Breweries

Lagunitas Brewing announced that it is taking a stake in three breweries in different parts of the country and it will open up buildings in Portland, Oregon, and San Diego that nonprofits can use for fundraisers. Financial terms of the investments were not disclosed. The purchases were all funded by Lagunitas and did not require any capital outlay from Heineken, which bought a 50 percent share of Lagunitas last year.

In an interview with the Chicago Tribune, Lagunitas founder Tony Magee said, “I would call it expansion. In consolidation, you’re looking for synergies and bringing efficiencies and trying to shrink the pool of competitors. This is really about all of us expanding our experience base, our understanding of things and growing our businesses at the same time.”

The stakes are in Southend Brewery and Smokehouse in Charleston, S.C., Independence Brewing Co. in Austin, Texas, and Moonlight Brewing in Santa Rosa, Calif.

“These aren’t conquests … it’s not for scale,” Magee told a local newspaper. “This a thread to make more local connections.”

Moonlight founder Brian Hunt said the opportunity “to secure Moonlight’s future into the next generation” was the driving factor along with his friendship of Magee, who he has known since 1993.

“I’m almost 60 now and I don’t know how long I’m going to keep doing this,” said Hunt. “I got other things going on my life. I don’t want to run a brewery until the day I fall under.”

When asked by the Tribune if there would be more deals, Magee answered, “Oh, yeah. I want to do more than three. I want to make a bunch of these relationships. This is a beginning, not an end point of anything.”

Virginia Governor Terry McAuliffe announced today that Ballast Point Brewing and Spirits will invest $47.8 million to establish an East Coast brewing operation in Botetourt County.

“I am thrilled to announce that Ballast Point Brewing and Spirits will join the Commonwealth’s world-class, award-winning roster of craft breweries,”the governor said in a press release. “Winning this significant project was a top priority, and we are proud that Botetourt County will be home to the company’s East Coast brewing operation. Virginia has truly become a leader in the industry and a destination for craft beer lovers. Today is another milestone of our ongoing success in diversifying and building a new Virginia economy, and we look forward to Ballast Point thriving in the Commonwealth.”

“This project is great news for the growing tourism, manufacturing and craft beverage sectors in the Roanoke Valley and the Commonwealth,” Secretary of Commerce and Trade Maurice Jones said in the press release. “Ballast Point’s decision to locate its East Coast operation in Virginia is a strong testament to our great talent, strategic location and superior business climate. Additionally, the company will benefit from our outstanding workforce training programs. Congratulations to Botetourt County and Ballast Point. We look forward to a long, prosperous partnership.”

Ballast Point began selling beer in 1996, brewing in the back of a San Diego homebrew shop.

Last November, Constellation Brands acquired the company for approximately $1 billion. 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. At that time, it was announced Ballast Point will continue to operate as a stand-alone company with its existing management team and employees running the day-to-day operations.

Brooklyn Brewery will move its headquarters to the Brooklyn Navy Yard. The Wall Street Journal reports the company is leasing 75,000 square feet at Building 77, a 1-million-square-foot industrial warehouse. Plans call for for the Brooklyn Brewery’s space to open in 2018.

The space is slated to include offices and a beer garden, as well as an area for manufacturing and a pub in the building’s food-manufacturing hub.

The Navy Yard, established in 1801, produced warships for the U.S. Navy through World War II. After closing as a naval yard in 1966, the site has emerged as a popular hub for manufacturing, industrial and creative businesses.

“For generations, the Brooklyn Navy Yard was behind a wall,” Brooklyn Navy Yard Development Corp. president David Ehrenberg said. “But the nature of the yard is really changing. We want to open it up to the public to show that things are still being made in Brooklyn.” Brooklyn Brewery has signed a 40-year lease.

Brooklyn Brewery will remain in Williamsburg until its three leases end in 2025, co-founder Steve Hindy said. After that, he hopes to maintain a retail space or potentially a brewpub at that location.

The Smithsonian’s National Museum of American History announced today at the Craft Brewers Conference in Philadelphia that it will launch a three-year initiative to “collect, document and preserve the history of brewing, craft brewers and the beer industry to explore how the beverage and brewing connect to larger themes in American history.”

