Anheuser-Busch InBev, via its Goose Island Beer Company outfit, today announced it will acquire a majority stake in Michigan’s Virtue Cider.
Specific financial terms were not disclosed, but officials with both companies described the partnership as a joint venture, noting that Goose would become the “majority shareholder” in the cidery.
Greg Hall, the former Brewmaster at Chicago’s Goose Island and son of brewery founder John Hall, launched Virtue Cider with partner Stephen Schmakel in 2011, following A-B’s $38.8 million purchase of the Chicago brewery.
Hall and Schmakel initially tapped 31 investors to get the project off the ground. All of those investors have opted to retain their interest in the company, Hall said.
Virtue, which specializes in European-style farmhouse ciders, was well-received when product first hit the market in 2012. In recent months, however, the company fell behind on payments to growers, owing more than $100,000 to at least one New Hampshire-based supplier. In May, the U.S. Department of Agriculture stepped in and imposed a sanction that restricted the company from “operating in the produce industry.”
At the time, Hall said the company was undercapitalized and was addressing the issue by “bringing more capital into the business.”
“We needed resources,” Hall told Brewbound. “We have a beautiful cider house, but we are very limited in our capacity to package that cider and get it to market. Demand has grown and it made sense for us to partner up with someone that not only brought financial resources, but also a packaging line and that go-to-market team.”
Hall said the company has repaid all of its apple growers and is “excited to be moving forward.”
“Most entrepreneurs, as they grow in the early stages of their company, are faced with that balancing act of growth versus resources,” he said. “I am happy that we don’t have to worry about that anymore.”
Virtue will join A-B InBev’s rapidly growing high-end division, which also includes craft brewing outfits 10 Barrel Brewing, Blue Point Brewing, Elysian Brewing and Goose Island.
“This is a very deliberate move on our part,” said Goose Island general manager Ken Stout. “We have had our eye on the cider category for a while.”
Hall, who maintained a seat on the Goose Island board following its sale, said the decision to sell a stake to A-B InBev was “natural.”
Virtue is currently distributed in 20 states with a mix of wholesalers. Stout said A-B would address any transitions on a “case by case basis.”
“We haven’t scripted everything,” he said. “We want to keep growing Virtue and satisfying the demand in our existing markets now.”
Production will remain at Virtue’s 48 acre farm in Fennville, Mich., but packaging will shift to Goose Island’s Fulton Street brewery in Chicago, Hall said.
“Now we can focus 100 percent on making the best cider we can and not have to worry about putting it in the package,” Hall said.
A full press release with additional details is below.
CHICAGO and FENNVILLE, Mich. (September 4, 2015) – Goose Island Beer Company of Chicago and Virtue Cider Company of Fennville, Michigan, announced a partnership today in which Goose Island will become the majority shareholder in Virtue Cider. Founders Gregory Hall and Stephen Schmakel will continue to be the creative and operational team behind the business and will continue producing Virtue Cider in Fennville. Virtue will utilize the facilities at Goose Island’s Fulton Street brewery for packaging needs – including bottling and kegging, and as a hub for increased distribution.
“Since we started Virtue Cider in 2011, we’ve committed ourselves to producing traditional European-style Farmhouse ciders using Michigan apples pressed at our farm in Fennville,” said Gregory Hall, Virtue Cider founder. “The partnership with Goose Island will give Virtue access to high speed bottling and kegging at the Fulton Street Brewery, and the resources to expand production and distribution. We will get our ciders in the hands of more cider drinkers.”
Since its inception in 2011, Virtue Cider has created a portfolio of barrel aged craft ciders, including their flagship brand RedStreak, a proper English style cider and The Mitten, a bourbon barrel aged cider. Virtue has more than 700 oak barrels in Fennville, including French oak, American oak and bourbon barrels. They operate a bottle shop at Virtue Farm in Fennville, where drinkers can tour the cider house and get a tasting of all the ciders.
“We’re excited to welcome Greg Hall back into the Goose Island family,” said Ken Stout, General Manager, Goose Island. “Virtue Cider produces amazing barrel aged ciders and with our combined resources we look forward to innovating and growing the business together. ”
Terms of the partnership were not disclosed.
About Virtue Cider:
Virtue is the hard cider venture launched in June 2011 by Gregory Hall, former brewmaster at Goose Island, and co-founder Stephen Schmakel. The company’s mission is to make European-style ciders from fresh heirloom apples—never from concentrate—and employ traditional farmhouse production methods that include native and secondary fermentation, use of wild yeasts, and an expansive barrel-aging program. For more information about Virtue Cider, head to www.virtuecider.com and find them on Facebook and Twitter.
About Goose Island Beer Company:
Founded in Chicago in 1988, Goose Island is a leader in craft brewing, creating award-winning beers that define innovative styles and capture the imaginations and palates of beer drinkers everywhere. Goose Island has won a variety of awards at acclaimed beer events including the World Beer Championships, World Beer Cup, European Beer Star, World Expo of Beer and the Great American Beer Festival (GABF). For more information visithttp://www.gooseisland.comand find them on Facebook, Instagram and Twitter.