Food & Drink » Food News

Downtown Boise Brewpub Part of Big Beer Purchase

10 Barrel Brewing Company sells to Anheuser-Busch


When 10 Barrel Brewing Company opened the doors to its cavernous brewpub at 830 W. Bannock St. last year, Boiseans were quick to embrace the addition to the Treasure Valley's burgeoning beer scene. So much so that the Bend, Ore.-based company was voted Best Local Brewpub in the 2013 Best of Boise by such a wide margin that we had to make an exception to our local-only stipulation for winners.

Boise beer lovers weren't the only ones attracted to 10 Barrel. A year and a half after opening its Boise brewpub in April 2013, the brewery—with locations in Bend and Portland, Ore.—has been acquired by beer titan Anheuser-Busch. The deal, announced Nov. 5, has sent shock waves through the Northwest craft beer industry. Not all the commentary has been kind.

"When are we going to see shitty 10 Barrel Brewing Company Superbowl commercials? Can't wait to see you in NASCAR too," wrote one miffed beer lover on the 10 Barrel Brewing Facebook page. Others chimed in with "bummer," "so sad," "lame" and, of course, "sell out."

Talking to the Herald and News in Bend, former Deschutes Brewery Brewmaster Larry Sidor said the deal "hasn't really sunk in yet. It feels like one of our family members has died."

Plenty of local 10 Barrel fans pledged their continued support, however.

"That is the idea of business," posted one commenter. "I just hope you keep it real, I still love the food and beer and will still support you."

In a video announcing the sale, brewery founders Chris and Jeremy Cox and Garrett Wales assured craft beer drinkers that nothing would change following the acquisition, other than giving 10 Barrel the financial backing to handle its rapid expansion.

While the news came as a surprise—even to some 10 Barrel employees, one of whom told Boise Weekly that the staff was told of the acquisition about five minutes before it went public—Wales told BW that the deal had been in the works for the past six months.

"We were already aligned with A-B and their distribution network," Wales said. "They were familiar with our brand and watched our growth. It was getting tough to manage from the business perspective for us."

Wales added that he's not expecting to see 10 Barrel beer in every grocery store across America, nor does the brewery plan to expand beyond its Northwest "home turf" in the near future.

Sheila Francis, president of Idaho Brewers United and marketing director for Payette Brewing Company, came to 10 Barrel's defense against attacks from the hard-core "drink local" crowd. She said the sale to Anheuser-Busch doesn't signal the end of the craft beer movement.

"The local movement is great, but when anything like this happens, I think people forget that 10 Barrel still pays local taxes. They still influence the local economy, they're still employing people on the local level and buying from local producers," she said. "While the ultimate profits are not necessarily staying here, they still have a positive impact."

Francis pointed out that A-B has been snapping up microbreweries across the country, including Chicago-based Goose Island Beer Company in 2011 and New York-based Blue Point Brewing Company this past February. The financial details of the 10 Barrel acquisition were not released, but A-B's previous deals have been high-dollar: Goose Island, which at the time of the sale was producing 127,000 barrels a year, went for $38.8 million; Blue Point, whose 60,000-barrel capacity is similar to 10 Barrel's 40,000 barrels, sold for between $18 million-$24 million, according to sources.

"They've made some changes, but generally, their core brands stay the same," Francis said of A-B's purchases. "[10 Barrel's] beer isn't going to be watered down, they're not going to be made with hops extracts. Goose Island's beer is still really enviable. A-B isn't going to touch that."

She admitted that 10 Barrel is going to lose some customers right off the bat—people who refuse to drink any Anheuser-Busch product.

"Craft beer has a really great story behind it, but I think what sometimes gets lost is that they're still businesses and they still have to make business decisions," Francis said. "No one really complains that much when a start-up gets bought out by Google. I think it's because of the story aspect. ... I think people are worried, and rightfully so, that they'll lose that personal touch and that personal connection with the brewery."

Wales said 10 Barrel started life as a bar, but he and his partners—brothers Chris and Jeremy Cox—dreamed of trading it for a brewery. That happened in 2007.

"We thought it would be really fun to start a brewery and sell our beer to our buddies and bars downtown and see what happened," Wales said.

The owners never aspired to sell the company to an industry giant like A-B, which itself was purchased by Belgian firm InBev for more than $50 billion in 2008, making it the largest brewer in the world with 25 percent global market share.

"When we started this, it was literally just us three for two years. We had one employee," Wales said. "But we've grown organically ... We never dreamed of having 300-plus employees and having multiple locations and being in three states and growing. To be honest, it started taking some of the fun out of it for us. We're getting into areas that we're not experts at, we were very fortunate to be able to partner with a company that is, in all honesty, the best that it gets when it comes to that side of the business."

Wales said among the perks of being an A-B subsidiary are access to Elk Mountain, the largest hops farm in the country—a few miles north of Bonners Ferry—and having some help managing the business side of things.

While he has heard grumbling from some in the craft beer community, the news of the sale didn't seem to have much impact on Boise's downtown location. Only days after the announcement, the restaurant was still packed for lunch, with more customers waiting to pile in.