Heineken buys Lagunitas – Good or Bad?

The news of the sale of 50% of Lagunitas to Heineken spread like wildfire today through the hop industry as it did, I’m sure, through the craft beer industry and the rest of the world. The discussion du jour among hop growers today was if this is a good thing and how will it affect the hop industry.  Will Heineken corrupt Lagunitas and their crazy passion for hops or will Lagunitas now roar ahead with a burst of fresh capital to take advantage of the expansion opportunities they have?

For what it’s worth, IMHO, the sale of 50% of Lagunitas is a good thing.  Lagunitas gains access to Heineken’s worldwide distribution infrastructure starting with the Mexico and Canada markets.  Heineken gains access to the craft beer market in a big way, which provides access not only to huge profits and market share, but a view into a different culture. Nearly everybody in the United States already appreciates how great craft beer is compared to “less flavorful” macro beers. This move, which begins with expansion into Mexico and Canada, offers the rest of the world an opportunity to discover the greatness of craft beer without having to wait years or even decades for a domestic craft beer industry to develop in their home country. If you love craft beer and hops, you should love this!  It will undoubtedly spurn on scores of local craft brewers around the world to get off their hineys and get busy brewing. When they do, they’ll be inspired by Lagunitas-type beers. That’s not a bad thing. It’s a huge step for the craft revolution and a great, albeit scary, thought for hop growers who now must entertain thoughts of a world craft beer industry growing at similar rates to that of the U.S., something they’re having a hard time handling already.  Can they handle the excess demand?

There has been a lot of hate today on the Interwebs about Corporate Beer and how it Sucks.  Don’t forget, Heineken is still family owned. It seems they plan to stay that way for the near future. There was a time when being successful in your family business was a good thing. You can’t be happy for Lagunitas’ success and at the same time shame Heineken.  Sure Heineken is a huge company, but they became huge by brewing beer people liked at the time. It seems to me they’re just trying to continue that tradition by working with Lagunitas. Heineken buying into Lagunitas is one of the world’s largest macro brewers acknowledging for the world to see that times are a-changin’ and that craft is the wave of the future. That’s like Coke admitting that Pepsi is better.  It’s like Vladimir Putin in a skirt.  These things just don’t happen ever day, but today it happened!  Heineken just wants to ride the wave too.

It’s great that people want to support their local craft brewer. They definitely should!  That’s how hundreds and even thousands of aspiring craft brewers will get their start. Supporting local is a great idea no matter what the product!  Let’s not forget though that Lagunitas is a brewery worth $1 billion and has already spread way beyond Petaluma, California.  Heineken has a market cap of $17.5 billion at the time of this writing. It’s enormous and can be found everywhere from James Bond movies to sports matches all over the world. Despite the endless sponsorship of sports events all around the world, is Heineken, holder of the monicker of “evil corporate brewery” in this scenario so much different than Lagunitas?

Maybe Heineken is guilty of being smart about business. Seeing a trend and jumping on board the craft beer wave the best way they can, which, since they have very deep pockets, is to buy one of the largest craft breweries in the country is not a bad idea.  The guys at Heineken aren’t likely to take the new toy they just bought and muck it all up by changing things. “Aanval is de best verdediging.”  That’s Dutch for “The best defense is a good offense.”  Big brewers know their time is passing and they much adapt or become relics of the past. This is how adaptation looks. My guess is Lagunitas will stay just the way everybody likes it for a long time … unless tastes change and people demand something different.