Russian River Brewing co-owner Natalie Cilurzo on recent mergers/investments
In recent weeks, the craft beer industry has been in a serious reshuffling, not because it is struggling but because it is doing so very well.
Lagunitas, the beloved Petaluma-based craft brewery, is now 50-percent owned by Dutch behemoth Heineken, as the former hopes to use the latter’s international distribution channels to extend its reach to Europe and Latin America. Fingers crossed that we don’t start seeing A Little Sumpin’ Sumpin’ and Brown Sugga in those unfortunate green bottles.
Another international giant, Belgian-based Duvel Moorgut, recently combined with Paso Robles’ Firestone Walker so this highly regarded California brewery could also expand its reach. Southern California’s Saint Archer, which has been brewing some excellent beer since it opened two years ago, just sold to MillerCoors.
On and on it goes. With an 11 percent market share nationwide and 18 percent and growing in California, craft beer is booming and some of those breweries are either merging or cashing in. Although the details of the deals haven’t been disclosed, they are surely worth tens of millions of dollars.
While it’s too soon to reach any firm conclusions about what the future looks like, I asked several people in the business for their take on what this means.
A.J. Tendick, co-owner of Bike Dog Brewing: “People who have worked really hard for a long time are getting some money. I can appreciate that and I’ve never held that against any of the people who have sold some or all of their brewery. Budweiser, you might not be excited about their beer, but it’s pretty high quality, and they have a lot of brainpower, a lot of money, a lot of ingredients contacts. In a lot of ways, if you want to focus on making really great beer, they’re probably a good partner. I think you might lose your soul, though, in the process.”
Quinn Gardner, co-founder of Sactown Union Brewery (opening in October): “People will ask, ‘If you had the opportunity to take the money, wouldn’t you?’ Our answer is no. Absolutely not. It’s not why we’re getting into this industry and not why we’ve been planning this for 10 years. This is what we’re passionate about. The craft beer drinker is savvier than ever. Authenticity and a company’s ethos are important to them.”
Troy Paski, owner of Hoppy Brewing: “There are a lot of breweries on the market right now and everyone thinks it’s an easy deal. This is an industry in transition. When big money gets involved, it becomes an industrial commodity as opposed to something that’s hand-crafted.”
Tom McCormick, executive director of the California Craft Brewers Association: “I’m pretty shocked it hasn’t happened sooner. Each of these deals is unique. There are some positives to be found in some, and I have trouble seeing the positives in others. We have had some forays into the craft beer industry (from the big beer companies) going back to the 90s, but nothing has really stuck. Blue Moon and Shock Top got into the industry by creating faux craft beer and forgetting to put their name on it.”
Natalie Cilurzo, co-owner, Russian River Brewing: “If I were 20 years older, I would probably totally entertain (selling) at the moment, but (husband, brewmaster) Vinnie (Cilurzo) and I are still relatively young and we’re going to gamble on the future. We think that we have a really good thing going. We’re very mindful about our modest, organic growth, our commitment to quality, not quantity, and that more is not always better...It’s not about personal wealth for me and Vinnie. This about a lifestyle. This about doing what we love, about providing jobs in our community and about having a really good time and giving a really XXX product out to our consumers. ... But yeah, I’m sure we are leaving millions of dollars on the table.”
J-E Paino, owner of Ruhstaller Brewery : “If you look at the big picture, we’re gaining. The challenge here is ignorance. Making beer with thought and passion, can people taste the difference? I think they can. It’s a sign that the beer intelligence is growing. Bud, Coors and Miller are losing because the consumer is getting more educated. Educated consumers are not moved by a great Super Bowl ad. They’re moved by quality.”