Beer Friday: Craft Beers Are the Real “Long Tail Libations”

Wired EIC Chris Anderson is impressed by Anheuser-Busch’s “embrace of niche beers,” noting that the big brewer has gone so far as to spin out a sub-company called “Long Tail Libations.” The idea behind the long tail, in case you’re not a web/content/business nerd, is that small brands or products may not be big splashes, but can continue to make up a considerable amount of sales over time since they cost little to stock and sell them in the internet age.

Of course, this model doesn’t really apply cleanly to beer, which takes up physical inventory and shelf space and will eventually expire. (Although A-B products tend to sell through before they have a chance to go bad… or at least “worse.”)

I wonder if the increase of brands—from 26 in 1997 to 80 in 2007—has less to do with A-B’s attempt to capitalize on a wider variety of niche beers but instead the standard two-pronged marketplace experimentation of any standard megacorp: floating out niche brands to see if they work before pulling them forever (see: the host of floated and forgotten sodas) and the acquisition of smaller breweries and their brands, such as Rolling Rock, Hoegarden, and Grolsch.

A-B has to react to the craft brewing market. It’s not going to knock them out as a company overnight, but the real long tail story is that dozens of small brewers are able to thrive and grow in the shadow of A-B’s billions of bottles of weak lagers, strange gluten-free and caffeine-added beer-a-likes, and standardized but charmless sub-brands. Those craft brewers are rarely making any big splash, but they’re selling small (but increasingly notable) batches of beer to those customers willing to sniff them out.

Anheuser-Busch and the Long Tail of beer [LongTail]