This week Lagunitas Brewing Co. became the latest in a [growing?] line of craft breweries to cut a deal with a big company in an effort to get a little more liquid – don’t be quick to forget that the number of breweries in the US is approaching 4,000. Brewers large and small have been cashing out for the past couple of years, and that’s not likely to change any time soon. There is little rumbling among the craft beer socialsphere when stalwarts like Oskar Blues or even Uinta take private equity money, but when breweries like Boulevard, Firestone Walker, and now, Lagunitas, sell out it seems like everyone gags just a little. Sure, there are legitimate reasons why we/they probably should. But for all the urgency to recreate the shower scene from Ace Ventura 1, there are some good reasons to keep calm and see that it’s not such a big deal.
Heineken, Duvel and others are having something of a turf war in Europe. Apparently, they’ve enlisted American Craft Beer to fight on the front lines. Shouldn’t we be somewhat troubled by that, you ask. No, it’s fantastic. Stone Brewing Co., famous for cutting out the middle man, went rogue (no pun) recently and just opened a place in Berlin. BrewDog did the opposite but made its U.K. bones making American style ales. Meanwhile, Duvel, which brewed just over a quarter million barrels last year (under six million keeps a brewery American craft beer) is mostly worried about meeting demand that doesn’t seem, yet, to have a limit. Wile Heineken is mainly trying not to get gobbled up by Miller.
Expect more deals like this as these massive European companies (and their SAB-style competition) try to proliferate good damn American beer for the rest of the world’s thirsty. Keeping the beer good is going to be an important part of the equation. So, in the short term, breweries who are bought for distribution or even market presence are probably going to remain untouched.
It’s fun to kick around SAB’s – my coastal Maryland shorthand for “Big Beer” – but if we’re being honest, they’re not out to rid the world of working palates – at least not in the current economy. They’re just dealing with the fact that craft breweries exist and for some un-deduced-in-a-marketing-conference-room reason are what the spending, drinking public wants to fill their fridges with. The macros want to sell to people who care what they drink just as well as they want to keep supplying the people who don’t with their legacy brands. Of course, the self-proclaimed beer nerd is probably concerned that too many people still don’t care what they drink.
Stroh’s was one of dozens of breweries that was hurt or killed by the race to the bottom that was the light beer craze of the 1970s and 1980s. With the improbable exception of Miller 64, the industry found the bottom of the taste barrel nearly half-a-century ago. These people know what they’re doing, because #beentherdonethat. They’re just doing something that makes a lot of us nervous.
I recently wrote about Jim Lutz, who has been through a sellout death and a sellout save at Wild Goose and Fordham Old Dominion (FDO), respectively. Fordham needed cash for expansion (to buy Old Dominion) and InBev wanted to open a craft revenue stream. Lutz has since taken the company in a different direction, focusing on local rather than national distribution, but the point is, they still make really good beer. They make good beer, are profitable and they have a plan to stay that way – and it doesn’t include switching out barley for corn syrup. It’s important for us to remember that quality and profit are the brewer’s responsibility. If a corporate beer gets shitty, the brewer has at least a hand in it.
There are some people who hate the notion of kicking any money at all into corporate coffers. I dig it – I mostly subscribe to that. But as the American craft beer market gets tighter – as it does with each passing day – revenue streams will probably have to be diversified and sacrifices will probably have to be made – at least for the breweries that value growth. The phenomenon of selling out may end up being common place, but something wonderful will most definitely happen: local beer will keep getting better.
I believe that very few breweries make excellent beer before they’ve been open for around 18 months or so. Brewery growth has slowed but not stopped. Most likely, over the next few years, as the larger breweries shake out their finances, smaller breweries will open, close and then stabilize. But if you really want to save craft beer (writ large) from the clutches of SABs, spend a month or two not drinking anything that wasn’t made within 50 miles of your home. Hell, even if you live in Petaluma that’s easy to do…