The popular image of the brewing industry is of a war between Craft and Big Beer. It’s small, independently owned breweries facing off against multi-billion-dollar corporations hawking bland-tasting beer with outsize control over the global market. These terms are useful for drawing battle lines in the beer world, but as Josh Noel explains in “Barrel-Aged Stout and Selling Out,” the reality is slightly more complicated.
Mr. Noel’s book recounts the rise of Chicago-based Goose Island Brewery, a vanguard name in craft brewing that was purchased in 2011 by Anheuser-Busch InBev, the biggest and baddest beer maker on the planet. Mr. Noel, a beer and travel writer for the Chicago Tribune, uses the tale of Goose Island and Anheuser-Busch to elucidate “how craft beer became big business.” His briskly written narrative will be of interest whether one prefers Bud Light or Goose IPA.
Barrel-Aged Stout and Selling Out
By Josh Noel
(Chicago Review, 386 pages, $19.99)Goose Island was founded in 1988 by John Hall, a box-company executive with a taste for European beers. The operation began as a brewpub on Chicago’s Clybourn Avenue. Mr. Hall envisioned a bar where patrons could purchase beers more flavorful than the ones served up by industry giants Anheuser and Miller. A dining critic wrote a favorable review soon after its opening, praising a porter on tap for its “sophistication, redolent with the full body and pronounced flavor of its toasted grain.” Such was the language of craft brewing, an enterprise that boomed from the late 1980s to the mid-1990s.
Mr. Hall’s business expanded in 1995 to include a stand-alone brewery. His talented staff—including his son, Greg, the brewmaster—turned Goose not only into a Chicago favorite but into one of the major players in craft beer. With a new production facility, Goose could now distribute its popular offerings—whether Honker’s Ale, Oatmeal Stout or, of course, India Pale Ale—to store shelves and tap handles far and wide. Goose reaped the rewards of its expansion, as its barrel production crept steadily upward.
Big Beer could not afford to ignore upstarts like Goose. Anheuser responded to the craft-beer boom by developing its own artisanal styles and buying stakes in a number of small breweries. But the threat to Big Beer seemingly abated when craft’s swift advance suddenly skidded to a halt. As Mr. Noel writes, “from 1997 to 2003, craft’s growth slowed to an average of less than 3 percent per year.” Goose was not immune, suffering its own slump with declining sales and barrel production. That downturn was one factor that led it to agree, in 2006, to the sale of a large minority stake—to a brewing company partially owned by Anheuser.
Mr. Hall realized that the beer giant’s distribution network and financial clout could “launch Goose Island into the big time.” Others weren’t convinced. Sam Calagione, the founder of Dogfish Head Brewery, said at the time that “in five years, if [Anheuser] really gives a s— about craft beer, then I’ll stand corrected.” Another industry insider said that the sale felt “like David selling out to Goliath.” In the meantime, however, the effect of the deal couldn’t have been more pronounced. Goose sales spiked 60% within a year. In 2004 Goose had produced 50,000 barrels of beer; in 2011 that number had tripled. But its success became its own obstacle: Goose couldn’t brew enough beer to meet insatiable demand. So it “sold out”—agreeing in March 2011 to a 100% sale to Anheuser for $38.8 million.
“Barrel-Aged Stout and Selling Out,” apart from a narrative history of a pair of beer companies, is also an accessible introduction to the business of brewing. Mr. Noel explains this landscape of distribution rights, franchise laws and equity contracts without relying on corporate jargon. For those interested in the art of brewing itself, Mr. Noel happily dives into the back stories of various Goose favorites, including its “dry hopped” IPA or the titular barrel-aged stout. As for the book’s centerpiece—the story of Anheuser’s purchase of Goose—nobody is more qualified to tell it than Mr. Noel, since he broke the news of the sale for the Chicago Tribune.
By the time Mr. Hall informed his staff of the decision, Anheuser itself was a subsidiary in an even larger beer behemoth—AB InBev, a Belgian-Brazilian brewing conglomerate. Anheuser had been purchased for $52 billion in 2008, creating “the world’s new largest beer company” and the antithesis of everything craft-beer drinkers held dear. Mr. Hall now had the unenviable task of telling his employees who their new bosses were. And though he tried to explain how a sale might actually benefit Goose, resistance was stiff. “Shock stared back at him,” Mr. Noel writes. “Anger. Betrayal.” One longtime member of the marketing team wouldn’t even look at him.
That sense of betrayal lingers for a large swath of beer drinkers, some of whom refuse to drink Anheuser products. In Mr. Noel’s book, Anheuser certainly doesn’t come off as the good guy, with its hardball tactics to stamp-out competition—as when it tried to keep its distributors from carrying non-Anheuser products. And the company has only become more formidable: In 2016, AB InBev merged with SAB Miller, the world’s second-largest brewer. Since buying Goose, AB InBev has purchased additional craft breweries in the U.S., including such familiar names as Blue Point and Elysian Brewing.
Goose, as it happens, has enjoyed impressive growth since being purchased by AB InBev. But what does that mean for the industry as a whole? There’s a contradiction at […]