Five Things I Learned About AB-InBev While Reading 'Barrel-Aged Stout and Selling Out'

Discussion in 'Beer Talk' started by IPAExpert69, May 14, 2018.

  1. IPAExpert69

    IPAExpert69 Initiate (156) Aug 2, 2017 New Jersey

    Read this article this morning and was shocked at the entire history of their issues that I was completely unaware of. Was curious what the community thought about some of these ridiculous blunders, as well as if anyone thinks they can turn this around. I mean Goose Island is still in every chain restaurant so they can't be messing up too much.
  2. IPAExpert69

    IPAExpert69 Initiate (156) Aug 2, 2017 New Jersey

    The fact they hired someone to oversee the entire operation that didn't even know rye could be in beer is astonishing!
  3. NeroFiddled

    NeroFiddled Poo-Bah (9,920) Jul 8, 2002 Pennsylvania

    Everything seems entirely normal to me, nothing out of the ordinary. That's just corporate America running the country without having a clue.
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  4. JackHorzempa

    JackHorzempa Poo-Bah (3,637) Dec 15, 2005 Pennsylvania

    “That's just corporate America running the country without having a clue.”

    While I ‘recognize’ that this statement is applicable here what I think needs to be recognized is that large organizations have their own unique cultures. This is true of companies (e.g., AB), religious organizations (e.g., Roman Catholic church), government organizations (e.g., DOD, US Congress,…), etc.

    It is challenging to take any person out of these large organizations and place them elsewhere (e.g., a small company, a government person transitioning to the private sector and vice versa,…) and expect there will not be some level of “cluelessness”.

    My first job out of college was GE (General Electric) and at that time GE had hundreds of thousands of employees and a business culture associated with such a large business/organization.

    While it should have been expected that Andy Goeler would not be a ‘fit’ for the Goose Island small brewery culture the decision makers at AB likely would have considered this a low priority concern at the time. They likely felt like Goose Island would benefit from somebody like Andy Goeler introducing a new way of thinking. I have not read the book Barrel-Aged Stout and Selling Out but one aspect of a positive change that Andy Goeler made at the Goose Island brewery was improving the safety standards and working conditions at the brewery; this is likely based upon his knowledge/experience he garnered at AB. Keeping employees from getting hurt (and worse case dying) from an industrial accident is a positive change IMO.

  5. IPAExpert69

    IPAExpert69 Initiate (156) Aug 2, 2017 New Jersey

    Agree with the safety standard point for sure, but the lack of understanding about the basics of craft beer is something I cannot wrap my head around. I'm by no means an expert but shit even I know some of the things claimed in this book that Goeler was completely unaware of. Seems to me AB-InBev fed him to the wolves with this expansion project, maybe it would have made more sense to have someone focused on distribution/saftey and someone focused on the nitty gritty of the product itself. One could say this is hindsight, but it seems pretty damn obvious before starting any production like this.
  6. JackHorzempa

    JackHorzempa Poo-Bah (3,637) Dec 15, 2005 Pennsylvania

    And that is because you are a person who appreciates craft beer (e.g., a BA).
    I would suggest that this is just a case of differing priorities.

    BIG CAVEAT: I have not read the book and there is likely better detailed information there!

    My guess is that among the top priorities for AB corporate for their acquisition of Goose Island was:
    • Transition brewing of core Goose Island beers from Chicago to existing AB breweries to 'fill up' unused capacity at those AB breweries and to more efficiently (i.e., save cost) brew those core Goose Island beers.
    • 'Roll out' core Goose Island beers nationally expeditiously
    Assuming that my guess above is correct than it could be argued that Andy Goeler was an appropriate person to be in charge of Goose Island (and later the High End group of AB).
    My guess is that this was not a priorty/objective of AB corporate. I suppose it could be argued this should have been (and still be) a priority/objective but I will return to the aspect of company culture I discussed in my post above.

    Maybe the 'answer' is that a large company like AB which prioritizes the large scale production of AAL beers should not be the owner of a small craft brewery(s)? I emphasized the word "small" since IMO that is likely more of an issue here as is the "craft" part of the business.

    Maybe AB has learned some business lessons here? They moved Andy Goeler back to being in charge of Bud Light (his knowledge 'sweet spot'). Perhaps Felipe Szpigel is doing a 'better' job being in charge of the High End group of AB?

