Bud buying Goose? Maybe not so bad.

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March 28, 2011 at 1:31 pm

Okay, Goose Island will be a Budweiser company now. Is that a good or a bad thing? Well, let’s take a look at what’s happened when big brewers have bought out other smaller guys.

Bud bought Widmer and Redhook, and the consensus of beer geeks on Beeradvocate is that both have declined a bit in quality. Looking at ratings on Ratebeer and Beeradvocate, though, it’s clear they’re both still excellent craft breweries, albeit not at the level of Goose. But whenever I visit my beer-challenged brother in Texas, and see his beer fridge stocked with Bud Light, at least I know I can go out and get a mixed 12-pack of Redhook to get me through a few days.

So it appears that Budweiser hasn’t especially hurt Widmer and Redhook. And Bud’s attempts to build its own “craft brewery” – Shock Top — have shown that they can’t do a credible craft brewery in-house. Which is why they need to buy others.

The story of Miller’s acquisitions is more divergent.

Miller bought Celis, an excellent brewery in Texas started by Pierre Celis — the guy who revived the Belgian wit style, by introducing Hoëgarden. After his brewery burned down (he was uninsured) he sold Hoëgarden to InBev to raise cash, and started a brewery in Austin Texas. In Texas, he turned out a number of well-respected beers — Celis White, a classic witbier in particular — and initially worked out a distribution deal with Miller. Later, in April 2000, Miller bought out Celis. By December of that year Miller had shut it down. saying it wasn’t making enough money. Michigan Brewing in Webberville purchased the Celis brand and some of the equipment, and the Celis White they’re turning out is, reportedly, an impressive replica of the Texas brew. Sadly, it’s not available in Illinois, Indiana or Wisconsin.

So being purchased by Miller was not good for Celis, although, ultimately, there was a semi-happy ending.

Miller also bought Leinenkugel in 1988. It’s a completely different story. Post-acquisition, Leinie used Miller’s R&D capabilities and financial and distribution resources to expand their line into a wide variety of specialty beers, including, reportedly, a soon-to-appear Russian Imperial Stout. The Leinenkugel family is still in control of the business, so I expect when they journey down to Milwaukee (or Wacker Drive in Chicago) for quarterly profitability meetings, the numbers are good enough that Miller essentially keeps hands off.

Miller has been good to Leinenkugel.

Along with the takeover, it was announced that Brett Porter, who has been brewing with Goose Island since May 2010, will replace Greg Hall as brewmaster. Porter has an impressive resume, although there’s been some speculation that he might become the “Budweiser guy” in charge. Based on his resumé, it’s unlikely, but we’ll see.

But you have to either respect or pity a guy with that name in the beer biz. To quote the late Michael Jackson (no, not that one … the influential, ultimate beer geek) on the history of Brett Porters, “Even after or War II, at least one German brewer continued to make a ‘British-style’ Porter with a Brettanomyces yeast culture. This type of yeast typically developed during the long maturation of strong, export Porters in the huge wooden tuns of the Victorian period. The brewer told me that a Porter without the ‘horse blanket’ aroma of Brettanomyces would have been thought ‘insufficiently British’.”

Some are wailing that the Budweiser takeover may mean the death of Goose Island. That’s doubtful, based on the Widmer and Redhook experiences. I’m guessing it’ll be more like the Leinenkugel/Miller experience than Celis/Miller.

And others have bemoaned money earned by Goose going to that megabrewer in St. Louis. But it’s clear that Goose was bursting at the seams — even having to outsource some production to New Hampshire. It’ll be a bigger Goose, employing more here. And I’m guessing as long as the revenues continue to grow, so will Bud’s investment in Goose.

It actually could be a good thing.

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5 Comments

  1. Rob Gardner says:

    “The Leinenkugel family is still in control of the business, so I expect when they journey down to Milwaukee for quarterly profitability meetings, the numbers are good enough that Miller essentially keeps hands off.”

    Is that not a journey down to Chicago these days? (Home office of MillerCoors)

  2. Hi Tom,

    I think that speculating this might be bad for Chicago’s craft beer scene doesn’t necessarily constitute “wailing.” Right now everyone involved is all shiny and happy and the guys I know who work for Goose are all saying the right things, but what else are they going to say right now?

    A-B says they’re going to continue producing these beers in Chicago, and I guess we’ll see. But I can’t help but think that Greg Hall stepping down isn’t a good sign. And despite the history you’ve described above, A-B’s record isn’t entirely spotless when acquiring smaller brands.

    I’m sure I don’t have to remind you what beer culture was like in America for most of the 20th century. A couple of shitty, nearly identical brands buying up and buying out all the small local breweries (which, to be honest, were mostly making shitty, nearly identical beers to said brands). A monolithic corporate culture controlled by a few companies with very little in the way of choice.

    I doubt we’ll end up with identical “Busch-Mart” brewpubs in every city in America ala Walmart. But if we have the big corporate breweries buying up our local beer culture and selling it back to us, are we really better off? And is it still local?

    So I think these things are worth speculating on. And I surely hope that Goose Island stays local and continues to brew the high quality of beers that we’ve been seeing from them. But there is a part of me that is nervous about the whole thing.

  3. Pete says:

    Bud is smart enough to not kill the golden goose. (Pardon the pun.) Mainstream beers have flat-to-minimal growth, and the only growth area in the industry is in the craft beer niche. I expect them to stay relatively hands-off and enjoy whatever revenue growth their new subsidiary can provide.

    And I suspect the Halls will be back with a new brewery venture as soon as the non-compete agreement expires. Meanwhile, there are plenty of local microbreweries around for beer lovers who insist on sticking to the independents.

    • Tom Keith says:

      I think that’s right. Also, I think Budweiser is starting to realize they can’t make a decent craft brewery on their own … think Shock Top.

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