I received a press release this morning that Anheuser-Busch InBev is buying a controlling interest in Goose Island Brewing. ABI will pay $22.5 million for a 58% share of the Chicago brewery and the remaining 42% currently owned by the Craft Brewers Alliance will be sold to ABI for an additional $16.3 million in cash, bringing the total price of the sale to $38.8 million. The Chicago Tribune is reporting that “[a]n additional $1.3 million will be invested to increase production at Goose Island’s Fulton Street brewery” and that the “transaction is expected to close by the end of June.”
From the press release:
Chicago-based Goose Island, one of the nation’s most‑respected and fastest-growing small brewers with sales concentrated throughout the Midwest, today announced it had agreed to be acquired by Anheuser‑Busch, its current distribution partner, in a move that will bring additional capital into Goose Island’s operations to meet growing consumer demand for its brands and deepen its Chicago and Midwest distribution.
Goose Island’s legal name is Fulton Street Brewery LLC (FSB). Anheuser-Busch reached an agreement to purchase the majority (58 percent) equity stake in FSB from its founders and investors, held in Goose Holdings Inc. (GHI), for $22.5 million. Craft Brewers Alliance Inc. (CBA), an independent, publicly traded brewer based in Portland, Ore., that operates Widmer Brothers, Redhook and Kona breweries, owns the remaining 42 percent of FSB and reached an agreement in principle to sell its stake in FSB to Anheuser-Busch for $16.3 million in cash. Anheuser‑Busch holds a minority stake (32.25 percent) in CBA.
Goose Island sold approximately 127,000 barrels of Honkers Ale, 312 Urban Wheat Ale, Matilda and other brands in 2010. To help meet immediate demand, an additional $1.3 million will be invested to increase Goose Island’s Chicago Fulton Street brewery’s production as early as this summer.
“Demand for our beers has grown beyond our capacity to serve our wholesale partners, retailers, and beer lovers,” said Goose Island founder and president John Hall, who will continue as Goose Island chief executive officer. “This partnership between our extraordinary artisanal brewing team and one of the best brewers in the world in Anheuser-Busch will bring resources to brew more beer here in Chicago to reach more beer drinkers, while continuing our development of new beer styles. This agreement helps us achieve our goals with an ideal partner who helped fuel our growth, appreciates our products and supports their success.”
Hall will continue to be responsible for Goose Island beer production and the expansion of Goose Island’s Chicago brewery, where production will continue and its business will still be based.
“The new structure will preserve the qualities that make Goose Island’s beers unique, strictly maintain our recipes and brewing processes,” Hall said. “We had several options, but we decided to go with Anheuser‑Busch because it was the best. The transaction is good for our stakeholders, employees and customers.”
Anheuser-Busch has distributed Goose Island brands since 2006 as part of an agreement with Widmer Brothers Brewing Co. of Portland, Ore., a co-founder of CBA, that provides Goose Island access to the network of independent wholesalers that distribute Anheuser-Busch beers. Anheuser‑Busch also provides logistical support to all Anheuser‑Busch wholesalers distributing Goose Island and CBA beers as part of that agreement.
“These critically acclaimed beers are the hometown pride of Chicagoans,” said Dave Peacock, president of Anheuser-Busch, Inc. “We are very committed to expanding in the high‑end beer segment, and this deal expands our portfolio of brands with high-quality, regional beers. As we share ideas and bring our different strengths and experiences together, we can accelerate the growth of these brands.”
The two Goose Island brew pubs are not part of the deal, but will continue in operation, offering consumers an opportunity to sample Goose Island’s award-winning specialty beers and food selections.
As part of CBA’s agreement to sell its 42 percent block in FSB to Anheuser-Busch, in addition to cash, Anheuser-Busch will provide enhanced retail selling support for CBA brands, will reduce distribution fees payable by CBA to Anheuser‑Busch and will provide CBA additional flexibility with respect to future acquisitions and divestitures.
In a separate press release today, Goose Island announced that Brett Porter will become Brewmaster of the production facility, replacing longtime brewmaster Greg Hall. Porter’s most recent brewing job was with Deschutes and he’s also brewed at Portland Brewing and a couple of UK breweries.
UPDATE: Goose Island founder John Hall has released a short statement about their acquisition by ABI, which they call a Special Announcement.
This is one I sure cannot “Like”. I will distribute for those loyal to Goose Island and INDEPENDENT craft beer so they can choose to continue to support them or not. I will not–along with a few other angry friends already showing disappointment.
It’s a shame when a good brewery (moreover a great brewpub) sells out. Many other small and regional breweries have found ways to expand production and distribution without selling their soul to AB, MillerCoors or any other giant. This has strengthened my stance on only supporting the little guy. Plus, with over 1700 breweries in the U.S. alone, it will not be hard to find great beer from local, small, INDEPENDENT breweries. I can only drink so much when I’m also brewing my own anyways, so no need to support corporate beer too.
Yeah, it pisses me off quite a bit, but it’s not the same beer climate it was 10 years ago, so weirdos like aren’t left high and dry. Chicago has several great breweries with paint still drying and some more on the horizon–one might be mine own in the next few years.
Got to agree with Adam on this. My first thought on reading the header was”Bummer.”
I guess I’m the only one who congratulates those involved (especially on the Goose Island side). Brewing is a business, and this looks like a smart business decision. I won’t begrudge them (or any other company in a similar position) or avoid their products simply because they’ve made a deal that brings them more into the mainstream.
Let’s just hope that AB-InBev is willing to keep a hands-off attitude and allow Goose Island do what they already do so well, on a larger scale.
More good beer, reaching more people, is _not_ a bad thing.
I am not worried…yet. Nor am I swearing off GI products…yet.
If and when AB-InBev starts to sacrifice quality for quantity or for the bottom line, then all bets are off.
But right now, congrats on the influx of capital Goose Island!
Brewing may be a business but it is also, at its best, an art. What’s more, what was an American original in Goose Island is now a Belgian/Brazilian conglomerate. Not that there are no good beers in their portfolio, but I’m done drinking beer without “soul.” They could have at least looked to sell this to an American company. Such a shame.
not to worry, there are hundreds upon hundreds of other excellent independent breweries out there that need support. I need to find a list of which breweries are actually owned by AB-InBev, and Miller-Coors, I’d rather support the local independent breweries instead