Chicago-based Goose Island brewery sold to Anheuser-Busch
BY DAVID ROEDER Business Reporteremail@example.com March 28, 2011 9:19AM
Largest U.S.specialty brewers
Rankings are by 2009 barrel shipments.
Brewer 2009 barrels
1. Yuengling 2,025,000
2. Boston 2,021,000
3. Mike’s Hard 985,000
4. Sierra Nevada 724,000
5. Craft Brewers Alliance 583,000
6. New Belgium 583,0000
7. Leinenkugel 480,000
8. Spoetzl (Shiner) 409,000
9. High Falls/Genesee 375,000
10. Pyramid 192,000
11. Deschutes 187,000
12. FX Matt 172,000
13. Boulevard 139,000
14. Full Sail 137,000
15. Harpoon (Mass Bay) 131,000
16. Alaskan 126,000
17. Bell’s (Kalamazoo) 125,000
18. Goose Island 114,000
19. Stone 99,000
20. Dogfish Head 97,000
Source: Beer Marketer’s Insights Inc.
Updated: September 24, 2012 6:25AM
By selling itself to the largest brewer on the planet, has Chicago’s Goose Island sold its craft-brewed soul?
Blogs and Twitter accounts of beer fans frothed with the news Monday that Goose Island’s corporation, Fulton Street Brewery LLC, sold control to Anheuser-Busch InBev, maker of Budweiser and Bud Light. Many wondered about Goose Island beers being changed for the mass market. “The end of the world” was one person’s review of the deal.
But everyone should relax, said John Hall, Goose Island’s founder and president. He will remain as chief executive officer, the recipes and processes are sacrosanct and the deal represents a “commitment to Chicago,” Hall said.
“Anheuser-Busch isn’t coming in to make changes,” Hall said. “They’re buying us because we have created a viable business model.”
Hall said Anheuser-Busch will provide capital to help Goose Island expand its output of Honkers Ale, 312 Urban Wheat Ale and other products. On tap this summer is a $1.3 million investment in the company’s brewery at 1800 W. Fulton, which can’t meet demand, and Hall said he’d like to find another local site for beer production.
Criticism of the deal would make more sense if the buyer were a hedge fund, he said. “There would have been more pressure from a financial investor that doesn’t understand the beer business,” he said.
Goose Island announced after the sale that Hall’s son, Greg, resigned as the brewmaster. John Hall said his son fully supports the sale but wants to start a new venture outside of brewing. He said his son will remain as a consultant on strategy and beer styles.
In all, Anheuser-Busch paid $38.8 million in a two-stage sale for Goose Island. It paid $22.5 million for the 58 percent owned by Fulton Street Brewery. And it paid $16.3 million for the 42 percent stake owned by Craft Brewers Alliance Inc., a publicly traded brewer based in Portland, Ore.
“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.”
Not part of the sale are Goose Island brewpubs at 1800 N. Clybourn and 3535 N. Clark.
The sale builds on a tie-in Goose Island already had with the Bud producers. Anheuser-Busch has distributed Goose Island since 2006, and it owns a one-third stake in Craft Brewers, a publicly traded company known for the beers Widmer and Redhook.
Industry experts said beers from smaller brewers are the fastest growing segment of the market. The Brewers Association, a trade group for smaller operators, said production of craft beer was up 11 percent in 2010, while overall beer consumption was down 1 percent.
Goose Island said it sold 127,000 barrels in 2010, up from 114,000 barrels in 2009. Beer Marketer’s Insights Inc. ranked it as the 18th largest specialty brewer based on the 2009 sales.
“There are a million different ways” the Goose Island sale can play out, said Gabriel Magliaro, president of Half Acre Beer Co., which last year produced 4,000 barrels at 4257 N. Lincoln. “It’s a matter of who is in creative control. Ownership is one thing, but who’s the driving force is another.”
During the craft beer craze of the 1990s, Miller partnered with Celis Brewing, a Texas craft beer with a Belgian heritage, helping to triple Celis’ production. However, when Miller bought the company in 2000, they soon closed the door on the brand when sales produced insufficient revenue.
Some cite the 1988 acquisition of the Leinenkugel beers, based in Chippewa Falls, Wis., by industry giant Miller as a model for the Goose Island deal. Miller used its clout to expand the distribution of Leinenkugel and helped it create seasonal brews by leaving the founding family in control, analysts said.
“Leinenkugel has prospered beyond anybody’s dreams,” Hall said.
Greg Hall’s successor will be Brett Porter, who has been Goose Island’s head brewer since May 2010. For 12 years, he was head brewer at Portland Brewing and a company release said he is “renowned in beer circles for his technical mastery.”
John Hall said Goose Island employs 115 people at the Fulton Street brewery. The number grew by 20 percent last year and could grow another 20 percent this year, he said.
Contributing: Scott Bort, Sun-Times Media