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A-B Buys Goose Island, Sky Immediately Begins to Fall(?)

Climb down off the ledge and back onto the bar stool, craft beer Chicken (or is it Goose?) Littles the world over; the sky isn’t falling, and the world isn’t ending, at least not yet.

Yesterday’s announcement that Anheuser-Busch, Inc. would purchase a 58% stake in Chicago’s Goose Island Beer Co. for $38.8 million sent shockwaves through the craft beer world. (PS. Kudos to BeerNews.org, soon to be BeerPulse, for his coverage yesterday. He was so swamped that he had to increase the bandwidth on his site.) Twitter erupted with craft beer fans weighing in on what this means for Goose Island’s beers going forward and for the industry in general.

“A soldier falls,” lamented one Twitter account. “bye-bye goose island, you are not a choice for me anymore. to go to bed with the mass producers of horse piss that they actually sell as beer goes against everything a good craft beer stands for. again quantity over quality. very sad,” declared a commenter on one of the myriad articles on the topic.

Others were more pragmatic, however. “It’s a BUSINESS, people. This is not some hobby brewer in his mother’s basement. Good for the GI folks finally being able to cash out. All you rabid fans…now is the time to put the screws to AB and make sure they continue to brew ‘your beer’, not walk away in some adolescent fit,” noted another commenter on the same Chicago Breaking Business article.

I have to side with the pragmatists. A-B’s purchase of Goose Island will be an important litmus test for whether or not a macrobrewer can absorb a craft brewer symbiotically rather than parasitically. This litmus test is important in at least a few ways. Consider that Goose Island has perhaps never been stronger than it is right now. The company cannot keep up with demand, not only with its 312 Urban Wheat and Honker’s Ale, both year-round staples, but also with its impressive bomber lineup, which includes Matilda, Juliet, Sofie, the recently released Pepe Nero, and of course the renowned Bourbon County Stout and its different treatments: Rare, Vanilla, and Coffee.

Anheuser-Busch is purchasing Goose Island at a high water mark (I say a high water mark because I wish only good things going forward for CEO John Hall and all of the Goose Island family going forward). Visibility has never been higher. Reputation never stronger. That puts a lot of pressure on A-B to keep things running right and the beers at the same level of quality. All eyes will be watching Goose Island. Craft beer tongues everywhere (those that don’t immediately say “The hell with this” and switch brands) will be drinking critically, looking for any sign of slip-up or formula change. Knowing this, and how rabid craft beer aficionados can be, can A-B afford to tamper with the Goose Island formula? I think not.

Any chatter about what this does to Goose Island’s craft status is also largely moot because nothing technically changes on that front. Because of the Craft Brewers Alliance’s share in Goose Island (and because A-B owns 32% of the CBA), Goose Island  has already been technically excluded from craft brewer status by the Brewers Association guidelines. I’m not prepared to say Goose Island isn’t craft in spirit as well as legal letter. Can you really look at beers like Rare Bourbon County Stout and the delectable Pepe Nero and declare that they aren’t craft?

The example of Dominion Brewing Co.’s downtrending in recent years was raised yesterday. This is often attributed to Anheuser-Busch getting involved with Dominion (through Coastal Brewing Co., of which A-B owns a minority share). Except A-B never went as far with Coastal as it is going with Goose Island. From where I sit, and from what I’ve heard, A-B’s involvement with Coastal has always been with distribution, not in the brewhouse. Have Dominion’s beers lost some of the reputation that they used to have? Sure. But with the hiring of former Flying Dog VP of Sales and Marketing Jim Lutz, the brand is starting to produce some exciting beers again and is looking to make more of a push in the D.C. area. There is a point to this sidetrack, and it’s to say that A-B never had as much formal stake in Dominion and Fordham as it will in Goose Island. This will make this whole litmus test with Goose Island even clearer to see the results of.

A lot rides on this. As craft beer continues to grow at an amazing healthy rate, more and more brewers will find it hard to keep up with demand. Dogfish Head just pulled out of Indiana, Tennessee, Wisconsin, and Rhode Island because of an inability to keep up with demand and a desire to fully service other markets. It takes a lot of money to expand on a brewery. Coincidentally, Big Beer has a lot of money. I wouldn’t be surprised to see more of this kind of thing with A-B and Goose Island in the future, but a lot rides on how this goes.

If things go well with Goose Island going forward, the beer quality doesn’t suffer, new beers like Big John make it to market, old beers like the Christmas Ale return, and you can get the (still-)delicious 312 Urban Wheat in the same places where you can get A-B’s more voluminous and taste-free water-derivatives, then this looks like a win and a macrobrewer having a successful business interaction with a craft brewer without killing everything we know and love about that brewer.

If, however, 312 Urban Wheat starts to taste like Shock Top. If, however, we see the contraction of beers and a loss of the delicious bombers that Goose Island has been putting out over the past two years. If, however, Bourbon County Stout becomes unavailable, or even worse, bad-tasting, then the Chicken Littles will have been right all along and A-B will have dealt serious damage to the idea that a macrobrewer and a craft brewer can get along.

I don’t know how this will play out. But I do know that all eyes are on A-B. If they take an otherwise extraordinarily healthy brewery and run its beers and reputation into the ground, that’ll be extremely unfortunate and a warning to other breweries. If, however, Goose Island goes on to all-new heights, official craft brewer status or not, then this deal could very well be a turning point for the craft beer industry, and those same craft beer Chicken Littles will need to wash down their humble pie with a Honker’s Ale.

Only time will tell. So take a deep breath, climb back onto the barstool, and order the Pepe Nero. I heard it’s from this great brewery in Chicago that just took a big first step in one of two directions.

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