Beverage Dynamics

Beverage Dynamics - September/October 2016

Beverage Dynamics is the largest national business magazine devoted exclusively to the needs of off-premise beverage alcohol retailers, from single liquor stores to big box chains, through coverage of the latest trends in wine, beer and spirits.

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American Made 36 Beverage Dynamics • September/October 2016 www.beveragedynamics.com For all the notice these deals are receiving, however, they are more of a bellwether of potential change to come than a fundamental adjustment of the brewing world. "When you look at the total amount of breweries, the number that have been involved in these deals is pretty low," says Bart Watson, chief economist with the Brewers Association. He estimates that a few dozen companies have been af- fected, out of more than 4,600 breweries in the country right now. However, he adds, "As a percentage of the overall brew- eries, it's not been particularly huge, but those are concentrated primarily in the top 50 breweries in the country, maybe the top 100, so it's a little more consequential in terms of the volume that it impacts." THE GROWTH OF CRAFT AND THE PRESSURE TO EXPAND With the number of breweries operating in the United States growing by double digits annually, increasing competition is inevitable. Dan Wandell, principle within the beverage alco- hol practice area with IRI, recalls a recent presentation. "I de- scribed a more challenging market, not only for beer overall, but for even the craft segment. Within craft, there's a lot of talk right now about not only fl agship fatigue, but even overall craft sales fatigue." He cites the fi rst slowdown in the growth rate of the craft segment seen in over six years of available IRI data. This loss in momentum, though slight, affects breweries of different sizes in different ways. The Brewers Association has reported for several years that larger regionals were experienc- ing lower rates of growth. However, the BA defi nes "regional brewery" as one "with an annual beer production of between 15,000 and 6,000,000 barrels"—a considerable range. For a closer look, Wandel divided craft vendors down into four tiers based upon their volume sales as tracked by IRI in total U.S. supermarkets (IRI counts as craft vendors the large producers of craft-like styles, not all of which the BA would include as craft breweries). NOTABLE MERGERS, ACQUISITIONS AND PARTNERSHIPS SINCE 2010 INVOLVING U.S. CRAFT BREWERIES ANHEUSER-BUSCH INBEV 2016: Devil's Backbone Brewing 2015: Elysian, Golden Road Brewing, Breckenridge Brewing and Four Peaks Brewing 2014: Blue Point Brewing and 10 Barrel Brewing 2011: Goose Island MILLERCOORS 2016: Terrapin Beer Co. (majority interest) and Revolver Brewing 2015: Saint Archer CONSTELLATION 2015: Ballast Point HEINEKEN 2015: Lagunitas (50% share) CARIBBEAN—ANSA MCAL 2016: Florida Beer Co. DUVEL MORTGAT 2015: Firestone Walker 2013: Boulevard ARTISANAL BREWING VENTURES 2016 Merger: Southern Tier and Victory Brewing FIREMAN CAPITAL PARTNERS VENTURE, 2016 2016: Oskar Blues, Cigar City, Squatters, Wasatch and Perrin Brewing NORTH AMERICAN BREWERIES 2010: Pyramid and Magic Hat

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