Tuesday, October 22, 2013

The Boulevard Buyout - Some Perspective

Hello, Beer World! I'd like to introduce myself as your friendly local beer philosopher and historian. Woah, wait, that sounds like a lot to live up to. Lets try that again. I'd like to introduce myself as that guy at the end of the bar trying to explain to random strangers why beer is way more important everyone thinks! I do at least have a few qualifications to lend some credibility to my rants. I've been homebrewing for a little over 6 years now and for the last couple of months I've had the honor of brewing part time down at Green Room. I'm also a BJCP Recognized Judge and try to judge as many of the homebrew competitions in town as I can. Other than that, I just really like beer--brewing beer, drinking beer, reading about beer, and talking about beer. So let's chat!


The sale of Boulevard has dominated the local and national brewing headlines for the last week. It's a contentious and polarizing issue that I'm sure you all, understandably, have a pretty strong opinion about. So for my first post on the KC Beer Blog, I thought, "What better way to make half of the beer lovers in Kansas City hate me than to give my opinion on the buyout!" In all seriousness though, I hopefully won't alienate too many of our dear beer friends with my writing. Like in most things, I take a pretty pragmatic view on the sale and have been trying to get a little more perspective on the issue over the weekend, rather than just putting out a disappointing reactionary article.

I had been hearing whispers of a possible sale of Boulevard for a while before the actual news. Even so, the announcement came as quite a shock. At first, the news of the merger obviously conjured up visions of the A-B takeover by InBev. It's happening again! Boulevard was being bought out by the Belgians! The 2nd largest brewer in Belgium, at that! These first panicked thoughts running through my mind were quickly dispelled after some breathing exercises and Tank 7. The largest Belgian brewery is InBev, producer of something north of 350 million barrels of beer per year, compared to Duvel Moortgat's paltry 800,000 barrels per year. Yes, this makes Duvel Belgium's second largest brewery, with a whopping 0.2% of InBev's production.

Seeing Duvel for what it is, rather than labeling it as the devilish takeover artist is really pretty easy. I would guess that if I asked any of you for your opinion on Duvel, it would be one of high praise. Lots of us cut our drinking teeth on fine imports like Duvel, boisterously claiming them superior to any American beer. Then we discovered American craft beer, and kind of forgot about imports, but hey, that's a whole different story. Duvel has been a family owned brewery for the last 142 years--they're now into the fourth generation of Moortgat's to run the business. Their flagship brew is literally the archetype of the Belgian Golden Strong style.

You can look at Duvel from a different perspective though--American beer is the future, European the past. I don't know of many stalwart bastions in traditional brewing countries that don't recognize this yet. (At least not within the brewing industry--local pride and historical precedent are still hard things for some proud people to let go of.) This lack of innovation in most old European breweries is shown off in Duvel's lack of ability to brew and market great new beers. Their latest offering is essentially a cherry alco-pop, marketed to be served over ice. (Will we be seeing bro's fruitesse over icing each other soon?) And then there's the entire concept of one of Duvel Moortgat's other illustrious brands, Vedett. Extra Rice makes their beer extra good, or so they say. These types of drinks may be big sellers, but do little to advance the state of brewing or to further Duvel's commitment to strive for perfection. Contrast this to Boulevard's latest few offerings--big winners with craft beer newbies and salty old drinkers alike. Is it this innovation that Duvel is trying to capture in buying American breweries?

Why come up with new brewing ideas when you can just buy them?
The question now is how this will impact the company and Kansas City. At least things look good if we let history be our guide. It seems that in all of the high profile craft brewery buyouts, the breweries have seen little negative change. Quite the contrary, it seems that most buyouts have led to brewery expansions and better availability for the consumer, with little sacrifice of quality. I really doubt that we'll see much change in the long run and I imagine the cash infusion will accelerate the ongoing and future brewery expansions. Duvel also seems much more the partner than anything, being the little brother to Boulevard in terms of their American presence.

Even though Boulevard will have more access to other foreign and domestic markets now, Kansas City is still Boulevard's biggest market by a wide margin. It will be in Duvel's best interest to keep Boulevard just as locally involved as it always has been. And barring any significant change, I can't buy into the argument that Boulevard will be any less "local" even if their owner's aren't. I imagine that five or ten years from now, they will still be sponsoring our sports teams, providing direct and indirect employment for hundreds of Kansas Citians, donating to local charities, and helping us stay green with Ripple Glass. And of course the most important aspect of drinking local in terms of the actual beer is its freshness. Our access to delicious fresh Boulevard will never change.

It will be an interesting time for the Kansas City craft beer community going forward. We're in uncharted waters now. I'm excited to see how it all plays out, and am hoping for the best. At least we all have a number of great backups in town if Boulevard gets eaten alive by zombie bean counters from Europe. Maybe this move benefits the other micro and nano breweries in the region more than anyone by sending more business their way--indirectly helping more new breweries to open? Now that the smoke has cleared and the panic has died down, I'd like to hear the thoughts of the drinking millions out there. Let me know what you think about the sale. Good? Bad? Indifferent? Too busy trying to find some foeder beer on tap to care?

