Looking back at the winter night in 2007 when I fell in love with craft beer at the Goose Island Wrigleyville brewpub, my heart sunk this morning. I learned that Goose Island announced that the company has agreed to a $38.8 million acquisition deal with its current distribution partner, Anheuser Busch. The facts: Founder John Hall will stay on as CEO. Brewmaster Greg Hall will leave, but stay on as a consultant. Brett Porter, formerly of Portland’s Deschutes Brewery will take over Greg’s position. The original owners and investors will get $22 million and the Craft Brewer’s Alliance (in which Anheuser-Busch owns a minority stake) will receive $16 million. The Clybourn and Wrigleyville brewpubs were not included in the deal and will continue to be owned by John Hall and a group of investors.
When it was reported that Goose Island was looking for partners to increase its production capacity last month, I concluded that the outcome would likely make little difference for Chicago craft beer drinkers because the expansion was intended to increase Goose Island’s ability to serve markets beyond Chicago with its Reserve line of Belgian ales like Matilda, Sofie, and Pere Jacques, and extreme beers like Bourbon County Stout and Demolition Ale. At the time, Crain’s Chicago Business reported that John Hall, known for his “deliberative and conservative approach and desire to control all aspects of the operation” was looking for “venture capitalists willing to take a stake in the fast-growing business but leave his family in control.” Today, we know that Hall chose not to secure such a deal with venture capitalists, but instead with a corporate partner that is bitterly despised in the craft beer world. In a press release, Hall said, “The new structure will preserve the qualities that make Goose Island’s beers unique, strictly maintain our recipes and brewing processes…We had several options, but we decided to go with Anheuser Busch because it was the best. The transaction is good for our stakeholders, employees and customers.” Hall went on to tell the Chicago Tribune: ”They didn’t buy us to change what we’re doing…If AB was going to water down the product, I wouldn’t have done it. I wouldn’t have worked 23 years to build what I have to piss it away in five minutes.”
If you believe John Hall, your 312 is not going to change. But how long does John Hall stick around before he gets in the way of the management consolidations and cost-cutting measures (read: corn and/or rice in your St. Louis-brewed 312) that a global conglomerate uses to increase its profit margins? Outgoing brewmaster Greg Hall offers some reassurance. He told Time Out Chicago today that the talks with Anheuser-Busch CEO Dave Peacock went like this: “Before we talk we want to make sure you know we want to keep brewing in Chicago, management in Chicago, decision-making in Chicago and we want to grow brands and add capacity.’ And they said ‘Great, that works for us.’” Let’s hope they had good lawyers crafting the language written into the contract. Do you see Anheuser-Busch bankrolling new variations on Bourbon County Stout five or ten years down the road? Who knows. I’m less concerned about the quality of Goose Island beers than about ongoing innovation and harm to the Goose Island brand. Anheuser-Busch is not going to start producing light versions of Goose Island beers. They’re trying to corner a new part of the market that they’ve been missing out on, and Goose Island represents one of the very best and most varied portfolios of beers in that segment. The catch-22 here is that craft beer drinkers will no longer see Goose Island as “the very best,” regardless of which direction this all goes.
On Principle Alone
Even if the recipes, processes, and tradition of creativity are here to stay, many beer lovers still see reasons to stop drinking Goose Island on principle alone. If you’ve seen the film Beer Wars, have been following the Save the Craft campaign, or have any understanding of how the beer industry works, you won’t feel good about increasing the bottom line of an international corporate behemoth and its distribution partners who are responsible for stifling growth of craft beer. It’s hard for me to accept that Goose Island is now oddly pitted against the other small brewers who make Chicago such a great beer city. The folks over at HopCat, one of the most highly esteemed beer bars in the world, have already announced that they’re pulling Goose Island from their taps. Beer drinkers hit Twitter with shock and dismay (@leonardhambone: Terrible news: Anheuser-Busch has purchased Goose Island. I will never drink a 312 again.), and Goose Island’s Facebook page with well-reasoned criticism (Matthew Garrison: To every person who believes that nothing will change, their beer will remain the same, and whatever other excuse you think up, just remember one thing: If you purchase Goose Island product from today forward, your hard-earned money goes into the pockets of A-B. You might as well be buying Budweiser.).
So what was at the heart of this decision? John Hall must have known how this move would look to craft beer lovers. Brand is everything, and having your brand associated with Anheuser-Busch among craft beer lovers is reputation suicide. Certainly part of the concern here for John Hall was to supply his beer at a pace that meets its growing demand so that retailers reserve shelf space and taps for it and distributors commit to selling it. He couldn’t do this without a major brewery expansion and was already looking to outsource some brewing to Red Hook. Hall’s concerns appear to beer geeks as business- and growth-oriented. Meanwhile, Dogfish Head Brewery has also experienced unprecedented growth and had the same pressure to ramp up supply. They had a chance this year to take the buyout route, but instead made the tough call to cut distribution to several states and focus on sustaining their mission and individual brand identity. With gutsy decisions like that being made, I understand beer drinkers’ disdain for Goose Island’s move.
