Boulevard's brewery in Kansas City, via Mark Shaiken
Big news hit a few weeks ago when it was announced that Boulevard Brewing Company, out of Kansas City, Misouri, was sold to Duvel Moortgag, the Belgian brewery that brews Duvel, for an undisclosed amount that could exceed $100 million. This is huge news: Boulevard was the 12th largest craft brewery in the country in 2012. This is on the heels of Goose Island's sale to Anheuser-Busch InBev in 2011. What does this mean for the future? In short, do not be surprised if more craft breweries are sold. Why? Timing and economics. Much has been written about the rise of craft beer, but it can be easy to forget that this is largely a recent phenomenon. A quick history lesson, although I'm leaving much out: many consider Anchor Steam to be the first craft brewery after it's purchase by Fritz Maytag in 1965, yet the industry took much time to take off after that point. One of the main factors was the repeal of the ban on homebrewing in 1979. I can't think of the last time that I met or heard of a craft brewer who didn't dabble, often majorly, in homebrewing first. With this, the first main wave of craft breweries really took place in the 1980s and 90s. Here in the Midwest, here are some large examples: Bells (1985), Lakefront (1987), Great Lakes (1988), New Glarus (1993), Founders (1996), 3 Floyds (1996), and 2 Brothers (1996). Goose Island and Boulevard (along with several others such as the aforementioned Great Lakes, plus Deschutes, North Coast, and Rogue) also started in 1988, making that year the craft brewery industry's 1983 NFL Draft. Why is timing important? Well, let's say you start a business. Generally speaking, you start it in your 20s, 30s, or maybe even 40s. What happens after 20 to 30 years go by? Most people generally want to retire. Therefore, the first wave of craft breweries are going to have owners getting out of the business world. And, by the way, I think this should be celebrated, as building a business is one of the most pristine examples of living the American dream. Check out the heartfelt letter from John McDonald, Boulevard's founder. (Careful note: I have no idea of the plans for any of the other breweries mentioned in this post and by no means suggest anything specific outside of Goose and Boulevard). When you retire, what do you do with your business? Well, you could sell it to your family, most likely your children. (You could gift it as well, but that would assume you made enough money during life of the business, and the brewing business is notoriously tough and capital intensive, even for the most successful breweries.) But this of course presents problems. One, your children probably don't have the money to outright buy you out, meaning they will either have to find ways to finance the buyout or you will have to give them a loan to do so. This makes retirement tougher to afford. Outside of the mechanics of selling the business, there are more personal issues associated with family businesses and money, which can be difficult and have destroyed breweries before. And this is assuming that there is someone willing to take over the business - perhaps there are no heirs or heirs don't want anything to do with it. Goose Island beers, now owned by Anheuser-Busch Inbev, via Ant217 So, if family is out, what next? Outside money. This could be anyone, including random investors, but more likely, other businesses within the same industry would be most likely to purchase due to their expertise in running a similar business and interest in the industry. Most craft brewers are busy filling up their own kegs and other associated difficulties of running small to midsize businesses, so larger brewers are going to be more likely to buy. And they have deeper pockets too, making it easier for them to finance and give a safer and likely larger buyout for the original owner(s). Top it off with market conditions: the beer industry has been relatively flat overall in the U.S. (losing market share to wine and spirits) for decades and that the only part of that segment that is growing is the rapidly expanding craft beer market. While it is certainly possible that random investors and smaller breweries could purchase craft breweries, I'd put my money on the bigger boys.
Finally, I just want to stress that this is not necessarily a bad thing. (Here's a good article defending the latest Boulevard sale). It depends on how the purchaser treats the purchase. I'm not a fan of huge corporations in any industry putting profits ahead of what's right - the environment, the location in which its located, its employees, and most importantly, the quality (in this case, beer) of what is being produced. And the big boys in the beer industry haven't exactly been the nicest kids on the block. But, if purchasers of existing craft breweries can honor the factors above and continue to brew great beer, I won't hate.
