Short’s Brewing Company, 21st Amendment Brewery, and Funkwerks all involved with big deals to larger breweries.
John Holl 9 months ago
It was a day of deals (well, finally formally announced anyway) throughout the beer industry with “minority investment” being the term batted around by both the entities spending and being bought.
Short’s Brewing Company of Michigan kicked things off Wednesday with a video announcing that Lagunitas Brewing Company has purchased 19.9 percent of the company. Brooklyn Brewery followed up several hours later with a blog post announcing a separate deal, saying they’ve made a minority investment in both 21st Amendment Brewery (San Francisco, California) and Funkwerks (Fort Collins, Colorado).
In the video, Short’s Founder Joe Short used the all-too-common phrase these days of “strategic partner” to describe Lagunitas. Then in describing the deal, CEO Scott Newman-Bale said they wanted to be “up front” with customers about the transaction but failed to mention that Lagunitas is now wholly owned by Heineken, a fact fans were quick and angry to point out on social media.
Short insisted that this deal would allow the brewery, which produced 48,000 barrels last year and moved into states beyond Michigan for the first time, to continue on its path and do right by its employees.
Lagunitas, through its Lagunitas US Holdings (LUSH) venture already has made investments in California’s Moonlight Brewing, Texas’s Independence Brewing, and Southend Brewery & Smokehouse in Charleston, South Carolina. Lagunitas sold 50 percent of its business to Heineken in 2015 and followed up with the rest of the company the following year. It’s on track to make 1 million barrels of beer this year.
Brooklyn Brewery referred to its equity investments as “teaming up” in a blog post that revealed its deal with the two breweries. The announcement largely focused on meeting the challenges of the marketplace.
The three breweries will officially begin working together on January 1, 2018, in a platform led by Dave Duffy, the vice president of business development at Brooklyn Brewery. The announcement touted a combined sales organization of seventy sales people and ninety brand ambassadors in thirty-eight states.
“We’ll be able to reach new markets, bring an incredible array of beers and styles to drinkers, and continue to grow and invest in all three breweries as independent craft brewers,” reads the announcement. “That means Brooklyn Lager will someday soon pour in the Bay Area, and 21st Amendment cans will roll forth along the Gulf Coast, and Funkwerks will pop up in Brooklyn.”
When asked if this means that the breweries will begin using each other’s facilities, such as Brooklyn producing and packaging its beers at 21st Amendment’s new San Leandro, California, facility, Brooklyn Brewery spokesperson Samantha Bernstein said, “We’re exploring many opportunities, but there are no specific plans for production right now. The current priority is developing the sales and distribution platform, which is no small feat and a big change for all parties involved.”
Brooklyn Brewery already has a number of international partnerships and breweries, including ventures with Carlsberg in London, Hong Kong, Sweden, and Norway.
Last October Kirin, the Japanese brewer, acquired a 24.5 percent stake in Brooklyn Brewery, just shy of the 25 percent threshold that would have caused Brooklyn to lose its Brewers Association designation as a craft brewer. At the time, Brooklyn called it a “minority equity investment” and used similar language today when announcing its deal with the two U.S.-based brewers.
“The details of the minority investment are confidential,” wrote Bernstein in an email. “All three breweries remain independent and both founders (at 21st Amendment and Funkwerks) retain control of their companies.”
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