Ben's Beer Blog

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On selling out

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You’ll never understand it
Try to buy and brand it
I win, you lose, cause it’s my job
To keep craft beer elite.
This beverage ain’t your fuckin’ industry.

~Fat Mike, if he were a beer blogger, probably. 

As it is with music, there is an important distinction in beer between what we might define as that which is indie and that which we might deem corporate.

Craft beer, you might say, is  something generally akin to your favourite band that’s still playing local clubs, manning their own merch tables, and banging out records on a small record label–or even no label at all. Much like craft breweries, indie bands maintain a devoted local following because they make a quality product and there is a perception that they do what they do because they love it and they’re not just in it for the money, man.

By the same token, we might readily compare big breweries to something along the lines of a boy band or the Spice Girls: a sort of fabricated version of the concept of a “band,” assembled by people with an understanding of the market and a unique ability to create a product that will have mass appeal. It’s often a profoundly successful “product,” but to those who are passionate about the scene, it’s a watered down, passionless version of what should be a good thing.

This is a simplified analogy for sure, but to me there are actually a lot of parallels between craft beer and independent music, the most notable of which is that rather icky feeling we all get when a treasured brewery or band suddenly becomes financially successful.

The brewers are good ’til they make enough cash
To eat food and get a pad
Then they’re sold out and their beer’s cliché
Because talent’s exclusive to brewers without pay.

~ Joey Cape, if he was into craft beer, I assume.

Now, this isn’t a situation we’ve had to deal with much in Ontario, but given the fact that craft breweries in the US are increasingly being bought up by big guys and the fact that trends in the US usually foretell where Ontario might end up in a few years, it’s probably worth exploring the concept of the craft beer “sell out” and preparing ourselves for the inevitable.

In the US, craft beer “sell outs” have been met with a rather virulent strain of beer fan outrage: A handful of US craft brewers have sold their companies in the last few years, including Pyramid, Magic Hat, Anchor Steam, Kona, and Goose Island. AB InBev has also bought up New York’s Blue Point Brewery Co., Oregon-based 10 Barrel Brewing, and Seattle’s Elysian was purchased as recently as January of this year. In virtually all these deals, the response from fans of these breweries has been swift and angry. Social media exploded when betrayed beer drinkers publicly aired their distaste, confusing comparisons to Nazism abounded, and cries of “sell-out” were myriad.

A quote from Seattle-based beer blogger Steve Body’s post about the sale of 10 Barrel fairly nicely captures the pervading sentiments in the aftermath of virtually all these acquisitions:

If you care about craft brewing – about the community of people, not corporations and not abstract legions of faceless laborers – then you do NOT, under any circumstances and for any amount of money, sell your craft brewery to a company whose stated objective is to bring about the ruin of that community.

On the one hand, I’m with you, Steve (and the thousands of other outraged craft beer evangelists). Fuckin’ eh, man! From a philosophical standpoint craft beer does and should stand in diametric opposition to the way big brewers run their largely profits-first beer business. AB InBev buying their way into the craft marketplace is a pretty obvious attempt to stem the tide of consumer change that is trending increasingly toward craft beer. It’s a transparent attempt for a big company to literally buy some indie cred.

But…on the other hand, is this really worth getting worked up about?

I know, I know this seems weird coming from me. I essentially wake up every morning with already high blood pressure just from residual rage about the business practices of large breweries, but the more I think about the brewery version of “selling out” and the more I consider the effect it has or will have on Ontario’s beer scene, the more I think, “Hey, this actually might not be another one of those put-your-head-through-drywall-in-a-rage moments.”

Consider a hypothetical situation: You are lucky enough to welcome a great craft brewer into your neighbourhood. You now have a great source for well-made local beer close to your house and, as you continue to frequent said brewery you actually get to know the folks that work there and own the company and, as luck would have it, they are great people. You are happy to support a small business making great beer in your backyard. Sunshine, rainbows, and happiness abound.

Suddenly, one day, you find that your favourite local brewery has agreed to be purchased be a larger brewery. Now, before you light that Molotov cocktail and run over there to burn those mother effing sell-outs to the ground, consider: what does this really mean for you and for the shiny happy people you’ve come to know working at that brewery?

Well for those brewers, it likely means a shit ton of money. 10 Barrel, the object of Body’s scorn, above, was purchased for $10 million and Chicago’s Goose Island welcomed their corporate overlords for a substantial $38.8 million. Presumably, given that you like the folks who own your local brewery, you should be happy to see them succeed and, regardless of your indie sensibilities, it’s pretty hard to see pocketing $38.8 million as anything less than a pretty fucking major success.

