A shock wave went through the world of craft beer last week, when Anheuser-Busch InBev bought out family owned Chicago brewery Goose Island for $38.8 Million.
Or, at least, there should have been a shock wave, right? When an innovative craft brewery like Goose Island gets bought out by the world's largest brewer, it should be surprising.
But it really wasn't.
They were already a part of the Craft Brewer's Alliance, a distribution network partially owned by AB-Inbev (so I guess I fibbed about that "family owned" thing in the first paragraph). And this isn't the first such purchase in recent weeks, as Anchor was recently purchased by large beverage company the Griffin Group.
The reason for the purchase is supposedly simple: Goose Island's brewing capacity was maxed out, and to meet increasing demand, they needed an influx of new capital. They had already cut out some of their core brands (namely their Nut Brown Ale and Oatmeal Stout) to increase production on brands like 312 Wheat, Honker's Ale and IPA, and demand was continuing to grow. Also, founder John Hall is 68 years old, and can't be doing this forever. This purchase is seen as one of the few viable exit strategies available for a craft brewery business.
Some agree with the move and see it as a positive sign for the future of craft beer. Beer writer Andy Crouch argues that not only will the purchase help Goose Island expand their distribution, but it shows a shift in the way large breweries like AB-Inbev look at the high-end beer market. Rather than trying to win customers by pimping fancy imports and "cartoon" craft beers like Shock-Top Belgian White and Budweiser American Ale, the purchase shows that AB-Inbev feels it is better to buy up and support craft breweries then try to compete with them with their own products. This is echoed by what Dave Peacock, president of Anheuser-Busch's U.S. division, told the Wall Street Journal last Monday: “We really needed to radically change our position in the high end."
There is one question Crouch and others putting a positive spin on the sale aren't asking: does a brewery have an obligation to meet their demand? What if Goose Island didn't get an influx of cash and had to limit their distribution? Many other breweries are making that choice. Stone, Boulevard and Dogfish Head have all recently pulled out of Wisconsin. Certainly all of those breweries could sell beer in Wisconsin, but they don't have the capacity to meet all of their demand and are choosing to shift their sales to places where they feel the demand is higher or the sales will come easier (which is the same thing, I suppose). And then there are breweries like New Glarus who choose to limit their distribution specifically to stay small and avoid losing the family-run aspect of the business they built from the ground up.
That's not to say that every brewery should limit their distribution to one state as New Glarus does. I for one am glad I can buy Goose Island beer, and am sad to see breweries like Dogfish Head leave the state, but the fact remains that this was not the only choice they had.
Goose Island had a tasting at Star Liquor last Friday, and I asked the rep who was hosting what his thoughts were on the sale. He echoed the statements made to the press that it will help with capacity issues. My fear, I told him, was that AB would shift focus to their big sellers, leaving their more innovative beers (especially the very limited release beers like the excellent vintage reserve series) on the chopping block. He told me that he thought the opposite would happen, adding that AB will likely take over brewing 312 (which amounts to over half of their sales), allowing the Goose Island brewery to put more focus on their specialty beers.
I hope this is true, but there is reason to have some doubts. Longtime brewmaster Greg Hall is leaving his position April 30th, and will only have an advisory role after that. And we don't know if AB will take a hands-off approach with their new acquisition or attempt to streamline the brand.
I'm a bit torn on whether to keep supporting a brewery once it has been bought out but a behemoth like AB-Inbev. Say what you want about Goose Island selling out, they are undoubtedly one of the pioneers of the craft brewing movement and over the years have continued to be one of its greatest innovators. With Bourbon County Stout they invented the bourbon barrel-aged aged imperial stout, which has become almost ubiquitous among "serious" craft breweries. If Matilda wasn't the first beer brewed in the US with Brettanomyces in it, it was one of the first and certainly one of the best. And this innovation hasn't slowed down since their entrance into the Craft Brewers Alliance in 2006. Since then they have introduced a number of new beers, including variations on Bourbon County and the great barrel-aged sour beers of the Vintage Reserve Series. Now they're brewing a beer with kombucha cultures in it, and it actually tastes good! Supporting small local companies is undoubtedly a big part of the appeal of being a craft beer drinker, but if Goose Island continues to put out innovative and delicious beer, it will be very hard for me not to support them.