Goose Island and AB

[bob1852]

Sounds pretty horrifying to me....

Goose Island Light! Coming to a store near you! It's the same as Bud Light, just sells for double because it's "craft" and we can rake in more profits that way! Muah ha ha ha ha.

 

[motobrewer]

It seems as though they could come up with something original instead of gobbling up the little guys.

Incredibly, incredibly expensive to do that. that's not really even a viable option for a macro.

if you wanna be "sick" at something, be sick at John Hall. He's the one who sold the brewery. It's not like this is 1988 and this was a hostile corporate takeover....

 

[bruin_ale]

well, they don't sell Goose Island here in CA - so this might be good news for me as Revvy mentioned, this will likely increase their distribution channels and get GI beer to places it wasn't previously seen.

 

[Revvy]

Good article from Beer Advocate. Note the bold.

Goose Island Selects Current Partner Anheuser-Busch for Growth Strategy


Chicago Small Brewer, Craft Brewers Alliance to Sell Stakes in Goose Island; Expansion of Chicago Brewery Planned

CHICAGO (March 28, 2011) - Chicago-based Goose Island, one of the nation's most‑respected and fastest-growing small brewers with sales concentrated throughout the Midwest, today announced it had agreed to be acquired by Anheuser‑Busch, its current distribution partner, in a move that will bring additional capital into Goose Island's operations to meet growing consumer demand for its brands and deepen its Chicago and Midwest distribution.

Goose Island's legal name is Fulton Street Brewery LLC (FSB). Anheuser-Busch reached an agreement to purchase the majority (58 percent) equity stake in FSB from its founders and investors, held in Goose Holdings Inc. (GHI), for $22.5 million. Craft Brewers Alliance Inc. (CBA), an independent, publicly traded brewer based in Portland, Ore., that operates Widmer Brothers, Redhook and Kona breweries, owns the remaining 42 percent of FSB and reached an agreement in principle to sell its stake in FSB to Anheuser-Busch for $16.3 million in cash. Anheuser‑Busch holds a minority stake (32.25 percent) in CBA.

Goose Island sold approximately 127,000 barrels of Honkers Ale, 312 Urban Wheat Ale, Matilda and other brands in 2010. To help meet immediate demand, an additional $1.3 million will be invested to increase Goose Island's Chicago Fulton Street brewery's production as early as this summer.

"Demand for our beers has grown beyond our capacity to serve our wholesale partners, retailers, and beer lovers," said Goose Island founder and president John Hall, who will continue as Goose Island chief executive officer. "This partnership between our extraordinary artisanal brewing team and one of the best brewers in the world in Anheuser-Busch will bring resources to brew more beer here in Chicago to reach more beer drinkers, while continuing our development of new beer styles. This agreement helps us achieve our goals with an ideal partner who helped fuel our growth, appreciates our products and supports their success."

Hall will continue to be responsible for Goose Island beer production and the expansion of Goose Island's Chicago brewery, where production will continue and its business will still be based.

"The new structure will preserve the qualities that make Goose Island's beers unique, strictly maintain our recipes and brewing processes," Hall said. "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."

Anheuser-Busch has distributed Goose Island brands since 2006 as part of an agreement with Widmer Brothers Brewing Co. of Portland, Ore., a co-founder of CBA, that provides Goose Island access to the network of independent wholesalers that distribute Anheuser-Busch beers. Anheuser‑Busch also provides logistical support to all Anheuser‑Busch wholesalers distributing Goose Island and CBA beers as part of that agreement.

Wholesalers currently servicing retailers with Goose Island beers will continue to do so with no disruption in service.

"These critically acclaimed beers are the hometown pride of Chicagoans," said Dave Peacock, president of Anheuser-Busch, Inc. "We are very committed to expanding in the high‑end beer segment, and this deal expands our portfolio of brands with high-quality, regional beers. As we share ideas and bring our different strengths and experiences together, we can accelerate the growth of these brands."

Anheuser-Busch's purchase of FSB is subject to customary closing conditions, including obtaining required regulatory approvals. The transaction is expected to close in the second quarter of 2011.

The two Goose Island brew pubs are not part of the deal, but will continue in operation, offering consumers an opportunity to sample Goose Island's award-winning specialty beers and food selections.

As part of CBA's agreement to sell its 42 percent block in FSB to Anheuser-Busch, in addition to cash, Anheuser-Busch will provide enhanced retail selling support for CBA brands, will reduce distribution fees payable by CBA to Anheuser‑Busch and will provide CBA additional flexibility with respect to future acquisitions and divestitures.

