VinePair’s Post

Mark Williams, chief executive of Keystone Brewing Group, the brewing operation backed by investment firm BREAL Group, has told Propel that the company plans to make further acquisitions as a “correction” in the market continues at pace. Over the last year, Breal, which also backs D&D London and Vinoteca, has acquired Yorkshire-based Black Sheep Brewery, the Purity Brewing Co, Brick Brewery and Brew by Numbers. Williams said the plan was to grow annual revenues from its beer operations almost fourfold to £100m by 2028, with three quarters of that planned growth coming from acquisitions. He told Propel: “It has surprised us, the amount of opportunities that have presented themselves. Since we bought Black Sheep back in May, there has almost been a queue at the door. We’ve looked at eight opportunities since we came back after Christmas, there’s a lot of pain out there. We didn’t anticipate buying four companies as quickly as we did, and we don’t make a habit of buying businesses out of administration. "We have a target to grow to £100m revenue and we are currently talking to a number of breweries – solvent breweries, I might add – with the view to acquiring them. Right now, a correction is happening in the category. What’s been remarkable about this correction is the speed. We’ve come out of covid and into the impact of the invasion of Ukraine, and then a significant increase in costs. Subsequently, many of these businesses took out CBILs at 2.5% above base, and base was 0.5%. Because that has now increased, they are carrying significant debt, and to pay that off they need volume, which is increasingly difficult to come by. So, if you are a brewery of a certain size, it can be almost impossible to get your head above water. So, there is a correction happening, but it’s been stimulated greatly by the cost of living and the cost of borrowing.” Williams said that since May last year, the business has saved 170 jobs that would have been lost and “saved some really great beers and fantastic brands”. On further hires, he said: “We have eight sales roles that we are trying to fill and we’ve recruited nine others already. We will have a sales team, hopefully by the end of May, of 35 people. That’s what the scale brings – the ability for us to invest and broaden our horizons. I mentioned we have a plan, and the plan is to grow the brewery group to a £100m-turnover business. Underpinning that will be a range of regionally loved beers.” 👉 Find out the latest hospitality news first by signing up to the Propel email newsletter for free, here: https://lnkd.in/g_vS_S7

Why Did Suntory Deny Acquisition Talks with Boston Beer? Uncover the Details Behind the Speculation. #SuntoryHoldings #BostonBeer #AcquisitionRumors #DrinksIndustry #BeerMarket #SpiritsBusiness #IndustryNews #MergersAndAcquisitions #CorporateNews #MarketUpdates

Athletic Brewing raised $50M at a $800M valuation 🍻 General Atlantic led the investment, boosting the nonalcoholic beer brand's production and global expansion. No longer a buzzkill, Athletic Brewing Co.’s NA craft beers are in high demand: • Sales grew 60% YTD through June. • It holds 19% of the nonalcoholic beer market. • It became a top-20 US brewer by volume last year, making 258K barrels. Targeting the 41% of Americans seeking to reduce—but not eliminate—alcohol, its beverages are a healthier stand-in for social gatherings and recreational pursuits. Unlike functional beverages, NA beer is surging for what’s *not* in it. With younger generations ditching alcohol, more sober swaps will follow — and Athletic will be ready for another round.

In today's CBD: Two of the largest Black-owned breweries, California's Crowns & Hops Brewing Co. and Full Circle Brewing Co., have struck a watershed alliance to leverage its members’ strengths and show up at market in a much bigger way. The new shared resources platform is dubbed “Circle of Crowns Beverage Group” (CCBG). The alliance “combines two leading Black-owned brands and centralizes production, sales and marketing between the two companies,” per announcement. Production will be centralized at Full Circle. Currently, the brands produce about 10,000 barrels collectively. It’s about “unlocking untapped opportunities” in the craft market, by "leveraging retail and venue diversity programs." Historically, Black suppliers have lacked the infrastructure to address these opportunities on a wide scale. CCBG also includes the historic Speakeasy Ales & Lagers brand, one of the oldest in San Francisco, and Sonoma Cider. "As you know, there's 9,000-plus breweries out there, and there's only 1% that are Black-owned," Arthur Moye, Full Circle founder, told CBD. "And I think, during a good period of the last half a decade or so, people have wanted to support Black-owned businesses. So you have major retailers reaching out to those 1%; you have distributors reaching out to those 1%; but then there hasn't been a structure by which they could significantly respond, because that 1% is mostly represented by people that don't have production facilities and can't create the margins and the economies of scale to sit on the shelves throughout the distribution networks of the chains." This starts to solve that. More here, we left the story open to all. https://lnkd.in/gsHErbeK

