Rereading the Goose Island Sale

Much ink has been spilled over what it means that Goose Island has sold out to Bud. Is it good for the city of Chicago? Is it good for craft beer? Many liken this to the transformation of Marshall Fields to Macy's, and if that is any indication, what we can expect to see is a watered-down version of a once-loved Chicago icon.

In an article defending the actions of Goose Island, the owner of the Hop Leaf, Michael Roper, likens this to a win-win situation: Bud gets a craft beer and Goose Island gets money. For some reason, this means that craft beer drinkers have "won" because Bud acknowledges it can't brew a good beer and Goose Island wins because it gets money to get a new brewery. So, Bud wins and Goose Island wins. Does that mean the people of Chicago win? Hardly.

Bud buying Goose Island is not about craft beer victories or Bud hanging its head in defeat acknowledging that it can't brew beer. It's about money and market share. Like any good megacorporation that wants to cloak its true intentions, it hides behind a front that claims to be "local" or "organic." In the green movement, this is know as greenwashing. Cutesy Burt's Bees is owned by Clorox. Tom's of Maine sold out to Colgate, which tests on animals. People don't know that some of their favorite "ma and pa" brands are funneling money to huge corporations that care little about the environment or their communities.

To see a great example of this, we have to look no further than Bud. When InBev took over Bud (and it was allowed for pure profit), people in St. Louis started to look at more community-oriented beers. (You can read an article here.) The people in St. Louis know firsthand how Bud has turned its back on the community, which is even more impressive considering how depressed the economy St. Louis really is. So, while Bud gets to rake in the cash, the pride of St. Louis is gone. If Bud can do it to its own hometown, is there any indication it won't do it to Chicago?

Perhaps because he is a businessman, Roper looks at everything through the prism of capitalism. It seems that all business activity is good business activity, regardless of what it means to the people that those businesses serve. He seems to assert that if Macy's didn't take over Marshall Field's that it would still be a vacant building. Hardly. It's the same line we've been told by Walmart, Target and Bud: only large business corporations can salvage any part of any city. Without their help, everything will decay. This seems to negate the point of community-driven business, which is one of the appealing parts of craft beer.

Craft beer is a way for communities to support themselves and to take part in the creating of their own identity. As everything does become Walmarts and Targets and Bud, we take pride in those small differences that make us unique. Portland has its beers. So does San Diego. So does Chicago, but now one less. Will buying a brewery suddenly make Bud changes its ways? No. It is far too large and powerful to really care about what one small segment, even if it is growing, does. Profit does not lie in craft beer. My guess is that Bud will pump money into Goose Islands less exciting beers, especially 312, which shows up at every summer festival. They can reduce the cost and jack up the price. It will be slightly more costly than a Bud but double or triple the price because Bud thinks that by labeling something "craft" will put it at a premium. Roper is deluding himself if he thinks this is some altruistic part on Bud. Sure, they might let someone at Goose Island toy around, but if lines need to be cut, look for that first unprofitable area to go.

For a better idea of what $30+ million means to Bud: in 2010 Bud spent $1.2 billion to be the sponsor of the NFL. That's enough to buy around 30 Goose Islands, and that's just a marketing expense for Bud. This doesn't include individual team deals or the Super Bowl. The Goose Island acquisition is akin to Google or Microsoft buying a company, toying with it and then shutting it down.

Where does this leave Chicago? With one less craft brewer and a bit more of its identity gone. Perhaps this is part of being a global city: it's common in London and New York, but not so in Chicago, which has a history of independence. Lately, we've seen the Sears Tower change names, Marshall Fields disappear, Carsons on State turning into a Target and numerous small community stores turn into chains. More and more companies want to get into Chicago, and with that a bit of the identity of the city dies. Why would anyone even travel when all cities are beginning to look alike? Are we too far off from a Goose Island chain opening in Las Vegas or Orlando?

Only time will tell if Goose Island suffers or changes. Regardless of what Mr. Hall thinks he might have arranged, a corporation can and will change what it wants to. I work in a large Fortune 500 company that buys out smaller companies. It does change. The culture changes. The people change. The decisions move to corporate. It's how the business world works. At first, there is a lot of hand shaking and getting to know everybody and promises that things will stay the same. As people move in and out of positions, slowly the company comes into the fold, losing the identity that once made it valuable. It just becomes part of the company. Soon, Goose Island will just become part of Bud and it's ever-expanding empire of cheap beer and high margins.