When Anheuser-Busch InBev bought Golden Road Brewing in September, many craft beer drinkers in Los Angeles, who’d followed the local brewery’s rapid growth and expansion, were not surprised. There was a sentiment repeated in tweets, Internet forums and comment threads that Golden Road was “built to sell."
It’s easy to grasp that narrative; Golden Road was different than the other upstart breweries that strove to transform L.A. into a craft beer destination. Golden Road started off bigger than nearly every other craft brewery in Los Angeles and grew faster than all of them. At the time of the sale, Golden Road was on pace to produce more than 45,000 barrels of beer a year (the next largest L.A. brewery could only produce a quarter of that), and Golden Road distributed its beer across California and into neighboring states.
But Tony Yanow, one of the founding partners of Golden Road Brewing, wants to put the “built to sell” rumors to rest.
“We didn’t have a single conversation about selling the brewery before August ,” he said during his first interview about the sale. “There was not a thought about selling until then.”
So what changed in August? Yanow says there were a few reasons behind the sale, but it boils down to how quickly the craft beer marketplace has changed over the lifespan of the brewery, especially in Los Angeles. Simply put, he says it was an “if you can’t beat them, join them situation.”
It turns out that the challenge of operating a midsize craft brewery isn’t so much making the beer, it’s getting that beer into bars and, even more importantly, onto shelves.
“In a world where the amount of shelf space is not growing, but the number of breweries is growing so quickly, it’s a fight to get your beer [into major retailers],” said Yanow. And it is a fight that is becoming increasingly difficult as the biggest players in the beer world continue to consolidate, acquire more brands and strengthen their grip on distribution networks and retail accounts.
Yanow said the Golden Road Brewing executive team was already feeling the pressure before last summer’s spate of acquisitions, and they knew the waters would get tougher ahead.
“When Meg [Meg Gill, co-founder of Golden Road] said they wanted to buy us, it was surprising, but it was also a relief,” said Yanow, even though he said that he wanted nothing more than to run the brewery until he retired. “Maybe my daughter would take it over some day,” said Yanow. But the offer was too good to pass up.
Financial details of the purchase were not disclosed, but Yanow said “there wasn’t really any reason to say no to that deal. They treated us really well, they gave us a really good valuation and they promised to keep all our people employed and give them opportunities for advancement.” Yanow is particularly happy with that final stipulation. “I wouldn’t have done it without that agreement in place,” he said.
He’s looking at a few options from Ventura to Orange County, as well as launching a brewpub in Los Angeles. “I don’t have any interest in another big brewery, I’ve done that,” said Yanow, though he wouldn’t reveal any details on the new brewpub.
“The beer world is changing, and the enthusiasm in L.A. is so vigorous. It’s still really exciting to be a part of it.”