…The Times, They Are A-Changin’…

Recent news in the beer world has unceremoniously slapped some of the rose-colored glasses off of many faces and forcing us to see the industry for what it is.  A business.  I know that it is shocking and hackle-raising to use such base terminology, but at the very core of it all, brewers are in business to make money.  I think it is all too common that we as lovers of the brew have a tendency to close our eyes and imagine that the brewers we love and support are all the best of friends and would do anything for one another regardless of the bottom line, and only have the quality and best interest of the beer lover at heart.  And in a lot of cases, this is true.  By and large, most brewers – at least in my experience – will go out of their way to help each other and to give the consumers what they want.  But at the end of the day, if they are not making money, they can’t keep the doors open.  For some, this means making difficult decisions.  For others, it means protecting their “intellectual property” and name.

The big news last week was that Bell’s Brewery, maker of the much-loved Two Hearted Ale, issued a “cease and desist” letter to homebrew supplier Northern Brewer for their clone recipe: Three-Hearted Ale.  This really set off a lot of negative buzz, with some beer lovers even calling for a boycott of the Kalamazoo brewer.  It should be noted that this clone recipe has been available for years without incident, and Northern has even collaboated with other brewers to create clones of other brews (Surly Brewing’s Furious being a notable example).  The official response from the brewery indicates that the issue is not with the actual clone recipe and kit, but with the use of the name “Three-Hearted” and that it could confuse the public.  While I fully respect the notion of trademark names and intellectual property, I think that is a stretch at best.  Consumers looking for Two-Hearted Ale are going to be at the store buying beer, not shopping online on a homebrew supply store.  Homebrewers looking for a clone of this excellent beer already KNOW the name of the commercial product, so will not be confused by the numerical change.  I wish I could say I saw the motivation for this action, but it just smacks of arrogance and bullying to me.

The other big news just came today, as macro-giant Anheuser-Busch announced it was acquiring Chicago brewery Goose Island for $38 million.  Brewmaster Greg Hall will be stepping down and Deschutes Brewery’s Head Brewer, Brett Porter, will take over Hall’s duties as Brewmaster.  CEO John Hall will be staying on, and the two brewpubs are not part of the deal and will remain open.  This was not something most in the beer community saw coming.  Beer reviewer and Hoptopia founder Lee Norman Williams said quite bluntly that he “saw this buyout coming like a freight train.”  The big question in my mind is what does it mean in the long run for the industry?  Is this just a single, albeit large, event?  Or a sign of things to come?  Will AB/InBev try to snap up more regional and independent breweries to bolster their own “craft beer” portfolio? 

The other question, though, is really: does it matter?  If the beer remains the same, and all that changes is the increased capacity and distribution and accessibility, is it a bad thing?  If SAB/Miller bought Russian River and suddenly I could get Pliny the Elder in Florida, woudl I raise hell about it, purely on principle?

It is too soon to say yet what the implications of this event are.  I am taking a wait-and-see approach, but I have had only limited exposure to Goose Island.  Would I react differently if the brewery were, say, Cigar City?  Yeah.  I can safely say I would.

Come gather ’round people
Wherever you roam
And admit that the waters
Around you have grown
And accept it that soon
You’ll be drenched to the bone.
If your time to you
Is worth savin’
Then you better start swimmin’
Or you’ll sink like a stone
For the times they are a-changin’.

– Bob Dylan

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~ by Sean Nordquist on March 28, 2011.

2 Responses to “…The Times, They Are A-Changin’…”

  1. Nice post! My understanding regarding the Bell’s dust-up is that if one doesn’t act to defend one’s trademark, it decreases one’s ability to do so in the future. Basically, if the intellectual property isn’t dear enough to defend, then it looks like you don’t care if others use it. So, while I agree that it’s a stretch to say that folks will get confused about Three vs. Two-Hearted, the cease and desist letter sent by Bell’s was run-of-the-mill. The language was very similar to many many C&D letters. And while Bell’s had to authorize the sending of the letter (attorneys generally don’t act without authorization by clients), I suspect that their lawyers strongly advised them to authorize the letter so as to mitigate risk. That, after all, is what attorneys do. All that said, I agree with your bottom-line conclusion: the beer business is a business.

    After all, I remember when Bell’s Oberon was called Solsun. I believe they got a C&D letter about that brand…

  2. Craft beer sales are on the rise. Macro sales are heading in the other direction.
    Mergers and buyouts have been a part of the U.S. beer story since it started. There have been instances of the new owners being heavy handed and fucking with recipes and such, but that usually involved deals among brewers of U.S. domestic lagers.
    I don’t think this will be the case with GI. It’s an established, well-respected brand.
    AB-InBev didn’t become the biggest beer company in the world by making stupid decisions, it’s just trying to grab some of that craft business. It’s called free enterprise.
    Is it bad that the owners took $38 million for it? Fuck no, that’s called the “American Dream.”
    Is it bad that a formerly American brewer is owned by a “foreign company”? If that bothers you, park your Prius, build a bicycle from raw materials (because most bike makers are owned by foreign corporations) and go cross-country because the road you’re would be riding on was likely financed by bonds held by China, Brazil, Russia or India.
    Suppose what I’m saying is, it ain’t no big deal.
    If you’re so damn uptight about where your beer comes from or who owns the brewery, guess what?
    There are more than 1,600 other small breweries in this country. You won’t go thirsty.

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