THE WARNING SHOT

Listen closely.

Did you hear that? That sound? Like a can of watery, tasteless swill smashing through the window of your local craft brewery?

That was the warning shot. The shot across the bow of craft beer. That was the sound of Anheuser Busch taking it up a notch. The sound of them kicking the tires on this whole “good beer” thing everyone has been talking about. It was the sound of them offering $38 million to purchase Goose Island…and Goose Island accepting. It was the sound we’ve been dreading.

Kid Carboy eloquently and concisely summed up the story for us yesterday. He’s a Chicago-area guy so the news has more of a direct impact on him. Hell, I can’t even get Goose Island beer down here in ‘Bama. But truth be told, this affects all of us. Or at least all of us who have a stake in craft beer…whether financially or just emotionally. In a very real sense, this is the beginning of the war for the very soul of craft brewing.

I know. There are real wars going on. There are life and death struggles happening every day that make this story seem laughably unimportant. But it IS important. Because it’s a story about a thriving industry being preyed upon by a ruthless giant. It’s the story of local economic interests being bought up by an overseas corporate monstrosity. It’s the story of the American public, just waking up to what they had been missing for so many decades, only to have the beast responsible for their slumber start rocking them to sleep again. Even if you don’t care about beer, you should care about this. Because this could effect an industry that is creating jobs and revenue and helping local economies thrive. This is a big deal.

Goose Island’s CEO, John Hall, used the “we can’t meet demand!” excuse to explain the buy-out. That is…I mean…I can’t even logically process that explanation. Lots of craft breweries are having trouble meeting demand these days! That’s a good thing! It’s OK if you can’t meet demand! There are alternatives. Grow intelligently. Grow thoughtfully. You don’t have to sell out to the biggest bully in the beer world just because they can help you crank out more brew. Look at your peers. Lagunitas is investing in a brewery expansion. Ditto Brooklyn, Oskar Blues, Founders…even recent Aleheads’ whipping-boy Bell’s. If demand is THAT high for your product, it shouldn’t be so hard to find investors willing to help you out without completely usurping your company. And what’s the worst that happens if you don’t meet demand? You pull out of a few states like Dogfish Head? Interest in your “rare” beer skyrockets like Russian River or Three Floyds? Some of your beers sell for big bucks on Ebay? Seriously? Who cares? Since when did meeting 100% of customer demand trump sticking by your vision and mission? Who would honestly look down at Goose Island for not being able to produce all of the beer their fans want?

Of course, the demand thing was just an excuse. Goose Island’s fate was sealed years ago when Anheuser Busch purchased a large interest in the brewery. Whether we knew it or not back then, this was inevitable. With overall beer sales flagging but craft beer sales skyrocketing, it was only a matter of time before Big Beer began looking for a craft brewer to snap up to allow them to tap into an emerging market. It’s a lot like Microsoft’s business strategy at the turn of the millennium (or Apple’s today). When a company gets so big that they forget how to actually produce a quality product, they simply gobble up a smaller company that does. Although, to be honest, I respect Microsoft’s approach more than Anheuser Busch’s. There was no subterfuge with Microsoft…no hiding behind the little guy. They were very obviously cannibalizing a smaller, nimbler company because they needed their intellectual property. The smaller company essentially just disappeared into the belly of the beast. But AB is purchasing Goose Island and expecting people to think nothing has changed. They’re expecting people to think that the giant, soulless, corporate monster is just being a decent citizen and helping a craft beer darling expand. They’re just a kindly old benefactor making sure that folks in small-town Idaho can grab a sixer of Honkers. Ignore the hideous behemoth pulling the strings on the Goose Island marionette. Just focus on that tasty bottle of suds, my pretty!

Anheuser Busch isn’t stupid. They didn’t get where they are by making poor business decisions. As Kid Carboy pointed out, they actually have some of the best brewers in the business crafting their tasteless, but eerily consistent beer.  If they put any effort into it, they could probably crank out some of the greatest beers in the world. They’ve got an unlimited budget, the best logistics in the industry, and some of the most experienced brewers on Earth. But the problem is, they’ll never shake the stigma of their flagship/horsepiss products. And they KNOW that. They have no intention of making a great beer and slapping the Budweiser label on it (spare me your claims that Budweiser American Ale is “decent”). Even if they DID make a good beer, they know that the craft beer fans of the world would just walk right by it. But they get the same industry forecasts that we see (actually, I’m sure they get far more in-depth numbers than we do since they undoubtedly have the best market analysts in the beer world). They see craft beer growing by double digits every year while the beer industry as a whole continues to decline. Their only option if they want to tap into a growth market is to snatch the reins of a true craft brewer.

But whose reins should they grab? They could go the hostile takeover route and bully a smaller brewery’s distributors or muscle them out of  bars and package stores. But that would just antagonize the locals. They could wow a microbrewery by throwing gobs of dough at them. After all, the CEO of said company might love making tasty, local beer, but he or she also probably loves $50 million.  Unfortunately, with that approach there’s always the chance AB would get rebuffed and look foolish and desperate. Instead, they saw a much easier option when the question of “whose reins should we grab?” arose. How about Goose Island? The company that had already handed one of their reins over to AB years ago? All they needed was $38 million and change. For AB, that kind of money was probably hidden under the couch cushions.

See, that’s the problem with making deals with the devil, Goose Island. Eventually, the devil will come looking for his due. AB bought up a stake in the brewery a few years ago just in case this whole craft beer thing caught on. It did…so they came back to finish the job. Goose Island had no choice in the matter. But we do. Oh yes…we certainly do.

