Duvel Buys Boulevard: What Should Consumers Expect?

Alex Fossi, October 21, 2013

News broke late last week that Boulevard Brewing Co. would be bought out (or "joined", depending on your preferred terminology) by Duvel Moortgat. Duvel Moortgat is a Belgian brewing company best know for the ubiquitous Duvel brew, which you've surely seen and probably tried if you spend a decent amount of time in bars. It's an internationally distributed beer, and while the company isn't the size of Anheuser-Busch InBev, make no mistake: this is an international beer distributor buying an American craft brewery. The price has been said to be around $100 million, and Boulevard will be rolled into a holding company that will now contain Boulevard, Brewery Ommegang (another Duvel subsidiary) and all of Duvel's imports in the U.S.  

As a dedicated non-economist, I'm not going to go into the economic details of the deal, because I'm far from competent enough to understand them; for that sort of analysis, the Brewbound article linked above is quite informative. As a beer drinker, I'm more interested in what this means for Boulevard's beers. Luckily, Duvel already owns Brewery Ommegang in New York, so we have a model to look at for hints as to what this deal means for Boulevard.

Increased distribution is probably the first change we'll see in the short term. Boulevard is currently available in just about half of the states in the U.S., and as far as I know isn't available outside the U.S. at all. If Ommegang's distribution is any indication, that will increase significantly; Ommegang is available in 44 or 45 states (depending who you ask) and ships internationally. This is good news for Boulevard fans living abroad and those of us in unfortunate states like Pennsylvania that can't presently find Boulevard (seriously, you can get it in MA, MD, and IN, but not in the middle of the three? Thanks, guys).

So, that's probably a positive. On the other hand, any kind of takeover will create concerns about diminished quality. Fans of Rolling Rock will recall that after Anheuser-Busch took over a few years back, the beer...well, put bluntly, it sucks now. It wasn't phenomenal before, to be sure. Still, this sort of example gives us cause to ask if a larger company will have a focus on profitability or increased production that might reduce quality.  

I don't think there's reason to worry here, though. First of all, Duvel has been in charge of Ommegang for a while now, and whatever you think of Ommegang's beers, they certainly don't scrimp on quality ingredients in the name of profit. Secondly, Boulevard's ex-president will remain involved at the brewery, which seems to be a sign that he and Duvel are on the same page with regards to the future direction of the brewery. Thirdly, Boulevard was already a pretty massive distributor, producing nearly 175,000 barrels of beer last year, and reports on this buyout suggest that they already had the facilities in place to at least double that. Concerns about increasing production leading to lower quality may be valid, but I don't see any reason to suspect that being owned by Duvel will make that any more likely than it already was.

Another concern that some have voiced is that Duvel might be buying up a brewery like Boulevard to strip it and boost Duvel sales in the U.S. This seems entirely unfounded to me -- again, Duvel's experience with Ommegang suggests that they aren't looking to do anything of the sort. On top of that, even a large brewery like Boulevard is a drop in the bucket as far as the craft beer market is concerned. Duvel would have to buy and strip many more craft breweries than this to have even the slightest impact on their own market share. Only about 10% of Duvel sales happen in the U.S., so I have to think they have far more to gain from growing Boulevard's business than from sinking it to boost their main brand.

Overall, we won't see a great deal of practical difference in the near future. I do think distribution will gradually be ramped up, though I'm sure it will take a while to both increase Boulevard's production and hammer out new distribution deals. It's not impossible that this might change the brewery's future choices as far as new recipes and ingredients go, but if the Ommegang situation is any indication, Boulevard will continue to operate more or less autonomously when it comes to what they produce.

That brings us to the elephant in the room; as craft beer consumers, should we take issue with breweries that get bought out? In another notable case, Goose Island was bought out by Anheuser-Busch, and many consumers feel that this is reason enough not to buy Goose Island's beers -- as Jeff Mac Donell so eloquently put it, "fuck A-B." Jeff also explained that "In my ideal world they'd use their incredible buying power and advanced brewing technology to make great beer at a great price, but in the real world I don't have to buy their crap," though personally, I kinda like the concise version.

The primary reason for this widely-held sentiment appears to be the approach Anheuser-Busch takes to the craft market. They're interested in making money off it, but there's not much indication that they feel it necessary to produce good beer to do so. Instead, they try to dress up crappy beers as "craft" beer and throw advertising money at it in an effort to impress drinkers.  

Alternatively, they brand one of their "craft" releases in an intentionally confusing way, so as to mooch sales from an existing craft brewer (knowing that a smaller brewery lacks the financial resources to challenge them in court). Perhaps most telling is that none of their "craft" offerings is ever clearly branded as an Anheuser-Busch offering.

There's been some heated discussion of how beer consumers should react to this Boulevard move, so this past Friday, I asked our commenters what their thoughts on the sale were. I expected some opposition.  After all, even prominent craft brewer Stone was throwing some shade at Boulevard for "selling out".

The responses I got, though, were largely positive, with some expressing that they were just happy that Boulevard might expand distribution going forward. Why is this move seen so differently from the Anheuser-Busch / Goose Island takeover?

Essentially, Duvel gets the benefit of A) not having a history of deceptive marketing and B) having a track record with their ownership of Ommegang. Commenter tehzachatak put it well, saying "I have no issues with Duvel as a company -- as far as I'm aware, they have not pushed anti-competitive practices into the marketplace like ABI has, and their management of Ommegang (who they own as well, to be clear), has been just fine." I'd agree with all of that.

Concerns about this sale occur because of Duvel's size; however, Duvel has no history of the kind of practices that have earned A-B the scorn of the craft beer community. Certainly, this is something to be aware of -- it wouldn't shock me to see other international distributors buying smaller breweries to grab a share of the growing U.S. craft beer market. That said, I don't see any reason to expect this particular deal to be a negative for Boulevard fans, and for those of us that can't find Boulevard in our home state yet, this certainly is a reason to hope for expanded distribution.