Brookston Beer Bulletin

Jay R. Brooks on Beer

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Anheuser-Busch InBev Buys Goose Island

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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.

Last Day To Sign Up For Brookston Baseball

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There are six spots left in Brookston League Baseball, a rotisserie fantasy league for the 2011 season. But hurry up, the league will draft tomorrow, so sign up today if you want to play along.

In order to join the league, go to game front page, click the “Sign Up Now” or “Get Another Team” button and follow the links to “Join a Custom League”. When prompted, enter the League ID# and password below. If it won’t let you join, it’s probably because we’ve reached the limit for the number of teams allowed in the league.

League ID#: 119845
Password: beer

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Fritz Maytag & Ken Grossman Give Keynote At CBC 2011

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Earlier today the 2011 Craft Brewers Conference began with the morning program, which ended with a keynote address by Fritz Maytag and Ken Grossman. It was more of a casual talk or reminiscence, with Maytag and Grossman talking about their early days, with both the challenges and joys of those times when their were trying to get their respective breweries off the ground. They sat opposite one another on comfy chairs and talked for just over 30 minutes finishing with a toast using the collaboration imperial stout they did together last year, Fritz & Ken’s Ale.

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It was a highly entertaining talk and even quite funny in places. I’d forgotten my Flip camera, but I did manage to record the audio of the talk. The keynote is introduced by Tom McCormick, executive director of the California Small Brewers Association, and then it’s Ken and Fritz for thirty plus minutes. Enjoy.

Archie Comics Tapped To Teach Kids About Underage Drinking

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The neo-prohibitionist organization MADD today sent out a press release announcing that they’ve partnered with Archie Comics “to raise awareness about underage drinking.” The new issue of Double Digest #217 hits the comic book stores tomorrow, and features an 8-page story entitled The Madd Cowboy of Riverdale High. Below are a few sample pages.

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The “Cowboy” part of the title is for Dallas Cowboy tight end Jason Witten, who appears as himself to speak to Archie and his classmates in an assembly. He’s specifically promoting MADD and their Power 21, which will take place April 21 and is touted as a “national event that seeks to have parents talking to their children about underage drinking.”
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Believe it or not, I’m not entirely against this latest effort by MADD, although I don’t believe the goal should be to completely eliminate underage drinking — an impossibility, in my experience — but should instead focus on figuring out an effective way to allow parents to educate their kids about drinking alcohol as they grow from teens to young adults. In my opinion, that would go a long way toward encouraging responsible behavior and reducing drunk driving and binge drinking. Though to be honest, by the time that message might have been relevant to me as a child, I was done reading Archie Comics. I’m not sure what their main demographic is, but my guess would be pre-teens, around 8-11 or 12.

Craft Beer Grows 11% In Volume

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The Brewers Association just announced the statistics of craft beer sales in 2010, and the news is great. Craft beer saw volume growth of 11% over 2009, and in terms of dollars the increase was 12%, equating to roughly an additional one million barrels, or 14 million cases.

From the press release:

“Beer lovers increased their appreciation for American craft brewers and their beers in 2010,” said Paul Gatza, director, Brewers Association. “Craft brewers’ stories resonate with Americans who are choosing small, independent companies making delicious beers in more than 100 different styles.”

The Association also reported a growth in the number of U.S. breweries, with eight percent more breweries than the previous year. In 2010, there were 1,759 operating breweries. Craft brewers produced 9,951,956 barrels, up from an adjusted3 8,934,446 barrels in 2009.

“Prohibition caused a dramatic decline in the number of breweries in the United States, but the number of breweries is now at an all-time high,” added Gatza. “With well over 100 new brewery openings in 2010, plus 618 breweries in planning stages, all signs point to continued growth for the industry.”

Total Breweries

In 2010, craft brewers represented 4.9 percent of volume and 7.6 percent of retail dollars of the total U.S. beer category. The Brewers Association estimates the actual dollar sales figure from craft brewers in 2010 was $7.6 billion, up from $7 billion in 2009.

Overall, the U.S. beer industry represented an estimated retail dollar value of $101 billion. U.S. beer sales were down approximately one percent, or 2 million barrels, in 2010 compared to being down 2.2 percent in 2009. Total beer industry barrels dropped to 203.6 million, down from 205.7 million barrels in 2009. Imports were up five percent in 2010, compared to being down 9.8 percent in 2009. (Note: the Brewers Association does not count flavored malt beverages as beer.)

Gatza added, “We also found that three percent of craft brewer barrels, by volume, are distributed in cans, confirming a growing trend.”

It’s always great to have confirmed what we see in the street, that most, if not all, craft brewers are doing well. Another great year of craft beer growth. Congratulations to everybody.

Triple Rock’s 25th Anniversary

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Monday marked the 25th anniversary of Triple Rock Brewery & Alehouse’s opening in 1986. Triple Rock was the third brewpub to open in California, the fifth in the U.S., and the only one still owned and operated by the original founders — John and Reid Martin. I stopped by this afternoon to join in the celebration and partake of the special beers that brewmaster Rodger Davis whipped up for the occasion.

