trends, styles, people and places,” according to Kiser, who serves as the website’s executive editor.
The Beer Necessities, meanwhile, is a lifestyle beer blog that is fully funded by Anheuser-Busch InBev’s “The High End” division and is published by Wasted Talent, a multimedia company that owns the popular electronic music publication, MixMag. The website employs two full-time editors, as well as a full-time project manager, and pays freelance writers, some of whom cover the beer industry for other publications, to create content that is intended to “reach a mainstream audience” and is “fun and engaging,” editor-in-chief Ethan Fixell told Brewbound during an interview last month.
Both October and The Beer Necessities aim to spread the conversation of craft beer to a broader set of consumers through various media, including written content, YouTube videos, podcast recordings and live events.
Along the way, both websites have, at times, discussed or featured A-B InBev-owned products.
And that’s troubling for people like Dogfish Head founder Sam Calagione, who is concerned that A-B InBev will attempt to use those platforms to prop up the dozens of craft brands it now controls.
“It just doesn’t seem right for a brewer of any kind to be in a position to potentially manipulate what consumers are hearing and saying about beers, how they are rated and which ones are receiving extra publicity on what might appear to be a legitimate, 100 percent user-generated platform,” he wrote in response to the Ratebeer investment.
Calagione believes the investments into Ratebeer, October and The Beer Necessities are a “blatant conflict of interest,” describing them as a “direct violation of the Society of Professional Journalists (SPJ) Code of Ethics,” which calls for proper disclosures and cautions writers to resist “external pressure to influence coverage.”
“It is our opinion that this initiative and others are ethically dubious and that the lack of transparency is troubling,” Calagione wrote.
Calagione is no stranger to creative media plays himself: in the past he has published a book about starting his brewery, and has forged partnerships with the Discovery Channel, via the Brew Masters television series and with First We Feast, via the ‘That’s Odd, Let’s Drink It’ web series. Calagione also helped launch Pallet Magazine, a quarterly print publication that launched in 2015 and was “created for people who like to think and drink,” where he served as the magazine’s “executive editor” but did not hold a stake in the publication.
Transparency
Dan Kennedy, an associate professor of journalism at Northeastern who teaches courses on media ethics and is a longtime media critic, wouldn’t comment on the October or Beer Necessities websites themselves, but said any journalistic enterprises owned or sponsored by large organizations must present adequate levels of disclosure so readers “know what they are getting.”
“It’s a problem if you’ve got a website that appears to be journalistic in nature but it is really a commercial venture,” he said. “It’s consumer beware. You have to understand if the people behind the website are fully explaining their various ties. You may be getting information that has a real spin on it and has something to do with the financial interest of the people behind it.”
In a message posted to its Facebook page last month, Southern California’s Beachwood Brewing said it had agreed to an interview with a freelance journalist writing for The Beer Necessities prior to the website’s launch in March. It wasn’t until after the story was published that they learned it was owned by A-B InBev.
“As an independent brewery that has fought hard against the predatory business practices of macro beer for almost a decade, we wholly reject this free promotion and all that it stands for,” the company wrote. “We don’t want it. We don’t need it. And if we knew that it would be used, in our opinion, to help AB-InBev in their intensifying quest to dilute the definition of ‘craft,’ we certainly would have refused participation.”
Although it does post frequently about many independent brands, The Beer Necessities has, at times, prominently highlighted A-B InBev-owned brands like 10 Barrel, Golden Road, Goose Island and Elysian.
In an interview with Brewbound, Jason Keath, an expert on digital trends and the founder of the Social Fresh digital marketing conference, said he believed the level of disclosure on The Beer Necessities website was not sufficient.
“As a consumer, I would not know this site is owned by A-B,” he said. “It seems they are clearly trying to create a site that is unbranded and appealing to a specific kind of beer consumer — someone that is more interested in craft beer and less interested in, say, Bud Light.”
For his part, Fixell defended the level of disclosures on the site and pointed to an age gate that includes the following message in small print: “A collaborative effort brought to you by The High End, a division of Anheuser-Busch.”
Kennedy said the presence of an age gate, something all users encounter upon arriving to The Beer Necessities, tipped him off to the potential commercial nature of the website.
“As soon as I am asked to enter my birthday, I suppose that I immediately know this is a commercial venture. But not everybody would,” he said.
One leavening factor for The Beer Necessities is that the focus is decidedly positive and pro-craft. Fixell said, for example, that The Beer Necessities would shy away from writing content that reflected negatively on craft brands owned by Anheuser-Busch, as well as those owned by independent craft breweries.
“We are just so focused on positivity,” he said. “Everything is beer positive. If we don’t have something nice to say, we aren’t going to say anything about it.”
(Editor’s note: Both Dogfish Head and Anheuser-Busch InBev have partnered with Brewbound to host Brew Talks meetup events in the past)