Monday, April 4, 2011

More on Goose Island

Over the weekend there was an Op-Ed in the Chicago Tribune by John Hall, the CEO of Goose Island explaining the sale.

Apropos of what I said on Friday, here is Hall explaining AB's rationale:

But Anheuser-Busch didn't buy us to change us. It bought us because we can do things its people can't. They're megabig, so it's harder to get people who sell huge brands to really push new products. As in a lot of industries, it's the small guys who are really creative, because they have to be creative. That's what's made us what we are.


My executive team, including Greg, who's my son and our brewmaster, all agreed that Anheuser-Busch would be far and away the best alternative for us if it would agree to certain conditions. We didn't work 23 years to build what we have just to throw it away.

Goose Island had to remain an independent company, with me in charge, with brewing centered here in Chicago and with sales and marketing reporting up through me. And I would report to just one person in St. Louis.

In other words, we wanted to continue to do what we've done. And they agreed to that right away.

Also in the Trib is an article on the many other craft beer options local to Chicago reinforcing the notion that craft beer is not in peril. The article focuses on Two Brothers and Three Floyds, too bad they chose to ignore the Four Horsemen...


Dann Cutter said...

Reading between the lines, it looks like a good exit strategy to me.

Often forgotten in the aspect of creating a large business is that at the end of the day, people would rather do their own thing than work. John Hall may view this as how he wants to end his days (I could only hope to be so lucky), but it's clear his son Greg was looking for a midlife change.

John wants Goose to grow, but clearly Greg was a driving factor in the agreement.

The real question is not 'did they sell out', but what happens when breweries' founders are done. Clearly Greg didn't found Goose, but his hand has been instrumental in its style in recent years; AB didn't buy him, they bought him out - likely to become a competitor.

But this is OK. In fact, we should expect more of it. Until the Asian market really opens up - and it will - the big brewers have a highly competitive saturated US market in which growth is likely to come from small craft products which become popular. The return on investment is good but more risky; but at the same time, the dollar amounts are very small comparatively. And it retains for us a niche product which can remain somewhat innovative.

Goose will get bigger, but I think their days of driving brands are done with Greg leaving. That is okay, they can still shoot from the hip now and then, and maybe get lucky; but they'll have a solid and expanded base in which to generate a nice return and less stress for all involved. At the end of the day, John can retire when it is no longer fun, and Greg likely walked off with a nice chunk of that buyout to start something new.

The interesting piece of this should be a discussion of how we expect others to exit as well? Anyone who starts a business and doesn't know how they'll leave is foolish... 'cause we all leave in the end. And we are hitting the time when some of these folks have been around a while.

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