Good Beer Hunting

Modern Times Founder Sounds Off on Acquisition Trend

In a fiery essay posted to his company’s website last week, Jacob McKean, founder of San Diego’s Modern Times Beer, declared that “selling to a macro-brewer is the fastest, simplest way to turn equity in a craft brewery into cash. That’s the only reason to sell to them. Anyone who claims otherwise is full of shit.” The scathing post was penned in response to a lengthy Serious Eats article titled, “What ‘Selling Out’ Allows a Craft Brewery to Do.”

McKean effectively called BS on a number of the Serious Eats story’s reported claims made by Anheuser-Busch InBev brass and the leadership on board at a number of its recently acquired craft beer companies. Among the claims he disputes are that AB InBev helps to improve beer quality, streamline access to hops and capital, and provides a glimpse into “the minds of fellow brewers.”
Now, McKean is hardly the first craft brewer to weigh in—guns blazing, no less—on this subject, and as sure as the sun does rise, he won’t be the last. That a craft brewer feels this way isn’t all that unique. But in his piece and the one he was responding to, there area quite a few interesting numbers worth considering. From Serious Eats, the reader learns just how much being bought out affects the price of beer in the market place. From McKean, the lesson is about the preparation necessary to operate as an independent brewery. And both sides offer some numbers to back it up!

To wit: “Goose Island kegs, which were once $110, can sometimes be found for $56, and six-packs dip well under 10 bucks, even in major cities.” That’s a near 50% decrease. Beyond representing a significant singular price drop for Goose Island, the statistic also nestles nicely alongside the topic of costs and pricing, which itself has become one of the leading conversations surrounding craft beer at the moment. Simply put, there’s no shortage of high quality beer—of every variety, for that matter—on the shelves today. Where as craft once seemingly competed on quality alone, it now also competes on price. There is still the veneer, entirely genuine or not, of camaraderie throughout the industry. It will be interesting to see how costs affect that.
Elsewhere in the Serious Eats story, it’s made abundantly clear how much more craft beer companies are valued today, as opposed to a mere five years ago: Goose Island sold for just south of $40 million back in 2011. Ballast Point joined the three-comma club last November.
Meanwhile, McKean elucidates on the legwork that goes into running an independent brewery when you don’t have a 1,700-acre hop farm at your disposal (as A-B and its subsidiaries do in the mountains of Idaho):“[W]e have more than enough hops contracted to see us through the next 7 years of extremely aggressive expansion. We are hardly the only ones who can say that. Hop contracting takes some work, but no one needs the help of macro brewers to get what they need or want.”

At the very least, stories like this on both sides are opening up an interesting conversation. Elsewhere, in a thoughtful-if-meanding post for VinePair, Will Gordon sums up what should be a pretty fair assessment for most everyday beer drinkers when they find out that their local brewery has "sold out" in one way or another: "I’d be disappointed for a second, then get mad at myself when I realized how selfish that is. It’s literally none of my business."

—Dave Eisenberg

What “Selling Out” Allows a Craft Brewery to Do [Serious Eats]
What ‘Selling Out’ is Actually About [Modern Times]