Founded by John Hall in 1988, Goose Island Beer Company is one of the Midwest's first small breweries. Located at 1800 W. Fulton St., Chicago, 312-226-1119, http://www.gooseisland.com , Goose Island is acclaimed for creating world-class ales, including 312 Urban Wheat Ale, Honkers Ale, India Pale Ale, Matilda, Pere Jacques, Sofie and a wide variety of seasonal draft only and barrel-aged releases, including Bourbon County Stout, the original bourbon barrel-aged beer.

Based in St. Louis, Anheuser-Busch is the leading American brewer, holding a 48.3 percent share of U.S. beer sales to retailers. The company brews the world's largest-selling beers, Budweiser and Bud Light. Anheuser-Busch also owns a 50 percent share in Grupo Modelo, Mexico's leading brewer. Anheuser-Busch is a major manufacturer of aluminum cans and has been a leading aluminum recycler for more than 30 years. The company is a wholly-owned subsidiary of Anheuser-Busch InBev, the leading global brewer, and continues to operate under the Anheuser-Busch name and logo. For more information, visit http://www.anheuser‑busch.com

 

[Revvy]

if you wanna be "sick" at something, be sick at John Hall. He's the one who sold the brewery. It's not like this is 1988 and this was a hostile corporate takeover....

Why? 'Cause he wants money? Because he wants to expand???? Maybe this article from Nov, will put it into perspective.

The Changing Face of the Craft Beer Industry…

In the early 1980s, American craft beer pioneers dreamt of nothing more than producing a few beers that broke through the monotony of humdrum, mainstream lagers. A group of men and women who had traveled through Europe and had their eyes and mouths opened by local beers or who had adventured to brew their own beers. For these early entrepreneurs, the future was uncertain but filled with hopes of building a few hundred or even thousand barrel brewery.

Fast forward two decades and things have changed beyond anyone’s greatest expectations. Once top of the pops, America’s largest breweries are now reeling on their back heels. Once considered little more than a gimmick, craft beer has enjoyed startling success.

As the beer industry has aged, it has both matured and evolved. From its slow infancy to its turbulent teens, craft brewers are now experiencing the complications of adulthood. What started as a fun experiment for some has led to some pretty high stakes. From hobbyist basement systems costing a few hundred or thousand dollars to gleaming new brewhouses costing a few hundred thousand, the craft beer business is hardly just fun and games.

Times are changing quickly in the American beer marketplace and they’re not going to slow down anytime soon. In response to double-digit growth, breweries recently producing 10-15,000 barrels per year suddenly produce 75,000 barrels per year and have tank space capacity for many times more. To meet market expectations and changes, these brewers have traded sore backs for aching pocketbooks.

We are thankful that times are good right now and that despite a weak economy and financial hardships, craft brewers are not yet seeing a reversion to old buying habits.
But the nature of the industry itself is also changing in other ways. Many craft beer pioneers are now elder industry statesmen. Fritz Maytag bought Anchor Brewing 43 years ago; Ken Grossman started Sierra Nevada 28 years ago; Jim Koch toted his briefcase from bar to bar 24 years ago. Beyond these well-known figures, many founders of regional breweries have been in the business for 20 years or more now. And as with any other small business, many are owned by one person or a small group of aging entrepreneurs who’ve long been toiling in the brewhouse, glad-handing distributors, and hawking product every weekend at beer festivals. For these hard working individuals, vacations are few and downtime almost non-existent.

And as with any other hard driving profession, it eventually wears you down. With high debt levels and decades dedicated to building up their companies and employees, these brewery owners can’t just walk away. Not to the mention the disappointment felt by their loyal customers who they’ve worked so hard to gain. And so we must look to an uncertain future but one where we can be certain of corporate shakeups and where change will be a constant.

Maybe he's looking for a little security for his company and his line of beers in these uncertain times. Maybe he's tired, and worried like Fritz Maytag was, about ever finding a successor....

 

[Homercidal]

I don't care what AB or Anybody from GI says. Once AB has control, they will do what they WANT. History is here to teach us something, and from many years working in, and watching the auto industry, I can tell you that anything that sounds like, "Nothing will change, and nobody will be replaced." usually means "... until the buyout/merger is complete, then we start cutting costs and anyone who doesn't like what we are doing can take a walk."

The proof will be shown in the future by the quality of the product.

And it's not any harder for a huge corporation like AB to start up a craft brewery than it is for the craft brewery to start up by itself. It's just easier to buy an already established business and make a few "minor" changes to suit your whims.

