New York based Brooklyn Brewery has taken minority stakes in both San Francisco’s 21st Amendment Brewery (21A) and Fort Collins, Colorado’s Funkwerks. The trio is creating a combined sales team.
The baseline purpose of this deal is competition. The beer industry in the United States is rapidly changing as big beer companies, like Anheuser Busch InBev and Heineken, are purchasing craft breweries, plus the growth of private equity-backed breweries.
Rather than shop for a buyout, it is time to join forces.
Brad Lincoln, co-founder of Funkwerks tells Beer Street Journal that their brewery only has two salespeople, both in Colorado, yet ships to seven states. “We can’t afford more employees to compete in the markets that sustain us,” he said.
It’s a known fact that sales generally increase in distribution territories that have salespeople. 21A ships to 24 states, and boasts a 20 person sales team. Brooklyn touts nearly that many for just New York City.
The search for a solution rather than a cash-out led Lincoln to his close friend Dave Duffy, who is the vice-president of business development at Brooklyn Brewery. “Brooklyn is seasoned in brewery partnerships both here and abroad. They understand the challenges,” Lincoln said.
Yesterday, Michigan’s Short’s Brewing announced Heineken backed Lagunitas is buying a minority share in their brewery for similar reasons. Both Lincoln and Scott Newman-Bale of Short’s said nearly the same thing about their new financial associates: “They are a partner that will leave us alone and let us be us.”
Per Lincoln, “This is how we grow, fight, and compete, and eventually – grow.”
Throughout the rest of 2017, Brooklyn, 21st Amendment, and Funkwerks will be hard at work creating a national sales platform, slated to go live in January 2018. The idea of sharing brewing operations (ex. 21A brewing at Brooklyn) has been thrown out there, but no immediate plans to do so.
The equity percentages or value of Brooklyn’s financial investment were not disclosed.