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We own the niche

Beer giantThere has been a fair amount of hand-wringing as the partnership of Fordham Brewing and Anheuser-Busch prepares to close on its deal to buy Old Dominion Brewing.

That’s understandable. Change is not always good.

But what we should not be worrying about is the fact that Anheuser-Busch is involved in the deal.

Today The Long Tail has an interesting post about “Why niche brands win.” The key paragraph:

Consumers are fleeing the mainstream for the authenticity and quality of niche products. Today, when a big company buys a little one, it hopes that nobody notices. The aim is to keep the indie feel of the niche brand, while applying the distribution and marketing advantages of the big acquiring firm.

So A-B isn’t taking a stake in Old Dominion, which brews less than 30,000 barrels a year, to add to its production (more than 120 million barrels).

Have the beers of Widmer Brewing changed since A-B took a stake in the Oregon company? More recently, how about the beers of Goose Island (which A-B got involved with via Widmer)?

No, and no.

Small brewers – which is pretty much every brewery in America smaller than A-B, Miller and Coors – craft beers than large brewers can’t. OK, technically they can. But to brew a batch the size of Goose Island’s Matilda makes no sense to those guys. Heck, neither would the somewhat more mainstream Goose Island IPA (which Stonch just gave a rave review).

Granted, there was a time when such beers weren’t being produced. But as long as we are willing to pay a fair price I think it’s safe to say we’ve established our niche. It belongs to us, not the brewers. Not even the ones we really like.

That doesn’t mean drinkers of Old Dominion beers (or other outstanding beers it makes like New River Pale Ale) shouldn’t be vigilant. After all, A-B bought a stake in Widmer, not controlling interest. And Goose Island remains firmly in charge at Goose Island.

Old Dominion was sold, although Fordham has the (barely) largest stake. It seems that Fordham is who we should have our eye on.

5 Responses to We own the niche

  1. Lew Bryson February 21, 2007 at 3:33 am #

    Yeah, yeah, yeah, absolutely correct, and I wish the hand-wringers got it, but…where the hell are you getting all your fabulous illos, Stan? That’s what I really want to know. This one’s excellent.

  2. Stan Hieronymus February 21, 2007 at 4:05 am #

    eBay is great, isn’t it? It used to be it I had to spend hours digging through boxes at paper shows.

  3. Loren February 21, 2007 at 12:17 pm #

    They’ve already cleaned house with some long time employees, no?

    OD will become to geeks what Widmer and RedHook has. A blur on the infinite radar.

    Sad.

    Cheers!

  4. Stonch February 22, 2007 at 12:41 pm #

    I agree that macrobrewers buying non-controlling stakes in small breweries need not be harmful at all.

    Here in the UK we have seen too many buyouts-and-closedowns. Fullers of London swallowing Gales of Hampshire is a recent example, though Greene King’s back catalogue of shame is a hefty one and wouldn’t fit through your letterbox. That tends to be our experience, so the moment one brewery starts sniffing around another it causes alarm.

    By the way – the guy in the illustration looks remarkably like Winston Churchill.

  5. Stan Hieronymus February 22, 2007 at 1:58 pm #

    I’ve reached the point where I don’t think I can wear my “Whitbread Tour of Destruction 1742-1993” T-shirt because itwill fall apart next time I wash it.

    It lists (on the back) all the breweries that Whitbread bought and closed.

    I bought that shirt about the same time that Miller bought into the Celis Brewery in Texas. Five years later it was closed. In this case not because somebody was gobbling up pub estates but because the macrobrewery clearly didn’t understand how to operate on a small scale.

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