  7. JohnnyChicago

    JohnnyChicago Crusader (793) Sep 3, 2010 Illinois

    Although I had not heard all that stuff, nothing in the article really surprised me. I’ve heard several other ridiculous stories post-buyout. On Tony Mcgee’s book, which was great, he says something along the lines of, ‘If you have a problem and don’t have the cash to ignore it, you have to get creative and actually solve the problem. If you have cash, you can just keep throwing money at the problem for bandaid solutions. Eventually the money will run out. And the problem will still be there.’ This looks like a great example of that. Unlimited purse to keep patching the

    Absolutely true. And I’ve seen some very corporate guys absolutely crush the transition into craft beer. In my experience, it’s because they actually have passion for the product, not the exciting their shareholders.

    Increasing safety is a good thing! But was was there any indication that Goose’ standards were low before Goeler showed up? I don’t remember reading any high profile accidents or deaths there. Safety protocol for the sake of protocol is a little differeb, no?

    Forklift training, safety glasses, gloves, steel-toe boots, earplugs. That’s about all you need tor 95% of craft brewing. Working at a Budweiser is a different story. Are hard-hats, hi-viz, and drug testing something craft breweries really need?
  8. jesskidden

    jesskidden Meyvn (1,324) Aug 10, 2005 New Jersey

    Not mentioned in the article:
    When AB bought Goose Island, the latter was 40% owned by Craft Brewers Alliance. Anheuser-Busch owned 36% of CBA and distributed their beers through it's national wholesaler network. AB bought into the two original breweries that formed CBA in 1994 (Redhook) and 1997 (Widmer). AB (pre-InBev) knew something about the "craft" segment.
  9. JackHorzempa

    JackHorzempa Poo-Bah (3,637) Dec 15, 2005 Pennsylvania

    You got me; I do not have knowledge here.

    Any responsible organization should not wait until an injury/death occurs before implementing a conscientious safety program. That conscientious safety program should be as much about education and monitoring aspects as it is about 'things' (e.g., a hard hat).

  10. 5thOhio

    5thOhio Devotee (481) May 13, 2007 South Carolina

    Reading this review confirms what I've suspected all along as to why big companies like AB, AB-InBev, MillerCoors etc have always been unable, despite all the financial wherewithal, to brew a really good craft beer: they don't have the mindset.

    Sometimes people on this forum have commented. "Why can't the Big beer companies make a really good (fill in the blank)? They have the best equipment, the best ingredients, knowledgeable employees, but they end up with stuff like Bud American Ale and Third Shift."

    It's because they can't pull the trigger and make something out of their comfort zone. They're marketers, not brewers.
  11. IPAExpert69

    IPAExpert69 Initiate (156) Aug 2, 2017 New Jersey

    Well if that's the case they really did know nothing about craft beer. Us diehards are fucking lunatics!:joy:
  12. jmdrpi

    jmdrpi Poo-Bah (5,110) Dec 11, 2008 Pennsylvania

    The highest profile incident that I can remember was the death of a worker at Redhook in 2012, which as mentioned in @jesskidden 's above post - is part of CBA and is partly owned by AB InBev.
  13. Crusader

    Crusader Aspirant (238) Feb 4, 2011 Sweden

    Just an observation. Most of the hires made by larger craft breweries I read about on Brewbound etc. seem to be of people from outside of the beer industry, who have experience in entirely different fields, but at a high level in their line of profession, these craft breweries seem to feel as though these people's education, competencies and experience in other product categories makes them attractive candidates as their own businesses grow and expand. Goeler at least came from a brewing company in charge of selling beer, and I see it as likely that a similar reasoning was behind him getting the job at Goose Island.
  14. jmdrpi

    jmdrpi Poo-Bah (5,110) Dec 11, 2008 Pennsylvania

    You can say that about the corporate leadership. But the actual brewers have the ability - Mitch Steele would be exhibit A.

    But I agree with the spirit of your point. Brewing the beer is not the roadblock, it's whether they want to make the business decision to do so.
    surfcaster likes this.
  15. 5thOhio

    5thOhio Devotee (481) May 13, 2007 South Carolina

    Which is what I wrote: "...They have the best equipment, the best ingredients, knowledgeable employees..."

    But the decisions on what to brew, as the article indicates, aren't made by the brewers.
    chrismattlin likes this.
  16. IPAExpert69

    IPAExpert69 Initiate (156) Aug 2, 2017 New Jersey

    To build off your point warehouse and driving personnel from Electric, Plumbing and HVAC Supply stores get ravaged by expanding breweries all the time. I work in the industry, I see it all the time. All have great training and slide in easily.
  17. JackHorzempa

    JackHorzempa Poo-Bah (3,637) Dec 15, 2005 Pennsylvania

    Would you be willing to purchase a BMC branded beer like an IPA?

