Over the past 10 years craft beer has been experiencing an incredible renaissance. The beers that were once novelty items relegated to obscure shelves at the local grocery or liquor store now occupy an entire section of the beer section at many stores. But, just like in the stock market, with such phenomenal growth comes the inevitable correction. That means that, because of economic factors some breweries will likely close or seek out other options to remain viable. Today, it is quickly becoming the norm for craft brewers to form coalitions, merge with other breweries or get bought by the big breweries.
Greg Koch, the outspoken craft beer advocate and owner of Stone Brewing Company in San Diego, Calif., secured $100 million in April from a group of “independent investors,” that will be used to acquire “minority, non-controlling” stakes in craft breweries. His finance platform called “True Craft,” is designed to help craft breweries avoid being bullied into selling to the big breweries.
“They can make their own decisions about their future,” Koch said in an article in industry magazine Bevnet. “They can stay independent. They can get financing and flexibility that they need to flourish, while keeping their soul and control.”
In March, Colorado-based Oskar Blues Brewing Company used a similar tactic to add Tampa’s Cigar City Brewing Company to their portfolio. Through a Boston private equity firm called Fireman Capital Partners, Oskar Blues has been able to bring Cigar City under the same umbrella as Perrin Brewing, and the Utah Brewers Cooperative outfit that includes the Wasatch and Squatters brands. The coalition strengthens each brewery individually and allows them to retain their own unique presence while providing an influx of financial security and access to surplus production facilities at Oskar Blues’ Colorado and North Carolina breweries.
In February of this year, two prominent East Coast breweries, Southern Tier and Victory announced that they were merging breweries under the title Artisanal Brewing Ventures. Under the new arrangement, both breweries will retain their own identities and creative control, but will join forces for marketing and distribution.
“Like-minded brewers,” said Victory Brewing founder, Bill Covaleski in an interview on TapTrail.com, “Such as Victory and Southern Tier can preserve our character, culture and products by standing together. Allied we can continue to innovate and best serve the audience who fueled our growth through their loyal thirst.”
Finally, there is a growing presence of the big beer brewers in the world of craft beer. And this is a point of much consternation to many craft beer drinkers who fear that “Big Beer” will ruin the innovation and imagination found in many craft breweries. Breweries that do sell to Big Beer are often reviled by many in the craft beer community. But, despite the shouts of “Sellout!” that permeate the Internet when another craft brewery sells, beer connoisseurs still line up for beers such as Goose Island’s Bourbon County Brand Stout. Goose Island sold to Anheuser-Busch/InBev in 2011. Since then there has been a slew of craft brands bought by non-craft breweries such as Constellation Brands’ purchase of Ballast Point Brewing, Heineken’s purchase of a 50% stake in Lagunitas Brewing Company and, most recently, MillerCoors’ purchase of Terrapin Beer Company in Athens, Ga.
How will all this buying and selling within the confines of craft beer affect the overall industry? The jury is still out, but for the short-term it does mean that brands will be more available to more beer-lovers. And, how could easier access to good beer be a bad thing?
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