New Belgium Brewing announces sale to Lion Little World Beverages (Kirin Holdings Company Limited)

Discussion in 'Beer News & Releases' started by ypsifly, Nov 19, 2019.

  1. justmebro

    justmebro Initiate (133) Mar 9, 2015 Massachusetts

    Glad I have many good local micros.
  2. EmperorBatman

    EmperorBatman Initiate (88) Mar 16, 2018 District of Columbia

    Can someone explain to me how these random Japanese brewing conglomerates are buying out the American craft beer industry? How do these people make so much capital to spend, by brewing mediocre beers?
  3. luisfrancisco

    luisfrancisco Initiate (174) Dec 1, 2009 Mexico

    Has anyone seen the sale price? Don't see it mentioned anywhere.
  4. Tom_Gilman

    Tom_Gilman Aspirant (239) Jan 4, 2013 Pennsylvania

    Seems like a good thing for vested employees. I don’t see in the article that they’re losing their jobs; this is a buyout and arguably a significant boost for their retirement funds. Need to read the fine print though.

    But what do I know? I still drink old Belgium.
  5. JohnnyU6

    JohnnyU6 Initiate (26) Jun 14, 2017 New Jersey

    No big deal. As we all know, there is no such thing as "craft beer". Beer is beer. Business is business. Long live The American Dream!
    officerbill and BJC like this.
  6. Oktoberfiesta

    Oktoberfiesta Aspirant (281) Nov 16, 2013 New Mexico

    $100,000 sounds nice. But it’s coming at the expense of retirement money. That’s not a lot at all. They got shafted. But then again, all of the other buyouts did not include this at all. So it’s something. But really, it’s pennies.

    And why buy a sinking ship? Are they gonna export the brand to unsuspecting locals?

    And if they’re taking their retirement money as a buyout or lump sum, I’m guessing this new company will not have a 401k or pension or any sort of retirement?
  7. Mongrel

    Mongrel Crusader (762) Feb 14, 2013 Maryland

    Oh they’ll kill them off alright. I love their tripel too, but only buy it periodically. You can bet they’ll streamline their rather broad lineup. Probably in favor of less core beers and more gimmicky rotating beers.
    mikeinportc likes this.
  8. gueuzegeek

    gueuzegeek Zealot (590) Aug 11, 2003 New Jersey

    Could be worse, could be AB/InBev! Some good paydays for employees there!

    This should be interesting since I am. It sure of any other US craft brewers that are part of this group.

    I wish them the best, but am sad to see another one sell out.
    craigo19 likes this.
  9. jesskidden

    jesskidden Poo-Bah (1,946) Aug 10, 2005 New Jersey
    Society Trader

    Someone above said they were the tenth largest brewer in the world - the list I have for 2016 from Barth-Haas Group Report puts them at #9, but they apparently also own #15, San Miguel in the Philippines (not the Spanish group that owns Founders), so that'd bump them up one place.
    officerbill and mikeinportc like this.
  10. JackHorzempa

    JackHorzempa Poo-Bah (4,372) Dec 15, 2005 Pennsylvania

    Frankly, no.

    I took a tour of Bridgeport when I attended the National Homebrewers Conference (HomebrewCon) in Portland in 2018. The brewery was located in an area of Portland that was expanding/gentrifying (or pick your favorite word here). That real estate was more 'valuable' for something other than a brewery. Also, while I thought Bridgeport brewed good (solid) beers they just were not competitive with the plethora of other newer breweries in the Portland area. I will confess that I felt bad about their demise but considering the value of that location (for other development) and the fact they just simply they were 'sub-par' considering their local brewing competition it just made business sense for them to close. Maybe there are other craft breweries in this same situation? Do you have some examples/ideas in this regard?

    mikeinportc and Bitterbill like this.
  11. JackHorzempa

    JackHorzempa Poo-Bah (4,372) Dec 15, 2005 Pennsylvania

    Do you know what "market value" exactly means here? Is this predicated upon the sale price? Or is it valued in some other manner?

    mikeinportc likes this.
  12. beardown2489

    beardown2489 Devotee (400) Oct 5, 2012 Illinois

    Japan is a weird place. Everything they drink is far less intense than American standards. Goes for their beer, their bourbon, gin. It’s all about subtly, refinement, and nuance. If you are familiar with the Suntory portfolio you’ll kind of see what I mean. @Oktoberfiesta I suspect fat tire might do pretty well out there. Brooklyn lager has been making a dent, but I think fat tire is a bit more approachable.
  13. unlikelyspiderperson

    unlikelyspiderperson Meyvn (1,169) Mar 12, 2013 California
    Society Trader

    I'd imagine international distribution is 'next level' up from their current seat

