Now I have in the not-so-recent past been accused of being a Goose Island-apologist and even a touch sycophantic when it comes to my hometown brewer. And I have made clear my respect for Goose Island and its founding family, including John and Greg Hall. To their credit, the Hall’s have made no bones about their decision to enter into an equity agreement with the Widmer Brothers Brewery and to their participation in the Anheuser-Busch distribution channels.
Despite all of Goose Island’s successes, [Chicago’s] s notoriously competitive distribution challenges in part led to the brewery’s decision in 2006 to enter into an equity agreement with the Widmer Brothers Brewery and the Craft Brewers Alliance, which has ties with Anheuser-Busch InBev. With their decision quickly came harsh words from self-appointed craft beer purists. Greg Hall quickly dismisses the criticism by noting that the big guys give them better access to market but “zero direction whatsoever” as to the beer. For others he jokes, “Can’t you taste the beechwood in there? Don’t you think it makes it taste better?” Simply put, “the beer is coming on a different truck now, but it’s the same beer from the same brewery and people.”
I’ve visited the Fulton Street brewery twice in the past two years and have been continually impressed by Goose Island’s dedication to pushing the brewing envelope and to developing some very interesting beers. If you expected Goose Island to go on autopilot after the 2006 Widmer deal or to fall prey to some flavor-killing influence of Anheuser-Busch, you’ll have to take you beer geek insecurities elsewhere. Goose Island has done nothing but improve its operations, both in terms of efficiency and creativity, since the inking of those big deals. The brewery has also enjoyed unprecedented access to a notoriously rough market in Chicago.
For the doubters, you need only consider what Goose Island has done since 2006 and then ask whether your local, “independent” brewery has fared as well. GI has introduced Sofie, Fleur, Juliet, Madame Rose, Pepe Nero and Nightstalker, as well as a number of variations on Bourbon County Stout. It has instituted a sustainability project meshed with a session beer offering through Green Line. Matilda is now widely available throughout the city on draft and the brewery is fast becoming known for anything other than its flagship Honker’s Ale (which remains excellent).
Despite industry criticism and snarky beer geek attacks, Goose Island has proven its dedication to producing world-class beer and to being inventive. And despite the departure of longtime brewmaster Greg Hall, I expect the brewery will continue to innovate. The future will tell on how a full AB-InBev owned and Greg Hall-less venture proceeds.
After getting beyond the initial surprise of the deal, I’m left with the thought that the A-B deal is actually good for craft beer (and certainly for Goose Island). As I noted in last month’s BeerAdvocate Magazine, it is time for the big brewers to signal their intentions towards craft beer. To date, Anheuser Busch’s entries have largely come across as a series of half-hearted, faux-craft brands that have tried to co-opt craft’s cool while simultaneously portraying the trend as cartoonish. While a few of the offered A-B brands have been respectable in terms of flavor (such as the Michelob Porter or the brewery’s dunkelweizen), the rest have been busts.
The Goose Island deal looks like a more focused approach for AB-InBev. According to the Wall Street Journal, the brewing behemoth intends to focus on a few core brands (as it does elsewhere around the world), including the Blue Moon-killer Shock Top (a cartoon brand in my opinion) while purchasing a handful of successful craft brewers. This latter approach, more in line with the InBev model, allows the company to bet on already successful brands instead of undertaking a throwing things at the wall approach that long seemed to dominate the A-B releases.
The Goose Island sale to AB-InBev in one sense must be seen as a victory for craft brewers. Instead of simply trying to knock-off or belittle their efforts, the world’s largest brewery clearly appreciates some of the nuances of the American marketplace. And it is certainly vindication for the hard work and efforts of the Goose Island family.
I also expect that this will signal the end of the half-hearted, Budweiser American Ale stabs at flavorful beer that we have seen in the past. Better to have the behemoth support, promote, and deliver flavorful craft beer than to crowd tap handles with flavorless and embarrassing knock-off brands (beyond the handful that will remain, such as Shock Top).
