A-B shopping spree continues with Breckenridge acquistion

Anheuser-Busch today announced it will acquire Colorado-based Breckenridge Brewery. Breckenridge Brewery is the seventh craft brewery to join The High End, Anheuser-Busch’s business unit of craft and import brands. Goose Island Beer Company, Blue Point Beer Company, 10 Barrel Brewing, Elysian Brewing Company, Golden Road Brewing and Four Peaks Brewing Company are the others.

A-B announced that it has acquired Four Peaks only Friday, and in the interim A-B InBev bought Camden Town Brewery in London.

“We’re excited about the partnership and have been encouraged to continue on our path and become more innovative moving forward,” Breckenridge president Todd Usry said in a press release. “I’m a believer in what The High End is focused on accomplishing and we are flattered that our team was chosen to help guide that journey. We’re looking forward to utilizing resources like decades of research and brewing expertise as we continue to create new beers.”

Available in 35 states, Breckenridge Brewery will sell approximately 70,000 barrels of beer in 2015. The partnership includes the company’s new production brewery and Farm House restaurant in Littleton, and original brewpub and current innovation center in the mountain town of Breckenridge.

The current management group, Breckenridge-Wynkoop, will continue to own and operate its remaining businesses including: Ale House at Amato’s in Denver; Breckenridge Ale House in Grand Junction; Breckenridge Colorado Craft in Denver; The Cherry Cricket in Denver; Mainline in Fort Collins; Phantom Canyon Brewing Co. in Colorado Springs; and Wynkoop Brewing Company in Denver.


A-B acquires Four Peaks Brewing

Anheuser-Busch has acquired Arizona-based Four Peak Brewing, the sixth craft brewery it has added to The High End, the company’s business unit for craft and import brands.

“For 20 years we’ve had more amazing experiences than I can count doing what we love to do most – brewing great beer and sharing it with a growing craft community in Arizona that has supported us from day one,” Andy Ingram, Four Peaks co-founder, said in a press release announcing the deal. “We’re excited to join the enthusiastic team and tap into their resources to expand our footprint and share our beer with even more people moving forward.”

Four Peaks will join Goose Island Beer Company, Blue Point Brewing Company, 10 Barrel Brewing, Elysian Brewing Company and Golden Road Brewing in The High End portfolio.

The deal includes the company’s three primary locations: the 8th Street Brewery & Pub in Tempe; the Wilson Street Brewery & Tasting Room in Tempe; and the Grill & Tap in Scottsdale, in addition to continuing their partnership at the Sky Harbor Airport facility. Anheuser-Busch’s acquisition of Four Peaks is expected to close during the first quarter of 2016. Terms of the agreement were not disclosed.

The Arizona Craft Brewers Guild is currently is assessing the impact of this announcement.

“Many of our members are personally happy for the owners and employees of Four Peaks Brewing Company. Consolidation, however, represents a threat to local breweries because it affects our ability to gain access to markets, raw ingredients and resources,” the guild stated in a press release. .


Constellation buys Ballast Point for $1 billion

Constellation Brands has reached an agreement to acquire San Diego-based Ballast Point Brewing & Spirits for approzimately $1 billion, according to a company press release. Ballast Point is one of the fastest growing craft beer companies in the U.S., its best sellers being Sculpin IPA and Grapefruit Sculpin IPA. The press release states, “The partnership with Ballast Point provides a high-growth premium platform that will enable Constellation to compete in the fast-growing craft beer segment, further strengthening its position in the highest end of the U.S. beer market.”

Ballast Point was founded in 1996 by homebrewers in the back of a homebrew shop. Ballast Point will continue to operate as a stand-alone company with its existing management team and employees running the day-to-day operations.

“We started this business nearly 20 years ago with a vision to produce great beer that consumers love and to do it the right way,” said Jack White, founder of Ballast Point Brewing & Spirits. “To achieve that vision, we needed to find the right partner. The team at Constellation shares our values, entrepreneurial spirit and passion for beer, and has a proven track record of helping successful premium brands reach the next level of growth and scale.”

Ballast Point had recently begun the process of going public, but that is suddenly history.

