AB Buys the Goose

Goose Island Brewing announces sale to Anheuser-Busch

Anheuser-Busch today announced it had purchased Chicago’s Goose Island for $39 million.

Founder John Hall will remain as CEO.

Hall also issued a letter to Goose fans this morning on the company’s web site, touting the ability for “growth and innovation” as a result of the deal.

Anheuser-Busch has had a hand in the company since 2006, when the Portland, Ore.-based Craft Brewers Alliance — of which AB has a minority interest — took a minority ownership of Goose. AB has played a role in Goose’s distribution ever since.

Greg Hall will be stepping down and be replaced by head brewer Brett Porter. Porter was previous head brewer of Deschutes Brewery before coming to Goose last year.

Goose’s two brew pubs in the city, on Clark Street and Clybourn Avenue, are not involved in the deal and will continue to be owned by John Hall and a group of partners.

Comments

  1. gitchegumee says

    Cut my teeth on this brewery with Greg as my teacher many years ago. Glad to hear they’re keeping the pubs. Good luck!

  2. LuskusDelph says

    BigWilley wrote: Sell out. They deserve to go downhill with this move.

    I disagree.
    And I doubt seriously that the beers will go downhill, either. The extra support may actually allow them to introduce some even better beers to their already good range. It may be a game changer, it may not…that remains to be seen.

    But the way I look at it, more mainstream distribution of their beer = more good beer reaching more people = more visibility for good beer = more rookie palates being educated to explore the quality beers made by smaller, local “craft” brewers.

    The reality in the world of beer is that bigger does not always mean less worthy product, just as smaller is certainly not a guarantee of better product; the marketplace has proven that pretty definitively. It has also proven that brand loyalty is certainly not the factor it once was in the beer biz.

    I for one congratulate them and wish them continued success. It will be interesting indeed to see how this all plays out in the long run in what is becoming a very crowded field. It may well turn out to be a positive influence on the “craft” market.

  3. BigWilley says

    AB has always been openly antagonistic towards the craft industry. Seems like a deal with the Devil to me. I doubt the beers will go downhill either, but I was in the store last night and came across several Goose beers that I know I’ll never buy again. Im hoping sales go downhill since all the profits are going back to AB and not the craft segment. AB actively works against the craft movement.

  4. GlacierBrewing says

    admin wrote: Goose Island Brewing announces sale to Anheuser-Busch

    Anheuser-Busch today announced it had purchased Chicago’s Goose Island for $39 million.

    Yea! How dare the Goose Island guys unload that dump truck of money that AB backed up to their door!

    Dave

  5. BigWilley says

    More power to them on the truckload of money. I simply think its a lame deal overall for craft brewing. Individually those guys had every right to do what they want with the company. I just wont support AB in any way shape or form.

  6. admin says

    I agree with BigWilley on both accounts;
    1) It is John Hall’s business that he grew through many years, extremely hard work, very smart decisions and a huge amount of risk – sprinkled with a handful of luck. It his totally his choice and right to sell to whoever. I certainly can’t dis him for that.
    2) AB wants our market share. They will do it anyway they can. August Busch was very competitive – but respectful and mindful of the integrity of the beer business. InBev is not. They see the beer business from a global perspective, not within the American lens. This is a VERY big difference and will dictate a very different approach to maintaining and (they hope), growing their market share and bottom line. This is juts the beginning folks.

    Admin

  7. yap says

    John Hall has a right to sell or not sell. That’s his business.

    However, as for the “what happens next” all one has to do is look at what InBev has done in the past. As they acquired several smaller brands in Belgium through the years, they applied some simple corporate philosophies such as “why brew 6 beers in 6 different places when I can consolidate them to this other brewery that I own with excess capacity”. From a business standpoint, this only makes sense. However, Belgium is now littered with defunct/closed down mid-size breweries (sure there is still lots of very small independents left). The beer is still being made but now at some other facility. Many diehards of these brands claim that they just don’t taste the same even though InBev has done their best not to “change” the beer. The fact is when you change equipment or modify processes to fit other equipment there will be changes to the flavor, albeit subtle in some cases. Some other more niche brands that were made by some of those brewers were simply discarded because they could not be made profitably. Make no bones about it, InBev is in business to make money period (for which I don’t blame them). However, every move must be approved by market managers/VP’s of this and that and most importantly ACCOUNTANTS. If the accountants don’t see any profitability in say barrel aging a beer in some very exotic barrel (for example) for a limited release, then that beer won’t be made. period.

    To see what happens next, just look at InBev’s history in Belgium. If I had to guess, the production of most of Goose’s staple beers will move to some other AB brewery in some other state and John Hall will step down (or be removed ) in less than a year. Is this good or bad? Who knows….depends on your point of view…

    One last thing. As I understand it with the goofy self-distribution law fight in Illinois, AB now (or sometime soon) has to own a brewery in Illinois in order to own 100% of a distributor that they want to buy. This is where they really want to make their money. from a big picture POV, buying Goose may just be a means to an end for them…

  8. infinitybrewer says

    Hate to say it, but Kona Brewing Co. could be next … now that they are owned by CBA. Could be something to keep your eye on.

    Thom

  9. gitchegumee says

    “AB wants our market share. They will do it anyway they can.”

    Goose calling the gander….? Don’t you and EVERY craft brewer want AB’s market share? Won’t you invent some “new” beer style, or hype some purity law, or water source, or insane hop dosage scheme to do it? I fail to see why AB is the devil when they are doing the same things every capitalist business entity does. With that kind of logic, then those other craft brewers that more directly compete with me are the bigger devil–especially collectively. Yet there is some propensity to bash AB at every turn, while we embrace and share with our real competition. Seems like more emotion out there than there is business sense. I maintain that every brewer, large and small, is a member of a unique community.