The deal also gives us hope that AB-InBev will finally take baby steps towards getting serious about supporting better beer. I expect Goose Island will receive a helpful infusion of cash and greater access to more markets as the division grows. As the industry continues to gray, it’s inevitable that many other craft brewers will find a buyer in AB-InBev, which will in turn lead to craft brewers comprising a greater percentage (however negligible globally) of the AB-InBev brewery portfolio. Assuming craft beer drinkers do not abandon their favorite but now-sold craft brewers, AB-InBev will experience pressures to continue to brew brands and keep local breweries in operation that they have not before faced in places around the world, including in Belgium.
To the extent that craft brewers can maintain an ownership, controlling, or operational interest in their breweries, using AB-InBev’s capital resources to expand their breweries will also lead to a greater availability of craft beer in markets across the nation. We have all seen our favorite breweries quickly expand their footprints across the country, only to have to pull back to a few or even a single state due to the inability to meet demand. This will continue to be a challenge for breweries for many years to come.
There are of course dozens of questions remaining to be answered in determining what effect AB-InBev’s growing involvement in the craft beer sector will have. We have no idea whether AB-InBev will be content to take a hands-off approach, as it has so far with Goose Island, and just see fit to help great craft brewers grow and showcase their brands or whether the large brewer’s shark-like corporate culture will cannibalize brands and move to shutter breweries and centralize brewing operations.
You keep calling AB-Inbev a “brewery” – they are NOT. They are a marketing corporation with only one client – themselves.
Did you see BEER WARS? Do you study the industry at all, Andy? These guys aren’t interested in making better beer, they’re interested in selling as much of their own crap as possible. Simply buying Goose Island doesn’t mean they all of a sudden “care” about the quality, craftsmanship, artistry, integrity, etc.
Remember when Miller bought Leinenkugels? What was once a fine craft beer has been turned into, in your words, a cartoony psuedo craft beer line. Honestly, Genesee and Saranac have more integrity and craftsmanship than Leinenkugels does. What about Rolling Rock? That got bought out, moved, and the quality tanked.
I’m not saying It’s an absolute 100% guarantee that AB-InBev is going to move Goose Island or start dumbing-down the recipes, but there’s no guarantee that WON’T happen down the road. With Goose Island now having the ability to be distributed wherever Bud products are sold there’s a chance they could usurp Samuel Adams in sales. Speaking of which, did you notice how Jim Koch’s quality has steadily DECLINED over the years? They open satellite breweries and have their beers contract-brewed by Miller and then start offering us crap like “Coastal Wheat” and try to tell us it’s REAL craft beer. Uh huh.
The point being, let’s not get all excited because now Goose Island is going to be the next Sam Adams or even the next Michelob. Let’s get worried that corporate raiders are meddling in an industry they don’t understand. I wonder if you Would be saying the same thing if AB-InBev bought Dogfish Head or Southern Tier or Rogue? And who’s to say that those breweries aren’t next?
I guess time will tell, but history repeats and those who fail to learn from the past are doomed to repeat it. I think this is another Leinenkugels move and NOT a Samuel Adams expansion.
I don’t agree that AB-InBev is a beer marketing company. They own hundreds of physical breweries around the world. A beer marketing company is something very different. And without getting into the whole Beer Wars thing again, I’m offering a very different perspective than the usual party line here, I acknowledge that. I’m pretty sure I never suggested that AB-InBev had suddenly experienced some sort of conversion of entire spirit. I think that the last four years of co-ownership has not led to anything but positive results for this one American craft brewer. InBev without question has a very deplorable history of gutting and cutting around the world, especially in Europe (Belgium in particular). That could very well happen here. I’m offering a case as to why it may not.
As to Leinie’s and RR, I can’t say I agree that there is much of a noticeable difference in those brands. Having grown up in the Midwest, the former was never a huge craft/flavor player and the latter is, well, RR.
And no, I’d be writing a very different story in AB-InBev bought DFH or Rogue (not so much ST), but probably not for the reasons you suggest.
As I said, time will tell. Until then, I’m not writing off GI.
And finally, I disagree with your characterization of Boston Beer but that’s just my palate.
Time to put the hysterics and rah rah craft us versus them rhetoric to rest, across the industry.
Being the eternal optimist that I am. I have to agree that this should bode well for Goose Island. Of course, time will tell. No one (that I know) has access to a crystal ball to see the inevitable ups and downs that will occur but the fact that Goose Island along with Widmer has already been working with the “enemy’ should prove invaluable and increased distribution should gain Goose Island more fans.
