Why the Purchase of Your Favourite Brewery Doesn’t Matter, and Why it Does!

Okay, let’s begin by getting one thing straight: There are not, as BrewDog’s James Watt recently tweeted, “so many breweries selling out to mega brewers.” There are a few, as many as a couple of dozen if you count the partial sales and purchases by private equity firms, out of the more than 3,700 breweries operating in the United States alone, plus the four hundred plus in Canada, eight hundred or more in Italy, in excess of 1,200 in the U.K. and so on and so on.

So no reason for panic.

But what if the brewery that sells out is one of your favourite breweries? An Elysian, for instance, or a Lagunitas or, most recently – as of this writing, at least – a Golden Road? Then what?

Again, no worries. Big breweries like Anheuser-Busch InBev, SABMiller and Heineken don’t generally do stupid things, and buying an existing, successful craft brewery only to tinker with their recipes and screw up their beers would be a decidedly stupid thing. The multinationals are buying these brands for their craft beer credibility, not their existing sales volumes, and so screwing with the biggest thing these brands have going for them would be paramount foolishness.

(You think these craft brewery buys are all about volume, you say? Well, consider this: In 2014, ABI’s Shock Top brand sold in excess of 14.1 million cases, according to the Beverage Information & Insights Group, while MillerCoors’ Blue Moon sold over 29.1 million cases. Lagunitas IPA, by way of comparison, sold a relatively scant 4.4 million cases, and the entire output of recently acquired Elysian was about 700,000 cases and Golden Road just over 400,000. In other words, the big breweries are doing far better with their made-in-house “crafty” brands than they are with the breweries they are acquiring.)

So that’s why it doesn’t matter. All a big brewery ownership means is likely better quality control and shelf stability for your favourite beers, and more than likely increased distribution.

Here why it does matter.

Leaving aside the less than 51% acquisitions, the half-and-half Lagunitas sale, for example, or the minority stake Founders sold, these newly acquired breweries exist and function at the whim of their owners, and their owners are not necessarily benign. Take Goose Island, for example, a case study of a successful big brewery buy-out if ever there was one.

ABI, which has owned Goose Island for a half-decade or so now, has been spending outrageous amounts of money and investing massive resources in expanding Goose’s barrel-aging program and promoting specialty brands like Sophie and Matilda. Which is great, until someone at head office finally decides that the revenues are not meriting the expenditures – which I’m not saying will happen, but might. At that stage, we could see the barrel program slashed, the specialty line cut in half or worse, and the hops in Goose Island IPA changed to cheaper and more easily accessible varieties. And there wouldn’t be anything that the brewers, managers or operations people in Chicago could do about it.

(As an aside, last night I drank a can of Goose Island IPA that my visiting west coast sister had left at my father’s house. I was unimpressed.)

More philosophically, however, the sale of a small brewery to a much, much, much larger one will put many craft beer fans in a bit of an ethical dilemma. Specifically, if you were drawn to craft beer as a supporter of the underdog, how do you react when that underdog gets sold to the very Goliath your David had been tossing stones at? Or, even more to the point, how does this statement by Meg Gill, owner of newly sold Golden Road Brewing, make you feel?

“Once I understood (ABI’s) vision and that they were going to win, I wanted to be on the winning team,”

To be clear, ABI “winning” means the effective end of independent breweries, or at least that’s how I see it. Because so long as there are more craft breweries outside of the ABI portfolio than there are inside, garnering increasingly greater market shares, then I cannot see any way of framing an ABI “win.” It’s really that simple.

So the bottom line is this: We all cast votes with our purchasing dollars and have the right to decide where we want those votes to go. If your concern is all about flavour and character and has little or nothing to do with ownership or oligopolies or multinational corporations, then you can and should continue buying whatever brand or brands of beer you want, whether they are owned by ABI or MillerCoors or the guy who lives down the street from you.

But if part of the reason you were drawn to craft beer is because it’s small and relates to you as a beer lover rather than as a consumer statistic and there’s a good chance you might bump into the brewer at your local bar this Friday night, well, you might want to think long and hard about your relationship with that recently purchased brewery.

6 Replies to “Why the Purchase of Your Favourite Brewery Doesn’t Matter, and Why it Does!”

  1. “All a big brewery ownership means is likely better quality control and shelf stability for your favourite beers, and more than likely increased distribution.”

    Except, when Molson Coors bought Franciscan Well in Ireland they achieved this by moving production to England and not telling anyone.

    And I, too, detected a drop in quality in a recent Goose Island IPA, the first I’d tasted since the buy-out.

    1. If anything, I think the quality of Goose Island’s brews (including the IPA) has actually improved.
      Their products are definitely far, far better than _anything_ made by the growing number of small breweries in my home state (including three that are less than 20 miles from where I live).

        1. Why? I’m trying to figure out what people think is different / worse. No one can seem to quantify that and all I hear people say is “it’s not as good”. The opinion is valid but there’s never any justification for it.

Leave a Reply

Your email address will not be published. Required fields are marked *