    The asian market is pretty large and I'd imagine many ingredients, labor, and infrastructure is pretty cheap.
  14. dele

    dele Initiate (63) Mar 13, 2019 Massachusetts

    So if New Belgium is employee owned, wouldn't a majority of the employees have to approve the sale before it could go through? And couldn't they make sure that the terms of the deal were more favorable to them than the retirement money on offer seems to be? To use grossly oversimplified math, if there were 300 employees and the sale price was $300M, wouldn't each employee be due an average of $1M, weighted by their seniority?
    waltari and philhyde like this.
  15. unlikelyspiderperson

    unlikelyspiderperson Meyvn (1,169) Mar 12, 2013 California
    Society Trader

    It wasn't equally owned by all employees, the money they got was payment for the stock that they held in the company. I think the reason it's talked about as 'retirement' money is because the vast majority of them will want to transfer it's value into a retirement account to avoid taxation.
  16. cg123

    cg123 Initiate (100) Feb 27, 2012 Ohio

    My guess is the company was valued by a third party prior to sale and thus shares valued accordingly. I've worked for an ESOP and the company was valued annually by a third party. The value of your shares then changed accordingly on an annual basis. It is not unlike a publicly traded company is valued. It was based on sales, gross revenues, profit margins etc., but instead of being valued at the close of the market day like a public company, it was only valued once a year.
  17. cg123

    cg123 Initiate (100) Feb 27, 2012 Ohio

    I've learned from this thread that people really don't understand what "Employee Owned" and how ESOP'a really work.
  18. JackHorzempa

    JackHorzempa Poo-Bah (4,372) Dec 15, 2005 Pennsylvania

    That is indeed correct and thank you for your contributions to this thread's discussion in this regard.

    Cheers to you!
  19. BeerDrinkinGuy

    BeerDrinkinGuy Initiate (53) Nov 2, 2018 Minnesota

    Isnt it ironic though that in the brewing industry low wages are common place while the company itself makes millions?
    ballardbeer likes this.
  20. dele

    dele Initiate (63) Mar 13, 2019 Massachusetts

    cg123, care to enlighten us? I'm interested in learning. 'Employee-owned' is a big tagline for a number of companies, including New Belgium, so I'm sure there are plenty of people who would like to know if it doesn't mean what it sounds like it means (that the employees own the company, and hence would have a say in determining whether it should be sold and would also be due a major share of the proceeds if it were).
    GuyFawkes likes this.
  21. cg123

    cg123 Initiate (100) Feb 27, 2012 Ohio

    It's all retirement based. Employees are awarded shares of the company based on whatever criteria the company sets up. The shares are held in an individual Employee Stock Ownership Plan. The value of the shares is determined by the success and/or failure of the business. Therefore the value can go up and down.

    If an employee leaves and they are vested in the ESOP, the value of the shares is distributed. But since ESOP's are qualifying retirement plans, the money must be moved to another qualifying retirement account or be subject to IRS early withdraw penalties and taxes on gains.

    ESOP does not mean that employees vote on the sale of the company or get any of the value of the company. The only people in this sale that are "making money" are the owners and investors. All other employees are only getting the value of their ESOP plan, which again, is a retirement plan.

    This is the basic idea. Each ESOP is slightly different but the concept is the same.
    SABERG, DrOfGolf, FonyBones and 11 others like this.
  22. philhyde

    philhyde Disciple (381) Jul 22, 2010 Oregon
    Society Trader

    Did no one read the "Letter from Kim"?

    This is not a done deal.

    "all of this is of dependent on our co-workers who also are our shareholders, approving the conditions of this deal."
  23. Oktoberfiesta

    Oktoberfiesta Aspirant (281) Nov 16, 2013 New Mexico

    But..... free beer bro!

    I know many bartenders and workers who get cases of free beer or even 2-3 pints after their shifts. You also don’t see a lot of 40-50 year olds working at these places. Free beer only has an appeal for so long. Then you realize you’re still broke, while the owner is living extravagantly.

    It’s all the same really. That sense of community is usually beer infused emotions. They don’t care any more or less than the companies we hate on more frequently.

    i know some distributor guys who have to use their own personal vehicles to do check ins. Some move from brewery to brewery trying to find just one who has affordable healthcare.
  24. JLaw55

    JLaw55 Meyvn (1,387) Jul 10, 2014 Missouri

    Oh of that I have no doubt! And I would completely agree, it was a smart play with where the market is likely heading. I'm just surprised because they seemed so proud of the employee ownership structure and have now essentially had an about face. Again I do not fault them for it, but it was surprising none the less. Then again, they would not be the first to do such a thing. Ahem ahem Lagunitas.
  25. elNopalero

    elNopalero Poo-Bah (3,635) Oct 14, 2009 Texas
    Society Trader

    Wow. I did not see this coming. (As in, ask me to name a large scale independent craft brewer being bought out and New Belgium would not have crossed my mind. Along with Sierra Nevada and Bells, who I hope don’t follow suit ever.)