The craft beer blogosphere is buzzing with folks who have emphatically claimed that they will never buy a Goose Island product again. Count me in their ranks. I truly love the Bourbon County Stout…but I have drank my last. I thoroughly enjoyed the Matilda…but never again. I was utterly indifferent to the 312…so…umm…I don’t really care about that one. This makes the flap over Bell’s and Northern Brewer look like much ado about nothing (which, admittedly, it was). In that situation, I “threatened” to ignore Bell’s offerings for a little while to justify my overblown moral outrage, but I’ll clearly be backtracking on my self-righteousness when HopSlam gets released next year. But Goose Island…well, that’s a different story. I will never touch their products again. Ever.

The warning shot has been fired. We’ve all heard it. And now it’s time to react. I’m sorry Goose Island. You made your filthy, shit-encrusted, lice-infested bed…and now you have to lie in it. And I’m sorry for you too Anheuser Busch. You thought you could just slip in, snap up a craft brewer, and enter a segment of the industry you hadn’t managed to completely bastardize. Unfortunately for you, the craft beer world is watched over carefully by Aleheads who care just as much about the people making our beer as the beer itself. You’re not welcome in this world AB. Not at all.

Farewell, Goose Island. Thanks for the memories. Tell the devil hello for us…and remind him that he’s too big to hide behind the little guy. We can still see his horns and tail.

We heard your warning shot, Anheuser Busch. We felt it crash across our hull and rattle our portholes. But we’re still here, AB. We’re still floating. You’ll have to do better than that…

Take your best shot.

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13 comments

  1. If you can’t get behind not buying Goose Island products for, vaguely, an “I hate AB” reason, it’s perfectly fine to not buy their beer for an “I love good beer” reason.

    The reason that such an enormous variety of interesting and good beer is around right now is because there is a high amount of competition in the market. Right now, beer looks more like a commodity market than just about any consumer product in America. This keeps prices relatively low, quality high, and innovation even higher.

    Obviously, those are things we should support with our wallets – which means buying beer from smaller brewers whenever possible. Buying AB is buying into a future where, even if AB and MillerCoors learn how to make good beer, offerings will be much slimmer and artificially expensive. And that would suck. No one beer or brewery, no matter how good their products, is worth more than the vibrant and competitive craft beer market’s health.

  2. CZAR VLADIBEER S. BOOTIN' · · Reply

    Warning Shot? Barleys – you are optomistical. This is the simply first incursion onto your occupied territories. More villages will burn as AB and everyone else buys large craft beer portfolios. 38MM is not an investment for AB. They are looking to buy at least 1B worth of assets if this is real investment – that’s 30 breweries this size (assuming prices didn’t just go up for breweries). If something else going on, like AB executive knocked up GI daughter, maybe other explanation.

  3. high5apparatus · · Reply

    Here’s what will happen to GI. They will lose many craft beer fans, but their beer will be introduced to a much larger market of people who don’t think much about beer. GI volume will grow, revenues will increase, and the shareholder’s will be happy. Because that is what happens when you have shareholders, you become a slave to the necessity of growth for growth’s sake. I don’t think they even use the phrase “cash cow” in business schools any longer, they must be long lectures on constant and sustained growth and maximizing shareholder value.

  4. spencer · · Reply

    i guess it’s time for john and i to pour that bourbon county vanilla down the drain.

  5. As long as it was purchased before the buy-out, you’re fine. But I expect you to drink it with withering glares and lots of tongue-clucking.

  6. Matty Lake · · Reply

    I think this is a bit over dramatic. Things like this happen all the time – breweries rise and breweries fall. It’s about beer and your personal choice about where you spend your money. This is not apocalyptic for to the market. I sell beer for a living (good beer), trust me when I say there will be another delicious, independent brewery that will be just as good and fill their shoes.

    You don’t know these people and you don’t know why they chose what they did. To pretend like the sky is falling is just as dis ingenuous as your market analysis isn’t it?

    If you were really a fan of Goose Island, haven’t they earned the right, after 20+ years in the biz, for you to taste their beer before you execute them?

    Or, perhaps, you fear you’ll never love a beer again like you loved the Bourbon County Stout?

  7. […] for their trivial legal machinations against Northern Brewer and Goose Island for serving as the sacrificial lamb on the altar of Big Beer that I had kind of forgotten why we started this site in the first place. We founded Aleheads to […]

  8. […] after nights on the town with Alehead buddies, I winced in sympathy at Mr. Cook’s position- the recent announcement that Anheuser Busch is acquiring Goose Island, along with his decision to step down after 23 years with the company meant that the embarrassing […]

  9. […] legislation all throughout the US. They’ve even started buying up some craft brewers (fare thee well, Goose Island) in the hopes of taking advantage of the remarkable growth in the industry. When these attempts […]

  10. […] followed up Kid’s piece with a typically Barleyian essay rife with hyperbole and righteous anger. While my post contained my usual pointless drivel, the crux of my argument was that AB InBev was […]

  11. […] means that MillerCoors now owns a part of Terrapin. If this strikes you as eerily similar to the Goose Island situation, well…I agree with […]

  12. Chris N · · Reply

    People have cried “sellout” for centuries and likely will for centuries to come. At some point, you have to know when to cash in your chips and go home. If I were an investor and I got a nice chunk of $38m off of a much smaller investment you had better believe it’s time to head home to roost. You can certainly vote with your dollar for or against the sellout, but to begrudge someone for taking the money and running demonstrates a complete lack of understanding about why people get into any business to begin with. If you think the purpose of doing business is just to feel all warm and fuzzy you’ll find yourself sitting outside in the cold soon enough.

  13. […] of course, there was the infamous sale of Chicago-area darling Goose Island a few years back. Since that warning shot was fired, AB InBev has also snapped up Blue Point Brewing out of New York, Elysian Brewing out of […]

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