Industry Reactions to Goose Island Sale
Last week, the craft beer enthusiasts community was shocked to learn that Goose Island was sold to Anheuser-Busch/InBev for 38 Million Dollars. While acquisitions happen everyday in the business world, this particular acquisition struck a cord with craft beer fans, as they felt they’re losing one of the staples of the community to “the man.” Liking craft beer is similar to liking Indy rock music or underground hip-hop. Folks who like those sub-genres of music, or in this case like craft beer because it’s good, and because it sets them apart from those who “aren’t in the know.”
Personally, I wasn’t shocked this happened, and it doesn’t affect my craft beer enjoyment one bit. Goose Island will most likely continue pumping out the hits, and will probably be taking over some more taps, and most likely in places you haven’t seen them before. Mark my words, it won’t be the last time a darling craft brewery gets acquired by AB/IB or MillerCoors.
So the day the story broke, we watched Twitter and Facebook fill up with largely negative remarks, some were filled with anger and sadness. We wanted to find out what members of the craft beer industry thought. Here are some reactions from around the industry. Of note, Sam Calagione of Dogfish, Bryan Simpson of New Belgium, Rob Todd of Allagash and Bill Manley of Sierra Nevada all declined to comment on record. The common theme of their reply was that they didn’t have enough info to form an opinion, and the underlying tone seemed “if you don’t have anything nice to say, don’t say it.” Keep in mind, there are only a few short pieces with the Hall family floating around, and of course, the official press release outlining the transaction. There may very well be a bigger story that has yet to be told, and for sure a story about the craft beer industry that is just now unfolding.
Joe Tucker, RateBeer.com – “At RateBeer, we don’t care who the owners are. We care what’s happening in the glass. There is precedent for both positive, negative and no changes related to brewery buys by larger entities so the effect of the acquisition on product quality is uncertain. With Goose Island, which is a top rated brewer at RateBeer (#10 in the world last year http://www.ratebeer.com/RateBeerBest/bestbrewers_012011.asp), I am clearly hoping their top rated beers remain completely unchanged through the transition.”
Deb Carey, President/Founder of New Glarus Brewing – “This is a tough and competitive industry John and Greg are a great team and have built a successful brewery. Dan Carey has fond memories of assisting with their start up in 1987, when he was working for JV Northwest. With so many years of hard work behind them this is not surprising. They have been happy with their AB partnership and this sounds like the logical next step. Of course, losing another American brewery to ABInBev is tough but they are keeping the plant open and retaining jobs so we will have to be grateful for that. Dan and I both hope this sale results in the chance for Greg and John to catch their breath, maybe even get a day off, and we can’t wait to see what they do next.”
Jamie Smith, Marketing Director on behalf of Firestone Walker – “They made a business decision that made sense for them and undoubtedly will add another element of interest to the craft beer vision of AB/CBA.”
Dan Kenary President and Co-Founder, Harpoon Brewery – “I have known and liked John Hall for many years and only have good wishes for those guys as they go forward. I used to live in Chicago and know what a brutal market it is so I congratulate them for what they have accomplished. The interesting twist to this for me is why they did it and what it means for CBA. Is the A-B model now changing and will they be looking to buy 100% of craft brewers? The main concern we would have is access to market and avoiding a return to the 100% share of mind days when AB wholesalers would not carry non-AB craft beers.
We know from personal experience that all the big brewers are nosing around craft beer along with the private equity guys (e.g. Magic Hat and Long Trail). The influx of private equity/hedge fund money is changing the craft industry as well.”
Neal Taflinger – Communications Director of Sun King Brewing in Indianapolis, IN – “I spent most of my teens and early 20s in the punk rock scene and it’s interesting how many parallels there are between craft beer and the indie music world. Not just in terms of the regional scenes and collectors coveting limited release records/beers but in small brewers’ attempts to subvert the big beer business model and achieve success on a smaller, more human scale. And like some big indie record labels and punk rock bands decided over the years that partnering with major labels could better help them reach their goals, some brewers will have decided – and will again in the future – that partnering with AB InBev or SAB Miller Coors is the best thing for their company’s long-term health. Whether that’s good or bad is in the eye of the beholder. I remember being heartbroken or feeling betrayed when one of my favorite labels or bands “sold out,” but as I aged I started to understand why some of those decisions were made, even if I wouldn’t have made them for myself.
Is a bigger, stronger Goose Island bad for craft beer? I don’t think so. Is Big Beer’s influence in craft something to be feared? Maybe, but it’s inevitable so fearing it is a waste of energy. AB didn’t buy Goose Island to compete with craft brewers, it bought it to retain market share that it’s losing to craft. We’ll probably see a number of breweries sell shares to AB InBev or SAB Miller Coors in the coming years, but my gut tells me that we’ll see many more companies redouble their efforts to make great beer, creatively tinker with business models, and have a transformative impact on the economies and cultures of their respective communities.”
Tomme Arthur, Director of Brewing Operations – Port Brewing/Lost Abbey – “I know the Hall family from my travels to Chicago. I respect their accomplishments and have nothing negative to say about this deal. From my perspective, they ran a very solid business for many years. Expanding is one of the hardest (and most expensive parts about this business). We know this because in our 5 years of business, we have constantly expanded through reinvesting all of our profits. Growth costs money. In the end, they also made a decision which allowed by father and son an opportunity to choose a new direction in their life.”
Greg Koch – CEO, Co-Founder of Stone Brewing Co. – “They sold partially to the A-B group a couple years ago. It’s quite difficult to be half pregnant. Now they’ve gone all the way, and everyone knows (no wearing loose clothing to try and hide it, as they did when they sold partially a few years back to the so-called Craft Brewers Alliance which is partially owned by A-B).
Banks are practically lining up to provide financing to growing craft breweries. Bank financing is MUCH ‘cheaper’ than selling equity (or just plain selling out). Comments that the sale was necessary in order for the brewery to grow seems like it doesn’t paint a full picture. Any entrepreneur would rather bank finance, and thus not have to give a chunk of flesh, than sell equity in their company. That is, unless their balance sheet chased all the bankers away, or they simply wanted to sell out. Which is, of course, their choice. Wearing loose clothing might not work.”