A press release stated that the initiative is made possible through a donation from the Brewers Association. It added:

Museum staff have researched and documented American food and beverage history for more than two decades and will work with the Brewers Association, American brewers and beer historians to document and collect the stories and history of modern American brewing. Beer and brewing have been an important part of the American experience since before the nation’s founding and into the present day, and beer production for the past 30 years has been connected to significant social, cultural, economic and environmental movements across the country. The team will explore the unique connections between brewing and broader themes, including advertising, agriculture, industry, innovation, business and community life.

“Brewing has a long and deep connection to our country’s history, and the museum’s collections explore the history of beer from the late 19th to early 20th centuries,” said John Gray, the director of the museum. “The support of the Brewers Association allows our staff to collect the more recent history, including the impact of small and independent craft brewers who continue to advance the U.S. beer culture and inspire brewers worldwide.

The museum currently houses several small collections related to brewing and beer consumption in America. The bulk dates from the 1870–1960s.

“The craft brewing revolution in America has had a profound social, cultural and economic impact on this country,” Bob Pease, president and CEO of the Brewers Association, said for the press release. “America is a beer destination. We are honored to support this effort and work with the National Museum of American History to chronicle and showcase the significant achievements small and independent brewers have made throughout this nation’s history.”

Birra del Borgo has announced a deal that makes it a wholly-owned subsidiary of Anheuser-Busch InBev. The Italian brewery characterized this as a partnership in the press release announcing the sale. AB InBev will provide the support to allow Birra del Borgo to expand its brewery know how and infrastructure, continue to innovate and bring new great beers on the market through its distribution system. Founder Leonardo Di Vincenzo will continue to lead Birra Del Borgo as CEO of the company.

Di Vincenzo started his brewery in 2005 in Borgorose, a small town in the province of Rieti on the border between Lazio and Abruzzo in Italy. Di Vincrnzo’s initial inspiration comes from English and Belgian beers, but he then reworked them to become a part of the Italian gastronomy culture. He is one of “Birreria Brother Brewers” — along with Dogfish Head’s Sam Calagione and Teo Musso of Birra Baladin Italy — behind the brewpub within each Eataly location.

For the press release, Di Vincenzo said: “Our voyage since we started in 2005 has been a great adventure. Today the beer sector has become very competitive and it necessary for us to make a next step to ensure that we can continue to evolve in terms of brewing techniques and in terms of the complexity and taste variation we can offer to consumers. We believe partnering with AB InBev is a great opportunity to do exactly that: it will allow Birra del Borgo to grow in a sustainable way while staying true to our unique identity and the philosophy that we have followed since the very beginning.”

Simon Wuestenberg, country director for AB InBev Italia, said: “We have been very impressed by what Leonardo and his team have built since 2005. They have been at the forefront of redefining beer in Italy, bringing a unique mix of inspired innovation, quality and consistency. Leonardo’s vision for beer and his passion for brewing will be great inspirations to our whole team, and we’re very excited about partnering up and growing together.”

The press release did not mention A-B’s High End division — which includes Goose Island Beer Co., Blue Point Brewing, 10 Barrel Brewing, Elysian Brewing, Golden Road Brewing, Virtue Cider, Four Peaks Brewing and Breckenridge Brewery — so at first glance it appears Birra del Borgo will operate separately.

Anheuser-Busch announed it has struck a deal to acquire Virginia’s Devils Backbone Brewing Co. The sale is set to close in the second quarter, A-B said. Financial terms were not disclosed.

Devils Backbone’s flagship beer is Vienna Lager, which accounted for about 60% of its sales last year. Devils Backbone joins what A-B calls The High End division. The High End includes including Goose Island Beer Co., Blue Point Brewing, 10 Barrel Brewing, Elysian Brewing, Golden Road Brewing, Virtue Cider, Four Peaks Brewing and Breckenridge Brewery.

“While we are joining a creative group of craft breweries in the division, Devils Backbone will retain a high level of autonomy and continue its own authentic DNA within The High End framework,” Devils Backbone founder and CEO Steve Crandall said in a statement. He also said the existing management team plans to remain with the brewer.

Devils Backbone operates the Outpost Brewery & Taproom in Lexington, where its primary production brewery is located. The brewer also operates its Basecamp Brewpub & Meadows in Roseland. Those two breweries have won 19 medals at the Great American Beer Festival since 2012.