And what does it mean for you, as a beer consumer? Well, it likely means the people making the beer you’ve come to enjoy will have more resources with which to make that beer, and your beer drinking experience will improve. You know those times you rode your bike to the brewery only to find that your favourite Ultra Dank Stink Bomb IPA wasn’t in stock because the hop supplier didn’t come through in time for the brew? Never again. Papa InBev just bought a farm that grows Columbus Hops exclusively and they have a guy chained to a tractor who will do nothing but harvest the sticky green stuff all day for the production of your favourite IPA until he dies (and is replaced by another guy).

It also means that your brewing friends will get to share their beer with the world.

Thanks to the plane full of money flown to Chicago from Leuven, Belgium, for example, Goose Island has been able to enjoy far broader distribution of a handful of their brands, including their excellent vintage ales. As a consumer, that means you get to try more interesting beer made in smaller and far away markets you wouldn’t otherwise likely enjoy: case in point, the above pictured Goose Island IPA that’s been in the Beer Store since April 20 and is available at the LCBO as of yesterday.

Corporate ownership aside, as a person who likes to put good beer into their face and as a craft beer fan who likes to see craft brewers succeed and make their beer to the best of their abilities, are these really bad things?

Obviously, the devil is in the details. There is the potential that these craft brands might now be sold and promoted in the same less-than-awesome ways that big brands are sold and promoted. We are yet to see them, but there is of course now the potential for bikini clad Elysian Girls and rumours already abound that Goose Island kegs are hitting the market at deflated prices in order to saturate the market and hurt competitors.  So too might employees of purchased breweries feel a little butthurt to learn about the change to who signs their cheques: one morning you’re going to work for a cool craft brewery, dedicated to making interesting beer, and the next you’re technically an employee of one of the world’s largest beer companies and wondering if you’re going to be replaced by a team of robots that I assume AB InBev and Miller-Coors are assembling in a warehouse somewhere. Most importantly, there is the issue of beer quality. Speculation has been rampant following every major acquisition that standards would slip as the big companies find ways to trim margins.

But one has to assume that the big brewers recognize that tampering too much with any of these areas risks devaluing the company they just purchased. The value in Goose Island, Elysian, Pyramid, Magic Hat, Anchor Steam, Kona, Blue Point Brewery, 10 Barrel Brewing, etc. is in these companies’ credibility as a craft brand. Mess too much with their marketing, their employees, or their beer quality and AB InBev risks losing that indie cred and, as a result, the return on their investment–which I think we can all agree is likely among that company’s top priorities.

So will it happen here in Ontario? In my opinion, almost certainly. It can’t be long before a local brand establishes itself to an extent that the big guys come sniffing around.

And mostly, I think, it will mean that a local craft brewer will get a big pay day in recognition of their hard work, the beer we like will be made with resources that likely ensure the quality is more consistent, and there is going to be more of that good beer available to a wider audience.

Call me a sell out if you must, but as a person who first and foremost likes great beer, this sounds OK to me.

 

Author: Ben

http://www.bensbeerblog.com

19 thoughts on “On selling out

  1. Hasn’t it already happened? Cremore comes to mind, as do Sleeman before them.

    • Yeah, it kind of sort of has. I’m not sure Sleeman ever had the sort of craft credential that would cause an outrage when they were bought out, but Creemore was bought by Molson and to my mind, much like Unibroue being bought by Sapporo, I don’t think the beer quality has suffered.

      • Didn’t Sapporo buy Unibroue by buying Sleeman? Anywho, that was what, 10 years ago? Craft credentials for Ontario beer were pretty different back then, weren’t they? I think my dad used to buy Sleeman because they were the small guys back in the 90s.

  2. Kudos for including NOFX and Lagwagon lyrics (almost).

  3. the Spice Girls are like way better than any boy band!

  4. My only concern is: will the beer still be interesting and good? Or will it become yet another almost-delicious beer that ends up being more ho hum than anything else? I’m fine with more money, more success, all that, but the beer still has to taste like the beer I love.

  5. 10 Barrel was definitely purchased for more than $10 million. Most agree that it was around (if not more than) $50 million.

  6. Didn’t the ex-owners (or maybe just one of them) of Goose Island went on and started their own breweries with the money they got? Southern Tier was one of those, I think.

