As you probably know, Take Craft Back launched the biggest crowdfunding campaign ever, aiming to raise $213 billion to buy Anheuser-Busch InBev. The campaign notes that “it only seems impossible if you really think about it”. Well, my job is to really think things through, so here are some of those thoughts.
First, let’s review some of the math. TakeCraftBack.com draws you in on how easy it’s going to be, noting that it’ll only take $653.37 per person in the US to hit the target. I hate to break it to you, but not all Americans drink. In fact, of the population 21 and older (already shrunk to 232 million), only about two-thirds of Americans drink. And only 80% of them drink beer, so we’re now at 124 million Americans. The thing is, the campaign will need more than $1,717.74 per beer drinker in the United States, so it’s time to sell some of your bitcoins, dig deep, and make that pledge of support!
Why is Anheuser-Busch InBev worth so much? Well, according to their statements, AB InBev produced 500 million hectoliters globally in 2016. That’s 426 million barrels. Last year, the 5,234 craft brewers made 24.6 million barrels. That’s 4,700 barrels per brewer. If we do the math, that’s what ABI does every 5 minutes, 48 seconds. In other words, Anheuser-Busch InBev is 90,700 times the size of an average craft brewer. It’s the same ratio as an elephant (African Bush, of course) and a red-tailed chipmunk. Coincidentally, as I write this, the campaign has just eclipsed $2.5 million in pledges. Turns out $2.5m vs. $213bn is basically the same ratio of that chipmunk to that elephant – so if you’re a campaign supporter, you now know what it’s like. to be a craft brewer compared to Anheuser-Busch InBev!
Last year, the 5,234 craft brewers produced 24.6 million barrels. That’s 4,700 barrels per brewer. If we do the math, this is what ABI does every 5 minutes, 48 seconds
Then, as an economist, I was trained to think about opportunity costs. If so, you’re probably thinking, “Sure, I’ve got $213 billion lying around and I’d like to help, but what else can I get instead of a multinational corporation worth $213 billion? of dollars ? How big is it really? Well, if you love sports, you might be interested in buying every NFL, MLB, and NBA franchise. Forbes estimates you could buy them all for the bargain price of $167.5 billion. And, you’d be left with $45.5 billion for some nice hatchbacks. This is the actual size of Anheuser-Busch InBev.
Alright, what’s the next step? Maybe donors would be more motivated if they knew what they were buying along the way. Well, once we hit $35 million, we could buy the biggest hop farm in the world. Your local brewery would probably love to own a piece of it. Now that we have raw materials, let’s get market access and buy some distribution. ABI owns about 10% of its distribution here in the US – I’ll estimate that’s worth $5 billion. Now we get independent beer on the shelves!
So let’s recap what we learned. First, you’re going to have to call beer-drinking parents outside the United States and ask them to commit. Maybe try someone in Peru, the Dominican Republic, or Colombia. These are countries where ABI holds 97 or more market shares. Then ABI is really big. Like really, really, incredibly big. Third, it’s no surprise that Anheuser-Busch InBev is grabbing all the taps in sports stadiums, because they’re worth more than all the sports teams put together. Finally, ABI has a lot of things that aren’t beer, but are important to brewers big and small. More than 90,699 chipmunks until crafting owns it all!
