Lagunitas Buys Stake In Three Smaller Breweries

Interesting timing: http://www.beeradvocate.com/mag/14011/brian-hunt-of-moonlight-brewing-company/

 

Excited to see what they produce in Charleston as it mentions they won't brew their regular lineup but instead exclusive small batch beers. I'm just not a fan of Lagunitas regular ho-hum lineup and would much rather have something different if/when I decide to visit.

 

I like hearing they are pushing non profit work.

 

Interesting that he (Tony Magee) compares this to ABs purchase of Goose Island!

 

Interesting move. I wouldn't expect any change to those breweries for some time. In the article, Lagunitas' Magee references Anhueser-Busch's takeover of Goose Island and the 2 years A-B sat on them "just trying to learn the business....and I think that paid dividends for AB." Magee also talks about making those spaces available for rent to nonprofits.
Hmmmm.

 

Another thing I am wondering is if bigger breweries will partner with locals for draft only locations, brewing only specialty beers and none of the staples. I always like refreshing brews. I can see it now...
Iso: Lagunitas Charleston hops FT: Lagunitas Chicago hops

 

I'm sure Hunt sees this as growth and not being trampled by the herd. Time will tell. Magee's thoughts, per the Tribune article, point to growth for both Lagunitas and Moonlight.

 

Smart. Instead of invading local markets with your brand, you partner with them to retain their local perception. Help your competitors expand by investing in them.

 

It's really all word play.

Stake this. Joint that.

It's looking like the bigger breweries are finding a need to diversify and be ready for it all. Why not be a part of all the craft beer growth in 3,4, or a dozen other phases. Sooner or later, everything will be owned by a select few with no one really knowing who owns what.

Profits still seem to want to flow pretty much into one set of main hands in all of these ventures. Sure you're helping the little guy. But help is also what banks do with business loans. So cut the cute crap. Magee wants a piece of everything. And why not if you're able to. Ab inbev shouldn't get the hate either.

 

Interesting move, to say the least. I always liked the iconoclastic nature of Brian Hunt's Moonlight, and the Press Democrat article gives me the impression this is a deal between good friends, only formalized. (Also, I knew Moonlight was pretty much a "one man" operation but I had no idea how literal that was.)

 

"
Moonlight Brewing opened in Sonoma County in 1992. “This has always been a haven for nonconformity,” Hunt argues. And Moonlight’s very existence was a mark of rebellion against corporate brewing. “I was incapable of working for the large breweries, due to my personality or theirs,” he says. “[Opening Moonlight] wasn’t some investment that could come or go, nor was it just money; this was an expression of myself, and feeding my family. And I hope that difference in motivation is something you can taste in the beer. Of course this is just something I say to sound like a non-comformist. All of these ideals go out the window the minute someone comes up with enough money. I'm really glad to be working for Heineken now.”
I just wanted to fix that for him.

 

Oh, boy. Reading some of the responses here. I sense the pitchforks of an angry mob.

 

How does this pass muster with three tier laws? Lagunitas is a manufacturer in California, and is now going to hold a retail license (brewpub) as well. Not supposed to happen. I'm sure that Heineken/Lagunitas is aware of this and has a legal work-around. Budweiser doing the same in Denver with 10 Barrel, but not sure if that will be brewpub or just taproom. Either way, this is what is called a "tied house", the biggest impediment to competition in the pre-prohibition era. Control the taps, lock everyone else out. This was the main thesis of Chris Black's rant against Oskar Blues- huge producer setting up shop in your backyard to take your business after you spent years supporting them. There is nothing friendly about this, the "we support local" tag line is total b.s., they are doing it to gain market share and squeeze the little guy.

 

Difficult from the outside to assign motives. We can only observe behavior.

I find the notion that a "tied house" is inherently bad to be at least exaggerated. It does not seem to be an issue in the hundreds of chain restaurants out there. Ever tried to order a Big Mac at a Burger King? Or a Bloomin' Onion at an Applebee's? Or, for that matter, ordering either at your local Ma and Pa cafe? Do chains tend to make life difficult for the Ma and Pa restaurants? Sure, they do. Why is beer treated differently in that "chain" competition must be made illegal?

NB: I'm not suggesting a change in the law; only stating I don't understand why it is evil for beer but OK for burgers. (And, yeah, I know... alcohol is heavily regulated; fine. But why do we have this particular regulation?)

 

Just as there is no universal Three Tier law in the US - every state has a different version of them - each state has changed them in the past 35 or so years to allow brewpubs. In most every state a brewpub license is a brewing (manufacturing) and an on-premise retail license (some states requiring a separate on-premise license) as well. As such, most of the Federal Tied House prohibitions are no longer in effect for licensed brewpubs. Pretty sure it is allowed due to this clause in the FAA Act:

 

Independence Brewing Co.'s announcement http://independencebrewing.com/news...dence-brewing-co-announces-unique-partnership. I like a few of this brewery's offerings, but Lagunitas could probably give them some advice on upping their IPA/APA game

 

The cyncism, people...smh....

I haven't read the other articles except the Press Democrat, but I've been drinking Death & Taxes and other Moonlight beers for years (since I live near where its made). I don't even see a mention of ABI from Tony. Maybe in the other articles, but any cynical "conquest" statements regarding Moonlight just don't make sense unless people think Brian is going to die in a few years and Tony completely blowup Moonlight (growth-wise). I can't speak to the other two though - I have no dog in the hunt - but I don't see why the story would be much different. Lagunitas has always hosted fundraisers and emphasized local businesses at the Petaluma brewery and brewpub.

 

Great. Years from now you can all say "I was the first to say this was worse than Walmart ****** mom and pop shops back in '16 when they gobbled them up." or "I told you so!" but for now let's just see how this works out. The glass has liquid in it and there's room for more. I don't know if it is half full or half empty, yet.
I would like to see what Lagunitas learns in Petaluma, Austin, and Charleston. I would like to see if that connection brings Moonlight, Independence, and Southend to Chicago, or if Lagunitas increases its offerings or changes its recipes....
I look forward to the opportunities.

 

Magee has a great understanding of small breweries, mega brewing corporations, geography, and the unending business need of new ideas to stay relevant. At this point he doesn't need to bat .950 like he once did. With his knowledge and intuition, risk is a nice tool to wield well. Charleston, Austin, and Santa Rosa are unique and very cool places in which to do business.