    I’ll always have a special attachment to them, but it won’t feel the same now.

    aside: 300 plus employees seems an awfully low number for the size of NB.
    russpowell likes this.
  26. Travler

    Travler Devotee (411) Feb 18, 2008 Illinois

    Crap!! Where will I get my craft beer?! Oh, wait ... there's still plenty :-)
  27. Anzac2541962

    Anzac2541962 Initiate (0) Nov 5, 2019

    As a Beer Lover, I can understand the trepidation with which this NEWS has been received, particularly in USA, where it is largely understood that the BEST Beers are almost without doubt produced by Independent Outfits like Dogfish Head.
    All I Ask, is for Beer Lovers to be patient, and see what transpires, as in Australia when Kirin took over Little Creatures & Malt Shovel, these have been largely allowed to run on their merits. - James Boykett(Rosebud, Australia)
  28. ballardbeer

    ballardbeer Initiate (176) Nov 10, 2013 Washington

    Dogfish Head is a public company owned by Boston Beer Company. Traded on the New York Stock Exchange!

    What a time to be ALIVE!
    unlikelyspiderperson likes this.
  29. denver10

    denver10 Poo-Bah (2,907) Nov 17, 2010 New Mexico

    This took me by surprise.

    Never would have guessed them to sell. I think they regret their Eastcoast expansion and this is them getting out of that "mistake."
  30. jhartley

    jhartley Poo-Bah (2,738) Aug 22, 2010 Florida
    Society Trader

    Easy come, easy go.
    cavedave likes this.
  31. SFACRKnight

    SFACRKnight Meyvn (1,386) Jan 20, 2012 Colorado

    Abbey is still one of my favorites of the style, american or otherwise. I was driving home and thinking about how NB was a bit ahead of their time with the lips of faith series. The idea seems to be working for other breweries currently. The whole voodoo ranger thing really seemed to be a shot in the dark executed by a company that's to big to really play those games. I secretly thought NB would be making this move. I would get out of the market now too.
  32. russpowell

    russpowell Poo-Bah (9,791) May 24, 2005 Arkansas
    Society Trader

    Not a brewery I drink a ton of any more. Having said that when I did their Brewery tour in 05, I was impressed by their overall business philosophy. I do think we are living in end times for a lot of these breweries I presumed were at least good for another 10-20 years
    ovaltine likes this.
  33. ManBearPat

    ManBearPat Devotee (476) Dec 2, 2014 Colorado

    I’m certain that the ‘cash’ element of this equation is huge for their ability to get past that ‘investment’
  34. Bobbi862

    Bobbi862 Initiate (37) Nov 10, 2019 Illinois

    scream likes this.
  35. VitisVinifera

    VitisVinifera Initiate (134) Feb 25, 2013 California

    anyone else remember when they made the reserve Frambozen with the foil skirts that went over the cap and the neck of bottles?
    ovaltine likes this.
  36. lurking4life

    lurking4life Initiate (26) Sep 30, 2017 Colorado

    It's a bit of a misconception that brewery owners are raking it in while poorly paying their employees. There are plenty of breweries that are very profitable but the majority of breweries are small operations with slim margins. $15 an hour would be average to high in many states for production staff employed at most breweries.

    New Belgium pays there employees well by industry standards. Their benefits are also superior to most breweries.
  37. beertunes

    beertunes Poo-Bah (6,937) Sep 24, 2007 Liechtenstein
    Society Trader

    Yes, as long as one counts ownership shares. Plus, do you think 30k is large in in our modern world?
    mikeinportc likes this.
  38. beertunes

    beertunes Poo-Bah (6,937) Sep 24, 2007 Liechtenstein
    Society Trader

    Yes, but what does that have to do with the topic?
  39. VitisVinifera

    VitisVinifera Initiate (134) Feb 25, 2013 California

    it was NB back in the good days. Anyways that was like 15 years ago, I wonder what the full story on that particular bottling was
    beertunes likes this.
  40. jesskidden

    jesskidden Poo-Bah (1,946) Aug 10, 2005 New Jersey
    Society Trader

    Yeah, like this report from 2015:
    ...which was 3 years after the ESOP took 100% ownership, after buying out* Kim Jordan and the remaining other shareholders.
    Making her, according to FORBES in 2016:
    * It's unclear how the NB ESOP paid Jordan and the others. According to the New Brewer article ESOPs in the Craft Brewing Industry:
    Hey, good for Jordan (mostly), she sure treated her workers better than many of the other "craft brewery" owners that truly "sold out " and for a lot more money that Jordan wound up with (Gee, she might have even made that Forbes Top 60 list :rolling_eyes:).