Lagunitas Buys Stake In Three Smaller Breweries

Love the ironic twist of fate that sees Independence brewing being purchased.

 

Which is exactly why Heineken/Lagunitas is following AB-InBev's lead - buy local breweries to get a foothold in that market, and use your resources and economies of scale to help them expand, all in the name of grabbing more market share.

And the reason why they are doing this is because craft beer sales are "slowing" dramatically - meaning the larger brewers sales have slowed (or fallen) while the younger, hyper-relevant and hyper-local breweries are cannibalizing the larger brewer's growth. So instead of competing against those brewers, there is a higher ROI to simply buy them.

Both AB-InBev and Heineken each own more than 150 brands/breweries around the world, so expect many more US craft breweries to be acquired by AB-InBev, Heineken, and others. Strong rumor that Pabst is now looking to acquire craft brewers as well - which makes sense, given their CEO's push to have premium products to be a bigger percentage of their sales.

This is what consolidation looks like. Brewing "groups" will control a large number of brands/breweries/production facilities - its not even close to being over, and AB-InBev and Heineken and others have already hinted they're on the hunt for more. They need to - they must purchase their growth, innovation, and relevance.

 

They all want to grow, and I'm in a position to fuel it. I also expect to learn a ton. This isn’t like, "Based on our insights and our market research, now we are going to act thusly." There are opportunities out there, and we just have to step into them. Anheuser-Busch investing in Goose Island was very similar to that. I don’t think they really knew what they wanted to do with the brewery once they bought it. They knew there was stuff to be done, and Goose Island clearly was an energetic place they could participate in, so they stepped in. They sat on Goose for a couple of years, just trying to learn the business and learn what the world was about, and I think that paid dividends for AB by looking at it as a learning experience rather than a top-down management decision.​

 

Brian's delivers the kegs himself. Silly but beautiful.

Moonlight was a symbol of something to me so this hurts a little... And I'm not anti Lagunitas! If the article is true and they don't scale then nbd i guess...

 

Yes, but also notice how I refer only to Moonlight and the PD article and stated that I had not read the other two articles. I don't know those other two breweries and I suspect Tony doesn't know them nearly as well as Brian/Moonlight. He may have a completely different perspective and plan for them.

 

Yeah, I know you stated you hadn't read the other articles. I was just pointing you to where the AB comment came from.

 

The expanded distribution of any of these very local businesses is about the last thing I want from any of these purchases. I suspect there's a short term mutual agreement that a storm is coming and this might seem- at the moment anyhow- to be a good way to protect both ends of the market from that storm.
I have no idea what the future holds, but if what history has learned us about getting the view on the good deck is that Lagunitas will become what the big breweries have always been to us in the future. These may seem like cool points now. But I sense a strategy for long term sustainability is in the works.
I also suspect now that Lagunitas has discovered that they have gotten the keys to the building and can start playing the board. They are also trying to figure out how the fuck to handle that responsibility wisely.

 

I just saw this opinion piece about Tony Magee and the direction of Lagunitas on Marketwatch.

Thoughts?

http://www.marketwatch.com/story/la...m-his-craft-beer-firebrand-persona-2016-07-01

 

Two aspects of that article that I agree with 100%:

“Tony Magee is a hypocrite.”

And,

“These are strange, unstable times for craft beer.”

The soothsayer that I most trust in these chaotic times is @Sixpoint. His observations/predictions have been spot on IMO.

Cheers!

 

Long quote, and none of this is new news, but putting this all into a couple of paragraphs is just WOW!

 

No one starts a business with the intention of losing money.

 

"foolish consistency is the hobgoblin of little minds." RWE

 

Save or remember your addition. I'm certain it will come in handy many more times.

 

All true - And this is also how capitalism works.

 

I'm not against anyone getting paid. I just get annoyed by the hypocrisy-Tony Magee's particularly.

 

This doesn't concern me in the least. Lagunitas itself brews great beer. If these smaller brewers experience problems because of Lagunitas' ownership, then I have no doubt that other entrepreneurial brewers will open establishments in those cities. Craft is demand-not supply-driven and the cost to enter the market at the local level isn't that great.

 

Hypocrisy annoys me as well. But as we have seen, Mr. Magee is not alone in having this trait. For the most part I have stopped caring about it when it comes from afar since if I did give a shit, I would have an absolute blowout.

 

Two of my craft brewing heroes and iconoclasts formed a partnership that ensures that one of my favorite breweries will continue to exist and might possibly, possibly, if its founder wants, get a little more wide distribution. What's not to like about that?

 

http://www.pressdemocrat.com/business/5789563-181/laguntias-brewing-co-takes-stake

 

If I were an employee of one of these three small brewers I'd be updating my resume. After the dust settles and a couple of years go by they'd (Lagunitas) be foolish for not trying to maximize their ROI. Capturing economies, improving efficiencies, and penetrating new markets are some of the main reasons M&As are done. This is often at the expense of employees and the acquired businesses. I can't imagine that Heineken isn't somehow involved. Either that, or Lagunitas is swimming in cash. Having said that, I don't have a personal objection, and I love some of Lagunitas' beers. I'm just saying that there are predictable outcomes. It's business.