It does lose the romanticism of buying beer from the guy down the street, but these small craft breweries are proliferating, not declining, at least at the moment, and I'll continue to support the small and/or new guys. I won't begrudge someone from reaping the fruits of his hard earned labor building a business over the long haul. Finally, it's worth mentioning that the big boys do employee tens of thousands of Americans, even if they aren't American owned. Now, if a purchaser attempts the typical corporate bullshit - eliminate jobs/pay, cheapen the product, and do other bad stuff to maximize profits, then I'll be the first to say I'm out, and they can go to hell. One thing is for sure: this isn't the the last time that a craft brewery will be sold. It's just another reason why the beer industry is a fascinating one to watch. And as long as the craft beer industry keeps growing, one that the industry can handle.
Here's a little writeup of the infographic: "More and more people are drinking craft beer both locally and around the world as well. Light mass produced beers still dominate the market, however craft beer is gaining more market share each day. Consumers are more interested in trying different styles of beers that actually taste good. Craft brewers are popping up all around and this growth is evident in Chicago as well. Students and professors in the hospitality management program at the Chicago based school Kendall College both agreed that craft beer was something they were both interested in learning more about. One trend that contributed to this was the fact that during the past 13 years, food and beverage jobs jumped just over 25%. This is especially impressive when you compared to the total US employment growth in that period equaled 4%. The growth in the craft beer industry is even more impressive. This curiosity into the growth of the craft beer industry resulted in this craft beer infographic. Some interesting takeaways from the infographic are as follows:
· The percentage of consumers that enjoy the taste of craft beer is 36 percent.
· Most consumers (45 percent) would be interested in trying more styles and brands of craft beer if they were more educated about them.
· Younger generations are more interested in trying craft beer than older generations. Only 32 percent of baby boomers enjoy the taste of craft beer as opposed to 43 percent of millenials (ages 25-34).
· One thing both students and professors agreed upon was that craft beer and food go together extremely well. Different styles of beer pair better with certain foods than others. If you enjoy drinking a lighter beer like a wheat beer, try pairing it with something light like sushi. If you prefer darker beer styles like stouts, try pairing it with chocolate based deserts like cake or brownies.
· 103,585 jobs in the U.S alone are provided by the craft beer industry.
· Total sales of craft beer amounted to 12 billion in 2012. This number is projected to hit nearly 40 billion by 2017."I'm not surprised by the growth - this has been widely reported. But it's fun to see actual numbers, including 100,000 jobs, associated with this fact. Also, I think that it interesting that younger people prefer more craft beer, showing that the trend has more room to run. Cheers, Bruce
Enjoying some new Atlas beer on our beer tour!
Hey everyone! I hope that you are enjoying this awesome fall weather! I had originally planned to post a comprehensive update on Chicagoland craft breweries, brewery-by-brewery, like I've done in the past. And then I got started. HOLY. FREAKING. HOPS. We are in the midst of a brewery boom in the city, the likes of which have probably never been seen before, not even in the 1800s with those German immigrants! Instead, I was able to find three very articles that sum everything up quite nicely - might as well leave it to the pros:
- The first is a travel article from USA Today outlining visiting 29 breweries around the city.
- The next is an incredibly detailed article from DNA info regarding Chicago's neighborhood beer scene. Amongst its many gems is this incredible fact: "Illinois is home to more than 80 craft breweries, up from 67 in 2012, according to the Brewers Association...the association counts some 30 craft breweries in "planning" within the city limits and 62 more statewide. Nationally, breweries are opening at a rate of more than one a day." WOW.
- Finally, an article in Time Out Chicago highlighting new breweries opening in the area this fall and winter.
