ew Belgium Brewing Company, the fourth-largest craft brewery in the U.S., has reached an agreement to sell 100% of the company to the Kirin-owned Lion Little World Beverages, making the Belgian beer specialists the latest buyout in a series of major brewery acquisitions this year.
According to Brewbound, the all-cash transaction will take place before the end of 2019, pending approval from regulators and New Belgium’s employees, who have collectively owned the company since 2012 via New Belgium’s Employee Stock Ownership Program, or ESOP. A sale price for New Belgium has not been disclosed at this time, but in an open letter penned by Kim Jordan says, “More than 300 employees are receiving over $100,000 of retirement money with some receiving significantly greater amounts.”
Jordan, who co-founded New Belgium in with Jeff Lebesch, will stay on at the brewery in an advisory role along Steve Fechheimer, who will retain his position as CEO, and the rest of New Belgium’s management team. The brewery also plans to remain headquartered in Fort Collins.
Jordan addressed some of New Belgium’s decision-making behind the sale in the aforementioned open letter to the brewery’s customers. In it, she points to the growing competition amongst American craft brewers, who now number over 7,500 in the U.S., and the need to balance the cash demands of the company’s ESOP and the operational needs for more capacity.
“These are a lot of competing priorities and it has been difficult to do all of them as well as we’d like,” Jordan writes in the letter. “As we surveyed the landscape over the last several years, we found that options to raise capital while being an independent brewer weren’t realistic for us. Some of the most widely used options by craft brewers were going to compromise a lot about what makes New Belgium great; environmental sustainability, and a rich internal culture. Some of these were going to lead to cost-cutting or a lack of focus on sustainability. Having the support and resources of Lion Little World Beverages, allows us to attend to those competing priorities and utilize our brewery capacity to its fullest.”
Jordan also calls attention to New Belgium’s status as a B Corp, and underlined that the brewery would seek to become a carbon-neutral business in the coming years. Lion Little World Beverages pledged within its press release that it is “Committed to protecting and nurturing New Belgium’s unique identity, culture, and brand as a leader in craft beer.”
New Belgium is quite the prize for the Australia-based Lion Little World, which was originally established in 2015 to grow the company’s portfolio outside of Australia, New Zealand, and Japan. They’ve certainly gotten that with New Belgium, which reached a brewing capacity of 850 thousand barrels in 2018, making up 3.3% of the United States’ entire craft beer production volume last year. Prior to their interest in New Belgium, Lion’s inroads to the United States beer market were limited to importing Australian brewery Little Creatures and owning a San Francisco brewpub, according to Brewbound.
Lion’s parent company, Kirin Holdings Company Limited, currently owns a 24.5% share of Brooklyn Brewery, one of the country’s 15 largest breweries—and by extension, Brooklyn’s minority shares in 21st Amendment Brewing (CA) and Funkwerks (CO). According to Brewbound, New Belgium’s current ownership stake in San Francisco’s Magnolia Brewery will also transfer to the Kirin–Lion portfolio.
New Belgium’s impending sale marks another major upheaval in the craft beer industry this year. Earlier in 2019, Boston Beer Company merged with Dogfish Head, and other former independents like Founders Brewing have also finalized the sale of their remaining stake in their respective breweries to major international distributors.