What worries me more are the knee-jerk responses. From reading them, you would think that the minute the deal was finalized that Goose Island beer suddenly became bad. It’s a very Hester Prynne attitude in my opinion.
Who knows. Maybe Goose Island will change ABInBev.
Maybe Goose Island will change ABInBev.
A little longshot that I’m going to bet a couple of bucks on myself, Sean. You never know.
Yes, mostly, with a few little things I’d say definitely yes to. Like, thanks for not jumping on the silly “Oh, sure, we all knew this was going to happen, but we didn’t say anything” bandwagon; this was a surprise, and it’s consumed conversation all day.
And Chad…Speaking of which, did you notice how Jim Koch’s quality has steadily DECLINED over the years? They open satellite breweries and have their beers contract-brewed by Miller and then start offering us crap like “Coastal Wheat” and try to tell us it’s REAL craft beer. Uh huh. Actually, nuh uh. Boston Beer is all brewed in Boston Beer-owned breweries these days, has been for over a year: there’s no contract-brewing any more. And far from “crap,” Noble Pils is one of the best beers they’ve ever brewed, in my opinion.
Which brings me to my biggest ‘yes definitely’: Time to put the hysterics and rah rah craft us versus them rhetoric to rest, across the industry.
Oh yes, most definitely.
Cheers, Andy. You gonna be at NERAX? I’m talking about session beers Friday afternoon, be good to sink a couple of them with you.
Hey Lew, crazy shit today. Goose Island trending as a term on Twitter, just as Egypt did two months ago. What a world.
Agreed across the board.
Definitely going to see you Friday for several. Might even heckle a bit from the peanut gallery. Those full pours of American “session beer” can catch up to you after a while. Hope your radio interview went well.
“Time to put the hysterics and rah rah craft us versus them rhetoric to rest, across the industry.”
I would agree with you but I cannot support an irresponsible corporation such as ABI.
Sure, maybe the craft vs. the big corporation argument needs to ease up but ABI is still the big BAD boss. If they start to prove more corporate responsibility, play fair, and end their gray-area and illegal business practices, then I can consider supporting a select number of their products, which are worthy of my beer spending dollars.
The way I see it, the argument against ABI is not that they are big, it is that they are BAD.
All I can see coming of this is AB-Inbev using their considerable clout with retailers to push other craft brews off the shelf since Goose Island can fill that shelf space for them now.
I still can’t see why A-B should invest in Goose Island, they’re certainly not doing this to promote beers like Bourbon County Stout or Nightstalker. So, it must either be an image thing or, more likely, for economical reasons; A-B may want to get a foot in the growing craft beer market or perhaps they just want to nip competition at the buds?
One could argue that A-B money would help Goose Island grow much faster, but isn’t that the road to blandness? Organic, sustainable growth allows a brewery to maintain quality while still expanding.
One could also argue that A-B is more professional (certainly true), and could teach Goose Island a thing or two about the running of an efficient brewery, but the economics of large numbers tend to reduce quality and the craftmanship of brewers; corn is a cheaper ingredient than malt, so why not add some of that to your beers? And why not cut back on the length of maturation / storage, the free space and bring out more beer to the market?
None of these reasons, though financially sound – I’m sure – endear me to support this takeover.
No, this deal makes as much sense to me as if the Prohibition movement had suddenly started buying up Scottish Whisky distilleries. I do fear for the future of the Goose Island beers, and I will be pleasantly surprised if I can buy Bourbon County Stout 2015 vintage and still enjoy it as one of the best beers in the world.
Only time will tell.
Interesting take, Andy. However I’m not sure Anheuser-Busch’s awkward history with cartoonish faux-craft beers really applies here. This company is NOT Anheuser-Busch. This company is InBev.
What does that mean, besides inevitable cost-cutting? We can only guess… But since there’s no shortage of guessing going around, this is not the first time A-B InBev a.k.a. Interbrew has swallowed a smaller/craft/artisanal brewery or brand. Think Hoegaarden. Whitbread. Staropramen (until ’09 anyway). Alexander Keith’s. In some cases brewing has moved to a larger InBev plant; in others brands were entrusted to others or contract brewed. In nearly all cases there is the usual debate about whether the products have suffered. But they all have their devotees.
