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On Golden Bud: InBev Beer Giant Purchases Golden Road Brewing

The announcement in late September that Anheuser-Busch InBev purchased L.A.'s Golden Road Brewing, followed by the news InBev finally figured out terms to acquire SABMiller (for $106 billion -- it's the fifth largest corporate takeover bid ever) left me thinking of the once over-heated satire, now sad prophecy, Network. For this isn't a tale about the future of craft beer. It's about, as Ned Beatty's character Arthur Jensen puts it in a fervid speech, "One holistic system of systems, one vast interwoven...multinational dominion of dollars."

 

 

Taste or not, craft or not (and has any term been sold to us more than "craft" in the last decade?), both parties have put up a good front about the sale. While Golden Road didn't respond to KCET's request for an interview, there is a video both parties released, featuring Andy Goeler, CEO of Craft, AB, chatting with Meg Gill, CEO and co-founder of Golden Road.

It's a terrifically staged study in contrasts, with Goeler a middle-aged, plaid-bedecked man of the people, and Gill the proudly 30-year-old blonde with the legs from L.A. (it is L.A., after all, that InBev is buying).

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The video starts with Goeler trying to be upfront about things, as multinationals usually are. He points out when InBev swallowed the golden Goose Island, the beloved craft brewery from Chicago: "People were unsure and unclear of our true intentions."

You don't even see Gill through this part, although she's just off camera -- it's almost surprising when she shows up, just as the sale was to almost everyone. But Goeler points out Goose Island is still fine beer (though not everyone in brewing land thinks so), and AB has learned a lot from them, including that it's good to buy more craft breweries -- Blue Point in Long Island, Elysian in Seattle, 10 Barrel in Bend, Oregon.

The funny thing is Goeler leaves out some earlier InBev portfolio acquisitions. The most famous, or some say infamous, is Redhook in Seattle, one of the original craft brewers back in the craft brew dark ages of the early 1990s. Once affordable and tasty, Redhook has both lost market share and grown less distinctive (anyone remember its Double Black Stout with coffee?) as it became one more part of the Craft Brew Alliance under the InBev umbrella with Omission, Kona, and Widmer.

National distribution is what these deals are about for the smaller players in the equation. We've got such a weird alcohol distribution system set up in this country, thanks to Prohibition, Puritanism, and Profit, that it's hard to sell your product, no matter how good it is, if there's alcohol in it. Unless you're an InBev, the world's largest brewer, or a SABMiller, the world's second largest brewer, navigating the three-tiered distribution system can be too costly and inefficient for the little guys.

Both Goeler and Gill then ask the other, so why the heck are you doing this? Then Goeler stresses a three-point plan for InBev. Note, it's never called InBev in the video, just the more user friendly, drinkable Anheuser Busch. "Number one it starts with the beer and you guys have an awesome portfolio of beers that we love. Number two, what you guys have built as a company, your culture, your passion for beer. The third thing is what you've done here in L.A., you've pioneered the craft beer market in L.A., you're the fastest growing craft in L.A. -- the opportunities moving forward are exciting."

Of course Golden Road couldn't say no -- and in fact, reached out to AB directly. More money, more distribution -- what else could a brewery want? The spot in the Grand Central Market is still a go, as is the new brewery to be built in Anaheim. After all, Golden Road is the largest brewer in Los Angeles County so it's not too surprising they drew this attention. And they're not alone in getting snapped up, as craft beer, while still small, is a growth industry. One article cites that "Total beer sales were up only 0.5% in 2014, with all the gains effectively coming from craft beers."

So InBev isn't alone in eyeing the sudsy and lucrative Southern California craft beer market (there's a rumor that all of San Diego might be bought by a mega-corporation). Recently SABMiller took over most of San Diego's Saint Archer, and up north, Heineken purchased a 50% stake in Lagunitas Brewing Co.

Here's hoping all the good beer getting bought up doesn't get buried by the system. And that the system doesn't try so hard to market everyone every way and stand for nothing.

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