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The Triple Rock truck was running again and parked out front.

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Davis re-created Batch No. 1, the first beer Triple Rock brewed.

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The first beer John and Reid brewed was a pale ale created on Christmas Day in 1985. Rodger altered the recipe slightly to account for different yeast and varied the amount of hops.

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Several former Triple Rock brewers stopped by for the party, including Shaun O’Sullivan, co-founder of 21st Amendment, whose first brewing job was at Triple Rock.

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AT 5:00 p.m., co-founder John Martin tapped a firkin of the Batch No. 1 that current brewmaster Rodger Davis dry-hopped and aged for a beer that was both historical and modern.

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Founders, and original brewers, John and Reid Martin, with their latest brewer, Rodger Davis, toasted the first 25 years with a beer bridging the past, the present and their future.

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John Martin with Shaun O’Sullivan, Reid Martin, Homer Smith (owner of the local homebrew shop, Oak Barrel, where the Martins bought all the ingredients for their first batch in 1985), and longtime beer salesman Ed Chainey.

Congratulations to John and Reid Martin. I hope to try the next anniversary beer 25 years from now.

Session Five-0 Ponders The Philosophy Of “How Do They Make Me Buy Their Beer?”

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Our 50th Session — The Big Five-0 — is a monumental one and our host, Alan from A Good Beer Blog, is tackling it with appropriate seriousness, especially considering it’s on April Fool’s Day. He’s chosen as his topic How Do They Make Me Buy Their Beer? Alan elaborates:

What makes you buy someone’s beer? Elemental. Multi-faceted. Maybe even interesting.

  • Buying beer. I mean takeaway. From the shelf to you glass. What rules are dumb? Who gives the best service? What does good service mean to you? Please avoid “my favorite bar references” however wonderful. I am not talking about taverns as the third space. Unless you really really need to and contextualize it into the moment of transaction at the bar. If you can crystallize that moment of “yes” when the bartender is, in fact, tender go for it.
  • What doesn’t work? What fad or ad turned you off what had previously been turned on about some beer’s appeal? When does a beer jump the shark? When does a beer store fail or soar? When does a brewery lose your pennies or earn your dimes?
  • Go micro rather than macro. You may want to explore when you got tired of “extreme” or “lite” or “Belgian-style” but think about it in terms of your relationship with one brewery rather than some sort of internet wave of slag … like that ever happens.
  • What is the most you paid for a great beer? More importantly – because this is not about being negative – what is the least? I don’t mean a gift. What compels you you to say this is the quality price ratio (“QPR”) that works best for you? When does a beer scream “you would have paid 27% more for me but you didn’t need to!”?

So pull out your wallet. Stare at it. What beer makes you open it up and throw down your hard-earned cash? Then tell the world what it is for the next Session on Friday, April 1. No fooling.

Fairfax Brewfest This Weekend

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This Saturday in the city of Fairfax, in Marin County, the 16th annual Fairfax Brewfest will take place from 1:00-5:00 p.m. Along with festival sponsor Iron Springs Pub & Brewery, at least 17 breweries will be pouring their beer. Tickets are $25 in advance, $30 at the door, for unlimited samples and full details, along with how to buy advance tickets online, can be found at the festival website. See you there.

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The Chemistry Of Beer

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I got an interesting press release this morning from the American Chemistry Society (ACS) touting the Chemistry of Beer, as they put it, “just in time for Saint Patrick’s Day. Today they “released a new video, The Chemistry of Beer, which focuses on the science involved in producing the world’s third most popular beverage (after water and tea).”

From the press release:

Shot in high-definition format, the video features Sam Adams Senior Brewing Manager Grant Wood, who holds a degree in Food Science & Technology from Texas A&M University. It explains the process of turning barley, hops, water and yeast into a lager or ale. Among the insights:

  1. Yeast is the most important ingredient because it determines if the brew is ale or lager.
  2. Water is crucial, too, and it must be free of organic substances and “off” flavors.
  3. Key flavor compounds are packed into those little flower clusters called hops, which add flavor and a pleasant bitterness to the beer.

Produced by the ACS Office of Public Affairs, the video includes plenty of “did-you-know” fodder for those St. Patrick’s Day conversations over a pint. Did you know, for instance, that the fermentation process in which yeast produce alcohol also produces almost 600 flavor compounds? The Chemistry of Beer ends with a message that all drinkers should take to heart, St. Patrick’s Day and every day: Drink responsibly!

The whole video was shot at Boston Beer’s pilot brewery in their Jamaica Plain location in Boston. Grant, who you probably know if you’ve visited the brewery or have been in the industry for any length of time, gives a polished tour and explanation of the brewing process. It’s probably nothing you haven’t seen before, but it’s relatively comprehensive and does a good job of explaining brewing in a nutshell, with an emphasis on the chemistry, of course.