Monday, April 4, 2011

Editorial: Sale of Goose Island to AB Inbev

Last week brought news of the impending sale of the craft brewery Goose Island to Anheuser-Busch InBev for almost $40 million ($22.5 million to Goose Island and $16.3 million to the Craft Brewers Alliance).  This announcement sent off a fire storm of commentary on craft beer forums and social media sites around the country.  The general flavor of these posts and comments, as least those I have read, was negative.  Something to the effect of "Goose Island is selling out" and "AB will ruin the beer forever."  The tone was usually shocked about the news and that such an event was unexpected and unbelievable.

I have a slightly different perspective on the sale of Goose Island.  AB InBev has a long track record purchasing other beer brands.  This has included a large number of craft beer brands from outside of America, including Leffe, Hoegaarden, Bass, and Spaten.  Purchases of these brands, along with the mass-market industrial lagers, have allowed AB Inbev to consolidate into the largest beer company in the world.  With the growth of the U.S. craft beer scene and AB Inbev's forays into the market with brands like Shocktop, it was only a matter of time before they started purchasing domestic craft beer brands.  It is my opinion that the purchase of Goose Island is another validation of the growth of the U.S. craft beer segment.  AB InBev executives must view the growth of craft beer as a threat and want part of the revenue stream.  Their attempts to gain access to the segment with their own beer have been largely unsuccessful, so the only real avenue left is purchasing established players in the business.  Goose Island seems a good candidate for this, given their size and history of making great beer.  The Goose Island purchase should be viewed, at the least, as expected, and possibly even a positive sign for the entire craft beer industry.

On the other hand, it is understandable why Goose Island customers are concerned about their favorite beers.  This concern should not be over "selling out" to the biggest brewing company, but because AB InBev does not have the best track record with preserving established brands.  AB InBev has incredible process control and can make beer that fits spec sheets down to the micron, but they are not usually as flexible and able to meet the seasonal and changing tastes of the craft beer drinker.  They also make business decisions at a much larger level, and as such, limited release crowd-favorite brands, may get cut because they do not make sense solely on a business level.

In conclusion, I view the Goose Island sale as a positive event for the entire craft beer industry.  This event will also likely become more prevalent as the craft segment gains market share, though craft beer drinker reaction may curb it initially.  As for the specific beers that Goose Island makes, we can only hope that AB InBev preserves both their spirit and their quality moving forward.

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Cheers,

TW

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