I guess I'm taking the glass half empty outlook on this. Lots of historic breweries the world over have been closed when they were promised that they would not be.

 

[keeku]

Interesting they announce this right after they sell all of the Bourbon County Rare. One last money grab? Who would ever buy a $15 bottle of "Budweiser Dark"?

 

[CrazedArmadillo]

Crap. I really liked their IPA and several others.

And to think that AB won't change the recipe is absurd. Of course they will do whatever the hell they want once they get in there.

On the positive side, expect someone as talented as Greg Hall to announce his involvement with another, or even his own, brewery. It happens all the time.

Interview with Greg Hall

Reading his response to the last question, it doesn't sound like he'll be brewing anywhere else... "I can’t really talk about what I’ll be doing for another month or so but it won’t be beer."

 

[jbrookeiv]

I don't care what AB or Anybody from GI says. Once AB has control, they will do what they WANT. History is here to teach us something, and from many years working in, and watching the auto industry, I can tell you that anything that sounds like, "Nothing will change, and nobody will be replaced." usually means "... until the buyout/merger is complete, then we start cutting costs and anyone who doesn't like what we are doing can take a walk."

The proof will be shown in the future by the quality of the product.

And it's not any harder for a huge corporation like AB to start up a craft brewery than it is for the craft brewery to start up by itself. It's just easier to buy an already established business and make a few "minor" changes to suit your whims.

I guess I'm taking the glass half empty outlook on this. Lots of historic breweries the world over have been closed when they were promised that they would not be.

quoted for truth.

 

[Revvy]

Interview with Greg Hall

Reading his response to the last question, it doesn't sound like he'll be brewing anywhere else... "I can’t really talk about what I’ll be doing for another month or so but it won’t be beer."

Having read this, I'm even less stressed out/upset with this. He's not leaving because he's upset or anything, he's using it as a change to try something new. No fault there.

This is all positve to me.

Respond to the idea that you guys “sold out.”

People said we sold our souls in 2006 when we signed a distribution deal with AB but look at what’s happened since then. We are still craft brewers. That year we had just brought out Matilda as a seasonal and were eventually able to make it year-round. We introduced Bourbon County Stout and since then we were able to add variations on it, as well as add Sofie, Fleur, Juliet, Madame Rose, Pepe Nero and Nightstalker. That kind of innovation and dedication to producing craft beers is what drew AB to us.

So how did the deal go down?

About six months ago we hired an investment banker to find money to help build a new brewery to keep up with demand. I mean, last year we had to kill three brands—Nut Brown, Oatmeal and Christmas—because we just couldn’t keep up with demand for everything. But as we found people who had the money to help us, they all wanted control and we didn’t want to give up control for obvious reasons. Then our friends at Anheuser-Busch, who’ve done a great job helping build our brand, called and said "Let's talk." We said "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." They’ve told us they’re committed to us because of who we are. I sat across the table from Dave Peacock [president of AB USA] and said "Why Goose and not Sam Adams or someone like that?" and he said "We like your beers, brands and innovations, what you’re doing and want to do with beer and food and we like that you’re in Chicago."

Now what changes?

I hate to say nothing changes. Miguel, a brewer who has worked for us for 20 years, walked in to my office and asked the same thing: Is it going to change? And I said "Miguel, when’s the last year that nothing changed?" and he said "Things change every year." Exactly. So we’ll continue to evolve by introducing new brands. Like, we’re about to release Big John, because with AB helping us add capacity it will enable us to add new stuff and keep up with the growth of brands like Matilda, which has grown 100 percent in each of the last three years. [As for] immediate change, they’re going to help us buy a bunch of new outside 400-barrel tanks so we can make more beer. Other than that, probably the biggest difference in the short term is we’ll have even better distribution. We’re not adding new markets because we expect we’ll get better distribution in existing markets.

And what about long term?

Well, we’ll see how the short-term capacity fix works and then it might be time to look toward a new, bigger brewery. And for me personally, I’m going to be here until April 30 in a brewmaster capacity then after that I’ll be on board as an advisor on beers, branding and strategy, working a minimum of three or four days a month.

 

[motobrewer]

Why? 'Cause he wants money? Because he wants to expand???? Maybe this article from Nov, will put it into perspective.



Maybe he's looking for a little security for his company and his line of beers in these uncertain times. Maybe he's tired, and worried like Fritz Maytag was, about ever finding a successor....

slow down. i didn't say you should, I just said it was his decision, not AB's.