  10. banjolawyer says

    My disdain for certain mega brands has been earned by their mega brand distributors, who line legislators’ pockets in order to control market share by statute, rather than maintaining consumer loyalty. When it becomes apparent that these distributors are nothing more than agents of the suppliers who they exist to serve, and that the corruption is tacitly approved, it’s enough to justify the development of a deeply rooted negative perspective of the brands, regardless of the quality of the beer. In certain markets, the result of any possible competition is predetermined behind closed doors at the state house. This kind of thing probably isn’t a problem in Palau.

  11. LuskusDelph says

    gitchegumee wrote: “AB wants our market share. They will do it anyway they can.”

    Goose calling the gander….? Don’t you and EVERY craft brewer want AB’s market share? Won’t you invent some “new” beer style, or hype some purity law, or water source, or insane hop dosage scheme to do it? I fail to see why AB is the devil when they are doing the same things every capitalist business entity does. With that kind of logic, then those other craft brewers that more directly compete with me are the bigger devil–especially collectively. Yet there is some propensity to bash AB at every turn, while we embrace and share with our real competition. Seems like more emotion out there than there is business sense. I maintain that every brewer, large and small, is a member of a unique community.

    Bravo.
    Well said, and I concur.

  12. admin says

    Excellent point Banjolawyer. Yes…as I have said here before, brewers of all sizes are part of a unique community. But that “community” is out the door when it comes to access to market issue (distribution) and legislative influence.

  13. SRB says

    The bit of news linked below seems to bridge over pretty well to banjolawyers comments.
    I realize there is not much meat to the claim but is it that hard to believe?
    How much do the multi-national corps like AB-Inbev and SAB-Miller-Coors really care about the brewing community? Apparently not enough to let a show that focuses on craft beer to stay on the air.

    The host of one of Travel Channel’s most successful shows accused “big beer” of threatening the Discovery Channel if it kept Brew Masters on air.

  14. BigWilley says

    Possibly some folks are naive to the tactics of the big boys. AB’s “Share of Mind” program and other such nonsense was specifically targeted to influence independant distributors and whoelsalers to discontinue craft labels they were carrying. I worked for a regional brewery that was distributed by a Budweiser wholesaler and they would literally hide our kegs and cases behind AB products when the big AB “inspectors came to town. Distributors were given discounts if they only carried AB products. Not to mention the millions of dollars they have spent on lobbiest’s to further legislative goals that are not usually in favor of craft brewers.

  15. Tlangle1 says

    For my money – only YAP’s got it right, and that motivation completely escaped mention in any national press. All the jabber is about the relationship of cost-cutting to brand building to beer making to craft to larget o small, yadda-yadda-yadda. They’ll make more money off getting their hands on that CHItown wholesaler of theirs than Goose’s brands will make ’em in a decade.
    They are now a local brewer in IL. Next step – buy the CHI town wholesaler and self-distribute. All the chatter here about it’s relavance to craft and treatment of brands and people is strictly secondary to the main event. Ownership of the wholesaler. That’s the future of ABI gang. Why do you think Buffet is licensing all his McLane warehouses as alcoholic beverage distributors? The only way to give 7-11 and other convenience channel stores what they want – without conslidated distribution of heavy liquids through retailers distribution systems – is if they all come on the GROCERY/SNACK/GUM truck, that’s already going to stop there anyway! Frankly – beer wholesalers will be put out of business by that model. How to maintain some semblance of distribution control? Own your own distribution is large markets where you can do large drops and leave the rest to the grocery delivery guys. (McLane, Nobel-Cisco et. al)

  16. liammckenna says

    banjolawyer wrote: When it becomes apparent that these distributors are nothing more than agents of the suppliers who they exist to serve, and that the corruption is tacitly approved, it’s enough to justify the development of a deeply rooted negative perspective of the brands, regardless of the quality of the beer.

    While I think this may be over-generalizing, I tend to agree with this appraisal of a significant choke on the growth of small breweries.

    Correct me if I’m wrong but…

    It seems to me that success in your market depends not just on quality people and product but equally on your distributors willingness to actualize your potential.

    This ‘other’ level in your system seems to control much of the power, money and political influence in the industry. It is also a level that is not so visible to the public. I also sense a certain reticence amongst producers to discuss/complain. Perhaps there is too much on deck to rock the boat. Don’t want to bite the hand that feeds you sort of thing.

    Shameful really. You have my sympathies.

    Pax.

    Liam

  17. Wolfgang says

    The one thing I look at is that distribution in almost all markets is monopolized by either a single distributer group or several that are basically a monopoly as well. The problem this brings is that a big brewing company such as the AmBev folks if buying up enough Goose Island large craft entities say about 20 could really start to choke off distribution even in the local market to the other restaurants and pubs we sell our beer to, let alone the state, or national market. I hang out at a large craft brew seller here in the Richmond Virginia area called the Capital Ale house which has about 30 draft beers on tap with craft beers from around the country coming from a lone distributor, and the international ones. The small brewers either work through this distributor or hand carry kegs to these businesses. I foresee once the distributor can get at least 20 top craft large industry owned beers and the international in the stable it would not be a stretch to think that the big boys will tell the distributor to play ball and wall off those outside of the combine. I do though believe that the marketing the biggies can offer on craft could help with more sales in the short term and be a good thing for the Brewpubs only. But, I find it hard to imagine that they would want to undercut the traditional cash cow of the Budlight or Miller light crowd which makes me even more suspect that sneak attack on the overall craft market is in the works.