“We believe in the vision that Jack and his team have created and we’re excited to welcome Ballast Point, one of the most respected craft brewers in the country, to the Constellation Brands family,” said Rob Sands, chief executive officer, Constellation Brands. “Along with imports, craft beer is a key driver of growth and premiumization within the beer industry, with craft doubling its share of the U.S. beer market in the last five years. Ballast Point has certainly been a key driver of that growth. Their business philosophy and entrepreneurial spirit perfectly align with our culture and we look forward to strengthening our position in the high-end beer segment with what is arguably the most premium major brand in the entire craft beer business.”

Ballast Point is on pace to sell nearly 4 million cases in calendar 2015, which would represent growth of more than 100 percent versus calendar 2014. The company has more than 500 employees and produces beer in four facilities in the San Diego area.


AB InBev ‘first truly global brewer’

As expected, AB InBev announced that as part of the final agreement to buy SABMiller for $107 billion that SABMiller will sell its 58% share of its venture with Molson Coors to that company for $12 billion.

That deal includes rights to the Miller brand name and gives Molson Coors full control of operations.

The combined company will still need to address regulatory issues in other countries, particularly in China, where SABMiller has a 49% stake in Snow, the world’s biggest selling beer.

“This combination would create the first truly global brewer,” AB InBev CEO Carlos Brito said after the final agreement was announced.

“The transaction would strengthen AB InBev’s position in key emerging regions with strong growth prospects such as Asia, Central and South America, and Africa,” AB InBev said in a statement. “These regions have hugely attractive markets and will be critically important to the future success of the Combined Group.”

The new company will be listed in Belgium, with secondary listings in Johannesburg, Mexico and New York.

Although selling its stake in MillerCoors was seen as vital to clearing the way for the takover, it will also undergo regulatory scrutiny in the U.S. After the announcement, Brewers Association CEO Bob Pease released this statement:

“The Brewers Association, the national trade association for America’s more than 4,000 small and independent breweries, is carefully reviewing the terms of the acquisition announced today by AB InBev and SABMiller, and, in the days ahead, we would urge the Congress and the Department of Justice to closely examine the potential effects on the U.S. marketplace and American consumers of this proposed deal.

“The size and scope of the ABInBev business has many ramifications for the U.S. beer industry, even with the divestiture of the MillerCoors joint venture. The most obvious is that AB InBev is still by far the largest brewer and beer distributor in the United States. It is vital for the continued success of small brewers that we have access to market with an independent and competitive middle distribution tier.

“Over time, ABInBev will have significant new global revenues to invest in the United States if it chooses to do so as a result of this acquisition. The MillerCoors operation will undergo significant changes. AB InBev’s new international footprint and scale give the company greater influence over commodities used in brewing and many other facets of the beer industry that could affect competition in the U.S. market.

“All of these issues – and their potential effect on small brewers, the broader industry and U.S. beer drinkers – must be carefully weighed and scrutinized by antitrust authorities.”


The giant gets bigger – AB InBev buys SABMiller

Anheuser-Busch InBev announced it has struck a deal with SABMiller to take over the brewer at £44 ($67.63) a share, about 14% higher than its initial offer last month. Reuters puts the value of the takeover proposal at $104.48 billion.

The combined company would have 31% of the global beer market. Heineken, the next biggest player, has 9% of the market.

Crucially for AB InBev, a deal would enable it to venture out more into the African and Australian markets where its might has yet to be felt in the way it is in Europe, North Africa and Asia.

The deal must still be approved by government regulators around the world and certain parts of the SABMiller operation will need to be sold in order to satisfy antitrust concerns. For instance, in the United States the new company would have 70% of the beer market. So it seems likely that Molson Coors will acquire SABMiller’s 58% stake in MillerCoors, their U.S. joint venture.

Although the scrutiny related to this deal is separate, that the U.S. Justice Department is probing allegations that Anheuser-Busch InBev is seeking to curb competition in the beer market by buying distributors is certainly relevant.

In recent months, the company has purchased five distributors in three states. Many states require brewers to use distributors to sell their product, and once A-B InBev buys a distributor, craft companies say they find that they can’t distribute their beer as easily and sales growth stalls. Antitrust regulators are also reviewing craft brewers’ claims that A-B InBev pushes some independent distributors to only carry the company’s products and end their ties with the craft industry, two of the sources said, noting that the investigation was in its early stages.