There was some big beer news this week if you missed it. Tilray Brands added 4 Craft Brands via purchase from Miller Coors. This is about a year after buying 8 brands from AB InBev and bringing the total portfolio up to 20. This will land them around #4 in volume of craft brewers. There's a few things to watch that have my attention. 1. Does this move accidently challenge the previously acquired Shock Top? MC specifically says that this unloading frees them up to focus on brands like Blue Moon - the most direct competitor to Shock Top. “We have big plans to lean into above premium starting this year into next with a clear set of strategic priorities – from strengthening the core of Blue Moon and growing aggressively with new drinkers with Blue Moon Light and Blue Moon Non-Alc,” St. Jacques wrote. 2. This adds production capabilities around the country. That feeds the narrative that Tilray is building a massive beverage platform starting with beer and ultimately moving to Cannabis when the time is right. 3. Tilray's strategy with the previous brands was to crash threw a tidal wave of new products and see what happens. I imagine you'll quickly see the same from these 4. I don't see a lot of brand building happening though, and the pace of change is creating some really opaque brand positions when consumers need clarity more than ever. I think this plan has short term benefits, but long term detriments - maybe that's the point?

📣 Investment Announcement: Otherwise Brewing 🍺 ICA is thrilled to announce our newest investment in Otherwise Brewing, an award-winning gluten-free beer brewing company in San Francisco that offers delicious craft beer in a wide range of styles. From their Guava Fresca kettle sour to their Sonic Bloom Juicy IPA, Otherwise Brewing unites beer enthusiasts, celiac-friendly folks, and everyone in between. Founded by composer and home brewer Aaron Gervais and cicerone Stellar Cassidy, Otherwise brewing was born out of a clear market opportunity in the craft beer industry and a vision of everyone getting to drink great beer, together: “There are hundreds of craft breweries in California and only a few of them are gluten-free. We saw an opportunity for growth in the craft beer industry: for people to have a gluten-free option in their fridge, too. Why wouldn’t you want to have something so that everyone can enjoy the experience together?” - Aaron Gervais Read more about Otherwise Brewing on our website or in our bio: https://lnkd.in/dUr_Fj_v #investment #announcement #icafund #seedcapital #venturecapital #impactinvesting #entrepreneurship

NEW: BrewDog is pivoting towards lager as it looks to become the fourth-largest brewer in the UK off-trade. With Carlsberg Marston's Brewing Company's bestseller San Miguel set to switch to Budweiser Brewing Group UK&I in January, there was an opportunity for BrewDog to leapfrog the supplier, group sales director Stuart Harrison said. In a bid to win the battle for fourth spot, the Scottish brewer would place greater emphasis on lager to appeal to more shoppers, Harrison said. “Penetration of craft has plateaued,” he said. “There are no new consumers coming into craft. So we have to drive penetration to craft. That is why you will see a lot of focus from us next year on Lost [Lager].” Lost Lager, first introduced by BrewDog in 2018, will this year overtake Punk IPA to become the brewer’s biggest-selling beer in grocery, accounting for around 22% of its total off-trade volumes. As well as driving sales of Lost Lager via new pack formats and promotions, BrewDog would invest behind its 3.4% abv lager Cold Beer and extend its Wingman sub-brand into lager next year, Harrison said. Read more via The Grocer.

