Wednesday, March 30, 2011

Goose Island Selling to AB Inbev

If, for some reason, you haven't heard, Goose Island have been sold to super-mega beverage giant AB InBev. I say "sold to" because that's exactly what happened. Goose Island wasn't bought, it was sold. There is a very nice and level headed interview here with current Brewmaster Greg Hall. Sadly (and the worst part about this deal is that) he'll be stepping down as brewmaster of Goose Island. He states that nothing is going to change about the beers after the sale, but since he's stepping down as brewmaster, he can't really say what's going to happen once he's gone, can he?

Apparently the sale was motivated by a desire to expand. Fortuitously, in seeking funding for a 1.3 million dollar expansion, Goose Island was able to stumble onto the 38.8 million that AB paid. This all begs the question in my mind: why does capacity need to increase? It may seem a silly question, but if sales are good and steady with current production abilities, and everyone is making money, why the push to turn into something completely different? Granted, there is demand, but does demand need to be met at all costs? As small and regional brewers seek to rise to the challenge of delivering their beer to every possible consumer in America, they inevitably become something that's no longer regional or small. This is great for the bottom line, and plenty of people will be happy to defend any decision which pads profits, but as a consumer, why would I possibly care about such a thing? Regional tastes and ingredients are inextricably linked to beer styles and beer flavor. Could their 312 wheat or oatmeal stout have come to be on the West Coast? Would Bourbon county stout ever have been brewed in St Louis? I don't think so, and I would be surprised if we see the kind of innovation we've seen from the Fulton Street brewery that we've seen in the past.

Goose Island's predicament isn't a unique one. John Hall started Goose Island 23 years ago. He's now in his 60's and demand for craft beer in this country is reaching unprecedented levels. This is sort of a perfect storm for the sale of a business and it's emblematic to what's going on across the industry right now. The first generation of craft brewers are reaching the age at which control of their breweries will need to passed along in some way. Jim Koch of Boston Beer is 62; last year at the age of 72, Anchor Brewing's Fritz Maytag sold what many call the first modern craft brewery to investors; likewise, Bell's Brewery has been in business for 26 years, and Sierra Nevada is 30 years old. All are companies old enough that the founders are likely thinking about exit strategies. While these first generation brewers and breweries are reaching a transitional age, the quest for growth is changing the landscape as well. Bell's recently aquired 52 million dollars for an expansion, Dogfish Head also announced earlier this month that it will be pulling out of several export markets even after its recent expansion in order to keep up with demand. This is a story that's reverberating around the world of craft beer right now. Given the age and the profitability of these breweries, it would be very easy for craft beer to lose its identity in the kind of consolidation that helped create the craft beer movement to begin with. If craft beer is a revolution, the founders of the revolution are staged to transition power to another generation. If they don't stay true to the ideals they began with, the whole thing will fall apart, or at least mutate into something unrecognizable. The answer to me seems simple: maintain regionality, and maintain growth at a sustainable and reasonable pace. New Glarus is an outstanding example of this model, and because of it, they've been able to produce amazing beers without over extending themselves and alienating their customers.

If you haven't gathered, I am disappointed by the sale. I feel no need to be an apologist for Anheuser Busch: they have ruined beer in America for generations of people. Some may argue with that, but even AB loyalists must admit that at the very least, they've been at the wheel during the worst period in time for beer, which makes them well deserving of some distaste and suspicion. As I write this, Anheuser Busch does not make any good or great beer. They do not own any companies that make great beer. I suppose it's possible that Goose Island under AB InBev will continue to make great beer, but I see no historical reason to believe such a thing will happen. At best, Anheuser Busch won't ruin Goose Island. That's the best possible scenario, and that's what defenders of the sale are hopeful for. I have not heard anyone (even people in support of the sale) suggesting that the deal could possibly improve Goose Island's beers, which I think says a lot.

As it stands, I very much enjoy Goose Island's beers and I plan to continue to drink them. I remain skeptical of the possible good that could come from the deal, but I'll reserve judgement until we actually see what happens.

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