Dogfish Head sells stake to private equity firm

Dogfish Head Craft Brewery announced today it has sold a 15 percent stake in the company to a New York-based private equity firm, LNK Partners.

In announcing the deal, Dogfish Head co-founder Sam Calagione said his company plans to eventually repurchase LNK’s share. The cash infusion now will allow Dogfish Head to continue growing. The company recently completed a $50 million expansion, financed primarily through bank debt.

“We lived through the first great shakeout of the craft era in the late 90s as brewers, beer geeks and mom-and-pop entrepreneurs,” Calagione told Brewbound. “Now as we go into the next most highly competitive moment in our industry, I see that it is not just home brewers and mom-and-pop entrepreneurs navigating this moment next to us.”

LNK will have one of five voting seats on the Dogfish Head board.


Green Flash brewmaster leaves to start on brewery

Chuck Silva his resigned his post as brewmaster and vice president of brewing operations at Green Flash Brewing Co.

Here are the details from a press release:

Effective immediately, (Silva) will be funneling his energies into the establishment of his very own craft brewing operation at a yet-to-be-determined location in California’s San Luis Obispo County.

“Words cannot express my deep level of appreciation for the opportunities that Green Flash Founders Mike and Lisa Hinkley have provided me over the past decade-plus,” says Silva. “Together, we pooled our shared passion and determination to accomplish great things and introduce drinkers across the country to innovative, largely hop-forward beers that I was proud to help craft along with Green Flash’s passionate brewing staff. I will miss them all, but feel now is the time to focus on this next chapter.”

Adding to Silva’s enthusiasm is the chance to build his brewing company in the region where he grew up. The brewmaster hails from the Central Coast, and many of his longtime friends and family still live there. Silva is particularly excited about brewing up a business working side-by-side with the newest family member, wife Mary Jo.

When Silva joined Green Flash in 2004, the employee base totaled less than a dozen and the business was struggling to find an identity and market share in San Diego’s rapidly growing brewing industry. Thanks in large part to poignant beers tackling a wide range of styles—from hoppy beers to Belgian-inspired ales to barrel-aged sours and stouts, and more—Green Flash evolved into one of the nation’s premier brewing operations, currently employing more than 200 with nationwide and international distribution, and plans to open a second full-scale brewery in Virginia Beach, Va. in 2016.

“It’s been so fulfilling to play such a major role in the accomplishment of so many goals at Green Flash. Together, we’ve come further and grown larger than I could have ever foreseen. I couldn’t have done it alone and I thank every member of the craft community that helped me along the way,” says Silva. “But it’s always been my dream and personal long-term goal to brew on my own terms. Now is the time to go for it and I’m looking forward to working on smaller projects.”

No word on what the brewery will be called or when it open.


Great American Beer Festival winners announced

Two hundred and forty-seven judges from 15 countries evaluated a mind-boggling 6,647 beers during the course of three days of judging at the Great American Beer Festival in Denver.

A few other numbers illustrate just how big the event has grown:

– 750 breweries were represented in the festival hall
– 3,800 beers served at the festival
– 60,000 attendees for four sessions
– 3,400 volunteers (festival and competition combined)
– 1,552 breweries in the competition from 50 states plus Washington, D.C.

The most-entered categories were dominated by hop-forward beers. There were: American-Style India Pale Ale (336 entries), Imperial India Pale Ale (208 entries), Wood- and Barrel-Aged Strong Beer (179 entries), Session India Pale Ale (161 entries), American-Style Pale Ale (160 entries).

Seven breweries won Brewery of the Year awards:
– Very Small Brewing Company – Rip Current Brewery (San Marcos, Calif.)
– Small Brewing Company – Port City Brewing Co. (Alexandria, Va.)
– Mid-Size Brewing Company – Firestone Walker Brewing Co. (Paso Robles, Calif.)
– Large Brewing Company – Pabst Brewing Co. (Los Angeles, Calif.)
– Small Brewpub – Melvin Brewing (Jackson, Wyo.)
– Mid-Size Brewpub – TAPS Fish House & Brewery (Corona, Calif.)
– Large Brewpub – Titletown Brewing Co. (Green Bay, Wis.)

