Why AB InBev bought into RateBeer…and why they didn’t

Posted by on Jun 6, 2017 in Editorial | No Comments

So, Anheuser-Busch InBev are at it again. The deepest chequebooks in beer(TM) have purchased another chunk of the global brewing scene to add to their portfolio. Except, this time it isn’t an American craft brewery of which you’d never heard and now the Twitter crafterati are shunning with a vengeance. You’d be forgiven to have thought that since AB InBev bought Wicked Weed a month ago (sorry, ‘partnered with’) they would have powered down their volcano-based control room for a while as their executives all suddenly tried to like sour beer for the first time. But no, they’ve now dipped into their pockets and acquired…RateBeer?

For those unfamiliar, RateBeer is an online portal where people record their reviews and scores of any beer they have tried, from Bud Light to SmashPow Brewing Co’s Imperial Buckwheat and Melon Weizengose. It is the tattered moleskine notebook for the digital generation. With thousands of users, and the most prolific of which having logged tens of thousands of unique beer ratings, it’s quite the catalogue. There’s been plenty of speculation since the news leaked as to why on earth a colossal brewing conglomerate like AB InBev would want to acquire the largest jotter on the internet. So let’s take a look at why they might have done so – but first let’s run through why they probably didn’t.

Why AB InBev didn’t buy into RateBeer

1. Industry dominance

Firstly, AB InBev acquired a minority share in RateBeer; a non-controlling amount. Ok you say, that’s their turndown service before they jump fully into bed with someone, but I’m not sure that’s the case here. The monetary terms of the deal have not been disclosed, but this isn’t a standard ABI pulverising blow, where their CEO’s sweep the board with the back of a well-manicured hand. The deal with RateBeer was so far under the radar it actually took place in October and has taken six months to come to light. The story was broken by Good Beer Hunting following a loose-lipped developer on LinkedIn mentioning RateBeer and ZX Ventures working together.

ZX Ventures are the venture capitalist arm of AB InBev – if the latter is Alan Rickman’s Sheriff of Nottingham, ZX are Guy of Gisborne and half a dozen Norman flunkies with crossbows. The enormous irony here is that another of ZX’s portfolio items is the upmarket beer magazine October, owned by Conde Nast and whose executive editor is one Michael Kiser, owner and founder of…Good Beer Hunting. The arms of AB InBev run deep, even if they don’t own LinkedIn as well (or if they do, wisely they aren’t admitting to it).

2. User Data

I’ll come back to data in its widest sense later, but specifically AB InBev cannot and would not be able to get hold of user data even if they wanted to. Anyone thinking they are going to subsume a load of passwords and soforth and will start causing trouble is mistaken. As part of the deal, ABI cannot access any of RateBeer’s Personally Identifiable Information (PII) – and secondly if they wanted the base data collected by RateBeer; the scores, weightings and so-forth, then these are not only readily available but accessed via an online form, as can be completed here.

Buried in the Terms and Conditions of the RateBeer API form is the caveat ‘You may not separately extract and provide or otherwise use data elements from the RateBeer Data to enhance the data files of third parties.’ So even if they did pony up and get hold of the info RateBeer provide to external companies they couldn’t then simply CTRL + V into the colossal spreadsheet we all know Big Beer has, listing every time we said bad things about Bud Light. Which brings me to…

3. To Boost Their Reviews

The super-cynic would imagine a scenario where a multinational corporation buys an independent review site solely to bump up their ratings. Well this isn’t the case either here – AB InBev are not only aware of the negative reviews of their products (for a sample selection of Bud Light reviews, see below) but as I understand it, their subsidiary ZX Ventures have asked the RateBeer ownership to continue to allow for negative reviews of AB InBev’s beers to be added to the RateBeer database and for them to be verified by the site Admins (of which I am one myself, for my sins).

So just as there won’t be a flurry of 5-Star reviews for their products from new accounts such as ‘Mr.B Weiser, St Louis’ (existing protocols ensure these are weeded out), neither will there be any censorship of car-crash diatribes as below. On the face of it this is the strangest part of the entire deal – why would a company pay a group of go-getters to acquire a third-party site that almost uniformly says their products are awful and not worth buying?

Why AB InBev did buy into RateBeer

Let’s take a look then. Here are three reasons why – in the short term at least – they can stomach those bad reviews.

A. Money

This is always what it comes down to. RateBeer has a huge customer base but is run as a labour of love by Admins who work for free and an ownership who work all hours with a shoestring budget. It’s amazing what they have achieved. With a small influx of cash (a minute influx by AB InBev standards), RateBeer could reasonably quickly become a fantastic platform. The UI can be improved. A new App developed, one that rivals Untappd. And then AB can have their adverts display on the site as soon as they are ready. Each one linking to Beer Hawk or other ABI-owned online retailers.

It’s a win-win for ABI, as premium membership of RateBeer (which costs $12.99 a year) removes most of the adverts from view. So either you see the ads and AB get the reach, or you pay and they are gone but the money goes – potentially, depending on the undisclosed details of the buy-in – to the same place in the end. ZX Ventures are experts in the bright and shiny, as their magazine October demonstrates. Adding tech to RateBeer and unleashing the power it has, with advertising on board, is a great move for them.

B. Beer Trends

Ok so whilst AB InBev may not be able to look through your webcam as you rate your latest purchase following this deal (and then follow-up with embedded adverts for new curtains as a result), they are after the bigger picture. This deal is not about the people themselves and their review scores – to them, the people do not matter. If they did they would purge the site of all the negativity towards them. No, AB InBev care about the brewers and the beers. Every year RateBeer have their awards and the ‘RateBeer Best’ of the shining lights arriving on the scene. That is what ABI are after.

In fact, it would surprise me if they didn’t do this sort of thing already. Search for a beer community with lots of ratings > Asheville. Search for beer style rated above the percentile > Sours. Search for highest rated producer of style in community > Wicked Weed. Search for email address > SEND. The one slight the crafterati love to throw at RateBeer, not without some justification, is that it skews towards the high-abv, the rare, the barrel-aged. What better resource to look through for potential new acquisitions?

C. Disruption

Finally, the third reason I think AB InBev pulled the trigger on their minority investment in RateBeer was just to stir up the shit a little. And boy did it work. This is their genius, this recognition that their name is so toxic that as soon as they append it to something the craft beer community implodes with rage. This self-applied negativity is like spitting in your pint before you go to the toilet. Nobody else can drink from it, but everyone who sees it is disgusted. And what’s the one thing that craft beer does, again and again? They fall for it.

Within hours of the announcement being made brewers were asking to be removed from RateBeer, even before Sam Calagione of Dogfish Head posted a blog post to that effect. There’s no way in hell RateBeer will remove breweries – why on earth would they, for one? But even if they considered it as soon as one is removed, whoever it is, it devalues the entire service for its users. Brewers can’t remove their entries from RateBeer – however they can make it harder for the volunteer Admins to collect imagery, ABV info and so-forth, which may well happen. Either way, ABI (like the Sheriff of Nottingham) spread discord.

That last point is the only one on which I think the site itself may suffer. It’s entire M.O. is to have everything on there, so that its raters can rack up the entries and complete more of their hobby. If at the end of this, AB InBev score some more metric-based data to add to their strategising, it is up to the eventual targets of their strategy to stand firm or sell out. I know this is bordering on the ‘guns don’t kill people’ type of argument, but there you go. RateBeer is a resource for a community of like-minded enthusiasts. If ABI bought into that to get their fingers on the pulses of what is going on in craft beer then they are going to get an awfully narrow view of it. But then, that could be exactly what they are after.

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