Anheuser-Busch, under the Dark Side influence of InBev, has acquired a 58% stake in Chicago craft brewer Fulton Street Brewery LLC, also known as Goose Island, for $22.5M. This increase in ownership includes a $16.3M purchase of Goose Island from The Craft Brewers Alliance. All it takes to “expand the brewing and distribution capabilities” of a respected craft brewer is $38.8M.
According to sources close to the deal, Goose Island CEO John Hall will be retained while brewmaster Greg Hall is stepping down.
Both sides see this as signs of positive growth for their companies. AB-InBev gains a Chicago-area brewery and general facility, Goose Island gains the funds and materiel support to match production to the growing national demand of their beers. The Deal includes provisions to leave the two Goose Island brewpubs within the direct custodianship of Goose Island.
There’s nothing truly shocking about this deal, outside of the players involved. Sales of craft beer, both in volume and dollars, has skyrocketed in the same time that macro-brewed beers have lost those dollars in the US. These mainstream brewers have jumped at each chance to acquire regional craft brewers to strengthen portfolios and introduce the more esoteric fares to new markets. Craft beer is projected to make up 11% of the total beer market this year.
What’s interesting is that this comes on the heels of Dogfish Head scaling back their distribution range, citing inability to produce to meet demand and unwillingness to thin out their brand. Goose Island has taken is doing just the opposite and it has many within the craft brewing community frustrated and nervous. Now that A/B-InBev has control of Goose Island distribution, the window for truly independent brewers to enter the market shrinks. Considerably. And speaking of Goose Island specifically, it opens the possibility of the new ownership to disastrously alter the make-up of the craft brew. Cheaper ingredients, processes streamlined for mass and massive production to meet demand have the potential to take finely tuned beers and make them nothing more than “fancified” macros. Therefore removing the essence of the original beer.
The deal is expected to close by the end of the second quarter of FY11.
(Stick-Taps to Chicago Breaking Business, Chicagoist, Beer News, and Beer Universe. For a great look at the present and future of the business of craft brewing, check out Beer Scribe’s take on the situtation.)