“The deal also gives us hope that AB-InBev will finally take baby steps towards getting serious about supporting better beer.”
Goose Island has the perfect portfolio of beers for this: A great transition beer in 312. Session beers in Honker’s Ale, IPA, and Green Line. Good seasonals all around. Reserve and vintage reserve Belgians. Extreme monsters like Bourbon County Stout and Night Stalker. The best part is that AB seems to be all for keeping the team (of beers) together. To me, this looks AB bowing to a growing craft beer market they can no longer ignore, attempt to squash, or compete with.
My take: http://chitownontap.com/2011/03/28/goose-island-bought-out-by-anheuser-busch-my-pint-glass-is-half-full/
You often scoff at the term “independent”, but while that label may seem silly to you, it is very important to others.
With craft beer being consumed by more than just beer geeks now, the “craft beer consumer” has more than just one set of principles. Some drinkers are in the eternal search for “better beer”, others are in search for the craziest sour beer ever created, and still others just want an okay beer made by the independent brewer down the street. All of them are growing the craft beer industry. And for the people that choose independent brewers, the choice to not drink GI anymore will not be out of spite, beer geekery, or jealousy. It will be out of a belief system of supporting independent businesses rather than multi-national corporations. Again, that may not align with your principles or what your preference is, but it doesn’t make it wrong or silly.
Also, you highlight that since their association with AB-InBev, Goose Island products have not suffered so it shouldn’t suffer now. However, you’ve gone out of your way on several occasions to highlight that the 2006 association was just “beer being delivered on a different truck”. So using the original partnership as the basis for assuming that this complete buyout won’t change much seems like quite a leap of faith.
Personally, I think it’s naïve to think that after 100 years of doing nothing but squashing competition by any means necessary, AB-InBev is now going to play the role of philanthropist and support the growth of “better beer”. Their number one goal is to maximize profits and increase shareholder value. You admit as much in your last sentence. It is by no means a leap to think at some point that “shark-like corporate culture” will conflict with the Goose Island way.
To a lot of people (myself included), this is just as much about who we want to support financially as much as being concerned about the future integrity of the beer. For those of us that want to support our own communities and buy locally, it matters not if the beer changes, for better or worse. Goose is actually a perfect example. I grew up born and raised in Chicago and now live in the south unable to get Goose. I have buddies that visit and bring some or we ship back and forth some local beers that cant be had in either market. So while undoubtedly, Goose will more likely be on shelves in Georgia faster now than it might have been without the deal, I also know that my money is going to a foreign company in InBev. I dont like that one bit. No longer am I supporting the little guy. I dont blame Goose Island for making the deal, they got a lot of money, which in the end is what a business is all about. I just wont have that same feeling that I am both drinking something special AND supporting my community, when(if) I drink Goose going forward. But as someone else brought up, just watch the movie Beer Wars and its easy to understand why the little guy would do it. Being distributed by AB prior is far different than being owned by AB/Inbev. Goose was paying AB to distribute to a larger channel of customers. Now, I buy some Goose and I know the profits are going to InBev. Certainly, I am concerned about the quality going forward. I doubt we will see very rare specialties any more like BCS (of which my 2 aging bottles probably just went up in value) but I wouldnt expect to see one bit of difference in the quality of production from the main lineup. Thats what AB/InBev wants to sell. They want 312, Honkers, etc. There will never be enough production of a beer like BCS rare for AB/InBev to care. While I agree with the prior poster of putting this craft vs big boy rhetoric behind us, that is not the reason I am disappointed with the deal. While I certainly cant always live by this rule, I do like to know as much as possible who I am supporting. Now, if I have to choose between say Coast HopArt IPA, which I know is made with local ingredients supporting local businesses in Charleston, or Goose IPA in an effort to support the city I grew up in, the choice has been made easier.
“…it is time for the big brewers to signal their intentions towards craft beer. To date, Anheuser Busch’s entries have largely come across as a series of half-hearted, faux-craft brands that have tried to co-opt craft’s cool while simultaneously portraying the trend as cartoonish. While a few of the offered A-B brands have been respectable in terms of flavor (such as the Michelob Porter or the brewery’s dunkelweizen), the rest have been busts.”
