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Anheuser-Busch InBev just bought its 10th craft brewer

May 8, 2017
Food & Drink

Anheuser-Busch InBev has acquired North Carolina-based Wicked Weed Brewing, scooping up yet another craft brewer to add to the Budweiser maker’s collection of higher-end ales.

On Wednesday, AB InBev announced Wicked Weed Brewing would join the company’s “High End” portfolio, which also includes AB InBev’s Stella Artois and craft brands it has acquired in recent years, including Elysian, Devils Backbone and Blue Point. Before the deal for Wicked Weed, the last craft beer AB InBev inked was in November when it acquired Texas-based Karbach Brewing Co. The Big Beer producer generally prefers to buy craft breweries that are located in different regions of the country and the deal for Wicked Weed fits into this trend, as the closest AB InBev-owned craft partner is Devils Backbone, which is located in Virginia.

Terms of the Wicked Weed Brewing deal weren’t disclosed. AB InBev’s official statement suggested that the craft brewer’s founders, which include Walt and Luke Dickinson, will remain at Wicked Weed after the deal closes.

Founded in late 2012, Wicked Weed has created over 500 different beer styles, starting with West Coast IPAs and Belgian ales though it later moved into creating sours as well. Some of the company’s most well-known beers include Pernicious IPA and Lunatic Belgian Blonde, which both won silver medals at the Great American Beer Festival. Wicked Weed also opens and operates four facilities in the Asheville region, including a brewpup and a 50-barrel production brewery.

Wicked Weed sold about 22,000 barrels last year and was on pace to nearly double in size to about 40,000 for 2017, according to industry watcher Beer Marketer’s Insights. Wicked Weed is particularly known for the company’s barrel-aged sour beers, even though they contribute less than 20% of total volume. The brewer currently sells ales in eight states, with half of the business derived from North Carolina, Beer Marketer’s Insights reported.

The nation’s largest Big Beer companies—including Corona maker Constellation Brands (STZ.B) and Miller Lite producer Molson Coors (TAP.A)—have all inked deals in the craft space to better compete in a market that has been producing fast sales gains in recent years that has outpaced the $108 billion American beer market. Of all the Big Beer makers inking deals in the space, AB InBev has been the most aggressive.

The deal-making by AB InBev has been lauded by Wall Street. It has also helped boost sales at a time when the brewer is confronting a challenging market in Brazil due to broader economic woes in that region, as well as declining sales for both Bud Light and Budweiser in the U.S. market. But the regional “craft” portfolio grew by 30% last year.

Conversely, deals that AB InBev and others have made in craft have hurt the growth of the craft industry, at least as it is defined by the Brewers Association, a craft industry advocate that requires a brewer make 6 million barrels of beer or less annually and also be independent (less than 25% owned or controlled by a Big Beer producer).Volume for craft, according to the BA, increased 6% in 2016, a slowdown from the double-digit increases the industry had been posting in recent years, partly because when a company like Ballast Point or Elysian is acquired, volume from those brands no longer is counted as “craft.” But those ales are generally still marketed as craft and retain critical craft beer shelf space in specialty beer stores, Whole Foods, and other retailers.

By John Kell

Source: Fortune

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