When Big Breweries Buy the Local Craft Heroes
Anheuser-Busch has bought 8 craft breweries since 2011; what happens next?
We love our local breweries, right? The original: Summit. The rebel that made it big: Surly. The brewery started by college buddies: Fulton. Indeed, Bauhaus, we all have a local favorite. In most businesses, when you achieve great success, you have to raise more money to accelerate growth. Do you let hedge funds or venture capitalists invest? Or do you sell to someone bigger? And is selling, selling out?
I began thinking about this with the recent news of Todd Haug leaving Surly. Why would he leave? What's the future for Surly? And how about Summit? Mark Stutrud is in his 60s, his brewery just celebrated 30 years in St. Paul. Mark can't run it forever. But he told me, "We are not talking to MillerCoors, ABI or any major brewer. In fact, I’m not talking to anyone...I’m interested in getting more shares in employee hands and staying fiercely independent."
Why wouldn't MillerCoors or Anheuser-Busch be interested in these successful breweries? AB wouldn't comment on whether or not it was interested in Summit or Surly. "Any acquisition plans would be confidential," they told me.
I did have a fascinating conversation with Felipe Szpigel, the president of The High End, Anheuser-Busch's specialty and craft brewery division.
AB bought eight different successful breweries, starting with Goose Island in Chicago in 2011. It got Goose Island national distribution for its Honkers Ale, Sumemrtime, IPA, 312 Urban Wheat, Oktoberfest, and Four-Star Pils. And it led AB to buy Blue Point Brewing, Elysian, 10 Barrel, Golden Road, Four Peaks, and Breckenridge. Plus Virtue Cider. For what it's worth, I asked a friend of mine who covers food and beverage in Chicago what he thought about the change, and he said there was consumer outrage at first. Goose Island bought by a big guy! Is this still our local beer?! But it calmed down, and he thinks it ended up being a net positive for the brewery (which got money and national distribution) and for Chicago drinkers (as the local Goose Island brewery was freed up to do fun/interesting stuff, like barrel-aged beers and high-ABV beers and sours).
What would Minnesotans think if AB or Miller took over Surly or Summit? Share your thoughts in the comments. I discussed what happens from AB's perspective with Felipe Szpigel, and am sharing his responses in their entirety.
DeRusha: What changes?
Szpigel: Very little changes. The High End enhances the focus on quality and safety—specifically accident reduction. We provide each craft brewery with upgraded quality assurance labs and then open those up to surrounding local breweries to utilize as needed. We help support the people, systems, and resources so they can brew and share the best, most innovative beers and create the best experiences. We also provide increased access to quality ingredients and our wholesaler network to help our craft partners get their beers to the consumers in the quickest, freshest way possible. That’s important for all of the beers in our portfolio, especially the IPAs.
DeRusha: Do you centralize brewing of the beers that get national distribution?
Szpigel: No, but in some cases where it makes sense, we cross brew in our larger breweries. We’re very transparent about that—any craft beer brewed in a larger A-B brewery states that on the label. Given the amount that needs to be brewed to meet consumer demand, cross brewing allows us to increase capacity in the craft breweries to allow space and time for innovation. Before scaled production begins at larger A-B breweries, each partner trials recipes and they have to pass a blind taste test by the craft brewery’s taste panel and Brewmaster, and the cross brewed beers continue to be tested on a regular basis.
DeRusha: Do the original owners stay on, original brewers?
Szpigel: Yes, with the exception of Dick Cantwell who decided to pursue other interests. [Cantwell resigned from Elysian, he was not in favor of the acquisition.] Everyone else keeps leading the business and/or sits on our Craft Advisory Board.