What would possibly lead you to believe that they haven’t signaled their intentions decisively and repeatedly through the very actions you have listed? Miller bought Celis to shut him down, which they did. AB has proven for decades that their intention is to maximize profit by minimizing production cost and putting all of that capital into advertising and/or paying distributors to support slotting to increase market share.
It is the lack of AB’s actions to do anything serious in this sector that speaks the greatest volumes. AB has more of everything that anyone has ever needed to move into the craft beer market. They have had the capital, the physical plant, the brewing expertise and the distribution chain to do this on their own for their entire existence, IF they truly wanted a card of genuinely high-quality beer in their product line. There is no company in the world with more opportunity to deliver on whatever intention they have to make great beer. There are but two things that have stopped them: bean counters and shareholders. They demand growth and increased profits. Growth they will get by buying decent breweries. Profit they will get by cheapening their product. That has been the A-B modus operandi for 50 years. The burden of proof to show that they are changing is on you, and not on the justifiably skeptical beer geeks.
Your characterization of detractors as “snarky geeks” is ad hominem and should be beneath you. If the brothers are still there in 10 years, I will be proven wrong, but is is an easy money bet on my part that they will not be. Ask Pierre.
Hello to Ken and others.
I had a similar discussion re Celis and Miller today and, suffice it to say, those are two deals that have nothing in common beyond the product, namely craft beer. Light years of difference. AB has been involved with GI in a less direct way for almost five years now, with little to no tangible negative effect. That is a point that most detractors either don’t appreciate or conveniently ignore. ABI has told the Hall’s that it wants to go all-in precisely because of what GI does well. If ABI just wanted to crush GI in the Chicago market, it would cost a lot less than $39mil to achieve that relatively easy goal. Maybe ABI will kill the golden Goose. I’m willing to reserve judgment as I think the GI deal may be a sign of the first steps towards a new era. And GI remains a sufficiently tiny portion of the overall ABI pie that shareholders won’t care how it performs.
Beyond suggesting that you take another look at the definition of ad hominem, I’m pretty comfortable with the characterization relating to most arm-chair critics of the deal. And I have no idea which brothers you are talking about.
As to Mr. Celis’s thought, this deal is world’s beyond his individual experience in the early days of craft.
Pardon me. The father and son. The Halls.
I meant ad hominem as in “to link the validity of a premise to a characteristic or belief of the opponent,” in this case specifically dismissing others objections to the sale by painting them with the characteristic of snarky geekiness. I’ll stick with that. Please stick with the arguments, and not the slams of the character of those with whom you disagree. You may be comfortable with the characterization, but it is needlessly hostile and diminishes your point.
AB spends $1.36B/annum on advertising. $39 million for GI is pocket lint. I recall Bud’s ads belittling craft and homebrew from a few years ago: “made in their (insert sneering voice here) basement.” I haven’t heard them say anything to the public that says “hey, here’s what a good beer actually is and why, and we’re sorry for lying to you for the last 50 years. And to prove it, we’ll stop using malt strains bred for the highest possible diastatic enzymatic activity that let us maximize adjunct content as a result, and make a beer with real taste.” When they do, I’ll stop being cynical about their motives and any business deal they make. But not before.
And Dave: excellent points.
I have also spent just as much time discussing and reading up on different perspectives to this news as most other readers that have commented up to now. I would like to congratulate you all for contributing to the most intelligent and respectful discussion that I have encountered thus far. And that comes after two full days of reading into it. Andy, I appreciate your thoughts and reasoning would like to reiterate this comment as a thank you for contributing them to the overall discussion taking place throughout the beer world.
Here’s an excerpt from my beer blog regarding the topic at hand:
“…But the largest effect, in my opinion, is the resentment felt by loyal Goose Island customers, who had what they felt was an intimate relationship with an independent brewing company, an unspoken agreement, a hometown hero they could believe in and stand behind. That was all ripped away in what was tantamount to a “Dear John” text message…”
To read my entire blog visit: goodbeersanta.blogspot.com
I always get confused when we reach the point of these arguments where we’re supposed to forget or ignore the war of ill-will that the major brewers have waged against craft brewers ever since the 1980s, and suddenly accept “Oh, I’m sure that oddly shaped sheep with all the black fur and fangs is just a regular ‘ole sheep, better not think about it too much.”
