Brewery Acquisition Predictions

I don't see how being established would really prevent an acquisition/merger/take over from taking place. You say that Brooklyn is way too established, they were the 11th largest craft brewery in 2012 while one that you label as regional size, Boulevard, was 12th. Long Trail, Shipyard and Great Lakes are both in the top 20 as well. Your perception regarding how well established a brewery may actually be, and its likelihood to sell, may be a bit off.

 

I said Avery because they are small yet have a big following in the craft industry. That to me makes a good opportunity to buy if you are BMC. New Belgium? lol no. New Belgium is a heavyweight and it's only a matter of about a decade before they are fully national, in canada, Europe, etc.

 

Straub Brewing of Saint Marys, PA completes a hostile take-over of both ABInbev and MillerCoors in the year 2016 and immediately discontinues production of both Budweiser and Miller High Life!

 

So, InBev bought the 100 million barrel brewing company Anheuser-Busch, but 765k bbl. New Belgium is somehow "too big" to be taken over?

 

I believe Oskar Blues is a solid posibility due to their recent speed of state expansion and slim infrastructure. The economies of scale and sales experience of a much larger brewery could take them a long way. Great well rounded portfolio.

 

I'm talking about craft breweries not BMC. NB is too big of a craft brewery to be taken over. They are making money hand over fist with no limit in sight. smaller craft breweries are more likely to sell out than say Sierra Nevada, NB, or one of the other big craft breweries.

 

In less than 3 years either Firestone or Hanger 24 will be acquired by AB. Hanger more likely to go first.

 

Schlafly trademark is being challenged by aunt Phyllis. No, I am not kidding!

 

Otter Creek/Wolaver is owned by Long Trail. Not much to acquire here unless LT gets sucked in completely.

Why? Their mainstream beer is subpar and would fit the AB lineup perfectly. If they can make a deal to continue making the reserve line independently, like Goose Island, I could easily see them being swept up. But not by ABI--what's the point of stepping on their own mainstream GI beers by offering something similar (and, by my estimation, less interesting). Again, I'm not talking about the reserve series or the GI's more inventive lines, only those picked up completely by ABI, like 312 and IPA.

In fact, CBA acquisition of LT/OC would make more sense. LT size and lineup match those of CBA's component breweries. On quality scale, they are also close. And they can work out regional exclusive and supplementary markets instead of basically stepping on each other's toes.

 

Because I have strong positive emotions associated with Long Trail, mainly due to the many memories of my wife and I vacationing up there when we were dating and I try to limit the amount of my money that goes to huge multinational corporations like ABinbev.

 

I'm waiting for the headline:

Harvard Business School graduate Shaun Hill sells out to AB InBev; wins bet with classmates

 

AB Inbev has recently bought a Midwest brewery (Goose Island), an East Coast Brewery (Blue Point), wanted to talk to Tony about Lagunitas. I think that that will try to buy craft breweries in different regions. A Southern Brewery (Abita seems to have topped out would be my pick to be bought), a Colorado brewery (I think Boulder Brewing is ripe) and a California Brewery where they tried for Lagunitas and failed and I can't think or another really plausible brewer from Cali to take over. Anderson Valley to get Summer and Winter Solstice maybe or Anchor because Anchor owns the name rights to Steam Beer and are the oldest craft company. But maybe they will just buy the rest of CBA alliance. InBev is really good at buying up breweries. Have a look at what they own. http://en.wikipedia.org/wiki/AB_InBev_brands

 

Anchor would be another one that I'd be very sad to see get absorbed by inbev.

I'm quite glad Lagunitas didn't go for it!

 

From what i was told at the brewery last month CCB is going to start contracting out some of their recipes to AB so they can distribute to more of the country. Not exactly the same as being bought but who knows what will come of the deal.

 

Anchor is not going anywhere. Read this article ( http://beerpulse.com/2013/11/anchor-brewing-selects-architects-for-upcoming-pier-48-brewery-1746/ ) . Why invest crazy money in their next Pier 48 brewery and distillery when they could just go brew beer in the middle of nowhere for much less? They are dedicated to their roots, California and San Francisco. Additionally would AB INBEV know what to do with this(www.anchordistilling.com).

 

Thoughtful and educated response. I agree with your comment on brand equity being a primary value driver in an acquisition. Many of these craft breweries do have a valuable brand which has been generated, presumably, by excellent products and marketing. A larger company would look to further sales through expanded distribution supported by increased branding. I agree a company such as SN doesn't need a lot of help in distribution and brand recognition. If SN were to be acquired it would likely be to incur some cost synergies by eliminating duplicative costs and leveraging buying power. The primary reason a company like SN would be acquired is product portfolio expansion and increased profits. Complimentary products and sometimes competing products are valuable to own.

It would be interesting to see the product offerings if SN, Lagunitas and say Deschutes were to merge through a series of transactions. I'd suspect most of the products, though competing, would continue to be made, promoted and sold. I would expect the reach of these products to increase and marketing spends to increase greatly, taking advantage of synergistic cost savings.

The industry is going to experience some consolidation. It's going to be interesting to watch.

 

I suspect, you miss the point of takeover. The issue is not how loyal and vocal the followers are. That's why most of the suggestions in this thread make absolutely no sense to me. The goal is to pick up a brewer who 1) has the potential to go national or even international, with broad appeal 2) has strong potential for profit growth (not just volume growth), 3) fits well with the current lineup of the potential buyer. On what planet does Avery fit any of these criteria? Or Bell or Founders? Expansion--yes, but not fast enough, because most of their products, while having strong appeal to the niche market, would not survive full national expansion. Things are a bit different with Duvel, but that's where #3 comes into play--which why Boulevard made so much sense (especially in retrospect ). NB, on the other hand, already is nearly national, with strong distribution channels, has a strong recognizable flagship product that has the potential to bridge the craft/noncraft divide, and already has strong corporate structure that can be seamlessly integrated into a larger whole. Since when is being a very large small corporation an impediment to takeover? Why wait a decade? A merger can make them national overnight!

 

Shipyard and Sea Dog have an existing master distribution relationship with a company from South Carolina company called Total Beverage Solution, which recently bought the old Nectar Ales/Humboldt Brewing Company brand from Firestone Walker and relaunched it. Total Beverage Solution also has a partial interest in Southhampton out of New York. It would not surprise me excessively to see the company buy some or all of Shipyard as well since they seem intent on expanding their portfolio of owned and operated brands rather than just acting as distributors.

 

Tony Magee says that Budweiser approached him about an acquisition and he told them to get lost. He promises never to sell, ever.

Here's what he had to say:
“There’s no plan to sell the business at any point … a few months ago, the largest brewer in the world came here to talk about what our intentions might be. I said, no, there is not much to talk about here,” he said.

“This is my life’s work; Why would I want to turn it into cash?” he said. “I mean, you don’t raise kids to sell ‘em. You raise kids to send them off into the world and continue to explore the future for you. That’s what Lagunitas is going to do.”

 

This guy has his facts straight. Thanks to the OP for starting this. I think it's important to delineate this difference to selling to a larger brewer (Duvel) and selling to a macro brewer (ABInbev). But to be fair so far so good with Goose Island.