My Beer Sold Out (Or When Small Brewers Go Big Time)

Oct 3, 2016

It’s an increasingly familiar story…small craft brewery draws fans, expands, and then…gets scooped up by “Big Beer”.

Recently, corporate labels including MillerCoors and Anheuser-Busch have acquired independent breweries, including Bend’s 10 Barrel Brewing and Eugene’s Hop Valley.

As KLCC’s Brian Bull reports, response is as complex and varied as an Imperial IPA.

A clear summer night finds a crowd at the Steel Pail Growler Station in Eugene. Chicago brewery Goose Island is here for its “migration week”, an event that lets people sample beer and meet staffers, including…

“Patrick Reisch, and I’m the lead cellarman at Goose Island.” 

Reisch has been with the company seven years.  So he experienced Goose Island’s $39-million acquisition by Anheuser-Busch in 2011.

“I think we were probably one of the first if not the first of the craft breweries getting bought out and everything.  A lot of people, they were upset at first, and then after the dust settled a bit, realized pretty much we’re just still gonna be making the same beer that we’d always been making.” 

Anheuser-Busch took over production of Goose Island’s large volume brands outside of Chicago. This includes Honkers Ale, 312, and IPA.  The trick being taking a beer formerly made in 50-barrel batches, and ratcheting that up to 1,000-barrel batches. 

Patron Alyssa Powell says both the acquisition and upscaling of Goose Island’s beers are working.

Powell: “I am drinking the IPA. (Bull: And how’s it faring by you?) Oh,it’s great! It’s kind of a positive because they get more access to different distributors, they can have more visibility in retail space, and just get their product out there to more customers.”  

A few tables away, Tyler McNeil tackles a flight of Goose Island brews.

“I’ve enjoyed most of it.  I mean some if it’s hit and miss.  But as long as they’re keeping unique and doing their own thing…as long as the major label they signed with let them keep doing that, I don’t see a big problem with it at all.” 

The Chicago Tribune recently rated six Goose Island beers mass-produced by Anheuser-Busch.  It rated four as either “top tier” or “not bad”.  The last two fell short of previous incarnations. 

McNeil doesn’t knock Goose Island, but admits some bitterness at Seattle-based Elysian, which Anheuser-Busch acquired in January.

"Not only did the price go up, but the texture, taste…it just tastes normal.  It wasn’t very unique.  I like unique.” 

Colby Phillips owns Eugene’s Tap and Growler, which boasts 45 beer taps, many local.  He remembers the brouhaha when MillerCoors bought Hop Valley this year.  Yet, Phillips says sometimes news of an indie brewer getting bought pleases patrons. 

“There’s a few that comes in and feel like, ‘Hey, you know…if that’s what they were intending to do, then they were able to achieve their goals, and not usually a bad thing.” 

Most, says Phillips, are neutral or indifferent. 

Credit Flickr.com's Northwest Beer Guide

“They’re like, ’I care but it’s not something that is first and foremost in my life right now.  Even in my beer drinking life.  Why, I’m just not going to buy 10 Barrel, I will buy this Oakshire beer that’s locally owned.  And drink that, enjoy it.”  

And then there are the vocal few who vow never to buy that beer again.  They say they won’t support any brewery under a corporate umbrella, that sacrifices small-batch artisanship for big-batch blandness.

At Hop Valley Brewing, a bartender in tie-dye pours IPAs, while customers relax in booths and patio tables.  Hop Valley co-founder Chuck Hare says their acquisition by MillerCoors wasn’t a ready decision.

“We were contacted by several other companies prior to conversations with Miller-Coors," says Hare. "Immediately it was off the table, and that was something none of us were interested in doing it at all.  As we began to move into other states and grow, we started to kinda realize “Hey, this isn’t as easy as we think it is.  Here in Oregon, the further you get away from home it’s difficult to sell beer, it’s very difficult to do distribution deals.” 

Hare says it’s easier getting business calls returned since signing on with MillerCoors…and Hop Valley’s distribution, production, and credibility are all up.  He says he’s just finished up contracts for hops through 2023, and his company is seeing some of their best sales to date…up nearly 30 percent from this time last year.

Hops on a pleasant August afternoon.
Credit Brian Bull

“People concerned about giving their money to a big brewery…I get it and I understand it," says Hare.

"But I sometimes eat Lochmead ice cream and sometimes I eat Haagen Dazs.  I hope people do drink our beer. I want everybody to drink it.  But there’s a ton of great beer not only here in Oregon and not only here in the Northwest, but in the U.S.” 

It’s also worth noting that big beer isn’t out to snatch up all microbreweries, either.  Most acquisitions are geographically plotted to let "Big Beer" cast the widest regional net for drinkers…with national craft beer sales up nearly 13 percent, it’s a game corporate labels want to get in on.  

The U.S. Justice Department has put regulations on Anheuser-Busch that’ll restrict further acquisitions after its $107-billion merger with SABMiller.  

Not that other companies haven’t been busy.  

“Most of the large players in the U.S. beer market have made acquisitions," says Bart Watson, Chief Economist for the Brewers Association

Watson adds there are 4,656 small and independent craft breweries in the U.S.  So while media coverage of acquisitions has rattled the brewing world…

 “….the vast majority of small breweries remain independent.  So while we have seen a trend in acquisitions, it’s worth remembering that 99-percent of breweries have not been acquired.  So there’s still probably lots of local independent breweries in your local market.” 

And many indie breweries plan to stay that way.  Eugene’s Ninkasi brewing company and Oakshire have pledged to keep locally owned, for example.  Both turned 10 this year. 

Still, it hurts many craft beer buffs to see their prized brew sell out.  Even the piniest IPA may not take the edge off of that loss.

(FADE UP HANK WILLIAM’S “THERE’S A TEAR IN MY BEER…” FOR  MUSIC TAIL)

For KLCC News, I’m Brian Bull.