Download a complete list of the winners here.


A-B buys Golden Road Brewing

Anheuser-Busch announced today it is acquiring Golden Road Brewing, the largest craft brewery in Los Angeles County.

It is the fourth smaller brewery A-B has purchased since it first bought Goose Island Beer Co. In 2014 it acquired Blue Point Brewing, 10 Barrel Brewing and Elysian Brewing. In addition,s last month Goose Island subsidiary bought a majority stake in Michigan-based Virtue Cider.

The deal comes on the heals of news of other acquisitions. Most recently, MillerCoors acquired a majority stake in San Diego’s St. Archer Brewing Co. Not long before, Lagunitas Brewing announced a partnership with Heineken that traded 50% of the company for an undisclosed sum and unequaled access to the international marketplace.

Founded in 2011, Golden Road produced 30,000 barrels last year.

Golden Road plans to remain focused on its current distribution in California, Arizona and Las Vegas, but could expand to other states under A-B’s ownership. “As demand grows, hopefully we’ll look at what other states and countries look like,” company co-founder and president Meg Gill told the St. Louis Post-Dispatch.

St. Louis-based A-B, the U.S. subsidiary of Anheuser-Busch InBev, said the sale includes Golden Road’s brewery, a pub in Los Angeles and a tasting room. Golden Road is adding a new tasting room this year, and a second production brewery and pub in Anaheim in late 2016.

Andy Goeler, A-B’s CEO of craft division, said Golden Road has created a passionate beer culture in its four years in operation. A-B continues to evaluate other craft brewery acquisition opportunities, he said.

“In addition to Budweiser and Bud Light, there’s a lot of demand for local beers and varieties of styles within those local beers,” said Andy Goeler, A-B’s CEO of craft division. “We’re always looking for other phenomenal companies to partner with to add to the portfolio.”

More from a press release; “A press release from A-B included As the largest craft brewery in Los Angeles County, Golden Road expects to sell approximately 45,000 barrels of beer in 2015 and can be found in more than 4,000 retail locations. With a brewery focused on draft and can production, a pub in Los Angeles and a new tasting room downtown. Additionally a new tasting room, opening in 2015, second production brewery and pub in Anaheim will be operational by the forth quarter of 2016. Its core brands – Point the Way IPA, Wolf Among Weeds IPA, Golden Road Hefeweizen and 329 Days of Sun Lager – represent 95 percent of volume. Along with the core beers, Golden Road brewers are constantly experimenting with the freshest ingredients through a collection of rotating, seasonal and limited-edition brews, most notably the Custom IPA Series, a line-up of diverse, hop-forward IPAs.”

In addition, A-B released this video.


A-B InBev makes offer to buy SABMiller

Anheuser-Busch InBev revealed today it has made an offer to SABMiller to unite the world’s largest beer makers. The combined company would have a market capitalization of some $275 billion and be by far the largest brewer in the world, controlling about one third of the world market.

Any such deal would be carefully scrutinized by regulators and require that the companies involved sell off parts of their current operations.

“AB InBev’s intention is to work with SABMiller’s Board toward a recommended transaction,” AB InBev said in a statement. “There can be no certainty that this approach will result in an offer or agreement, or as to the terms of any such agreement.”

SABMiller is London based, and under U.K. takeover rules, AB InBev has until 5 p.m. on Oct. 14 to make an offer for SABMiller or walk away. SABMiller can then extend the negotiation process.

Buying SABMiller would strengthen AB InBev’s position in fast-growing economies in Africa and Asia. SAB Miller employs about 69,000 people in more than 80 countries, including Australia, Zambia, Colombia and the Czech Republic.

AB InBev was created in 2008 when Brazilian-Belgian brewer InBev bought Anheuser Busch. The company has operations in 25 countries and makes more than 200 beers, including Stella Artois and Beck’s.

There are significant antitrust hurdles to the deal, particularly in the United States, where the companies would have about 70 percent of the beer market, and parts of some of the companies likely will have to be sold. There was immediate conjecture about how a deal might affect the overall market in the United States, and the impact on distribution and sales of smaller breweries.

