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Tuesday, December 22, 2015

A Holiday-Buying Spree

Wow. The world's largest brewery has, in just five days, added three new breweries to its craft portfolio. Last Friday it was Arizona's Four Peaks. Yesterday we learned that AB InBev had snapped up London's Camden Town Brewery. Today it was Colorado's Breckenridge:

Anheuser-Busch has made a play for a piece of Colorado's craft brew market, snapping up Breckenridge Brewery for an undisclosed sum, officials announced Tuesday.

Breckenridge, which sells its beers to 35 states, is on track to produce 70,000 barrels of beer in 2015. Earlier this year, Breckenridge departed its downtown-area Denver digs for a 12-acre brewery and restaurant in Littleton. The 25-year-old company is Colorado's sixth largest craft brewer by barrels produced, according to The Brewers Association data.
We were playing a little game on Facebook of trying to guess which brewery would go next. It's possible someone might have rung in with Breckenridge (one commenter was on the right track with Avery and Great Divide), but the damn thing happened too fast for a robust sample to gather. I will leave you with the newly-updated map of the Little Buds and their national distribution:

Various comments/questions. (1) Interesting that ABI seems to be focused on blue states (a fact made more obvious by my use of an electoral college calculator to generate these maps)--does this mean North Carolina or Florida is more likely to be the first southern state than, say, Georgia? (2) Some enterprising young journalist (Bryan Roth?) should look to see what the distribution ramifications are in these states. I continue to believe that's a huge part of this equation. (3) Which brewery is next, and (4) how many breweries do you expect ABI to buy stateside before it feels it has collected enough to make a big push into the craft segment?


  1. We need a bingo game app to keep track of rumours, expectations and confirmations.

  2. I fully expect ABI to acquire at least one brewery in every major US market. In some states, like California, this will obviously require multiple purchases. At least since 2011 with their area code trademark applications, they've expressed the intent of leveraging localism. I think this creates a reasonable base from which they can gradually scale up their takedown of the industry.

    From an Arizona perspective - and I think this goes elsewhere - there are only so many local brands that carry weight in grocery stores. For ABI, grocery stores are where this battle will be won or lost as those consumers want better beer but don't necessarily care about backstory. By positioning themselves/Four Peaks against shelf space expansion of other local brands, ABI creates a self-administered ceiling for craft growth in Arizona grocery stores. Utilizing this method on a market-by-market basis, this is how they can control the growth of craft brands as a whole.

  3. They aren't done in California or Colorado. Probably not in Oregon or Washington, either. Although they will use the pubs of the acquired brands to expand recognition, T-Bone is correct when he says grocery stores are where the battle is being and will be waged. That is where they can leverage the advantages they enjoy in distribution, pricing and efficiency. They fully understand they don't have to own a large fraction of craft breweries to substantially damage the independents in the retail channel. They like the local angle presented by their pubs, but they aren't out to undermine independents in that sector. It's not where they have the greatest advantages.

    Looking at the map, I'd say the next likely targets are in Texas, Florida and North Carolina. But there may be additional buyouts in top tier craft states where they already own breweries before the buyouts in other states happen. The timing will depend on factors unknown to any of us.

  4. T-Bone, I totally agree. And from the ABI perspective, having the portfolio means having not just one craft brand to offer, but the several that have distribution to that state.

    Pete, your comment is a bit of a refinement on T-Bone's. How many breweries does ABI want for each market? What kind of breweries? I'm sure these decisions are already made and all that's left is finding the breweries to buy.

  5. With the caveat that maybe there will now be a wait-and-see period to see what they can do with their acquisitions (and a second caveat that I don't know regional breweries beyond the Midwest that well), I'd echo all your predictions that acquisitions would have a good tapline and supermarket presence as opposed to merely a specialty store/liquor store presence. So, a brewery such as Great Lakes would be more likely on their radar than would, say, Three Floyds or Surly or Half Acre. I wish Lew Bryson or Jack Curtin were still beer-blogging-active (I guess Jack still is, kinda sorta) to offer knowledge on PA breweries who might be targets, like Troegs or Victory.

  6. Oh, hey, maybe Lew is reviving his blog? There's a countdown on Seen Through a Glass!