13 comments:

  1. good article thanks

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  2. Hi Jay. I'm looking forward to your voice on the blog.

    I agree, Boulevard isn't going anywhere but KC. The beer will probably be shipped farther and wider than before, and they'll be getting a nice infusion of cash to expand production. Duvel is getting new ideas, Boulevard is getting cash.

    Duvel bought Ommegang in 2003, and if there's a comparison for the Boulevard sale, it's that one. This isn't AB/InBev or even Goose Island/AB.

    Until the quality of the beer goes down (and I don't expect that to happen), we should be happy for John McDonald and everyone at Boulevard, even if we're a little sad about the whole thing.

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  3. I don't expect any negative impact on my enjoyment of Boulevard beers. Unfortunately I don't expect them to put out my favorite Bourbon Barrel Quad year around either.

    So for now, business as usual. Make mine Blvd!

    -Nuke

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    Replies
    1. They announced today it will be in the 2014 lineup instead of making us wait 2 years

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  4. When AB/In-Bev bought Goose Island, Goose lost it's voting rights in the Brewers Association. Even though Goose was a craft brewery, AB/In-Bev was not.

    The brewers association has already ruled that Boulevard -- like Ommegang -- was still considered a craft brewery because Duvel, despite its size, still had the craft brewing philosophy.

    I think that is about the best endorsement that you can receive.

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  5. Great article Jay. I'm looking forward to the next. I have a feeling that Boulevard will be under some especially intense scrutiny as a result of this sale for the next few years, both in terms of community involvement and the beers themselves. Let's hope that if things change, they change for the better!

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  6. 6:28, you argue against yourself. Is Goose Island a "craft brewer" or not? You say they are, then say the reason they don't get a vote in a paid trade association is because they're not.

    Goose Island is now wholly owned by InBev. There is not distinction in the business between Busch Light and Goose Island.

    InBev, at their Goose Island facility, makes some craft beer. Just as they make craft beer at other facilities.

    Don't fool yourself about the Brewers Association either. You pay the money, you join. Period. It's not a fraternity, not a social club, not an award. You pay for it. No need to get sponsored.

    Yuengling is a "craft breer." They make 78.75 MILLION gallons of beer a year. Most of which is a fizzy pale lager. If that's "craft beer" then the definition of "craft beer" per the Brewers Association means nothing.

    To be a "craft" brewer in America, the test is pretty simple:
    InBev: If yes, stop. If no continue.
    MillerCoors: If yes, stop. If no continue.
    Did check clear: If yes, you're in!

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  7. Do a little research before you claim to know something about being a BA member. Yuengling is not a voting member of the BA. Here's the definition, lifted from their site:

    Small: Annual production of 6 million barrels of beer or less. Beer production is attributed to a brewer according to the rules of alternating proprietorships. Flavored malt beverages are not considered beer for purposes of this definition.

    Independent: Less than 25% of the craft brewery is owned or controlled (or equivalent economic interest) by an alcoholic beverage industry member who is not themselves a craft brewer.

    Traditional: A brewer who has either an all malt flagship (the beer which represents the greatest volume among that brewers brands) or has at least 50% of its volume in either all malt beers or in beers which use adjuncts to enhance rather than lighten flavor.

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  8. You all bring up a good point at least. I didn't want to tackle that whole issue in this post, but it was definitely on my mind. The definition of a "craft brewery" is pretty ambiguous, especially with the "traditional" requirements. Boulevard Wheat isn't an all malt beer. (Which, by the way, are they talking about barley malt, or any kind of malt?) Does the wheat really enhance the flavor or just affect the body and head?

    So is Boulevard a "craft" brewer anymore? BA says so at least. Does it even matter? Hmm...might just have to do some thinking on this myself...

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  9. My feelings in brief: I am fine with the assertion that this is in the best long-term interests of the brewery. I also resent the assertion of some folks that I should be doing cartwheels when an iconic KC company is no longer locally owned. I'm perfectly capable of understanding a move and simultaneously being saddened by it.

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  10. Boulevard discontinued the Stout this week, the first regular lineup beer to go away. Also, not sure why everyone is a John McDonald fan. He forced 5 of the other share holders a while back to sell all their stock back, just so months later he could get 5x return. Pretty Greedy. At last, Boulevard is not an AMERICAN craft brewery, just a craft brewery, which makes a very big difference in lots of peoples eyes. But then again, since this is seemingly a bias Central States website, I understand the positioning of ths article..

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  11. Just to clarify for our lovely Anonymous friend here, Boulevard Dry Stout has not been discontinued. It has been available on draft only for quite some time now.

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  12. 1:42, you need to reread the post you replied to. I never said Yuengling is a voting member of BA. So before you launch into a lecture about "fact checking," read the post and comprehend before hammering off some irrational reply. Second, Yuengling IS a member of the BA. That was the point. Voting or not I don't care. Being part of the Brewers Association, which is a special interest group and nothing more, means NOTHING with respect to whether a beer is "craft" or not. It means you paid money. End of story.

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