Why Anheuser-Busch bought Goose Island beer

March 29, 2011

Some fans of craft beers are foaming over the news that industry giant Anheuser-Busch plans to buy 23 year-old Chicago-based, brewing powerhouse Goose Island Beer Co.  The $38.8 million deal was announced Monday, but is set to close in June.

On the surface, the two brewers couldn't be more different:  One is known for mass-marketed and mass appeal brands like Budweiser and Busch; the other is known for microbrews and specialty ales like 312 and Matilda.

So why would Anheuser-Busch gobble up Goose Island?  Two words: craft brews.

“These critically acclaimed beers are the hometown pride of Chicagoans,” said Dave Peacock, president of the St. Louis-based Anheuser-Busch in a statement. “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.”

As overall U.S. beer sales have fallen in recent years, the fast-growing craft brew market is expected to make up 11 percent of total beer consumption this year. “We just need to be more competitive there,” Peacock said. Led by its signature brew, Honkers Ale, last year sales of Goose Island grew 24 percent, selling $4.2 million in beer up from $3.4 million in 2004. Goose Island sold approximately 127,000 barrels of beer in 2010.

“Demand for our beers has grown beyond our capacity to serve our wholesale partners, retailers, and beer lovers,” said Goose Island CEO John Hall in a statement. “This agreement helps us achieve our goals with an ideal partner who helped fuel our growth, appreciates our products and supports their success.” 

So what's next for Goose Island beer?

Goose Island’s beer will continue to be brewed in Chicago, and A-B plans to invest $1.3 million by this summer to boost production capacity by 10 percent, said Peacock. The deal does not include the acquisition of two Goose Island brewpubs, which will remain open, and no disruption to supply will occur in current markets.

Hall, who will stay on as CEO, added that the “new structure will preserve the qualities that make Goose Island’s beers unique, strictly maintaining our recipes and brewing processes.” Effective May 1st, Brewmaster Greg Hall will be step down, and will be replaced by Brett Porter, Head Brewer at Deschutes Brewery in Bend, Oregon where his beers have earned more than 150 awards.

As one of the Midwest’s first craft breweries creating acclaimed ales including 312 Urban Wheat Ale, India Pale Ale, Matilda, Pere Jacques and Sofie, as well as a wide variety of seasonal, draft-only and barrel-aged releases including Bourbon County Brand Stout - the original bourbon barrel-aged beer – followers who fear for the future of Goose Island Beer should rest easy.

"The beers will not change," said Goose Island Brand Ambassador, Ken Hunnemeder on Twitter. Calling the deal, “inevitable," he added, “it will allow us to make great beers that got bumped from the lineup." 

Even more beer? Cheers to that.