Friday, August 13, 2010

Genessee Buys Magic Hat - Some Last Minute Industry Buzz To Whisper About

According to the Rochester (NY) Democrat and Chronicle, Genessee parent company, North American Breweries, Inc., has purchased three "craft" breweries: Magic Hat, Pyramid, and MacTarnahan's. I'm not familiar with MacTarnahan, but Pyramid and Magic Hat are familiar to most everyone. Seattle-based Pyramid is famous for its hefeweizen, while Vermont-based Magic Hat hasn't found a beer it can't put an apricot into. Both breweries started as small, local breweries but have rapidly grown to quasi-national brands with placement in big-boxes like Walmart and Target.

I'll be honest, this came about 2 or 3 years before I expected it to. I don't know if this is going to be the trigger that sets off this regional/national consolidation of craft brands, but I certainly see this becoming more and more prevalent in the coming years. The reason for this is obvious, but I don't think you could pick more stereotypical breweries to outline the reasons why.

North American Breweries has always been about brand management. For other examples, consider brand breweries like LaCrosse/City Brewery or even Minhas/Monroe. However, NAB's brands are aging. I grew up, literally, on Gennessee and Genny Light and Honey Brown was one of the first "different" beers that I ever had. But these are hardly flying off the shelves these days (I can't remember the last Dundee's Honey Brown that I had). For NAB to stay relevant they needed new brands.

On the other hand, Pyramid and Magic Hat clearly have big aspirations. They are out to grow, and grow quickly. With their own pluck they were able to get rather large national accounts and get into states with a relatively limited brand selection, but enough name recognition to gain traction.

Along with acquiring the brands themselves, NAB adds some breweries dotted around the country that will allow other NAB brands to reach other parts of the country as well. Thus, this purchase really helps everyone involved.

Unless, of course, NAB trashes whatever goodwill Pyramid and Magic Hat have by turning them into Gennessee and Genny Light and Honey Brown. Luckily for the sellers they've already got their money.

2 comments:

  1. Aww man, growing up in Connecticut Magic Hat #9 was my gateway beer into craft brewing.

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  2. You know Jesse, you raise a good point. Does being owned by Genessee make Magic Hat any less "craft"? Shouldn't it depend on to what extent Magic Hat changes (or has changed) its operations? Or does having an overlord per se taint its "craftiness"?

    In other words, can it still function as a "gateway" to craft, and if so, what side of the gate is it on?

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