Friday, April 1, 2011

Bud! Bud! Goose!

The beer world is abuzz with the purchase of Goose Island Brewing Co. by Anheuser-Busch. No one seems to be happy about this and they point to the history of A-B acquiring smaller breweries to either shut them down and take over their market or use their facilities as area breweries for their own swill. I'm not even sure the veracity of these claims, but even if they do keep Goose Island as a viable brand, the detractors claim that the bean counters will reduce the quality by making the bumpkins at Goose Island cut corners to become more profitable. Few are taking a pragmatic view of this supposed horror, but I'd like to propose an alternative view of this news.

I first heard of the news from a friend who sent me an article explaining how bad the news was. I received e-mails from others with links to various articles with the same tone...bereavement for Goose Island. Another theme also ran through all the articles; they all stated that the purchaser is Anheuser-Busch with either passing or no reference to InBev. Remember, A-B is owned by InBev which is a Belgian company. If A-B had purchased them before they were owned by InBev then I’d see this as bad news since they probably would destroy Goose Island.

I think this is different. Big Beer has taken note of the rise of craft brewing in the U.S. The fact that sales of craft brews rose during the recession and their own sales plummeted was not lost on them. Yes, the market share is still less than 5% in the U.S., but it's growing. A-B and Miller Coors both recognize this trend, as has been made evident by their many failed forays into the craft brew world with their own “handcrafted” creations. They failed because the beers they produced were not all that great...and I'm being kind in many cases. By purchasing GI, A-H is taking a step into the craft brew world using the skill and knowledge of their new acquisition. From what I’ve heard, they’re retaining the GI brewmaster. That’s telling. He’s even come out and spoken about the acquisition saying that having the A-B muscle behind them will allow them to get their beer into more hands. He specifically mentioned Matilda, whose sales rose 100% from last year comp. He's either confident that A-B's financial, marketing and distribution prowess will work in his favor or he's been badly lied to.Goose Island has long been allied with A-B. They've been using their distribution channels for years, so they have experience with these guys.  

The book is out on what exactly will happen and the proof will be in the bottle after the reins are handed over, because once the accountants get involved they may try to change the way GI does what it does. Accountants don't make a company profitable by contributing income, they do so by limiting expenditures. It's possible that they'd want inferior ingredients to be used or they may just streamline some processes. Who knows? But let's not forget that A-B is not stupid. They may make some pretty bad beer, but have lasted pretty long doing so. 

Why? First of all, they have a marketing team that has many fans of NASCAR devoutly believing that their beer is superior to anything else simply by telling them its so and showing them hot women, Clydesdales and the occasional holiday commercial that tugs at your heartstrings and/or buoys your patriotism. Morality is a discussion for another time, especially if you've heard Anthony Bourdain's claim that Big Beer drove Brew Masters off the air by threatening Discovery that they'd pull their sponsorship. Again, another time for that by read this for now: When you do so remember that Bourdain's production company is the same that one that produces Brew Masters.

If you think about the financial expenditure and risks involved in this purchase for A-B, you know they had to have done a good deal of research ahead of time and I doubt they’d acquire a brewery with a shoddy operation. There are some efficiencies that I’m sure they’d want to put into place and we can only hope that it’s on the distribution and marketing side and that they’d leave the operation and creative aspects alone. As long as the quality doesn't fall off and the creative process is untouched this could be a good thing. 

At the top of the page I invoked InBev as the parent company because they do not have a history of destroying their acquisitions or interfere with the way they brew their beer. They add marketing campaigns and increase their production and distribution capabilities. Stella Artois is a prime example. I’m not a huge fan since I’ve had better Belgian pales, but it IS still the same beer it was prior to being purchased. InBev also owns Leffe and I’m a huge fan of both the blonde and bruin. I wish they had a redhead. Rewind a few months when Anchor Steam was purchased through Griffin Group by Keith Greggor and Tony Foglio . We did not see the same media storm at that time. Why? These guys are not Anheuser-Busch. A-B is the Darth Vader to craft beer's Ewoks. Okay, bad analogy (many Star Wars fans bought Galactic Battlegrounds just so they could shoot Ewoks), but the point is that A-B is bad bad bad bad bad and has been the mortal enemy of any beer with flavor since time immemorial. Nothing they do could be a good thing, right? Well...

You could look at this as good news for beer geeks in the Garden State as it could result in larger distribution which could include New Jersey. Yay! But only "Yay!" if the quality is not sacrificed. I still find it hard to be hopeful that a massive increase in production will result in no loss in quality. Let's not forget the change for the worse for Pilsner Urquell when the Iron Curtain fell and they finally allowed to take their profits and update their equipment. It's still damn good, but not as good as it was. I’m also a little worried if the brewers at Goose Island will be allowed to continue with the big bottle portion of the operation Since I have yet to sample it, I'd be heart-broken if they discontinued  the Bourbon County Stout line.

The whole beer world in the U.S. will be watching this develop. 
  • The micros will be watching with paranoia to see if and how A-B will rape the company. They'll swear to not let it happen to them. Already today, Nimbus Brewing from Arizona is poking fun at the acquisition.
  • The beer snobs will be extra critical of the Goose Island beers after the transition occurs, claiming that Big Beer has destroyed a maverick in its prime. I doubt we’ll see objectivity from that segment of the beer geek population in this matter unless the Brothers Alstrom can make them heel. They've never been too successful with that, but they do try. 
  • The macros will also be paying attention. If it works for A-B then it will be a race to create the largest U.S. beer conglomerate and Miller/Coors and A-B will get into bidding wars over the likes of DFH, Rogue, Sierra Nevada, Widmer Brothers and Stone.
I’ll reserve judgment and watch along with everyone else to see if this will launch craft beer into the next realm and then try to figure out if that "next realm" is Nirvana or Gehenna. The worse that could happen is that one of the micros is sacrificed for the good of the rest as a warning to beware macros bearing gifts. 

POST PUBLISHING NOTE: CEO Greg Hall has announced he will step down as brewmaster at Goose Island. While this is a shame it is not disastrous. Brett Porter from Deschutes Brewing Company will take over. Anheuser-Busch has stated that it is dedicated to keeping the brewing tradition at Goose Island intact. This change in personnel may be a sign that they actually mean it.

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