A-B InBev Proves a Good Home for Goose Island as Big Brewer Helps Cult Craft Rise
When Anheuser-Busch InBev acquired Goose Island in 2011, some beer enthusiasts seethed, fearing that the small, respected Chicago craft brewer would suffer under its corporate overlords. "My heart just sank," tweeted one fan. "Chicago is just a little bit less Chicago today," tweeted another, according to a roundup of immediate reaction by Chicago magazine.
Put the doubters seem to have been proved wrong. As the three-year anniversary of the $38.8 million deal approaches in March, Goose Island has managed to hold on to its street cred. It's stayed true to its roots by avoiding many tactics employed by A-B InBev, such as copy testing, consumer testing or market research. Instead, the brand has relied on grassroots marketing as it puts new beers in the market based on the judgment and creativity of its employees and head brewer. But in January, Goose will begin getting more aggressive when it launches its first ad campaign under its first ad agency, Chicago-based VSA Partners.
For the campaign -- aimed partly at gaining awareness in new markets -- Goose Island is being careful to maintain its image as a gritty, urban brewer known for an innovative pipeline of specialty beers, such as Sofie, a Belgian-style farmhouse ale, and Lolita, aged with raspberries in wine barrels. The push includes print, out-of home and a digital video that mixes city images with shots of beer ingredients, such as a bowl of cherries, brewery scenes and warehouses stocked with bourbon and wine barrels where some of the beers are aged. The tagline is "To What's Next." The media buy includes Travel and Leisure, Rolling Stone and specialty-beer publications such as All About Beer.
How much of a cult following does Goose Island have? On Black Friday, hundreds of people stood in long lines in cities such as Austin and New York to snare Bourbon County Stout, a rare barrel-aged beer that Goose Island has released intermittently for brief periods since 1992. Maintaining such excitement among hardcore fans could be tough, especially in a craft-beer world where enthusiasts are often skeptical of big-brewer motives.
"We're at a time where almost any craft acquisition will be met with some knee-jerk backlash among certain circles," said Jenn Litz, who covers the industry for Craft Business Daily. But brands like Bourbon County "have really helped Goose Island hold on to cachet, and they're really trying to leverage that."
At the same time, Goose Island's largest brands, which include 312 Urban Wheat Ale and Honker's Ale, continue to fly off the shelves after achieving national distribution this year, thanks to A-B InBev's wholesaler network. Sales for all Goose brands jumped 62% in the 52 weeks ending Nov. 3 to $31.7 million, according to IRI, which does not include bar and restaurant sales.
That's a pittance of the $14.7 billion in total sales made by A-B InBev in the period. But with the craft industry thriving, Goose Island is eyeing even more growth with the new campaign.
The effort wasn't subject to the rigorous copy-testing standards that A-B InBev is known for, which is one example of how Goose execs say they are operating independently from their parent. "We get very, very, very little direction from Anheuser-Busch," said CEO Andy Goeler, who worked in various roles at A-B for 34 years before taking the Goose assignment in 2012.
Moving to the next level
He replaced retiring founder John Hall, who began making beer at the Goose Island Brewpub on Chicago's North Side in 1988 when the craft-beer industry was in its infancy. The name refers to a small artificial island nearby in the Chicago River. The pub is still open, but Goose today is headquartered on Chicago's West Side in a nondescript building and small brewery nestled among industrial warehouses.
"We bought Goose Island for what Goose Island was: authentic, very credible," Mr. Goeler said. "The intent was not to change any of that but to continue to evolve it and let it move to the next level."
Goose still faces some criticism within the beer world, however, including for its move to brew 312 (which is a Chicago area code) at an A-B InBev brewery in Baldwinsville, N.Y. "I still often hear from hardcore beer nerds who are upset about the sale of Goose Island and won't consider buying its brands," said Andy Crouch, a columnist for BeerAdvocate magazine. But he said even beer geeks agree that Goose's line of barrel-aged beers "remain among the best produced in this country."
Mr. Goeler said the shift of Goose's largest beers to A-B InBev breweries has freed space for more experimentation at the Chicago brewery. Goose also gets access to an A-B InBev-owned hop farm in Idaho, where the craft brewer controls its own plot. That's the birthplace of a hop in one of the brewer's newest brands, a winter seasonal called Ten Hills Pale Ale.
Like all Goose brands, the brew was crafted with no consumer testing or market research, relying on the creativity of Brewmaster Brett Porter. That's in contrast to A-B InBev, which typically takes years to develop big new brands. "We are not sitting here analyzing what is the potential interest," said Goose Island VP-Marketing Mark Hegedus. "We are just saying, 'Let's make this great beer, let's make it the best we can, and let's tell the story behind why.'"