I appreciate your optimism, but after seeing what InBev did to AB in St. Louis, I don’t have a good feeling about the future of Goose Island. After buying AB, InBev slashed staff and looked at every way to cut costs and improve efficiencies. Staff at the brewery there was cut by 40% almost instantly – not because of duplication of effort, but because they didn’t see why they needed so many people in areas like QC. I have no idea what’s been done to cut costs and save on ingredients. I fear that InBev’s history of buying iconic beer brands (not a recipe or brewing process) and cutting costs will cause it to suffer. Fortunately, the craft beer movement is growing fast and if the quality suffers, there’s plenty of others stepping up with great craft beers.
I have some serious concerns about this move and see it as another way for the big guys to corner markets, squeeze independents (shelf space), and increase profits. But why is no one mentioning the fact that the longtime brewmaster is out the door? This seems to me like one of the surest signs that the GI name will not maintain the quality that has been GI.
@matt-“But why is no one mentioning the fact that the longtime brewmaster is out the door? This seems to me like one of the surest signs that the GI name will not maintain the quality that has been GI.”
I don’t see why that would necessarily be the case. Brewmasters have come and gone from breweries for years.
It seems to me that part of the skill set of a _true_ master brewer is to follow a blueprint that may have been laid out years before his arrival. If the new brewmaster stepping in uses the same formulas, ingredients, and methods, there should be little or no difference.
Even with minor changes due to raw materials availability there is enough wiggle room that the resulting product needn’t change at all.
So I agree with Andy here. It all depends upon whether AB-InBev actually (or I should say, miraculously) does keep a comparatively hands-off attitude here. There are beer geeks/snobs that will be pissed off and will reject out of hand the results anyway, no matter what, just because a big company is now involved. Nothing will change that,.
But if the GI quality can be maintained, there will be a lot more fine beer reaching a lot more people. And it will could ultimately lead to better business for small brewers as well.
Besides, if AB-InBev were looking to undermine the so called “craft beer” movement, they need only fire up the kettles and REALLY get serious which as we all know they definitely have the facilities and technical know how to do. Either that, or they would have to pony up a LOT more money to snap up the many other successful “craft” brewers.
Quite frankly, AB-InBev themselves are already too busy making the kind of beer that most people actually want. But this acquisition (as well as some of their own very good specialty brews) gives them a further presence in an undeniably growing segment.
As a consumer, I actually welcome AB’s major foray into the craft beer biz. This community is long overdue for a free-market reaction. The exponential increases in prices have to have a result.
It’s interesting….the same crowd that dismisses high prices as a natural business force “hey, people pay that much for the beer so it’s worth it!” are the same ones slamming AB’s purchase of GI. So, the laws of business only apply when it suits them?
The craft beer industry is overdue for a shakeup. I hope the GI acquisition is the 1st of many to come.
i wouldn’t know how Goose Island’s quality will be affected, because i won’t be buying it. AB-Inbev has continuously attempted to force craft brewers to close their doors with frivolous lawsuits and underhanded tactics. they even went as far as to force Discovery Channel to cancel the wonderful series “Brew Masters” by threatening to pull advertising. in no way, shape or form is ANYTHING AB-Inbev does “good for the craft industry.”
Honestly, in the end it doesn’t really matter to me. I won’t drink GI as much (I don’t anyway) whether it gets better or worse, because that’s not how I like to spend my money. But as was said before, the “craft beer consumer” is changing, and so is “craft beer.” I think in the future we will have more of what we have now: a few dozen large regional craft breweries most likely owned by big players, or the only big player left, or maybe owned cooperatively like North American Brewers, and a few thousand small to medium sized craft breweries. I will always prefer the latter, but many other craft beer drinkers, who care about taste more than ethics, won’t. And I’m ok with that, because every once in a while they might unwittingly support what I support, stemming from their enjoyment of some good ol’ macrocraft. Then again, things could take another turn, with macrocraft crowding out smaller competitors on their home turf. But I think the local, interesting beers that creat enough of a niche will always be with us.