PLEASE let the Northern Brewer buy-out be a hoax!

[Norselord]

The AB Inbev move makes a lot of sense.
Craft brew is on the rise.
It is cutting into the macro-brew market share.
Sales of Budweiser are down.
Budweiser owns maltsters and hop farms.
If those ingredients aren't going into their beer, due to decreased demand, then they still need to use these perishable ingredients.
Owning an outlet to sell their extra malt and hop makes a lot of sense.
Also, they will likely make a higher margin selling malt and hops whole than as ingredients of their line of beer.

 

[brewnonymous]

Budweiser owns maltsters and hop farms.
If those ingredients aren't going into their beer, due to decreased demand, then they still need to use these perishable ingredients.
Owning an outlet to sell their extra malt and hop makes a lot of sense.
Also, they will likely make a higher margin selling malt and hops whole than as ingredients of their line of beer.

This makes a lot of sense. All of the global beer leaders maintain epic hop and malt growing trials on their own farms and facilities. Not only do they grow varieties that are in huge craft beer demand, but are never made available (up until now?), but they also grow varieties that the general U.S. brewing public is sometimes not well aware of. They really could end up supplying some ground-breaking hops if they really wanted to. IF - they wanted to.

 

[Cartman98]

The AB Inbev move makes a lot of sense.
Craft brew is on the rise.
It is cutting into the macro-brew market share.
Sales of Budweiser are down.
Budweiser owns maltsters and hop farms.
If those ingredients aren't going into their beer, due to decreased demand, then they still need to use these perishable ingredients.
Owning an outlet to sell their extra malt and hop makes a lot of sense.
Also, they will likely make a higher margin selling malt and hops whole than as ingredients of their line of beer.

Craft beer sales are slowing rapidly. I read it has been over 10% for years now and this year sales are up 6%. Can't speak for major brewery sales though. I guess it never hurts to expand your business into related areas.

 

[ColeVet67]

http://www.fool.com/investing/2016/10/27/is-anheuser-busch-inbev-doing-an-end-run-around-cr.aspx

They are buying up everything.. thats why they want to be referred to as AMERICA..

 

[mmb]

Craft beer sales are slowing rapidly. I read it has been over 10% for years now and this year sales are up 6%. Can't speak for major brewery sales though. I guess it never hurts to expand your business into related areas.

http://www.brewbound.com/news/craft-beer-sales-slow-midway-2016

Sales of craft beer are officially slowing, according to new data from market research firm IRI Worldwide, but a closer look shows an important distinction: the biggest brewers and their craft brands are the ones facing the slowdown.
...
As Brewers Association chief economist Bart Watson noted via Twitter, year-to-date craft volume gains would actually be closer to 9 percent if you removed non-Brewers Association-defined craft brand families like Blue Moon and Shock Top, which Watson estimates are down 4 percent and 9 percent year-to-date, respectively.

 

[ericbw]

There's way too many variables - Blue Moon is down 4%, but Goose Island IPA is up 175%. So take out Blue Moon, and the "craft" segment is up more. And the logic is that it's ok to to take out Blue Moon because it's fake craft. Not sure I agree with that.

Blue Moon, I think, is a brand created by a bug brewery - it started as part of that large operation. Goose Island was brought into a large company but started independently. Of course, Coors started independently, too.

Craft beer that is tracked in certain ways is down or up. But it's really murky.

 

[Dangeruss]

From a local aspect. NE MPLS Indeed Brewing decided to remove their kits sold at NB for Day Tripper and Midnight Ryder but decided to put the recipes on their website http://growlermag.com/mill-indeed-brewing-pulls-homebrew-kits-from-northern-brewers-shelves/

 

[ericbw]

What is NEMPLS?

 

[GilaMinumBeer]

What is NEMPLS?

It's an acronym.

 

[lschiavo]

It's an acronym.

What's an acronym?

 

[PADave]

From a local aspect. NE MPLS Indeed Brewing decided to remove their kits sold at NB for Day Tripper and Midnight Ryder but decided to put the recipes on their website http://growlermag.com/mill-indeed-brewing-pulls-homebrew-kits-from-northern-brewers-shelves/

Good for them, standing up for what they believe. Saved the recipes, might have to do the Midnight Ryder soon as a black IPA is my favorite.

 

[ericbw]

It's an acronym.

I hate you.

 

[ericbw]

That was a joke, mods.

 

[singybrue]

What is NEMPLS?

Northeast Minneapolis
aka Nordeast

 

[soccerdad]

Ya shur

 

[hunter_le five]

I hate you.

He has that effect on people.

 

[CA_Mouse]

dup

 

[hunter_le five]

dup

Drp

 

[alane1]

Northeast Minneapolis
aka Nordeast

Not to be confused with the North East Minneapolis Pretzel Legoman Society.

 

[alha]

Not to be confused with the North East Minneapolis Pretzel Legoman Society.