Brewers Association director Paul Gatza offered some thoughts on the BA website:

“In terms of impact on craft, my first thought is that most craft brewers operate in a different sphere—their communities and regions primarily. … Many craft brewers would look at a potential deal of Anheuser Busch-InBev and SABMiller as not relevant to their businesses and will keep on doing what they do—make flavorful and high quality beer, engage beer drinkers and serve the community through jobs, involvement and serving as a place for people to gather and discuss the events of the day.”


MillerCoors acquires San Diego brewery

Tenth and Blake, the craft and import division of MillerCoors, announced today an agreement to acquire a majority interest in Saint Archer Brewing Company. Here’s the rest of the press release:

Founded in San Diego in 2013 by a talented group of entrepreneurs, artists, skateboarders and surfers, Saint Archer brews an award-winning range of ales including Blonde Ale, IPA, White Ale and Pale Ale. Saint Archer expects to sell 35,000 barrels of beer in 2015, up more than 100 percent over 2014, making it one of the fastest-growing breweries in California. Tenth and Blake plans to support its continued growth under the ongoing leadership of Josh Landan, Saint Archer co-founder and president.

“We have always wanted to get great beer into more people’s hands,” said Landan. “We were fortunate that brewers big and small were interested in partnering with us, but Tenth and Blake was the clear choice. Tenth and Blake shares our passion for putting great beer first. Joining Tenth and Blake allows us to keep doing what we love right here in San Diego, but now with more resources to innovate and grow. With Tenth and Blake’s help, we hope to one day be a national brand.”

Saint Archer’s management and their team will continue to brew, package, ship, and sell Saint Archer’s outstanding portfolio of high-quality brands. Saint Archer will be run as a separate business unit of Tenth and Blake.

“We’re really excited about our partnership with Saint Archer,” said Scott Whitley, president and CEO of Tenth and Blake. “Saint Archer is consistent with our strategy of building our high-end portfolio while driving topline growth. Josh and his team represent everything we look for in a partner. Saint Archer brews award-winning ales across a variety of styles that are complementary to our current portfolio—including some outstanding IPAs. We’re excited at the prospect of working together to support the continued success of Saint Archer.”

Saint Archer picked up two gold medals at the 2014 San Diego International Beer Festival and a gold medal at the 2014 Great American Beer Festival.

Saint Archer joins other leading crafts in the Tenth and Blake portfolio, including Blue Moon Brewing Company, Jacob Leinenkugel Brewing Company, Crispin Cider Company and a minority equity stake in Terrapin Beer Company.

The news comes two days after Heineken bought a 50 percent stake in Lagunitas Brewing.


Heineken buys 50% of Lagunitas

Brewing giant Heineken and Lagunitas Brewing turned the beer world sideways today when they announced that Heineken has acquired a 50 percent shareholding in Lagunitas.

First the press release, and then a bit more from Lagunitas founder Tony Magee:

Heineken N.V. today has announced the acquisition of a 50% shareholding in the Lagunitas Brewing Company, the fifth largest craft brewer in the United States by volume. Lagunitas owns a stable of award-winning brands, including Lagunitas IPA. Lagunitas IPA is the largest India Pale Ale brand in the United States and has become a benchmark for the category. The transaction will provide HEINEKEN with the opportunity to build a strong foothold in the dynamic craft brewing category on a global scale, whilst it provides Lagunitas with a global opportunity to present its beers to new consumers in a category that is showing exciting international growth opportunities.

Founded in California in 1993, Lagunitas is estimated to sell c. 1 million hectolitres of beer in 2015 from its two world-class breweries in Petaluma, California, and Chicago, Illinois. A third brewery is currently under construction in Azusa, California. The brewer has a strong track record of growth, with 2012 – 2014 revenue CAGR at 58%. Its other leading brands include A Little Sumpin’ Sumpin’, Daytime, Pils, Sucks, Hop Stoopid and Maximus. Lagunitas has a nationwide presence in the United States and the brewer has expanded into a number of other markets including the UK, Canada, Sweden and Japan, offering strong potential for continued growth outside the United States.

In the United States, craft beer continues to outperform the overall beer market, and now represents 11% of total volumes. Within the craft segment, IPA is the fastest growing category.