3 Floyd's Dark Lord, rated the #2 beer in the world, via TheMrHofstad
There are a lot of "best beer" lists, and, considering the tens of thousands of beers in the world, it's subjective as hell. But one list recently came out that I believe has more credibility than most. Stanford University computer science post-doc Julian McAuley and assistant professor Jure Leskovec released a paper earlier this year regarding beer ratings. In the paper, they re-ranked beers on ratebeer.com based on the expertise of the reviewers, figuring that they would be better qualified. An article on Business Insider discloses the top 20 beers from this list and, while the list appears US-biased, Midwest beers do awesome! Here's the ranking of the Midwest beers that made the list - for full commentary and list, definitely check out the article here. Eight out twenty - not bad! There are a surprising number of stouts on the list, so I'm not quite sure what this means...perhaps we brew them well because of our cold weather? But I know I'm thirsty. Again, for full commentary and list, click here. Cheers, Bruce
One of the several breweries opening now
Hello party people! We've got a ton of new beer scene info for you today, so let's get to it: Via cpence, Half Acre's tap room. A new space will serve food.
- Food at Half Acre. While it opened an excellent tap room last year, it does not serve food, but that's about to change. Half Acre has bought the building south of it and will turn it into a BYOB restaurant where you can take their beer, according to Andy Ambrosius at Patch.
My hands are tired from typing! Our beer scene ain't slowing down. Time for a beer. Cheers, Bruce
- 5 Rabbit makes beer for Chipotle. Via Chicagogrid.com, 5 Rabbit brewed a beer specifically for this year's Cultivate Fest, sponsored by Chipotle. The beer is called Cultivate Farmhouse Ale, made with multifloral honey from Morelos, Mexico. Now, you can find the remainder only in local Chipotles - for $4 a bottle, not a bad deal.
Revolution Brewing's Oktoberfest, via revbrew.com
As we move from summer to fall, seasonal beers are taking the limelight. First off, we have our Oktoberfest beers. We recently placed Revolution's Oktoberfest on our Lakeview & Lincoln Park Beer Tour and Great Lakes' Oktoberfest on our Bucktown & Wicker Park Beer Tour. What are oktoberfest-style beers? They are Marzens and the story behind them is pretty cool. Basically, in Germany, it was either ill advised or even illegal to brew beer during the summer months. The warm weather often lead to nasty stuff like bacterial infections. Also, brewing could increase the risk of fire in those wooden German towns. So, these beers were brewed in March and were typically maltier with a higher alcohol content so they could ferment and hold up until the fall. These beers will typically be malty/sweet and will contain a decently high alcohol content (awww yeah...fist pump). I find them quite drinkable and enjoyable, although I typically only have a couple or so in a session. A truly delicious way to enter the fall months. And I've started to see pumpkin beers on shelves, too, so be ready for them. Although I think it's a bit early for this style...as with everything, it seems like we get calendar creep with seasonal beers...they are delicious if you like pumpkin-spiced things (move over, pumpkin-spiced lates). Basically, brewers add seasoning to the beers, such as cinnamon, pumpkin pie spice, and brown sugar, and some brewers will use actual pumpkin during the process (I've seen homebrewers actually ferment their pumpkin beers inside huge pumpkins). I think they are better when the weather turns cooler, but be ready to see them more and more on the shelves. I wouldn't be surprised if one of them turns up on our beer tours at some point. Many local Chicago brewers will be brewing both of those styles, so keep your eyes peeled! Two great seasonal styles for the fall...giddy up. Cheers, Bruce
Look for Destihl around Chicago, via Pete
Summer has made a triumphant return! As you cool down with a cold beer, here's the latest beer news in Chicago: Olivia Wilde stars in Drinking Buddies, via Michael Evanet Archives
- Tickets to FoBAB, or The Festival of Barrel Aged Beer, went on sale at noon today(and are probably sold out - but you can check here). It is scheduled on Saturday, November 16th and is THE most anticipated beer festival in Chicago.
- Via the Tribune's Josh Noel, small yet acclaimed brewery Destihl from Normal, Illinois (in the middle of the state) is now distributing in Chicago. They are known in particular for their sour beers. And this expansion may not be the end: "In addition to Chicago, Potts plans to distribute in the rest of Illinois, Michigan and much of Indiana before the end of the year. He also said a third brewpub is likely at some point — maybe in Chicago — but likely not soon."