Molson Coors to Invest £100m in UK Brewery and Beverage Network Molson Coors Beverage Company has unveiled ambitious plans to inject over £100 million into its UK brewery and beverage infrastructure over the next five years. This significant investment aims to enhance capabilities, increase efficiencies and support the company's growth in the UK market. Fraser Thomson, Chief Supply Chain Officer for Western Europe at Molson Coors, emphasised the strategic nature of this investment, by stating that: “This plan is an investment in our future, giving our people and brands the tools to fulfil our potential in the UK market while making strong progress against our sustainability targets". Key components of this investment include upgrading brewing capacity and packaging capabilities at Molson Coors' major UK facilities, notably the breweries in Burton-on-Trent and Tadcaster. The Burton brewery will benefit from a new 24-tonne high-speed can filler, capable of filling an impressive 120,000 cans per hour. Moreover, the packaging keg lines at Tadcaster and Aspall Cyder House will also undergo enhancements. Molson Coors is also directing resources towards Sharp's Brewery in Cornwall, supporting new and existing ale brands such as Doom Bar, Solar Wave Hazy and Twin Coast. This builds on previous investments, including a recent £13 million expansion at the Aspall Cyder House and a £21 million investment in a new canning line in Burton. Molson Coors' focus on upgrading its facilities reflects its commitment to meeting market demands and advancing sustainability goals. Furthermore, the company's growth in the UK market is highlighted by the success of its brands, particularly Madrí Excepcional. Thomson described Madrí Excepcional as “the country’s fastest-growing major beer brand in both volume and value sales” in late 2023, reinforcing the need for expanded brewing and packaging capacity. In sum, this substantial investment by Molson Coors is not only about modernising its infrastructure but also about empowering its workforce and ensuring environmental responsibility. Thomson added: “This is a landmark moment in our history as we evolve to meet the demands of our growing portfolio and bring new innovations in the years ahead, while continuing to reduce the impact our business has on the environment”.

"American breweries are currently at about half their capacity. That’s not good! But it’s actually worse that in looks because growth has been dead flat for three years. Were the industry growing, it would need headspace, so to speak, for future expansion. Here’s Bart: “When you’re growing rapidly, excess capacity is a good thing so you can keep up with that growth. Athletic has a lot of excess capacity right now with the purchase of that former Ballast Point facility, but no one thinks that’s an issue. So the ratio in the mid-2010s was different because brewers were rapidly growing into it. As I pointed out in 2015, the 2012 and 2014 ratios look the same, but 2014 production was actually bigger than 2012 total capacity. “So you need to understand the capacity number in the context of its time. If we were growing 18% again right now, even 51% might not be that bad (at 18% you’d use up all that excess capacity in 4 years), but at static or negative growth, it’s a lot worse, because it represents investments that aren’t being utilized.” I don’t have a lot more to add to this, except to say that if you want to open a brewery in the next few years, you might consider starting a contract brewery or alternating proprietorship. Not only would it save you a ton of money at the outset, but you might be doing another brewery a favor in helping them fill up those tanks." https://lnkd.in/esCxj5RU

News that Athletic Brewing raising another $50million for growth plans now gives them an amazing $800 million valuation which is double of what it was two years ago. My question is why would Athletic give up more equity albeit a "small" amount, if doing a straight calculation the $50million raised at $800 million valuation, don't know if pre or post-money, but for easy math say its 6.5% equity they gave up on this round. A CNBC post, Bill said they did $90million in revenue in 2023 so for simple math at an $800million valuation so about a 9x multiple on revenue which is VERY high for a beverage brand where 3-4x is a lot and typically a 2x multiple. Bill also mentioned in 2023 they sold over 3 million cases so revenue of say $30 case using the $90million. One would assume at this point Athletic could easily get a $50 or $100million loan at say 7-9%, so why would you give up more equity? I understand early on when starting a new business its a gamble if you will succeed so the old adage of "play with other people's money" when you are a start-up, but at this point I wouldn't consider Athletic a "start-up". In the interview they said Athletic is at 19% US market share of the US NA beer market. Stats I could find, the top 5 US NA beers had $246.7 million sales & a total US NA beer market of $368.7 million in 2023 or 67% of the total US NA beer market. Statistia 2023 US NA beer stats of: Heinken $77.45 million (21% share) Bud Zero(ABinBev) $55.44 million (15%) Athletic $51.83 million (14%) Busch (ABinBev) $33.61 million (9%) O'Douls (ABinBev) $28.37 million (8%) NOTE: if combined all of ABinBev's NA lines would be the leader at $117.42 million (32% share) What is interesting is that 33% of the US NA beer market are "other brands". So while not the duopoly like in hard seltzer where the top 2 brands have 80% market share, you do still have 5 NA brands at 2/3 of the market. The question is if the top 5 will gain market share as the overall US NA beer market grows if they can keep pace with the NA beer segment growth. I see O'douls losing ground, but the other 4 gaining or maintaining their current market share. I expect the NAs from Corona & Guinness to gain share especially on-premise as both brands begin to focus on this channel as they primarily focused on off premise early on. On premise for NA beer I think is where the market share will be gained or lost as NA brands negotiate contracts (which is legal in most states with NA). Also, whichever NA brand can safely execute NA draft will dominate on-premise is the white space right now. https://lnkd.in/eRU3QJtu