Chicago’s Goose Island brewpub will close at the end of 2008
You thought that with running a brewery you were in the beer business? Apparently not. Goose Island’s brewpub closure proves that you are in the retail business. Because should your neighbourhood suddenly become hip you can fall victim to rising rents.
Goose Island has been one of the beer landmarks in Chicago for two decades. John Hall founded the Goose Island brewpub, the maker of Honker’s Ale, 312 and other brews, in 1988 at 1800 N. Clybourn Avenue, then a not-so-posh neighbourhood. The venture was a success and Goose Island decided to build a stand-alone brewery at 1800 W. Fulton Street in 1995 for the production of its packaged beer. Since then, the company has focused on retail beer sales, though it has continued to operate brewpubs at Clybourn Square and at 3535 N. Clark Street. The Clybourn outlet will close at the end of the year when its 15-year lease expires but the Wrigleyville brewpub will remain open.
The brewpub’s landlord, CRM Properties Group, asked for a “significant” rent increase, which John Hall, Goose Island’s founder and chief executive, was unable to accept.
The area around Goose Island’s Clybourn outlet has since been gentrified and turned into an upscale retail mall. Today, Clybourn Square is surrounded by one of Chicago’s hottest retail regions, featuring several national chains. And despite a big downturn in retail and commercial real estate, North-Clybourn continues to thrive.
Goose Island may look to open another brewpub elsewhere.
Last year, several of Goose Island’s founding shareholders sold their interests to Oregon-based Widmer Brothers Brewing, which is partly owned by Anheuser-Busch, the nation’s largest brewing company. John Hall is Goose Island’s majority owner. Nevertheless, he has always defended the partial sale of Goose Island by pointing out that it gave Goose Island access to Anheuser-Busch’s distribution system.
The figures prove him right. Goose Island’s production rose from 60,000 barrels of beer in 2006 to 90,000 barrels (105,000 hl) in 2007.
“We had a terrific year,” John Hall was reported as saying, and added “that Goose Island hasn’t seen such a growth rate, 50 percent, since its early years.” Despite the downturn in the economy he expects that sort of growth to continue this year.
In the grand picture, Goose Island, which is available in 14 U.S. states, is relatively small, ranking 25th among U.S. brewers last year, according to a recently released report from the Brewers Association.
Among so-called craft brewers, which make traditional-style beers, Goose Island would rank 15th largest. But the Brewers Association doesn’t count Goose Island as a craft brewer, even tough it makes only craft beers. That’s because the association’s rules say a craft brewer can’t be more than 25 percent owned by a non-craft beer-maker. The association claims Widmer owns about 40 percent of Goose Island, and Widmer is about 40 percent owned by Anheuser-Busch.
That’s what got John Hall miffed. Boston Beer, which is the fifth-largest brewer in the U.S., still has some of its beer brewed by industry heavyweight SABMiller, yet its flagship brand Samuel Adams is considered a craft beer. “You tell me Sam Adams is a craft beer and we’re not,” John Hall was quoted as saying.
