The story of craft beer is actually thousands of iterations of a handful of stories: the hobbyist going pro, the drop-everything second career, the shrewd business move, the artist finding an unexpected outlet.
But there’s no story quite like that of Chicago’s Goose Island Beer Co. It was a craft pioneer, created some landmark beers and then sold itself to Big Beer. Selling to a bigger brewer isn’t unique — Wisconsin’s own Jacob Leinenkugel Brewing did so to Miller in 1988 — but Goose Island’s 2011 sale to Anheuser-Busch was the first in the contemporary landscape of craft beer. It truly began the ongoing and often heated debate about how we should feel about who or what makes our beer.
Josh Noel has had a front-row seat to the Goose Island story and tells it in his new book, “Barrel-Aged Stout and Selling Out.” He’s been a reporter with the Chicago Tribune since 2005 and has covered the beer industry and culture since 2009.
The Goose Island story, starts decades earlier, when John Hall founded Goose Island in 1988.. At the time, Goose Island was just the third brewery in Chicago and one of fewer than 200 nationally.
Noel details how Goose Island employees spent years wrenching drinkers’ hearts, minds and dollars away from Big Beer.. It’s a compelling reminder of a bygone beer era and Goose’s influential role in it. “Barrel-Aged Stout and Selling Out” makes a compelling case that Goose Island’s early rise in the tough Chicago market and its constant innovation earned it a spot on the Mount Rushmore of craft beer.
Bourbon County Stout was the industry’s first beer aged in bourbon barrels, and the style remains the apotheosis of craft beer. Its barrel-aging program didn’t stop there, accelerating into wine barrels, perfecting fermentation with wild, funky Brettanomyces yeast and fruit infusions. These elegant beers — Matilda, Sofie, Juliet, Madame Rose — remain among the best of their kind produced in the U.S. today. On the more populist end, it scored a huge branding hit with 312 Urban Wheat Ale.
And then came the sale.
“The announcement of Goose Island’s $38.8 million sale to the world’s largest beer company, on March 28, 2011, functionally ended an era for craft beer — an era of collaboration and cooperation, growth and good vibes, and the shared cause of building a lifeboat in a sea of Big Beer banality,” Noel writes. “Anheuser-Busch and its parent company, Belgian-Brazilian conglomerate Anheuser-Busch InBev, kept buying breweries, and as they did, divisions grew starker and more rancorous. The classic American success story — nurturing a business that changed an industry, then selling it for millions — became heresy in craft beer.
“The beer industry entered an era of revolution — fragmentation, increased competition, and, for the breweries that dared to follow Goose Island’s lead with a sale to Anheuser-Busch, searing claims of ‘sellout.’”
While the story centers on Goose Island, the book also puts Anheuser-Busch under the microscope: the culture clashes between stodgy St. Louisans (AB) and hard-charging Brazilians (InBev), the sometimes illegal anti-competitive business practices, the clear sense that Goose’s new corporate parent clearly didn’t understand what it had bought at first.(tncms-inline)f11b2ed2-4f43-497d-a9b6-c9b8074a4a05(/tncms-inline)
Noel will be in Madison on Thursday if you’d like to ask him a few questions about his book. In case you can’t make it, I asked him a few, too.
Q. How deeply into craft beer were you as a fan and as a professional in 2011? What were your first thoughts when you heard the GI news?
A. Like most people, my relationship with craft beer has been an evolution. I certainly know more now than I did in 2011, but I knew enough in 2011 as both a fan and as a journalist to realize that the sale to Anheuser-Busch was seismic. My first thought, as a journalist, was that it was huge news and I needed to claw through to explain to readers why it mattered. That was challenging because there really was no precedent. As a craft beer fan, my first thought was along the lines of, “This is huge and has the potential for disaster — but let’s see what happens.”
Q. Do you think the sale has been a success for Goose Island? For Anheuser-Busch?
A. I’d say the results have been a mixed bag for both. Both Goose and AB both certainly solved problems with the sale. Goose needed to grow and John Hall, who was approaching 70 years old, needed an exit strategy. John got well-earned millions and he was able to see his creation grow and grow — all the way into the national and global force that it is today.
AB got a portfolio of good-to-great beer that it was able to use as an entry into the world of craft, which the company finally realized wasn’t going away. It needed to jump in with both feet, and the Goose deal allowed it to do that.
The primary downside for Goose I see is the quality of its beer — most of the brands made at Anheuser-Busch breweries are all below average these days. The last few times I’ve had Goose Island IPA and Green Line Pale Ale, they have been undrinkable. That’s a direct result of becoming Anheuser-Busch’s national IPA and pale ale, scaled up in the same tanks where Bud and Bud Light are made. It just hasn’t worked, and we see evidence in the market, where sales of the Goose portfolio both in Chicago and nationally were down in 2017 almost across the board — the exception being Goose Island IPA. (It should be noted, however, that the beers made in Chicago at the Goose Island brewery are still mostly good or even very good.) The silver lining for AB: it made a lot of mistakes with Goose — namely, trying to grow too fast — but they have used the lessons of its Goose Island experiment to operate a bit more successfully (so far) with the nine other craft acquisitions that followed the Goose deal.
Q. Are there lessons learned for the craft beer world at large here? Perhaps in how a small brewer should handle a sale to a megabrewer, or vice versa?
A. There are a ton of lessons. Goose Island probably suffered more than any other brand that has been sold solely because it went first, and the company that bought it was desperate for the product it made. For a couple years, AB really had no idea what to do with Goose, and then when it began to capitalize on its acquisition, it moved too hard and too fast. AB learned, Goose learned. And probably anyone in the industry paying attention learned. AB, while still quite aggressive, has been more deliberate since then about growth with its acquisitions. And other companies buying up craft breweries — MillerCoors, Constellation, Duvel — have seemed to heed the lessons as well.
Q. Has the evolving landscape of craft beer since 2011 changed the value of Goose to AB?
A. The value of Goose to AB has certainly changed. When the deal went down there was no guarantee that AB would buy more craft breweries. Some people in the company — including John Hall — believed that Goose Island might solve all of AB’s craft beer needs. But obviously the industry has grown so wildly and become so fragmented that one brewery wasn’t going to solve all its problems. Goose Island is still hugely valuable to AB as evidenced by its role as lead national and international American craft beer brand, but the fact that AB felt the need to buy nine more breweries is telling.
Q. Do you think ABI’s brewery buying spree of the past few years is done, at least for a while?
A. I do think it’s done — at least for awhile. They’re onto the execution portion of their craft beer plan — growth and innovation, mostly, rather than still more mergers and acquisitions.
For a fair bit of the time I was working on the book, I was nervous because I couldn’t see the end of the narrative. It hadn’t happened yet — and how do you finish telling a story when there’s no logical end? Then, it happened, in two forms: the Wicked Weed sale and AB buying the original Goose Island brewpub. And my book got an ending.