Business & Tech
Fri December 13, 2013
Boulevard Sale Shows American Beer Makers Have Turned The Tables On Europe
People in Kansas City may not be too thrilled about it, but the pending sale of Boulevard Brewing company to Belgian beer maker Duvel Moortgat says a lot about how the American craft beer industry has grown up and gone global.
Kansas Citians are proud of lots of things, their barbeque, the Chiefs, Sporting Kansas City, even lately, the Royals, and most beer lovers in this town would add Boulevard Brewing to that list.
“I think Boulevard is, is one with Kansas City,” says Bob Ellis, standing in line for a Boulevard Tank 7, at the Bier Station, in Kansas City.
Char O’Hara, sitting at a table nearby says she’s little leery about a Belgian company taking over.
“What are these people going to do? These people came from the outside, and took something that’s native to us, and it’s kind of a bummer," says O'Hara. "It makes the future uncertain."
Boulevard’s founder John McDonald is not surprised.
“I think a lot of people were kind of shocked at the news, and I kind of knew that would happen,” he says.
McDonald, started the business 24 years ago, something equivalent to the mid-Triassic period in American craft brewing. He’d traveled, and tasted lots of European beers, and the relatively thin, homogeneous beer back home just left him flat.
“A few of us said, 'Hey, I think I can do better.' And we started these little breweries all over the country," says McDonald. "We all came from different walks of life, almost none of us came from the beer industry."
They just loved beer. And McDonald says they went at making it with a sense of adventure.
“We didn’t have a lot of rules about the types of beers we made. So we made, we stole ideas and invented things from every brewing culture in the world. We mish-mashed them all together," he says. "We’re all pushing ourselves to keep in the cutting edge of that."
And that is what American beer lovers have come to want.
The explosion of American breweries
Craft beer sales have been growing by almost 10 percent a year, according to the Brewers Association. And Donna Hood Crecca, who watches the beer industry for Technomics, says some 2,600 breweries have sprung up to meet that demand.
“American brewing has just exploded over the past few years,” says Crecca. “There are so many craft beers coming out. Very difficult to keep track of. So, it kind of is the Wild West right now."
Beers now have crazy ingredients such as spices, coffee, and bacon combined with traditional items, especially hops, and innovative production techniques. The Brewers Association counts 142 distinct styles of American craft beer, and reports that craft beer export sales jumped 17 percent last year. Crecca says American brewers have turned the tables on Europe.
“It tells you how much it’s changing, that you’ve got a Belgium brewer coming in an snatching up an American craft beer, with the intention of taking it global,” says Crecca.
Duvel Moortgat is a collection of smaller European breweries, and one in upstate New York. Simon Thrope who runs the Duvel’s American arm, says that, in addition to quality and approach, lots of American brewers have also developed a strong, and salable, sense of place.
“Part of the reason that American craft beers are interesting to people in Europe, or even, a craft beer made in Kansas City, is attractive to someone in California, or Massachusetts, is because of where it comes from,” says Thorpe.
So brewers, like vintners and artisan cheese makers are now selling a story as well as a product. And, Thorpe says, craft beer’s local identity can help give it global reach.
“If you’re sitting in a bar in Tokyo, and you’re able to drink a Boulevard Beer and connect to Kansas City in America, a long way away, and you get that sense of the values of Kansas City and the Midwest,” says Thrope. "Those things resonate in a way, that when it’s on our own back doorstep is very difficult to see."
The two big beer companies Anheuser-Busch InBev and MillerCoors are onto this trend. Both have bought craft brewers, most recently in Chicago.
Enter: The Big Guys
Andrew Gill who hosts the Strange Brews podcast from WBEZ in Chicago, says some Windy City hearts were broken when the world’s largest brewer, Anheuser Busch InBev from Belgium, bought Goose Island, the first generation craft brewing company there.
But, Gill says Goose Island still makes great beer, even though they now make some if outside of Chicago.
Gill says Duvel buying Boulevard is a lot more like a marriage of craft brewers. AB/InBev makes around 500 times more beer than Duvel and works under a very different business model.
“It’s not as cataclysmic has having the Clydesdales stomping all over your local craft brewery, you know,” laughs Gill.
Many loyal Boulevard customers have with time come around to accepting Duval’s purchase of their brewery.
Sipping a Boulevard in the brewery’s tasting room, Kansas City native Sam Anderson says he couldn’t believe it, when his son called from New York with news that Boulevard had been sold. He’s healing now.
“You know, after I heard more about the details and the company that bought them, and everything like that it seemed like, well, OK,” says Anderson. “I still hate to lose a pure Kansas City product, but… it’s OK.”
The newer customers are generally more enthusiastic. Charlie Boehm was visiting Kansas City from his home in Washington DC, where Boulevard beer is still pretty scarce.
“I think it deserves the exposure,” says Boehm. “I’ve come to KC a couple of times, and was really impressed by the beer. Kind of a regional legend. And I hope that they’ll make a push to our neck of the woods. Love to have it,” he says.
This is just the kind of reaction Duvel is banking on, as it begins to distribute Boulevard first nationwide, then to Europe and beyond.
Meanwhile Boulevard, with financing from Duvel, will expand production capacity early next year. Some of beers now produced by the other U.S. brewery Duval owns, Ommegang in upstate New York, may eventually be produced in Kansas City.
Simon Thorp with Duvel says the company will make those decisions very gingerly, as it tries to take something intrinsic to Kansas City to a much wider audience, without screwing it up.
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