    I would be willing to bet that there are many beer geek consumers who would answer "no" to the above question.

    Even a lot of BAs post they refuse to purchase the beers from craft breweries that are now owned by BMC companies (with the possible exception of Goose Island BCBS?).

    The BMC breweries are fully capable of producing high quality 'craft' beer but the problem is would the beer geek part of the craft beer market purchase those beers?

  18. jmdrpi

    jmdrpi Poo-Bah (5,110) Dec 11, 2008 Pennsylvania

    I read the whole article and as just a beer consumer (not in the industry), none of that was surprising. But the saddest part was the whole "occasions" part. It's just the perfect example of marketing and sales philosophy being so out of touch.
  19. JackHorzempa

    JackHorzempa Poo-Bah (3,637) Dec 15, 2005 Pennsylvania

    And I suspect that is still true today by some at AB Corporate. Hopefully the folks at the AB High End group are much better informed and in tune with the craft beer market now.

    People are capable of learning if they are so inclined.

  20. IPAExpert69

    IPAExpert69 Initiate (156) Aug 2, 2017 New Jersey

    If they had I think "Wild Blue" wouldn't exist any longer.

    THANAT0PSIS Crusader (758) Aug 3, 2010 Wisconsin

    Pabst has an American Pale Ale in my market that I have been curious about just to see what they can do. This is the first beer I can think of that has had a big brand name on it that is not the beer that built the name, if you follow.

    I think you're correct in assuming that many wouldn't bother with, say, Budweiser IPA or Busch Porter or Miller Barleywine.

    While I didn't know the specifics of anything revealed in this article, I also did not find anything the least bit surprising about it. It all seemed pretty par for the course in what little I know of the acquisition game.
    TongoRad likes this.
  22. JohnnyChicago

    JohnnyChicago Crusader (793) Sep 3, 2010 Illinois


    From what I remember, Goose was one of the good ones. People who worked there are pretty highly regarded for their knowledge, beer common sense, and safety-mindedness.

    The reality is that when you institute things like mandatory drug testing, you cause exodus, then you rush untrained or undertrained people into skill roles and you get accidents. Then you create a culture of turnover. That is a much less safe situation. But hey, at least you get to brag to your shareholders about ‘increasing workplace safety protocols by 75%...blah blah blah’ :grin:

    THANAT0PSIS Crusader (758) Aug 3, 2010 Wisconsin

    It must be selling somewhere to some demographic.
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  24. IPAExpert69

    IPAExpert69 Initiate (156) Aug 2, 2017 New Jersey

    PBR is pretty decent, I'd take the gamble on their Pale Ale
  25. IPAExpert69

    IPAExpert69 Initiate (156) Aug 2, 2017 New Jersey

    The amount of hatred I've seen about this beer rivals the hatred of "haze bros", "infected batches", and "people who hate sours yet still review them".
  26. jesskidden

    jesskidden Meyvn (1,324) Aug 10, 2005 New Jersey

    Well, there was Budweiser American Ale, Busch Copper Lager and Miller Reserve Amber Ale and Velvet Stout...
    generallee, BJC, beertunes and 2 others like this.

    THANAT0PSIS Crusader (758) Aug 3, 2010 Wisconsin

    Have you had it? It's awful.

    Also, people that don't like sours really should not review them negatively unless they are poorly made sours. It makes no sense to negatively review something because it succeeded at what it was going for yet the hypothetical reviewer wanted it to be something it is obviously not. This is a whole different, unrelated can of worms that I've opened way too many times on this site, so I'll stop here.
    IPAExpert69 likes this.

    THANAT0PSIS Crusader (758) Aug 3, 2010 Wisconsin

    Thanks. I was hoping someone would correct me since I was pretty sure there had been others. The fact that I couldn't think of any supports the point that they mostly fail, and it's interesting though not unexpected that most have been ambers. I will have to look up Velvet Stout, as that is the outlier, and I don't remember it at all (the others ring bells here and there now that you mention them).
  29. JackHorzempa

    JackHorzempa Poo-Bah (3,637) Dec 15, 2005 Pennsylvania

    Pabst not too long ago came out with a 'reconstruction' of Ballantine IPA. I thought this was a pretty good beer but it is now discontinued (because of poor sales?).

    Pabst also introduced Ballantine Brewers Gold Ale and my understanding it that beer is also discontinued (because of poor sales?).

    Maybe three times is a charm? But personally I doubt it.

