Yet another regional brewer that began as an alternative to mass-produced, corporate-owned beer has now fully joined the ranks of the mega-sudsmakers.
On Monday, the Portland-based owner of Redhook Brewing — an iconic Seattle beer-maker that helped ferment the craft-brew movement nearly 40 years ago — agreed to be bought out by Anheuser-Busch InBev, the global beer behemoth known for mass-produced brands like Budweiser.
Under the deal, Anheuser-Busch InBev, or AB-InBev, based in The Netherlands, will pay some $220 million for shares it didn’t already own in Craft Brew Alliance, formed in 2008 when Redhook merged with Widmer Brothers Brewing of Portland.
The deal, for $16.50 per share, came at a time when Craft Brew stock was trading at a more-than-three-year low of just above $7.
Redbook was founded in 1981 in an old Ballard transmission shop by Gordon Bowker and Paul Shipman with the aim of “brewing Seattle a better beer,” according to the Red Hook Brewery website. The ale, first sold at Jake O’Shaughnessy’s in Queen Anne in 1982, was both celebrated and mocked for a banana-like sweetness.
But it sold. Coming just as the American craft-brew movement was gaining momentum (in 1982, the first-ever Great American Beer Festival, in Boulder, Colorado, drew just 20 breweries and 35 beers) Redhook saw steady growth and a series of ever-larger facilities and tasting rooms, most recently, the Redhook Brewlab in the Pike Motorworks Building on Capitol Hill.
But as Seattle writer and beer aficionado Eric Scigliano has noted in these pages, Redhook’s growth brought tensions with its craft beginnings.
In 1994, the brewery sold a quarter of itself to what was then Anheuser-Busch with the aim of gaining broader distribution.
According to Scigliano, Shipman later came to rue the sale: “I didn’t understand the consequences for the brand, or for the relationship with consumers and distributors,” he said.
The sale also had consequences for the brewery’s homey image. According to the Brewers Association, a trade group for independent breweries, the term “craft” cannot be applied to a brewery in which an industrial brewer has a stake of 25 percent or more.
But Redhook’s nascent corporate identity would only become more pronounced.
In 2008, Redhook merged with Widmer, another A-B partner, and the combination went on to acquire Kona Brewing in 2010. In 2017, Craft Brew closed the Woodinville brewery, where Redhook had operated since 1994, and moved to Widmer’s much larger facility in Portland. (The Woodinville site was sold in late 2017.)
Monday’s sale to AB-InBev wasn’t a surprise. In 2016, AB-InBev obtained a complicated option to purchase the remainder of Craft Brew at a later date. In the years since, both companies have had incentives to merge as beer sales have sagged under competition from alternatives like White Claw.
The fortunes of Craft Brew Alliance had gone particularly flat: Since July, its share price has fallen by more than 50 percent, and was at $7.33 at Monday’s close, before the merger was announced — a sweet deal for AB-InBev, by all accounts.
Whether beer drinkers find it as sweet is another question.
At the Redhook Brewlab Monday night, employees were withholding judgement until they’d heard more details about the deal.
Ryan Ewnig, an expediter in the Brewlab’s restaurant, said he understood concerns about Redhook’s small-batch craft image. On the other hand, he said, gaining such a large corporate parent might give Redhook more ability to experiment with new beers.
“It’s easier for a larger business with more funding to experiment and push into places that are not as well-documented or proven to sell,” Ewing said. The sale “might mean more restraint, but it also has the possibility to give them more freedom, too.”