Lagunitas will continue to be led by Tony Magee, its founder and Executive Chairman, alongside the existing management team and the company will continue to operate as an independent entity.

The transaction is subject to customary closing conditions and is expected to complete in the 4th quarter of 2015. Financial terms are not disclosed.

Commenting, Jean-François van Boxmeer, Chairman of the Executive Board & CEO of HEINEKEN said: “We are very excited to partner with Lagunitas. We recognise and respect the tremendous success of Tony and his team in building one of the great U.S. craft beer brands. We look forward to that same team partnering with us to expand Lagunitas globally, so it can reach parts of the world that other craft beer brands have not.”

Tony Magee, founder and Executive Chairman of Lagunitas, added: “This venture will create a way for Lagunitas to let HEINEKEN participate in the growing craft beer category across its global distribution network in places from Tierra Del Fuego and Mongolia to the far-flung Isle of Langerhans. Lagunitas will share in the best quality processes in the world and enjoy access to opportunities that took lifetimes to build. This alliance with the world’s most international brewer represents a profound victory for U.S. craft. It will open doors that had previously been shut and bring the U.S. craft vibe to communities all over the world.”

In his own blog, Magree wrote, “So….. this morning you may have heard the exciting news that we announced a powerful joint venture with Heineken to export the exciting vibe of American craft beer globally. If you did, then you know the reason for my previous ten blog entries. What you might not know is how the thinking came about that brought us to this opportunity or how it is that this new relationship will work. If you’re interested, dear reader, please read on.”

Here are the rest of his thoughts.


HefeWheaties – trend or gimmick?

A Minneapolis brewery has partnered with General Mills to create a limited edition beer called HefeWheaties. Not surprisingly it will be a German-style hefeweizen.

General Mills stated in a press release that the beer will not actually contain Wheaties cereal, but will be representative of the Wheaties brand.

Fulton Brewery plans to release the beer Aug. 26 and only in Minnesota.

“We’ll see how people react to it,” said Fulton co-founder Ryan Petz. “If it’s something everybody loves, we’ll obviously consider doing it again in a bigger and more widely distributed way in the future.”


Craft beer production up 16%

The craft brewing industry has continued a strong pace of growth in the first half of 2015, according to new mid-year data released by the Brewers Association. American craft beer (as defined by the BA) production volume increased 16% during the first half of the year.

From January through the end of June 2015, approximately 12.2 million barrels of beer were sold by craft brewers, up from 10.6 million barrels during the first half of 2014.

“Industry growth is occurring in all regions and stemming from a mix of sources including various retail settings and a variety of unique brewery business models,” BA economist Bart Watson said in a press release. “The continued growth of small and independent brewers illustrates that additional market opportunities and demand are prevalent.”

As of June 30, 2015, 3,739 breweries were operating in the U.S, an increase of 699 breweries over the same time period of the previous year. Additionally, there were 1,755 breweries in planning. Craft brewers currently employ an estimated 115,469 full-time and part-time workers.

“More and more Americans are discovering the joys of enjoying fresh beer produced by their neighborhood brewery. By supporting local, small and independent craft breweries, beer lovers are gradually returning the United States to the system of localized beer production that existed for much of our nation’s history,” Watson said.


New Belgium to operate small Denver brewery

Fort Collins-based New Belgium Brewing has announced it will operate a 10-barrel brewery The Source Hotel in Denver’s River North District. New Belgium will brew on the ground floor of the Source Hotel, with barrel aging on the eight floor in a rooftop lounge, called “The Woods”, a collaboration between New Belgium and The Source Hotel. “The Woods” will serve New Belgium beers paired with small plates and will include a snack counter and bar, sit-down dining and beer garden.

“After 25 years in Ft. Collins, we’re really excited to get more deeply involved in Colorado’s cultural and political capital,” Jenn Vervier, director of strategy and sustainability at New Belgium, said for a press release. “We’ve long considered creating a Denver location to bring the New Belgium experience to more of our Colorado fans and to the millions of travelers who visit Denver. RiNo is already a vivid scene with a rich art and craft beer culture, and will soon have great access for bikers and walkers.”