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Anheuser Busch InBev : Why Goose Island is shut out of Great American Beer Fest after 29 years

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10/05/2017 | 08:08pm CEST

Oct. 05--More than 800 breweries from coast to coast will pour beer for tens of thousands of people at the Great American Beer Festival beginning Thursday, but at least one iconic name will be missing.

Goose Island Beer Co.

For the first time in Goose Island's 29-year history, Chicago's oldest brewery will not participate in the beer industry's premier event, which draws an estimated 60,000 people to a sprawling downtown Denver convention center.

Goose Island's exclusion is not for a lack of the brewery's desire to be there. It's the result of a complicated relationship between craft beer and Big Beer that's only growing more complicated.

The Brewers Association, which operates GABF and is the trade organization for 4,000 breweries that meet its definition of "craft" -- small, traditional and independent -- says the issue comes down to two intersecting factors: a wildly growing beer industry and the consolidation sparked by Goose Island's sale to Anheuser-Busch InBev in 2011.

After two years of discussion, the Brewers Association has begun limiting the number of breweries that a single beer company can have on the floor at GABF. Left on the outside are Goose Island and a handful of other breweries that have been bought by the world's largest beer companies.

Arguably, no brewery's presence will be missed more than Goose Island, which typically brings several of its renowned bourbon barrel-aged Bourbon County beers and is rewarded with long lines of festgoers, no matter its ownership.

"Absolutely, it's a disappointment," said Todd Ahsmann, who was named Goose Island's president and general manager last week, and who previously spent 10 years with the company. "It's been a long tradition for Goose, but hopefully we get in next year."

The Brewers Association says limiting the number of breweries affiliated with Big Beer comes down to simple numbers. When GABF was launched, in 1982, the nation was home to fewer than 100 breweries. Now there are more than 6,000, with hundreds more in the planning stages.

Bob Pease, CEO of the Brewers Association, said more than 100 breweries were left out of GABF in 2015 because demand was so high. Discussions began that led to the new policy of one brewery allowed per company. Any brewery interested in taking part was entered into a lottery. Those that didn't make it were wait-listed.

In 2016, Anheuser-Busch InBev had nine booths at GABF -- one for the St. Louis-based parent company that makes Bud and Bud Light, plus others for each of the craft breweries it had acquired during the previous five years: Goose Island, Elysian, Blue Point, Four Peaks, Devils Backbone, 10 Barrel, Golden Road and Breckenridge. Two other breweries that Anheuser-Busch InBev subsequently bought -- Karbach and Wicked Weed -- also had booths.

This year Anheuser-Busch InBev again tried to get all its breweries onto the floor at GABF, but only Blue Point, of Patchogue, N.Y., which was bought in 2014, was initially picked. Every other Anheuser-Busch InBev brewery was then removed from consideration, said Nancy Johnson, the Brewers Association's event director.

When additional slots opened after some breweries decided not to attend, the Brewers Association conducted a second lottery and drew Four Peaks, of Tempe, Ariz., which Anheuser-Busch InBev bought in 2015.

Chicago-based MillerCoors faced a similar situation. Initially, only Coors was picked, but the company subsequently got two of its craft operations in: AC Golden and Hop Valley breweries.

Johnson said GABF, with more space this year, was able to accommodate every brewery wanting to participate in GABF, with the exception of the Anheuser-Busch InBev and MillerCoors breweries that weren't admitted. (She noted that Anheuser-Busch InBev also could have selected the two breweries it wanted to place at the festival; they didn't need to be picked at random.)

Ahsmann was running Blue Point when he got the news that that brewery could take part in the festival. He immediately began trading messages with leadership from other Anheuser-Busch InBev-owned breweries.

"The texts started going around," he said. "'Are you in?' 'Nope.' 'Are you in?' 'Nope.' 'Are you in?' 'Nope.'"

Initially, no one at Anheuser-Busch InBev realized there were restrictions on its involvement, Ahsmann said.

MillerCoors was similarly unaware at first, said Lisa Zimmer, that company's beer culture and community manager. When the nation's second-largest beer company initially only landed only one of the 10 breweries it submitted for GABF, she took to Twitter to post some salty thoughts.

Zimmer said she was "pretty frustrated" initially but calmed down after the Brewers Association reached out to explain the new protocol. Like Anheuser-Busch InBev, MillerCoors had ample representation at GABF in 2016, which included booths for Miller, Coors, Blue Moon, Leinenkugel, plus craft acquisitions Terrapin, St. Archer, Hop Valley and Revolver.

"I know who their constituents are and who we are, but I always liked GABF because it's like, 'We're all here together,'" Zimmer said. "We're here next to these other booths, and it's good. It felt like a level playing field."

The Brewers Association also sees the decay of a level playing field, though in the opposite direction. The increasing incursion by large corporate beer companies into craft has led the Brewers Association to prohibit those companies from sponsoring the festival. That means Big Beer can't get the valuable "end cap" booth -- the best and largest real estate on the convention center floor. Having an end cap also affords the opportunity to pour 10 beers instead of five.

The Brewers Association has long criticized big beer companies for a lack of transparency about the fact that once-independently owned breweries are now part of global conglomerates. In recent months, the organization has introduced a seal to identify breweries that meet its definition of craft.

"We decided we only want craft breweries to have that end-cap space," Pease said. "GABF is a marquee showcase event, and we did not want other companies to use a Brewers Association vehicle to further confuse the beer drinker as to what is really a small and independent craft brewery."

Which raises questions: Why does GABF continue to invite Big Beer to the event, and why does Big Beer continue to participate?

Pease noted that Anheuser-Busch (before it was acquired by Brazilian-Belgian conglomerate InBev), Miller and Coors (before those companies merged) have all been a part of GABF since the early days.

"There's a desire to be inclusive when we can -- within reason," Pease said. "Ultimately, the Great American Beer Festival is a Brewers Association property, and the Brewers Association's purpose is to promote and protect small and independent breweries."

As for Big Beer, Zimmer said, GABF still offers plenty of rewards for MillerCoors, both in terms of pouring on the festival floor and taking part in its high-profile competition.

"The competition piece, where it's blind and there's no sticker that says, 'This is not craft beer,' that's really important, and it's important for our brewers to be rewarded," she said. "I love that it happens in this blind-tasting atmosphere, where we often do well. I'm not sure we're ready to give that up."

That said, she added that the industry "does feel weirdly divisive sometimes."

"If I were a small brewer, I might be shaking my fist at the big guys, but I'm on the other side of it, and I work with great, smart people, and one of the advantages we have is time -- we've been doing this for 150 years," she said. "Sometimes, I throw my hands up, and I'm like, 'It's beer -- it's supposed to be fun!'"

[email protected]

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(c)2017 the Chicago Tribune

Visit the Chicago Tribune at www.chicagotribune.com

Distributed by Tribune Content Agency, LLC.

© Tribune Content Agency, source Regional News

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Financials ($)
Sales 2018 56 243 M
EBIT 2018 18 896 M
Net income 2018 9 158 M
Debt 2018 99 881 M
Yield 2018 3,84%
P/E ratio 2018 22,76
P/E ratio 2019 19,30
EV / Sales 2018 4,90x
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Capitalization 176 B
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