Consolidation Continues in the Beer Industry

One potential explanation for the emerging popularity of craft beer and decreased demand for larger, more mainstream brands such as Coors Light and Budweiser has been changing consumer tastes. Especially popular among millennials, craft beer and other local, DIY-type products – with more attention paid to fuller flavors, better quality, and more local ingredients – is in part driven by this generation’s willingness to focus on “experiences” instead of just strict consumption for consumption’s sake.


Reasons they are easier to buy and sell.
The“big beer companies”are trying to penetrate this fastest growing niche in the beer industry.

The brewery industry is in the“sweet spot”of its business cycle where there is both documentable growth in revenues and profits for many industry players AND continuing prospects for growth which are above average.


Craft brewers that sold
Fortune magazine reports that a surge of craft beer mergers and acquisitions has upended the annual Top 50 Craft Brewing list compiled by Brewers Association, with four brewers removed from the 2016 list because of recent deal making.

The craft brewers that were removed from the list due to M&A activity were Lagunitas Brewing (#6 in 2015; sold 50% stake to Heineken); Ballast Point (#11, sold to Constellation Brands) and Breckenridge Brewery (#47) and Four Peaks Brewing (#49)— both sold to Anheuser-Busch InBev (BUD, +0.40%). To be a craft brewer, less than 25% of the brewery can be owned or controlled by a big alcohol beverage rival. The brewery must also report production of 6 million barrels of beer or less.


Major Acquisitions
AB InBev has been by far the most active private market investor since 2013, with 43 acquisitions and investments. They acquired huge Mexican brewer Grupo Modelo but mostly focused on craft brewers, including US-based Blue Point Brewing, UK-based Camden Town Brewery, and Italy-based Birra del Borgo.

Heineken ranks second with 7 deals – 5 made in 2017 alone – including Kirin’s Brazilian operations along with craft beers: South-Africa-based Stellenbrau and US-based Lagunitas and investing in UK-based Brixton Brewery.

Molson Coors acquisitions include Rekorderlig, a UK-based cider company, Trou du Diable, a Canadian craft beer brand, and Mount Shivalik Breweries, an Indian strong beer company.

Kirin: This second giant Japanese brewer has acquired two Myanmar-based breweries: Myanmar Brewery and Mandalay Brewery. Kirin has also invested in craft beer, with a minority stake in US-based Brooklyn Brewery, as well as in event planning, with festival management startup Omatsuri Japan.

Carlsberg: Carlsberg has acquired Wusu Brewery, a Chinese brewer, as well as London Fields Brewery, a UK-based craft beer producer. The company also increased its stake in China-based listed company Chongqing Brewery to 60% in 2013.