Thoughts on the Sale of Magic Hat and Pyramid

Posted on August 26th, 2010

Several recent news stories have reminded us once again of how much growth and change the craft beer world is constantly undergoing, in particular the purchase of Independent Brewers United, the producers of the Magic Hat, Pyramid, and MacTarnahan beers, by North American Breweries (NAB). NAB is the company responsible for such questionable “brews” as Labatt Blue lager and Seagrams’s Escapes wine coolers. Understandably, many in the craft beer world are a bit concerned over this news, as Magic Hat and Pyramid are  the 8th and 5th largest craft breweries in the country, respectively. Some are also reading the resignation of Magic Hat’s president and co-founder following this deal as another bad sign.

And while I agree that the signs don’t look great, this may actually turn out to be a good thing. If NAB changes the recipes to existing beers I will be the first to be outraged, but I haven’t seen any evidence that that’s their intention. Like many, I would prefer to see craft brewery ownership remain local and independent as much as possible, but it’s going to be tough to maintain that business model as craft beer continues to grow. The fact of the matter is that as craft beer continues to gain in popularity, larger business interests are going to increasingly take note and want part of the action. The influx of money-driven investors could easily go poorly, but it could also provide growing craft breweries like Magic Hat and Pyramid with more money to expand and continue to produce amazing beers. The better bargaining power that comes with consolidation is after all probably one of the main reasons that Magic Hat and Pyramid  created the Independent Brewers United in the first place. This is extremely important with the Three Tier distribution system currently in place, the pitfalls of which were covered extensively in the movie Beer Wars.

My bottom line is that change is inevitable, and I’m strongly opposed to drinking or not drinking a beer simply because of who made it. I try to judge my beer not by the label but by the taste. In my experience  independently owned craft breweries are almost always tastier than the corporate stuff, and that trend may continue, but I’m trying to keep an open mind. The sale of Magic Hat and Pyramid is uncharted territory, there are few precedents to reference for guidance so we are all going to have to be patient and see how this plays out.