Greg Hall doesn't keep us waiting

Check out this interview with Goose Island brewmaster (and hellaciously good guy) Greg Hall. There's a man who's grabbing the brass ring, and good for him. Greg delivered a ton of great beer, put up with a lot of crap, and kept smiling. I'll miss talking to him for work; hope to keep talking to him for pleasure.

Thanks to STAG regular Steven Herberger for the link!

Goose Island to be Acquired by AB InBev

Just got this. Goose Island has agreed to be acquired by AB InBev. Important points: John Hall stays on as CEO (no word of Greg Hall's status - update: it's been announced that Greg will be stepping down as brewmaster); this is a 100% acquisition; the two Goose Island brewpubs are NOT part of the deal; ABIB will invest in a brewery expansion immediately; and wholesalers will not be affected. Read on:

GOOSE ISLAND SELECTS CURRENT PARTNER ANHEUSER-BUSCH FOR GROWTH STRATEGY

Chicago Small Brewer, Craft Brewers Alliance to Sell Stakes in Goose Island;

Expansion of Chicago Brewery Planned

CHICAGO (March 28, 2011) – 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. 

Wholesalers currently servicing retailers with Goose Island beers will continue to do so with no disruption in service.

“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.” 

Anheuser-Busch’s purchase of FSB is subject to customary closing conditions, including obtaining required regulatory approvals.  The transaction is expected to close in the second quarter of 2011.

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.

So...if you're a diehard craft beer type, and you love Goose Island...do you keep drinking it? Or do you immediately stop, and start bitching about how it doesn't taste the same anymore? Or do you just...wait and see and try to stay impartial?

Pabst Deal Closes

News comes Friday that the Pabst deal is final. Connecticut investor C. Dean Metropoulos bought the company from the Kalmanovitz Charitable Foundation for an undisclosed price; the erstwhile chairman of Pabst, Lou Giraudo, would only say that the speculated price of about $250 million was incorrect. Metropoulos made no comment.  A Reuters story said that "The foundation listed its total assets as $62.3 million in its tax return for the year ending June 30, 2008." The story also noted that

"Sales of Pabst Blue Ribbon in food, drug and other retail outlets rose 33 percent to about $172.7 million in the 52 weeks ending April 18, The Wall Street Journal has reported, citing data from market research firm SymphonyIRI Group." 

So that's done. Now we'll see what the Pabst drinkers -- the reputed hipsters and bike messengers -- are going to do. I suspect they're going to keep drinking Pabst.

Hey, Mister Kiely: which of your kids do you like best? Huh? Which one?

Interesting piece in Crain's Chicago Business this week on the struggle MillerCoors boss Leo Kiely is facing. There are a number of components, but the key factor, the big Wahooni, is this: how do you grow both Miller Lite and Coors Light, two beers that are obviously in direct competition with each other...and with the best-selling beer in America, Bud Light. How do you put together a business plan that keeps Coors Light chugging along (the brand grew 6% in the last 12 months, very impressive indeed) and also lights a fire of focus under the flailing Miller Lite (down 4% over the same period)?

This is exactly what I was talking about almost two years ago when I called an impending MillerCoors merger a shotgun wedding. This was a merger that simply had to take place; when you're at this level in a highly consolidated business -- as mainstream brewing certainly is -- the only way to survive is to be the biggest sumbitch in the jungle. SABMiller and Molson Coors weren't big enough alone -- amazing, but true -- to take on A-B, let alone the ABIB juggernaut that was starting to look ever more real at that point. They had to merge to have a hope of winning.

And that's the sad thing about what this business has become. It's not enough to do well any more. It's about the guys at the top winning. It's about the shareholders getting a big pay-out (and taking the money and buying more stocks in hope of hitting the jackpot again when some company gets gutted). The best thing I see about the current deep recession is that these damnable masters of the universe are no longer celebrities. I hope it lasts, and we make much of people who create something other than marketing campaigns and buy-out deals.

Gruppo Campari acquires Wild Turkey

I have to admit that I was surprised by the news today that Gruppo Campari, the makers of, well...Campari, have acquired Wild Turkey from Pernod Ricard for $575 million in cash. Not surprised that Wild Turkey was sold; there have been rumors about that. Pernod borrowed a lot to buy Absolut last year, and they're looking for cash to retire the debt; selling Wild Turkey was a quick way to do that, and analysts feel this was a good price.

This is Campari's biggest acquisition so far; they also recently bought SKYY vodka (2002), Cabo Wabo Tequila (the Sammy Hagar booze), and X-Rated vodka (both 2007), and picked up Glen Grant (a single malt that's big in the Italian market) as a side deal in the Allied Domecq dismemberment. Wild Turkey's definitely a jewel among those brands: it's growing, it has a strong foothold and excellent reputation in the U.S., Australia, and Japan, and, of course, it comes with Jimmy Russell.

This could be a smart move for Campari. Wild Turkey is a premium brand, in the honest sense of the word (maybe they'll enhance that premium aspect by dropping Wild Turkey 80 proof?). It has great name recognition; so does Campari, but people actually drink Wild Turkey.

What's this mean for Wild Turkey drinkers? Probably nothing at all, thankfully. It's all going to be back-office stuff: new wholesaler, new sales rep at most, and maybe not even that. Did anyone in the eastern U.S. even notice when Corona changed importers a few years ago? Nope. Wild Turkey has a strong enough pull from consumers that orders should keep up even if Campari bobbles things a bit (which they probably won't; they must have some kind of sales force, because there's a bottle of Campari on every damned back bar and I never see anyone actually drinking it).

I'll admit, this makes me a little sad. Wild Turkey was one of Pernod Ricard's earliest acquisitions, and they've been with the company for almost thirty years. Jimmy Russell will tell you that Wild Turkey is just a little family-owned company...only the family lives in Paris. I don't know if the Campari family still controls most of Gruppo Campari, but Milan (not Torino, as I originally misstated) just doesn't have the same pizzazz as Paris.