The Brewers Association has released its annual lists of the top 50 craft and overall brewing companies in the U.S., based on beer sales volume. Of the top 50 overall brewing companies, 43 were craft brewing companies (according to the BA definition).

“The top U.S. brewers continue to drive demand, growth, innovation and exponential interest in beers from small and independent brewers,” said Ba chief economist Bart Watson. “With a historic record number of breweries in U.S., the top brewers continue to open new markets and expose beer drinkers to a variety of fuller-flavored styles and offerings.”

For more information, including the overall list, visit the Brewers Association website.

Deschutes Brewery announced that after a long search it has chosen Roanoke, Virginia, as the location for its East Coast brewery. The new facility will begin shipping beer in about five years.

The company is calling the future brewery “Brew 4.” The original brewpub in downtown Bend, Oregon, is Brew 1, the production facility in Bend Brew 2, and a brewpub in Portland Brew 3. Construction on Brew 4 will begin in 2019, and its initial capacity will be about 150,000 barrels.

“We started Deschutes Brewery when craft beer wasn’t burgeoning and led with a beer style that wasn’t popular at the time – Black Butte Porter,” said fouder and CEO Gary Fish. “This pioneering approach was a key driver behind our decision to go with Roanoke, as that same spirit exists in this community and its fast-growing beer culture.”

Deschutes opened in 1988. The brewery produced 345,000 barrels in 2015.

Craft brewery production volume grew 13% in 2015 and sales volume 16%, leaving craft beer with a 12% share of the overall beer industry.

Craft brewers — as defined by the Brewers Association — produced 24.5 million barrels in 2015 and sales of $22.3 billion of represent 21% all retail sales.

“For the past decade, craft brewers have charged into the market, seeing double digit growth for eight of those years,” BA chief economist Bart Watson said for a press release. “There are still a lot of opportunities and areas for additional growth. An important focus will remain on quality as small and independent brewers continue to lead the local, full-flavored beer movement.”

The numbers are preliminary and the Brewers Association will release the list of Top 50 craft brewing companies and overall brewing companies by volume sales on April 5.

For information about the methodology in the collecting the numbers and about the BA definition of craft brewer, visit the association website.

Mid-Atlantic breweries Victory Brewing Company and Southern Tier Brewing Company announced an alliance under a under parent company Artisanal Brewing Ventures (ABV). A press release stated, “This new strategic framework between ABV, Victory and Southern Tier provides capital, security and vision for the future. ABV, formed to unify independent craft brewers and distillers, embraces the collaborative craft spirit while administering crucial growth resources. As a key partner in this formation, Arlington Capital Advisors acted as exclusive financial consultant to Victory. The transaction is expected to close within the next 60 days.”

Victory and Southern Tier will independently operate their breweries, which have a joint capacity of over 800,000 barrels. This alliance creates one of the largest brewers in the Northeast and ranks within the top 15 craft brewing companies in the United States with combined

“The craft beer community is at its most critical moment since its inception as larger brewing corporations have bought into our grassroots movement, irrevocably changing the marketplace. Like-minded brewers such as Victory and Southern Tier can preserve our character, culture and products by banding together,” Victory co-founder Bill Covaleski said for a press release. “Allied we can continue to innovate and best serve the audience who fueled our growth through their loyal thirst.”

The Victory and Southern Tier leadership teams and employees will remain intact. Covaleski and Victory co-founder Ron Barchet will join the Artisanal Brewing Ventures’ Board of Directors. CEO John Coleman and CFO Bill Wild will lead ABV’s management team.

“This is exactly the kind of alliance we imagined when we created Artisanal Brewing Ventures in 2014,” said Phin DeMink, founder of Southern Tier Brewing Company. “This is a concept that was specifically designed by and for craft brewers, so we can focus on the things we’re best at while creating meaningful scale advantages. I’m proud to see this model validated and am grateful that my friends Ron and Bill have become our partners.”

“I look forward to guiding these two truly great organizations forward as they collaborate, innovate and share best practices.” Coleman said. “I believe this is a watershed transaction for the craft brewing world.”

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 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.

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.”