AB InBev Buys Online Retailer BoozeBud

August 1, 2018, by Crafty Pint

AB InBev Buys Online Retailer BoozeBud

The world's largest beer company has moved into the local retail market with the acquisition of online business BoozeBud. AB InBev's global venture capital arm, ZX Ventures, announced the purchase today, stating in a release that the business will be "committing a substantial capital injection and it's [sic] global expertise to turbocharge the development and growth of the BoozeBud’s e-commerce platform, product range and logistics capabilities".

The move follows AB InBev's other acquisitions in the Australian beer industry; since merging with SABMiller in 2016 and taking control of CUB, the company has purchased 4 Pines and Pirate Life. And it comes within 24 hours of Woolworths unveiling its Endeavour Marketplace, an online sales portal that is initially supporting Dan Murphy's stores but is planned to be used by BWS and Langton's too.

Today's announcement has been met with a range of responses from independent brewery owners who currently sell beer via BoozeBud. There are those who say they will be watching the developments with interest and others who have told us they will no longer be using the platform following the change in ownership.

"I don't want to sell beer through AB InBev," says Matt Houghton, co-founder of Boatrocker Brewers & Distillers. "From a business point of view, I don't like the fact they would be making money out of a company that's selling beer under the guise of craft, but it's actually AB InBev."

Matt, who collaborated on a beer with AB InBev-owned Goose Island during Good Beer Week in 2017, added: "Perhaps the brewers are going to make money, but you might see a large uptake from Goose Island and other faux craft brands within their stable. It's another way to pull the wool over consumers' eyes.

"Their reach is quite scary now; they've got rating sites, homebrew stores... there's so much happening."

He also said he'd been looking at the track record of major brewing companies in Australia and felt that, James Squire apart, "nothing that they do has developed craft beer – they just take what's good."

Following the acquisition, BoozeBud's founders have committed to running the business "for the long term", with co-founder Andy Williamson saying: "We’re really excited to be working with ZX Ventures to build one of the leading online alcohol sites in Australia."

Along with co-founders Alex Gale and Mark Woollcoot, with whom Andy had previously advised and invested in a number of other online businesses, he launched the retailer as BeerBud in 2014 with a focus on local craft beer. Since then, its scope has expanded to include wine, spirits and ciders from across the world, moving away from the initial craft focus to an approach that includes mainstream products such as Corona and Strongbow.

Andy told The Crafty Pint they have already spoken to a number of suppliers, adding: “This is very much business as usual but we now have the resources and capital to actually build a much bigger business and, if we build a much bigger business, that’s going to be for the benefit of everybody.”

The new partners also sought to allay customers' concerns over access to sensitive data, such as sales and pricing, stating there are laws in place to prevent them sharing such information with CUB/AB InBev.

Rodolfo Chung, ZX Ventures’ Australia head, said: “It’s very clear that there are protocols of data protection that we are absolutely going to adhere to. This means AB InBev will not have access to customer data and will not have access to competitors' data.

“BoozeBud already have a practice to feedback to suppliers ... this will absolutely continue but there is no such thing as a big database that’s been shared, this just doesn’t happen.”

He described BoozeBud as "a great fit for ZX’s global e-commerce business, where we’ve been successful in partnering with other entrepreneurs in developing their cutting-edge platforms."

As well as facilitating the acquisition of brewing companies across the planet, ZX Ventures is also involved in RateBeer, an acquisition that led to furore in the States in particular, online beer site October, homebrew suppliers in the US and other online retail portals including Beer Hawk in the UK.

As to future purchases, Rodolfo says: "I think the best way to imagine or predict our areas of interest is to look at what we’ve done in other countries."

Reacting to today's news, Johnny Latta from Sydney brewery Nomad and importer/distributor ExperienceIT, said he was worried – if not surprised – by the purchase and unsure what it means for Nomad.

“My concern is what they’ll do to the major independent retailers like Beer Cartel or Craft Cartel,” he told The Crafty Pint. “What are they going to use that platform for? Are they going to push their own crafty brands or allow the guys running it to do it.”

“Looking overseas, they are buying news, brewers and distributors, they seem to be trying to lock up every possible angle of the channel so they can control it. It definitely won’t be the last of what we’ll see with them trying to control channels here."

He added: “The more ABI get into retail the more dangerous it will be. They are beholden to their shareholders to make money and the fact that commercial beer has been declining means they’ve been snapping up as many craft breweries as they can. They don’t give a shit about craft, they give a shit about their bottom line and investors. So this is ultimately just another way they can try and control craft beer better for themselves.”

Stone & Wood co-founder Jamie Cook said it was more a case of "Watch this space" for the country's second largest independent brewing company, with online retail an area that offered opportunities for smaller brewers.

"We are watching the vertical integration of brewers, retailers and hospitality operators very closely, and this move is just another in the evolution of the industry," he said. "We look forward to seeing what this change in ownership means for independent brewers as suppliers.

"The online liquor channel has provided a good alternative as a route to market for independent brewers, particularly the smaller ones. Given the traditional channels are clogged with multinational brands, including former independent brewery brands, the online channel provides a more direct access to drinkers, where the market clout of large brewers isn’t a factor."

Photo at top (left to right): Alex Gale, Rodolfo Chung, Andy Williamson and Mark Woollcott.

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