- Via the Tribune's Gregory Pratt, a new brewery, 350 brewing, will hopefully open in Tinley Park in December of this year.
- ABC's Steve Dolinsky profiles new brewpub Dryhop in the Lakeview neighborhood.
- You can read about the movie Drinking Buddies here and here. We profiled it in the past. I've seen it and definitely recommend. The cool thing is how authentic it appears, and that was by design: "If that wasn’t authentic enough, the film was also entirely improvised. The cast knew the general story arc, but didn’t have set lines to deliver." Also Anna Kendrick was actually drunk in one of the scenes.
Revolution helped make Logan Square cool. Via Steven Vance
Beer does a lot for us: it lifts our spirits, helps us have great times, and even can keep us healthy. But beyond that, the craft beer movement is even helping to revive urban neighborhoods. A recent article by Tali Arbel in the Associated Press discusses this trend:"But beer drinkers weren't the only beneficiaries. The arrival of a craft brewery was also often one of the first signs that a neighborhood was changing. From New England to the West Coast, new businesses bubbled up around breweries, drawing young people and creating a vibrant community where families could plant roots and small businesses could thrive."It's happened here in Chicago, too. Neighborhoods that are rapidly gentrifying, like Logan Square (with breweries such as Revolution, Ale Syndicate, Arcade) and Pilsen (with future breweries Lagunitas and Moody Tongue) are getting an influx of our craft breweries. While gentrification certainly has it's downfalls, such as pushing out minorities, the economic revivals can have huge positive benefits. The article further states that these breweries can soon become victims of their own success, as the economic gains sparked in part by them price them out over time. Regarding Brooklyn's Brooklyn Brewery: "Rising prices might force Brooklyn Brewery to exit the trendy scene it jump-started...Once an iron foundry, the building, built in 1896, has been bought by developers who Hindy says won't renew the lease. He suspects that they want to convert the space into apartments." I doubt that Chicago breweries will have to worry about this for some time, as we thankfully don't have the same pressures and rapidly increasing land values of San Francisco or New York City. We got plenty of space for brewers across our city! Cheers, Bruce
In the very sad news category, actor and former Chicago cop Dennis Farina recently passed away last month. He was a Chicagoan through and through, having grown up in the Old Town neighborhood and spending 18 years as a Chicago policeman before becoming an actor, most famously known for his work on Law & Order. Via Deadspin, he also starred in incredible beer commercials for Old Style Lite in the early 1990s. Check them out:
I do chuckle at the NYC and LA hatred. "Surfs up, dudes!"
Dennis Farina was one of a kind and a true Chicagoan and will be missed. Our condolences to his friends and family.
Via get directly down
I've been on a bit of a summer hiatus drinking too many beers outside, but with the return of some fall-like weather, it's time to get back to beerness (that's just turrible, I know, I know). Here's a quick update of some Chicago beer news from around town:
- The Tribune's Josh Noel reports that Jared Rouben's new brewery will be called Moody Tongue Brewing Company, located in the Pilsen neighborhood, and that it will focus on "culinary brewing". What is that you ask? I think Mr. Noel sums it up well: "Moody Tongue beer will be familiar to fans of Rouben's work at Goose. Think bubblegum plum Belgian blonde. Gingerbread chocolate milk stout. Brandied black cherry Belgian dubbel. Nectarine India pale ale. Watermelon wit. You get the idea." The brewery plans to be producing beer by the end of this year and have a taproom open in 2014. Awww yeah.
- Here's a great article by Lorene Yue in Crain's regarding Tony McGee, the owner of Lagunitas, set to be Chicago's biggest brewery when it opens this fall. My favorite part of the article: One last reason for choosing the Windy City: “It's f----n' Chicago,” says Mr. Magee, who left the city a quarter-century ago after what he says was a “pile of bad decisions,” which included playing in a reggae band and a monthlong acid trip (emphasis mine). I think we're going to like this guy.