It will be interesting to see where new brewmaster Brett Porter (yes, that’s his real name, not a sour, dark beer) will take Goose Island’s brewing. The fact that John Hall is bringing on the former head brewer of Oregon’s highly-regared Deschutes Brewery is a good sign that the deal will keep Goose Island creating high-quality, innovative production beers. The sad part of this development is that longtime brewmaster Greg Hall is leaving not only Goose Island, but the world of beer altogether, save the three or four days per month he spends consulting to Goose Island. He told Time Out Chicago:
This was my ray of sunshine through the clouds. When you think about this, my father had worked for Container Corporation of America since his early ‘20s and had seen it grow while his influence with that company grew. And in the late 80s his company was sold and he had the opportunity to stay on but he had two kids in school so he hung it up and started his own thing, starting Goose when he was 45. Well, I’m 45, I have two kids in school and I’ve worked with same company since my 20s. So this is perfect timing. It gives me money to start something new and a little bit of flexibility. I can’t really talk about what I’ll be doing for another month or so but it won’t be beer. Think about it—if Goose Island was my Mt. Everest, climbing Mt. McKinley would be boring. I’ve already done the beer stuff. I’ve created a new style in bourbon stout, I’ve brought wild fermentation beers to a food community and the masses and there’s gotta be at least a dozen Goose brewers working as head brewers around the country and I’m terrifically proud of that. Now it’s time for something else.
Goodbye, Greg, and thank you for the great brews.
The biggest questions for me concern the brewpubs. The selection of draft-only, one-off, experimental, and comeback beers is what has made Goose Island so appealing to me as a beer consumer. Will the brewpubs continue to produce such a great beer program without 312 and Honker’s Ale on the balance sheet? Will Anheuser-Busch allow Jared Rouben and the pub brewers to produce draft-only beers for the brewpubs with the now-Anheuser-Busch-owned Goose Island name? Will craft beer drinkers see a distinction between Goose Island production beers and brewpub beers as they begin to live by their boycott promises?
Why My Pint Glass Is Half Full
Here’s one positive take on the situation: Even if this deal is, in the long run, bad for Goose Island’s creativity and quality, it could be, overall, good for craft beer. This move by Anheuser-Busch shows that they want to get a piece of the growing craft beer market. This means that the beer world is shifting in the right direction and big investments are following it. It’s not enough for Anheuser-Busch to peddle carboard-piss flavored swill anymore, and that’s an encouraging sign. Furthermore, the increased production capacity and distribution means Goose Island’s quality beers will be available to more people in more places. Now Joe Schmoe in Podunk, Arkansas will be able to get a 312 and may start to make the transition from mass-produced American light lagers to craft beer. 312 served that purpose for countless Chicagoans and now has a greater ability to do that nationally because of the $1.3 million investment in new tanks that will be online this summer and greater access to Anheuser-Busch’s unparalleled distribution system. Hell, after knowing and liking 312, Joe Schmoe may even pick up a Bourbon County Stout because he recognizes and trusts the brand and be completely and utterly converted. Goose Island has a catalog extensive enough to make its transition beer truly powerful. Sure, 312 becoming the next Blue Moon is no comfort to today’s craft beer lover, but sometimes it’s not all about you.
Ultimately, I really like what Karl over at Guys Drinking Beer wrote today:
The good news is that if you’re really turned off by GI’s newer, bigger connection to the Patron Saints of Beer Genericism, Chicago hasn’t had this many other craft beer options since Prohibition. (And while we’re on the subject, have you considered Save The Craft today?) Metropolitan, Half Acre, Revolution Brewing, Haymarket and more would be happy to have more of your business. If you want to keep your money and your drinking habits local, honestly, it’s really never been easier.
Like Honkers? Try a Half Acre Gossamer.
Like 312? Try a Flossmoor Stationmaster Wheat.
Enjoy a Green Line IPA? Give Daisy Cutter a try. Fan of Summertime? Check out Metro’s Krankshaft Kolsch. Have a Two Brothers Atom Smasher for the Harvest Ale. Gonna miss the Mild Winter? Give Over Ale a shot. We could do this all day.
At the end of all this, will the deal be a bad thing for Chicago’s craft brew scene? It’s not great, but it’s not completely unexpected. (And if we’re really being honest, I had mentally put Goose Island in the macrobrew category years ago.) But it could work out great for the little guys still doing it the way it was meant to be done.
I recently swung by Metropolitan Brewing for the first time. It’s whole operation is 3 main players running the day-to-day stuff, supplemented by a few volunteers. I watched them labeling every bottle by hand, filling each bottle in small batches, and packing it up the old fashioned way – carrying each case to the pallet by hand. I know I’ll remain in the minority for a while to come, but it’s the little guys like them who I’ll continue to get behind. Yeah, I’ll probably still have a 312 every now and again, but I’m looking forward to seeing who steps up and takes their place – and whoever it is, they’ll have far more of my support.
As for me, I’ll still be drinking Matilda, Demolition, and the other Goose Island beers I love. And I hope that I’ll still be able to try great new beers at the brewpubs. And yet, I may picket the Fulton Street production brewery every now and then. Damn, am I conflicted about this or what?