InBev Dilutes Loyalty to Anheuser-Busch in St. Louis

St. Louis Cardinals fans are seeing something they never expected at Busch Stadium: craft beer flowing beside the Budweiser taps.

Until a couple of months ago, Anheuser-Busch InBev NV’s namesake baseball park allowed Schlafly draft beer to be sold at just one concession stand. Now eight sell it.

“It’s like people are finally realizing that there is more than just a Bud,” said Mark Schwartz, 53, a season-ticket holder at the St. Louis Rams’ Edward Jones Dome, where Schlafly debuted for football fans this season. “It’s great to root on your hometown team with a hometown beer.”

Generations of local loyalty is eroding in the wake of InBev’s 2008 hostile takeover of Anheuser-Busch -- a St. Louis tradition since 1852, when it was called Bavarian. For Schlafly and other small breweries in the city, it’s an opportunity to exploit the increased interest in craft beers nationwide.

Drinking Bud in St. Louis used to be like driving a Ford or Chrysler in Detroit. Bars, restaurants and catering companies didn’t want to offend the company or its fans by offering other brands, said Mike Sweeney, a systems administrator and former part-time tour guide at Schlafly who runs a beer blog called STL Hops.

Then Leuven, Belgium-based InBev bought Anheuser-Busch in November 2008 and by Christmas had trimmed about 1,400 U.S. jobs, three-quarters of them in St. Louis. They ranged from executives to brewery workers in a city where the baseball stadium carries the name of Anheuser-Busch’s founding family.

Team Ties

The brewer owned the Cardinals for more than four decades before selling the team in 1996. For years, the ballpark organist played the Budweiser theme song at games.

“Now there’s a bit more ambivalence to AB: They’re just another major world company,” said Sweeney, 31, whose three-year-old website has attracted 50,000 visitors and a million page views in the past six months. “You don’t have that same hometown pride.”

The AB InBev unit’s market share and number of tap handles in St. Louis are stable and its share in professional sports stadiums remains “exceptionally strong,” said Dave Peacock, president of the U.S. unit, Anheuser-Busch.

“We have a strong bond with St. Louis and the people here, and they return the sentiment,” Peacock said. “We never take any beer sale for granted, whether it’s in St. Louis or anywhere across the United States.”

Craft Surge

Craft beers are a growing trend everywhere, he said, pointing out that Anheuser’s Shock Top wheat beer and AmberBock are sold at Busch Stadium and Edward Jones Dome.

The Brewers Association, a Boulder, Colorado-based trade group for craft and microbreweries, calls such beers from major brewers “domestic specialties.” It defines craft beers as those less than 25 percent-owned by a large brewer and producing less than 2 million barrels a year.

U.S. sales of craft beers increased 13 percent in the year ended Oct. 3, according to Chicago-based researcher SymphonyIRI Group. Domestic premiums such as Bud Light, the country’s best-selling beer, declined almost 3 percent.

Businesses that serve beer see a turn in customer attitudes. Chris Sommers opened Pi Pizzeria in St. Louis six months before the InBev takeover and offered only microbrews as a way to stand out.

“People were really angry with us in the beginning,” said Sommers, 34, whose restaurant now features Schlafly Pi Common, a custom-made brew. “After the takeover, that all changed. The anger shifted.”

No More Grief

Customers “come into our restaurant now and don’t even give us grief anymore, because they don’t think of AB as local,” he said.

Some competitors come from Anheuser-Busch’s own ranks. Its stock even financed one entrepreneur.

Urban Chestnut Brewing Co. was started by Florian Kuplent, a brewmaster who helped create Shock Top, and David Wolfe, 43, who was senior director of consumer strategy and innovation. Both left Anheuser-Busch earlier this year.

Kuplent, 36, said he doesn’t see himself as a serious challenger to his former employer.

“The more specialty brewers there are, the better it is for everybody,” he said. “There is space for everybody.”

Tom Schlafly, 62, used Anheuser-Busch stock as part of the collateral for a loan to start Schlafly. He and partner Dan Kopman founded the brewery two decades ago.

Last Laugh

“They laughed at us when we first opened in 1991 -- a microbrewery in St. Louis, home of the Bud?” said Kopman, 49, who bills Schlafly Bottleworks as “St. Louis’s first new production brewery since the end of Prohibition.”

Local restaurant and bar owners often spouted the same refrain when Kopman first tried to persuade them to serve his brands: They already stocked all the beers.

“Of course, what they meant by ‘all’ was that they served the full lineup of Anheuser-Busch beers, and not just Bud and Bud Light,” Kopman said. AB InBev also makes Bud Ice, Michelob and Busch brands.

Kopman said Schlafly expects to sell about 35,500 barrels this year, up from 9,600 in 2003.

AB InBev shares have more than doubled to $43.72 from $18.25 since Nov. 18, 2008, the day it closed the Anheuser-Busch purchase.

Yet St. Louis tastes continue to shift. Carleen Kramer, vice president of Catering St. Louis, said clients’ preferences have changed since the company was founded 30 years ago. It served only Anheuser-Busch products because that’s all people wanted to drink.

Brother Bud

“Your brother didn’t have a job if you didn’t drink AB beer,” said Kramer, 57. “It was about loyalty.’

That changed after the takeover led employees in St. Louis to worry about their jobs. Catering St. Louis has increased the proportion of Schlaflys it stocks.

“It’s given people permission to try something new,” Kramer said. “Schlafly is the little guy, the underdog.”

Delaware North Cos., which holds the beer-vending concession license at Busch Stadium and Edward Jones Dome, noticed the growing interest in Schlaflys and decided to give them a try.

“We wanted to see if that product line had legs,” said Dan Fetcho, regional director for the Buffalo, New York-based vendor’s Sportservice subsidiary. “Schlafly is a local flavor that has become more and more mainstream.”

Boutique Brew

That popularity may not carry the brand beyond its boutique status. Brewers whose output exceeds 60,000 barrels a year are required to pay the same $18-a-barrel excise tax as the world’s biggest brewers, according to the Brewers Association, which is working to get the law changed.

For now, small brewers are growing one tap at a time, in venues such as the Edward Jones Dome, where Christopher Field manages the only beer stand carrying Schlafly. It’s in Section 104, near a corner of the north end zone.

“People were coming from the other side of the dome just to buy it,” he said, noting the new preference as fans rushed to place orders during last call at a recent game. “People were saying, ‘All I want is one more Schlafly.’”