[ethinson]

I'm guessing they had about 10 million reasons to change their minds.....

[MDixon]

I doubt 10 million reasons would cover the costs of two of their four operations. Maybe they had 100 million reasons.

[ethinson]

I doubt 10 million reasons would cover the costs of two of their four operations. Maybe they had 100 million reasons.

I debated about that extra zero, but I'm sure you're right.  We'll find out eventually.  Won't the terms become public at some point? It usually does.. 10 million for 10 barrel.. a Billion for Ballast Point etc.

[WattsOnTap]

Seems they had enough real craft brewers back out of the Funkatorium Invitational that they had to cancel it.  Now putting on an event in September with a charity prominently in the name.

[BrewBama]

I hope they don't follow the path of Rolling Rock: In 2006 Anheuser-Busch took over regional brand Rolling Rock and closed the brewery in Latrobe, Pennsylvania, where it had been brewed for 67 years.


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[ethinson]

I hope they don't follow the path of Rolling Rock: In 2006 Anheuser-Busch took over regional brand Rolling Rock and closed the brewery in Latrobe, Pennsylvania, where it had been brewed for 67 years.


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I get the feeling that won't happen.  It seems like for most of the High End brands, the whole point (besides owning the brand) is to have a toehold in that market.  Bend OR, Chicago, SoCal, Denver, Atlanta, etc etc.. now North Carolina. 

Like with Goose Island they've now acquired a huge barrel program and warehouses.  I imagine they'll keep it exactly where it is. 

Just my hunch.

[MDixon]

Wicked Weed is certainly a strong brand in NC, but they don't command a majority of the shelf space. In most stores their display is separate with single bottle (I'm hesitant to call them bombers) displays and occasionally a sixer or two (bottles & cans) on the shelf. In the bottle shops they are typically top row and languish due to the price point. At $10+ for a 500ml bottle you must contemplate whether or not you want that beer because you could purchase a six pack of something you may enjoy just as much if not more.

I think the Wicked Weed purchase does a couple of things for AB. It gets them firmly in the NC market and it also allows them an established sour beer production facility. IPAs and Sours are the rage at the moment and so they can ride the wave provided people purchase the products.

As to the selling price, I was discussing it last night with someone and we both agreed the Wicked Weed capital investment is at least 20-25 million. The owners/investors had money and probably saw an opportunity for an excellent return on investment. Not sure we will ever know, but I would not be shocked to see it be a 10X-20X ROI.

[reverseapachemaster]

I hope they don't follow the path of Rolling Rock: In 2006 Anheuser-Busch took over regional brand Rolling Rock and closed the brewery in Latrobe, Pennsylvania, where it had been brewed for 67 years.

I get the feeling that won't happen.  It seems like for most of the High End brands, the whole point (besides owning the brand) is to have a toehold in that market.  Bend OR, Chicago, SoCal, Denver, Atlanta, etc etc.. now North Carolina. 

Like with Goose Island they've now acquired a huge barrel program and warehouses.  I imagine they'll keep it exactly where it is. 

Just my hunch.

When one big brewer bought out another it was pretty common to close down the acquired brewery and ship production of its brands to the acquiring brewer's other locations because it put the beers closer to their existing distribution chains and allowed for more efficient production. That was possible because even if the brands had some regional connection there was virtually no regional connection between the presence of the brewery and its brands. By the mid-twentieth century most of the major regional brands had nationwide or nearly nationwide distribution. It didn't matter where it was brewed.

With craft beer that's not the case. Breweries are destinations and you drink right at the brewery. People care about buying local and go to bars and drink local beer. If you unearth one of the acquired brands, people will take notice and it will lose its hometown support. ABI has known this for a while. It tried in the 2000s to set up fake craft breweries using area codes to make them appear local (while brewing out of their large brewing facilities) but it was never authentic and didn't last. If they just wanted to buy out craft brewers for the identity and consolidate the beers into their existing facilities then they could have spent a fraction to buy startups struggling to get by who wanted out.

[BrewBama]

I agree with what you're saying except this: "It didn't matter where it was brewed."  I'll bet it mattered where it was brewed to the folks who depended on that job.


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[narvin]

They won't change anything until growth stops.  At that point, any and all cost cutting measures are on the table, including consolidating facilities.  It has happened time and time again, and is an inevitability, really.

[ethinson]

Wicked Weed is certainly a strong brand in NC, but they don't command a majority of the shelf space. In most stores their display is separate with single bottle (I'm hesitant to call them bombers) displays and occasionally a sixer or two (bottles & cans) on the shelf. In the bottle shops they are typically top row and languish due to the price point. At $10+ for a 500ml bottle you must contemplate whether or not you want that beer because you could purchase a six pack of something you may enjoy just as much if not more.

Only sideways related to the original topic, but the price point thing is one I struggle with for a lot of beers.  After touring New Belgium I have a lot greater appreciation of barrel aging, blending, holding on to something for three years and why those beers cost so much.  But that doesn't make it easy. 

Cascade Barrelhouse beers run around 25$ a 750ml, Art Larrence admits they are higher than everyone else, but claims that's the true "cost".  I really want to try stuff from The Breury/Breury Terreux but it's just so hard to drop 27-30$ on a bottle.  Granted, a lot of the sour beers are probably more akin in price to wines based on the work and blending and barreling that goes into them, but you're right when you compare that to the bottle next to it that's only 8$ it's shocking. 

Same reason I don't buy Ballast Point.  It might be cheaper closer to where it's made, but here in Oregon they run 13-18$ a sixpack depending on what it is, and to me that's just way too much.  Obviously they sell a lot of beer at that price point and then sold the brewery for a billion dollars because of it, so hell.. it works for them.  But it doesn't work for me. 

I've never bought wicked weed.  I don't know if I've ever seen it in this market.  I feel like I've seen bottles on a shelf somewhere but that's probably my imagination.  The two beer I've tried from them were both at bottle shares with people who travel a lot and have huge beer collections.