Northwestern Pacific Railroad Network

Dedicated to Sharing the Heritage of Redwood Empire Railroading

Heineken completed a deal to take full control of California-based Lagunitas, after the Dutch brewing giant was encouraged by efforts to expand the brand in a handful of international markets.

On Thursday, Heineken (hinkf, +1.66%) said it acquired the remaining stake in Lagunitas in a deal that has been closed. Terms of the transaction weren't made public.

The brewer bought the first 50% stake in September 2015 amid a wave of craft beer acquisitions by large brewers including Anheuser-Busch InBev (bud, +5.69%) and Constellation Brands (stz.b). That pace of dealmaking remains steady, as AB InBev announced the Big Beer company's 10th U.S. craft beer deal on Wednesday when it said it acquired North Carolina-based Wicked Weed Brewing.

Since that first deal occurred, Heineken has helped boost the international presence for Lagunitas, bringing the brand to new markets such as France, Italy and Spain, as well as expanding distribution in the U.K., Canada, and the Netherlands. American-based craft brands actually sell well in markets abroad, as consumers in foreign markets have become increasingly educated about diversity of ale styles and flavors for beers produced stateside by small brewers.

Founded in 1993, Lagunitas grew to become one of America's top-selling national craft brands. It was the sixth-largest craft brewer in the U.S. before the initial Heineken deal in 2015, which resulted in the brewer being removed from the Brewers Association's annual top 50 list. The trade group requires that Big Beer producers own no more than 25% of a craft brewer for it to still be considered "craft."

Big beer companies have been scooping up smaller craft rivals as that sub-segment of the $108 billion U.S. beer business has been outperforming the overall category. Consumers have expressed interest in fuller flavor beers and local brands, trends that craft brewers play up in their beer innovation and marketing. Deals like the Heineken-Lagunitas transaction can at times upset craft beer enthusiasts, though mostly, consumers don't care about the tie-ups (or aren't even aware they occurred).

Heineken said that to retain the culture at Lagunitas, it would remain a separate business entity within the broader Americas region group. Founder Tony Magee will remain active as chairman and the current management team will also stay the same. Magee will also be tapped to help Heineken develop the company's global and local craft strategy. While AB InBev and Molson Coors have both inked a handful of craft deals, Heineken and Corona owner Constellation Brands have each only done one. (Constellation bought Ballast Point.) Most observers expect more craft beer M&A will occur in the years to come.

"Over the last 19 months, we've had the privilege of getting to know the Lagunitas team and learning from each other's experiences," Heineken said in a statement. "We will continue to find even more ways to collaborate with their team where it makes sense."

Views: 354

Reply to This

Replies to This Discussion

Well hopefully they will keep the plant open and not move it. If they keep it in Petaluma they should have the million dollars easily.

More importantly they will have the legal staff to put the hammer on not-so-smart about closing off an existing spur.

I don't think there's an issue  about the spur

Other than somewhere between $500K and $1 million.

Latest report is that the owner and all staff of Lagunitas Brewery are staying on and operations will not change at all. The word is that the big brewing companies are buying up the small craft breweries just like the big alcoholic beverage companies bought up a lot of the wineries years ago. This is how the rich get richer. Take note... in case you ever get rich!

While I agree that the super beers companies are buying up the craft beer startups because they market horses and sports and not drinkable product, they see their market share dwindling.  But attempting to buy up the competition is a fools pursuit.  I was a brewer before becoming a vintner and there are thousands of good brewers out there who want to go big.  Just go to Healdsburg Bear Republic brew pub for wonderful ales and you will see.  BTW the Bear Republic brewing facility is in Cloverdale area and needs good Canadian grain in rail car volume.

I expect that Lagunitas will just get bigger and still make wonderful IPAs as Heineken fades in the North American market.  Means the demand for more Canadian grain in rail cars.

Found this story funny...and sad.

Lagunitas, one of the original "stick it to the man" breweries, accepts buyout from "the man."  



© 2019   Created by Mark Drury.   Powered by

Badges  |  Report an Issue  |  Terms of Service