Huh? lol

I do have a question, after reading every post in this thread over the last few days. Can someone please try to explain exactly what happened in terms of ownership, etc. From the best that I can tell, the original owner had sold/cashed out to an investment firm about 3-5 years ago, and had hung around as a figurehead. Said investment firm had then been offered and accepted a Big Check from AB for their investment. Business doing business.

I had seen people sometimes give (a small amount of) grief earlier in the thread about the orig owner, but as he seemed to be out of that picture (in terms of real control, as best as I can tell) due to his sale 3-5 years ago, is any of this angst even applicable? At least against him personally, as he was no longer in control if it, the investment bankers were? Am I missing something? Or do I have it mostly wrong?

If so, could someone please provide some clarity so I can get a better understanding of the moving pieces? I understand the general gist of the issues of AB owning the HBS and all that, but that is separate in my mind to the progression of ownership, and how far it is removed from the 'guy started LHBS and grew it into a now big company', because that to me ended back when he sold out to the investment firm.

 

[ericbw]

It doesn't matter about who owns it. Home Brewers like to think they are independent and have indie cred. Bud Light is the antithesis of that. Thus, anything associated with it is bad.

Note how beer tastes better when it's made by a small independent brewery. Preferably by a guy with a beard. If a big company buys them out, the beer tastes worse.

Meaning: it didn't matter that he sold out to an investment firm. It only matters that eventually there is a connection to Bud Light. None of the angst is actually applicable.

 

[shellsbells]

It doesn't matter about who owns it. Home Brewers like to think they are independent and have indie cred. Bud Light is the antithesis of that. Thus, anything associated with it is bad.

Note how beer tastes better when it's made by a small independent brewery. Preferably by a guy with a beard. If a big company buys them out, the beer tastes worse.

Meaning: it didn't matter that he sold out to an investment firm. It only matters that eventually there is a connection to Bud Light. None of the angst is actually applicable.

Sometimes I really wish this site had a dislike button

 

[Murphys_Law]

Note how beer tastes better when it's made by a small independent brewery. Preferably by a guy with a beard. If a big company buys them out, the beer tastes worse.

This raises a question: does the indie brewer have to shave his beard after a buy out?

 

[ericbw]

Sometimes I really wish this site had a dislike button

Me, too!!

 

[bob1852]

Huh? lol

I do have a question, after reading every post in this thread over the last few days. Can someone please try to explain exactly what happened in terms of ownership, etc.

Terms were undisclosed.

So, of course we immediately start grabbing torches/pitchforks and throwing around terms like "sell-out", etc.

 

[jammin]

Terms were undisclosed.

So, of course we immediately start grabbing torches/pitchforks and throwing around terms like "sell-out", etc.

Is it not the textbook, pop-culture definition of sell-out though?

 

[UncleLankyFrank]

Woke up to a new story in the Growler Magazine, who broke the Northern Brewer acquisition story locally and was the credited source for many of the national news outlets who are now all over it:

Indeed Brewing pulls homebrew kits from Northern Brewer’s shelves



Indeed Brewing is a young Minnesota company and one of the most popular local craft brands. This is an unexpected but satisfying response from the industry. I had not thought about the ramifications of InBev having access to craft beer clones, but this seems like a logical reaction. It will be interesting to see if others follow suit.

 

[WaltStarr]

Woke up to a new story in the Growler Magazine, who broke the Northern Brewer acquisition story locally and was the credited source for many of the national news outlets who are now all over it:

Indeed Brewing pulls homebrew kits from Northern Brewer’s shelves



Indeed Brewing is a young Minnesota company and one of the most popular local craft brands. This is an unexpected but satisfying response from the industry. I had not thought about the ramifications of InBev having access to craft beer clones, but this seems like a logical reaction. It will be interesting to see if others follow suit.

I love that they put up the recipes for the kits.

I plan on Midnight Ryder being my next batch. I love Black IPAs.

 

[bob1852]

Is it not the textbook, pop-culture definition of sell-out though?

What if the terms were a pure equity deal, with NB went to Zx and said "if I had 5 million in cash, we could do 'xyz'', and Zx said 'prefect, we'll give you 5 million for 10% equity in your company with repayment terms of 'abc'."

Not all business deals are about complete buy outs, shifting business practices, etc....

Sometimes it's just that a venture company has cash to invest and a business needs that influx of cash for growth.

 

[jammin]

What if the terms were a pure equity deal, with NB went to Zx and said "if I had 5 million in cash, we could do 'xyz'', and Zx said 'prefect, we'll give you 5 million for 10% equity in your company with repayment terms of 'abc'."

Not all business deals are about complete buy outs, shifting business practices, etc....

Sometimes it's just that a venture company has cash to invest and a business needs that influx of cash for growth.

Occam's razor bro haha

Seriously though - you can what if anything to death but it's quite obvious at surface glance this appears to be a "sell-out". I personally could care less and would probably do the same. I'll take cash over "street cred" any day.