    THANAT0PSIS likes this.
  30. JackHorzempa

    JackHorzempa Poo-Bah (3,637) Dec 15, 2005 Pennsylvania

    Michelob Amber Bock is still on the market but I must confess that I personally have not seen this beer in years.

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  31. LambicPentameter

    LambicPentameter Poo-Bah (1,719) Aug 29, 2012 Nebraska
    Premium Trader

    I found the article to be pretty mundane. The ABI purchase of Goose Island was, in many ways, the case study for a big conglomo-brewer buying out an independent shop to break into new markets. It shouldn't be a surprise that they made several missteps.

    Ugh. As someone with a marketing background, this shit makes my eyes roll out of my head.

    Don't get me wrong, the whole idea behind the "occasions" of helping define the scenarios in which customers are going to drink a given product makes sense. But part of the point is to establish some differentiation between the brands and the situations in which they will be consumed.

    If your "occasions" are really similar to one another, or if all of your "occasions" result in basically the same product set, then you're being a shitty marketer who came up with something to meet a deadline. There is nothing insightful whatsoever about ABI/Goose Island's initial "occasions", which should be embarrassing. I realize that ABI didn't have the organic and established understanding about craft beer, but if any company was going to understand marketing and the value and insight it could bring, it should be a company like ABI.
  32. rgordon

    rgordon Champion (844) Apr 26, 2012 North Carolina

    I marvel at the spread of Bud Light at the local mini Wal Mart nearby and understand instantly: these beers sell extremely well.
  33. JackHorzempa

    JackHorzempa Poo-Bah (3,637) Dec 15, 2005 Pennsylvania

    And AB and their partner Wholesale Distributors are adept at selling Bud Light. They are still learning how to sell their craft line of beers.

  34. TongoRad

    TongoRad Poo-Bah (2,451) Jun 3, 2004 New Jersey
    Premium Trader

    That Michelob Amber Bock seems like the lone survivor of a whole line of Michelob beers from a ways back- a Porter, Weizen, maybe one or two others. It was one of the ways AB tried to enter the market prior to the acquisitions. I don't think they got too much love at the time, either, but mostly because they were kind of middling brews to begin with.
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  35. rgordon

    rgordon Champion (844) Apr 26, 2012 North Carolina

    Jack, the incentives have always been with the core brands, and what has emerged as the core flavor, Bud Light. What is so amazing to me is that the "specialized" brands are given short shrift by many of the route sales crew. The money is made by volume and generally not by new placements. It seems to me to not be a full team effort, across the board.
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  36. drtth

    drtth Poo-Bah (3,568) Nov 25, 2007 Pennsylvania

    Which, I would suggest, is why the ABI High End Division early on made a fundamental management error that led to both lots of unneeded hires and then layoffs when such core brand sales crew types were put to work dealing with High End beers as well.
    rgordon likes this.
  37. bubseymour

    bubseymour Poo-Bah (2,233) Oct 30, 2010 Maryland

    I always here how a large percent of businesses fail, yet I hear stories from people all the time where an owner of various businesses is a complete bafoon, and makes mint despite poorly managing and operating his/her business.
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  38. rgordon

    rgordon Champion (844) Apr 26, 2012 North Carolina

    It's interesting, but it's rather like what calls for passion, is met by a crap shoot of people across the industry. I still believe that the marketing potential of small wholesale operations in this state remains very favorable.
    drtth likes this.
  39. surfcaster

    surfcaster Crusader (734) Apr 20, 2013 North Carolina
    Premium Trader

    A lot of sites and articles seem genuinely interested in the repeated miss steps of InBev. Well it seems in spite of slipping macro sales, reports (at least what gets posted here) are that profits are up.

    Curious when the pie chart for all beer sold in US by brewers is updated, where they fall out for 18.’ I would say that in a completion with >5000 American brewers and plenty of imports, that they are still doing ok.

    And a Goose IPA along with a WW were by far the most represented non light lagers at the Wachovia tourney with a lot sold. Of course that is distributor directed.
  40. surfcaster

    surfcaster Crusader (734) Apr 20, 2013 North Carolina
    Premium Trader

    Absolutely and where it seems the emperor is scantily clad.

    This is fascinating to me but seen not infrequently. A local place that moved a lot of package and tap was relieved to finally not have to deal with our local Bud distributor. Even though he sold a lot of the “true craft’ they represented, he said it was like pulling teeth with genuine lack of interest in getting them to come by, stuff getting older and older and just all out poor service. Wasn’t worth it-too many other good things and better service.
    #40 surfcaster, May 15, 2018
    Last edited: May 15, 2018