 

[topend]

I don't like the idea of Goose Island changing, but no one made them sell their company.

 

[motobrewer]

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.

sad. i don't think the belgian line will be the same without greg.

wonder what he'll do?

 

[NPK]

http://beernews.org/2011/03/anheuser-busch-to-buy-goose-island-for-38-8-million/#more-18165

I knew AB had their hands in Goose Island. It was the only thing allowing me to buy 312 in BFE. At least it will still be brewed out of Chicago. We'll see how it develops in the future. I hope its a good move for Goose Island.

Edit: I wanted to point out that I found the link above by DFH posting it on facebook.

I also wanted to post the link to Goose Island's blog from the article. http://www.gooseisland.com/pages/special_announcement/133.php

 

[motobrewer]

not to be a jag, but:

https://www.homebrewtalk.com/f5/goose-island-ab-235629/

 

[Revvy]

sad. i don't think the belgian line will be the same without greg.

wonder what he'll do?

Man, it could be anything, from the most banal like opening a restaurant to building custom surfboards. Imagine already have done something cool that you wanted to do, be successful at it, probably got a decent bit of money from this, and now having freedom to follow another dream? It's awesome.

 

[NPK]

not to be a jag

No problems. I didn't even think to look in that forum before I posted this.

Mods, please delete.

 

[bob1852]

Man, it could be anything, from the most banal like opening a restaurant to building custom surfboards. Imagine already have done something cool that you wanted to do, be successful at it, probably got a decent bit of money from this, and now having freedom to follow another dream? It's awesome.

There's a story in AZ's paper today about a local brewer who changed gears into the soda industry....

http://www.azcentral.com/community/...327scottsdale-cider-mill-soda-brewmaster.html

 

[olllllo]

This is basically the Jake Leinenkugel story except Goose Island is working from a position of power. So the operation is saved and will remain in Chicago (Leinie - Chippewa Falls) and unlike Leinie, GI should be able to preserve the brand. That said, I'm going to be pissed if 312 wheat starts knocking off local brands here in PHX.

Side note, I don't think that Greg has "brewed" in several years, but I understand the anxiety.

 

[Bernie Brewer]

Meh, I never cared much for Goose Island, anyway.

 

[Pappers_]

For local drinkers, there is good news - two other local breweries are gearing up to open:

Finch http://www.finchbeer.com/home.html

Pipeworks http://pipeworksbrewing.com/ and http://www.kickstarter.com/projects/pipeworks/pipeworks-brewing-chicago-small-batches-big-beers

 

[KUbrew]

For local drinkers, there is good news - two other local breweries are gearing up to open:

Finch http://www.finchbeer.com/home.html

Pipeworks http://pipeworksbrewing.com/ and http://www.kickstarter.com/projects/pipeworks/pipeworks-brewing-chicago-small-batches-big-beers

Yea, I'm sad. I'm moving Thursday, looks like I won't get to see these open.

 

[wedge421]

As long as the quality is maintained I dont see a problem with this at all.

 

[chicagobrew]

I'm not GI's biggest fan, but I fail to see this as positive. At best, AB/In-Bev's move into the craft market will make it harder for others to start a brewery and gain distribution. Now that they have a good range of craft beers under their umbrella, don't think for one minute that AB isn't going to lean hard on their distributors to reduce distribution of other craft beers. AB just increased their supplier leverage and the customer is not going to benefit. I think one of my favorite parts about drinking craft beers is seeing the little guy win. That just got harder.

 

[bob1852]

I'm not buying the conspiracies. I have access to more craft beer now than I ever have. I can get SNPA at most Circle K's now...

Arizona just recently started getting Bell's at places like Total Wine and BevMo.

And there's this: http://blog.oregonlive.com/thebeerhere/2011/03/nothing_but_good_news_for_us_c.html

 

[weirdboy]

Arizona just recently started getting Bell's at places like Total Wine and BevMo.

Yeah that's kind of weird when you look at the map of where they distribute, AZ is just sort of out there in the west by itself. I wouldn't mind getting some of that here!

 

[olllllo]

It's because Larry is a Cubs fan and it evens out their Oberon production.

 

[Brewpastor]

The Jeep still is on the road!

Hey olllllo.

 

[olllllo]

The Jeep still is on the road!

Hey olllllo.

Hey Tom. Did you ever think you'd see a day when AB would do such a thing?

 

[payton34]

just got a call from relatives in chicago . budweiser has bought goose island brewing. another one bites the dust. i hear the head brewmaster quit. lets hope he starts up another brewery somewhere else!