Wednesday, 30 March 2011
AB-Inbev *hearts* Goose Island. So now what do we do?
I know I'm probably the last beer blogger on earth to weigh in with a comment on the news that AB-Inbev has bought Goose Island, but comment I must - even if I repeat what everyone else has said.
At the outset it looks tricky: I've criticised AB-Inbev more than any other macro, not out of any prejudice, but simply in response to their actions. And Goose Island is one of my favourite brewers in the world, with their IPA my standard issue secret weapon for converting people who 'don't like' beer.
AB-Inbev do not like beer. Most people I have met personally who work for the corporation don't even drink it. I have argued with AB-Inbev marketers, trying to convince them that, if you want to make money from selling beer, you must recognise that it is not like other grocery products - that it has more romance, charm and mystery around it, that people take a greater degree of ownership in beer brands than they do in other product sectors. And those marketers have disagreed with me, stating categorically that they feel beer is no different from any other product and can be standardised and treated exactly the same. Stuart Macfarlane, CEO of AB-Inbev UK, has said that he works not for a brewer, but for an FMCG marketing company that happens to sell beer. It's a company that has an industry-wide reputation for being a ruthless cost cutter - after all, their relentless expansion has to be paid for somehow. The tragedy of Stella Artois is that it was once a special beer, and the last ten years have seen every single ounce of value stripped from that beer. AB-Inbev is also a company where, if you are an employee and you are seen drinking a beer from a different brewer - even on your own time, off the clock, when the company is not paying you - this can be, in the words of more than one former employee, "a career ending move." (Apart from anything else that completely transgresses employer-employee relationships, making working for AB-Inbev a form of indentured slavery, and I look forward to the day when some ex-employee sues their asses over this disgraceful policy. And if what I am saying is not true, I invite AB-Inbev to sue me for libel. I'm not short on potential defence witnesses.)
So no - I don't think it's good news that a mean, ruthless, cost focussed, heartless, acquisitive, jealous company run by people who don't even like beer has bought one of the best craft brewers in the world.
But this is not because "they're a macro" - it's because of the specific organisational policies and practices I've outlined. Interbrew in the old days were not like this. Not all AB-Inbev's competitors are like this. My point is, it's not about how big they are, it's about what they do - it's about their record.
I can only hope that people on Twitter who talked about their Goose Island beer 'turning from a micro to a macro' when they were half way down a pint were joking. As many people have pointed out, AB have long had a stake in Goose Island - they've just upped the size of that stake into a controlling interest. If your problem with this is the mere association, the smell of a macro brewer, then - actually, you know what? You just stick with that. I'm not going to try to convince you otherwise. But I don't think you'll end up a happier drinker because of it. The Goose Island products that are currently sitting in your beer fridge, in your local craft beer pub, your supermarket or beer shop, are no different than they were a week ago.
This takeover occurred, weirdly, just two days after I finished a piece for Brewers Guardian on innovation and new product development. In that piece, I argued that the brand management culture of big companies is entirely different from the entrepreneurial spirit of smaller companies. One can manage and grow brands on a global scale, but is incapable of nurturing genuinely new ideas to market. The other is the opposite. If a big company really wants something fresh and new, the best way for them to get it is to buy it, once it's reached a point where it has proven to be a profitable and sustainable niche product that is ready to make the transition to something bigger. And if a small company wants to grow beyond that point, the best thing they can do is to sell to a company that has processes, channels and people in place who know how to do that.
I think it's a perfectly valid argument for a craft beer fan to say, "Yeah, but we don't want them to grow! We want them to stay small and crafty." It's your opinion - beers are built by fans and fans have a say, and God knows, I'm all for supporting small companies because they are not multinationals. But remember, when a big company buys a small company in this way, the small company also wants to sell. If the people who built this thing from scratch, who devoted 20 years of their lives to it, decide this is the next step in the evolution of the business, you have to respect that.
So where does all that theory leave this particular acquisition? I'm in total agreement with Nigel Stevenson of James Clay, the importers of Goose Island into the UK. He says,
"Anheuser-Busch has acquired an American brewer of high acclaim, we thereby feel they recognise the potential within this market and appreciate that genuine craft beer brands cannot be 'invented' by a large Multinational organisation.
"At James Clay we are immensely proud to have been involved in Goose Island's growth and development over the years. We urge Anheuser-Busch to respect the culture of experimentation and innovation that has made Goose Island the world renowned brewer it is today. James Clay will continue to work with Goose Island in the UK but will monitor the impact of Anheuser-Busch closely.”
To illustrate what this could mean: I'm currently consulting with another global macro brewer who is doing a deal not dissimilar to this (though on nothing like the same scale). It's not something I will cover as a writer because that would be a conflict of interest, and I can't say who it is until it goes public later in the year. But the macro in question is saying to itself internally, "We can't manage brands like this the way we normally do - if we apply our standard processes to the craft market, we'll only fuck it up." The deal therefore gives the craft beer access to far greater distribution channels and new investment in the brewery, and gives the macro a slice of the profit plus a little kudos, and the chance to see how craft beer works. But the macro has committed to not trying to interfere with how the micro makes its beer.
Similar deals occurred in Canada a few years ago, when Molson Coors acquired craft brewers Creemore Springs and Granville Island. These beers now have far greater distribution, but so far their craft brewing values and ways of doing things have not been compromised by pressure from the macro.
Will AB-Inbev follow a similarly enlightened process? Who knows? It would be nice if they told us - the only comment so far, unless I've missed something, is from the Goose Island guys. On the one hand, their record makes me very pessimistic. On the other, despite recent evidence to the contrary, they can't actually be total morons. If they wanted to make Craft Beer Lite, they could do so without forking out $39m for Goose Island. One can only hope they've bought it for the right reasons - that they recognise the value of craft beer, concede that they cannot do it themselves, and have a deal in place that will allow the craft brewer to continue doing that they do best, but on a larger scale.
I wouldn't bet money on this, but I have my fingers crossed. Either way, I'll be waiting until they completely screw it up before I start attacking them for having done so.