Anheuser-Busch Bought Golden Road Brewery. Could That Be Bad for Craft Beer?
Et tu, Golden Road? First, Chicago craft brewery Goose Island was sold to Anheuser-Busch in 2011. Then, two weeks ago, within 48 hours, Heineken purchased half of Northern California's Lagunitas Brewing and San Diego's Saint Archer got swallowed by MillerCoors. But Los Angeles is a less established beer city than those other places, and it appeared that our younger breweries might be immune to corporate takeovers.
Well, it turns out that Los Angeles is not immune. Yesterday's news that Anheuser-Busch will acquire Golden Road Brewing appeared to come as a shock to L.A.'s craft beer community, which has grown quietly, organically and without much national attention over the last 5½ years. But is it really all that surprising? L.A. is craft beer's biggest sleeping giant, with a regional population over 10 million and, according to a study released on Monday, $91 million in annual local craft beer sales. Of course Anheuser-Busch would want to own a slice of that market.
The macro breweries have been struggling to recoup lost market share as a result of the popularity of craft beer, and Golden Road is L.A.'s largest craft brewery, with retail sales at more than 4,000 locations, a strong core brand of approachable beers and killer branding that stretches from packaging design to swag. Golden Road might not be L.A.'s best brewery, but it helped grow the fanbase for craft beer in L.A. at a far faster pace than any of the smaller breweries could.
So what does the Golden Road acquisition mean for L.A.? To the optimist, the buyout means that L.A. beer should be taken more seriously. It proves that L.A. is a player in the national beer market. And with the spotlight temporarily on Golden Road — and with Golden Road’s soon-to-be-expanded distribution — hometown favorites like Smog City Brewing, Monkish, Highland Park and Beachwood BBQ & Brewing likely will get more attention. After all, Beachwood BBQ has been twice named one of the best brewpubs in the country by the Brewers Association.
It's been business as usual so far at all of Anheuser-Busch’s acquisitions (Blue Point Brewing, 10 Barrel Brewing and Elysian Brewing), so it probably will remain business as usual at Golden Road, too. Brewing and canning will still happen at its facility off the 5 Freeway. And you'll still be able to get specialty releases from brewmasters Jesse Houck and Victor Novak at the Pub at Golden Road and its affiliated bars, Mohawk Bend and Tony's Darts Away.
Golden Road's brewery near Atwater Village
"For us, it's business as usual but amplified," Golden Road co-owner Meg Gill said in a video interview with Andy Goeler, Anheuser-Busch's CEO of craft, that explained the deal. "We're continuing with our plans for Grand Central Market and Anaheim. We're going to be able to innovate on the style side, and we're going to take those beers and our current portfolio and put them into [A-B's] great portfolio with the best distribution network in the world. I don't see how it gets any better."
As a result of the acquisition, Golden Road will now have access to A-B's more cost-efficient packaging and larger distribution channels, which will help reduce costs every step of the way. But what is good for Golden Road might not be good for craft beer.
To a pessimist, this deal blurs the line between the very different philosophies espoused by craft and non-craft breweries. It used to be that craft beer was the punk rock of booze, and it was easy to distinguish between the fizzy yellow lagers made by "the man" and the hand-crafted IPAs and saisons made by your local brewer. But consolidation makes it harder to draw that distinction. And newer craft beer drinkers often don’t care either way — they're just looking for something affordable that isn't Bud Light. The breweries who choose to sell to these conglomerates risk losing fans, many of whom have supported the small brewer from the beginning. It's the same reason people stop liking their favorite indie band just because it gets signed to a major label. Let the arguments of "selling out" and compromising integrity commence.
Bitching and moaning aside, here’s why this is bad: If the few large global beer brands get enough control of smaller craft breweries, it could take us right back to the dark ages, with a few tiny local craft breweries eking out an existence — and everything else operating under the umbrella of the big guys. With A-B distributing craft brands across the country en masse at a lower price than the small producers can afford to charge, there’s the potential for monopolies at the tap and shelf level. What will be the distribution options for smaller breweries looking to expand on their own? If their beers make it into a retail space at all, will customers pay a higher price, even for a premium product?
"We want to be with the winning horse," Gill said in the video.
But in the end, this deal could make Golden Road stronger at the expense of other local breweries getting weaker.
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