  7. It is worth highlighting the importance of passion in beer brewing because it is a key source of creativity – as your article implies. Corporate profit interests typically stymie the introduction of new or experimental brews that cannot be sustained at output levels with production efficiency. Many acquired breweries have seen their brand portfolio streamlined and the introduction of new products halted – Unibroue is a good example. Product innovation is a key benefit we beer drinkers get from the craft brewing scene, and too much corporate ownership may very well inhibit the creative passion of brewers in that regard.

  8. But it already did happen in Ontario, it’s the basis for all our fears of good breweries losing their standards of excellence after being bought.
    Sleeman bought up Heritage brewing and many many others, shutting some down and/or lowering the quality.
    Unibrou(Quebec I know) got lucky and are still pretty darn good. From what I understand, they were left to work pretty autonomously, but some old timers have complained about a drop in quality.

    Here in BC, Granville Island brewing was bought by Molson, and while the original brewery still operates, making small batch beers of good quality, it mostly acts as a tourist destination. The majority of their beer is made at the Molson facility and tastes terrible. Their winter ale has been worse and worse every year I’ve been here.

    Mind you, that was then, this is now. Hopefully anyone buying up a smaller brewery will have learned from past follies and will work to keep those quality standards.
    If that were all there was to it, I’d leave it at that and be very very happy… But it’s not.

    To be clear, it’s not big breweries I hate, in theory they provide lots of stable work and if a beer is so popular that it needs larger output, by all means, grow large, get larger tanks, employ more people!(Go Steam Whistle Pilsner)
    It’s unethical business practices that I hate.
    Molson/labbat/budweiser, as I’m sure you know, run the monopoly on beer in Ontario. These are a few private companies with the favour of the government.

    Ever wonder why they’re not required to put the ingredients on beer containers? Once again, lobbying by the big breweries so they can use cheaper fermentables without saying so and despite their massive output and cheap ingredients, charge the same if not more for their product as a small brewer charges for small batch, carefully crafted beer of quality ingredients.
    It also allows them to say that there are “No Preservatives” on the packaging, which is funny because believe it or not(And I know you wouldn’t know by tasting it) There ARE hops in Molson, Bud, etc. and hops are a preservative.
    Which leaves me to my next point….

    The article says that big breweries provide a stable supply of hops because they own all the hop producers. Well, when you own the breweries and producers of ingredients and are in charge of the sales outlets, that’s a monopoly, they’re bad.
    The big breweries were actively buying up hop fields to prevent smaller breweries from having access to them.

    On Broader Distribution… Why do we need this? Transportation drives up costs and needlessly uses fuel.
    Buy local and produce for your local market. Own a big company? Open more breweries, provide local jobs!(Actually Molson has three breweries across Canada, so I’ll give them that.)
    Few products I’ve tasted are so special that you can’t find something similar enough locally made, with the exception of really interesting small batch stuff.
    Is your beer actually that special? Make people come to you to get it, bring money to your community!
    We don’t need West Coast North American Style craft beer made in Germany, or from the opposite coast of Canada, or even from three hours south! We have it all here, made locally.
    Is a beer style missing from your market? Suggest it to a brewery or start a new brewery!
    Don’t have any locally made beer of that quality? You either don’t have a market big enough for an interesting local brewery, in which case you probably don’t have a market big enough for importing interesting beers, or liquor production is poorly regulated by your provincial government, possibly because the big breweries are lobbying them to keep competition from popping up.

    That is why you don’t support big breweries. When a good brewery is bought by Molson/Labbat/Coors/Busch/whatever, I mourn the loss because I’m not going to support those particular unethical corporations.

  9. Couple of key points worth thinking about…

    1) Goose Island regular lineup is no longer craft brewed, it is brewed by InBev and is a modified version of their recipe. That new IPA kinda sucks compared to the true Goose Island ones. This is a loss.

    2) Because of point #1, the good stuff (aka Sofia, BCBS, Sours) are craft brewed at the original brewery by Brett Porter and team. This is a plus.

    3) The crafty versions of Goose Island beers are now taking tap space away from local breweries, you’ll see crafty versions of Elysian soon coming to a bar near you very soon. This is a loss, fueled by pay to play issues.

    4) Money goes to Belgium. This is a loss.

    If a beer is craft brewed, I will ultimately buy it regardless of ownership only if I cannot find a suitable craft replacement. Goose Island BCBS and Sours fall into this category, so do their craft Belgians for now. For the rest, no way there’s lots of great craft beer out there produced independently, unless I am in a place that only has drinkable but mediocre crafty beer that is.

    Note “crafty” refers to beer made by big commercial brewers in an attempt to imitate craft beer.

  10. I only drink locally made beer. That is right, locally made in my basement.

  11. Sleeman buying out Upper Canada also comes to mind..

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