The last time I took a trip, that one to Denver for GABF, Miller and Coors merged their domestic operations. Now I’m in Munich, Germany on my last day of a long beer trip and Widmer Brothers and Redhook announce, they too, will be merging. I have got to stop leaving the house otherwise who knows what might happen next.
Maybe it’s because the news reports I read were from Seattle newspapers, but I was surprised that Redhook is the buyer because Widmer has been the much stronger performer ever since Anheuser-Busch purchased minority stakes in both breweries in the late 1990s. Shortly thereafter, Redhook was called “Budhook” derisively by many craft beer aficionados and their reputation, as well as their business, did appear to suffer. Certainly Redhook was not as active in the community as they had been before. Widmer Brothers, on the other hand, seemed to maintain their reputation and sales continued to grow. But perhaps more importantly, the Widmers continued to be active in the brewing community and were out in the public, effectively managing to keep the perception intact that they are a quality-minded small craft brewery.
Redhook reportedly will buy stock in Widmer valued at about $50 million. The new company’s name, with no touch of irony, will be called the “Craft Brewers Alliance.” Both Widmer and Redhook will continue to brew beer as before at their respective breweries.
Their combined output will be approximately 600,000 barrels, enough to catapult them into the top ten, probably around eighth or ninth. The pair separately was number 11 and 12 last year. Kurt Widmer will become the chairman of the Craft Brewers Alliance, which also has a stake in Chicago’s Goose Island Brewing and a distribution agreement with Hawaii’s Kona Brewing. Paul Shipman, who helped found Redhook, will be given the title chairman emeritus, but effectively will be retiring from the day to day operations of the business.
I don’t know that we’ll ever be able to do more than speculate, but my guess is that the arrangement was struck this way because Redhook has the New England plant. They could do more with that plant for Widmer than Widmer could do for Redhook. Plus, Kurt got to be the big Chinook, so the oversight will go to the man with the better big-picture vision.