“Independent” Breweries Quietly Build Mini-Empires

Brooklyn Brewing Image
Brooklyn Brewing promotional photo on their new brewery partnership

When Japanese brewing conglomerate Sapporo recently bought craft beer icon Anchor Brewing, it was big news, and rightfully so. But a week earlier and with a lot less fanfare, Brooklyn Brewing announced a partnership with the Bay Area’s 21st Amendment Brewing and Colorado’s Funkwerks Brewing Company, investing in the two breweries to create “innovative new shared platform for sales and distribution nationwide”.  Which means Brooklyn Brewing’s beers are coming to the Bay Area and 21st Amendment’s beer will be found in the Southeastern United States, according to the Brooklyn Brewing press release. I wouldn’t be surprised if all three brands eventually go national.

And now San Diego’s Green Flash Brewing has announced they’re opening a new location in Nebraska  thought buying the Ploughshare Brewing Company facility, that became available when Ploughsare went out of business this summer. Green Flash already has facilities in their home town of San Diego and also have one inVirginia Beach, VA.  While “craft” brewery acquisitions by large corporations like Constellation Brands, Sapporo, Molsen Coors and AB InBev make all the headlines, smaller regional breweries are responding either banding together or slowly expanding into small national brands. I cite just two examples here, but similar arrangements have made news last year, such as the merger of Southern Tier and Victory Brewing and Fireman Capital’s Oskar Blues purchasing Tampa Bay’s Cigar City Brewing. It’s beginning to look a bit like a game of musical chairs, to see which breweries either get acquired or partner with others, with those left out to go it alone. While economies of scale are big in the brewing business, it remains to be seen which strategy works best, and it’s quite possible different business structures can co-exist.

And Bryan Roth recently showed the sales advantages of large breweries “going small” by setting up smaller outposts across the country in am interesting data-driven piece.

Beer in America is increasingly dominated both by national conglomerates and small tap rooms.  Unaligned mid-sized breweries that need to rely on at least some high volume retail sales are find themselves squeezed both by large corporations that have invested into craft, as well as “independent” craft brewery alliances. How well mid-sized breweries can operate in a business climate increasingly turning against them remains an open question.

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ramblingsofabeerrunner

Writing about beer from the California's Silicon Valley.

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