So the beloved craft brewing industry lost another major player today when Anheuser-Busch purchased its second Pacific Northwest based brewery, Elysian Brewing. Yes, Elysian has joined 10 Barrel Brewing in the ranks of Anheuser-Busch’s craft beer division. (You can read the press release about this purchase here.)
Anheuser-Busch sees these strong craft beer players as a more convenient way to enter this rapidly growing segment. Currently AB owns a 47.2% share of the total U.S. beer market. Even before its beers hit the mouths of consumers, AB owns and operates 15 breweries, 17 distributorships and 23 agricultural and packaging facilities across the United States. And for all of the craft beer lovers, AB owns a huge hop farm in Northern Idaho, Elk Mountain Farms, so there’s a strategy behind these recent acquisitions.
Brewpublic was able to speak to two of Elysian Brewing’s founders, Dick Cantwell and David Buhler along with Andy Goeler, CEO of Anheuser-Busch’s Craft division via phone from their location at the Warwick Hotel in downtown Seattle. The conversation was pleasant and some answers seemed a bit well rehearsed but this is what happens in the business world.
Elysian was formed in 1996 by Cantwell, Buhler and Joe Bisacca when the trio opened their first brewpub in Seattle’s most populous neighborhood on Capitol Hill. Known for variety, Elysian has brewed more than 350 beers over its history. The brewery continues to grow and in 2014 Elysian brewed over 50,000 barrels.
Currently Elysian operates a production brewery in Seattle’s Georgetown neighborhood, four Seattle brewpubs, Elysian Capitol Hill, Elysian Tangletown, Elysian Fields along with its most recent property, Elysian BAR. Its growth has exploded over the past 5 or so years. The brewery received some large-scale notoriety in 2008 when it was asked to brew a beer for Sub Pop Records 20th Anniversary weekend of concerts. Its product for the fest was Loser Pale Ale with the tag line “Corporate Beer Still Sucks”. This was a take on the shirt that Kurt Cobain wore during the photo shoot for Nirvana’s first cover on Rolling Stone that said “Corporate Magazines Still Suck”.
So will Elysian continue to brew Loser Pale Ale? “Absolutely, we all are losers”, says Buhler. When asked about the beer label that states “Corporate Beer Still Sucks”, Cantwell jumps in to say, “The plan is to keep it the same. The reference to that is when Nirvana was on the cover of Rolling Stone and we kind of ran with that. We brewed that beer for Sub Pop Records 20th Anniversary. But we are keeping going with it. It adds another layer to the joke”. Buhler interjects, “We always thought it was funny that people didn’t get the joke. From the beginning we were a corporation and we were literally calling ourselves the Loser. That’s what that beer was about”.
Moving forward all three original partner will continue in similar rolls except now they all work for someone else. “We are all still on board creating great beers and trying to run a successful operation with a lot of great people”, states Buhler.
When the subject turns to the Brewers Association and Elysian’s now forced exit from this trade group based on the new ownership, Cantwell’s frustration was noticed. Over the years he put forth great effort towards this group. “I have a long association with the Brewers Association. I was on the board for several years. I had and hand in crafting a lot of that message and drawing some of the lines and now we are on the other side of the line. You know, that’s just the way it is. I recognized the choices that we have made and what that means. I am sorry that I won’t be able to continue fulfilling some of the rolls there. But life can get complicated too.”
This past year Elysian produced over 50,000 barrels. Already into 2015, when asked for their production goals for the year Buhler states, “We projected out based on our plant capacity and not stressing or changing price points too much to be in the mid 70’s”. If reached this is an impressive jump of about 50%. This is huge and not many breweries can pull something like this off.
“And that level is what I built all of our hop contracts to so now we have theoretically access to other sources of raw materials to grow beyond that I suppose. But that is about as far as we planed out. We are looking at filling out our capacity at our Airport Way production brewery in probably 18 months to 2 years. So now is the time to make some sort of decision about how to grow,” says Cantwell.
With this massive jump in production, one wonders where will the brewery sell this extra product. It currently distributes its brands in 11 states: Washington, Alaska, Colorado, Oregon, Idaho, Montana, Pennsylvania, New Jersey, Maryland, Delaware and New York, as well as internationally in Vancouver BC and Alberta, Canada; Taiwan; Australia and Japan.
“We have been planning to enter Southern California for the last year. To be honest we have had to postpone it because of the growth that we have seen in Washington state and Oregon. That has really taken up all of our plant capacity and our hop contracts. We have expanded our plant since then so I believe that we are going to open up Sothern California at some point in 2015. But nothing has been set as far as timeline”, states Buhler.
One of the entities that’s very alluring that Elysian brings to the table for a sale is its popular brewpubs. When AB purchased 10 Barrel they too had a strong pub culture and appeal. However, 10 Barrel is facing some challenges with its ability to operate its Boise Pub due to Idaho’s alcohol laws. The question is posed will Elysian face something similar in Washington?
Buhler steps in, “No there’s not. The liquor board in Washington recognizes that the 3-tier system you can be in different tiers as long as you let them where you are and what you’re doing. So that should be ok.”
When the subject moves to further on in the future will Elysian follow the lead that Goose Island took with brewing their core lineup of at existing AB breweries. “Well the future for the next couple years we seem to be in good shape as far as plant capacity. Beyond that we need to take a look at brand velocity and what the potential is. They have fabulous breweries to brew in. Our biggest fermenter is 240 barrels and I believe their smallest fermenter is 500 barrels. We are already looking at putting 480’s in our parking lot so it wouldn’t’ be out of the realm of possibilities. But its not in the current plan”, states Buhler.
Cantwell jumps in, “We doubled our fermentation capacity over the summer and pretty much filled out the room. We are doing a little building/construction next door but that’s mostly going to be for cold storage. So we have probably 110,000 to 120,000 barrel capacity there. We got some room for growth in terms of numbers but we don’t have room there to put anymore tanks in”.
When presented with the inquiry of what other changes will we see in the future is finally when Andy Goeler, CEO of Anheuser-Busch’s Craft division, speaks up. “That answer to that is NO! The simple answer is that we bought Elysian to continue to be who they are. So the will continue to operate in Seattle, same people to continue to run the brewery, make great beers so you don’t see a lot of change occurring. We want them to kind of the core of who they are in tact”.
Will there be backlash at Elysian for “selling out” to giant corporate behemoth of Anheuser-Busch? Of course there will be some upset Elysian fans that don’t want to support corporations no matter what size. Very similar corporations that these same individuals are receiving this Elysian news on, such as an iPhone or Dell computer, that also come from very large corporations. A person can say one thing but it’s very difficult to follow through with it in one’s life in today’s modern world. In the end its the consumer that will decide.
Something we are excited for is that when it comes to Elysian’s expansive lineup of pumpkin beers. In 2015 there will be five additional pumpkin beers added to their extensive lineup. As long as Elysian’s quality and creativity continues along the same path, the masses will still be drinking the brewery’s beers.
D.J. is a Portland, Oregon based writer that spent his formative years in the Midwest. With over 20 years under his belt of drinking beer at festivals across America and the world, he has developed a strong appreciation and understanding of craft beer and the industry that surrounds it. He can be found in any of the great breweries or beer bars that make Portland the best beer city in the world. His writing can also be found in Northwest Brewing News and can be followed on Twitter at @hopapalooza.