Twelve days after the U.S. Department of Justice approved the acquisition of Craft Brew Alliance by Anheuser-Busch, the two companies have completed their merger and shared details about the new structure of the Brewers Collective, A-B’s craft division.
“Connecting with consumers through our brands is at the forefront of everything we do,” A-B CEO Michel Doukeris said in a press release. “After a successful partnership that spans more than 25 years, we are excited to now fully welcome CBA into the A-B family and continue to work together to bring more consumers, in more communities, even more choices for every occasion.”
The merger was announced in November 2019 and had to clear several hurdles in order to obtain regulatory approval. In order to appease Department of Justice regulators, CBA divested itself of the Hawaii operations and sales of its Kona Brewing brand, which included selling off two brewpubs and its under-construction 100,000-barrel brewery to PV Brewing Partners, a partnership between former A-B president Dave Peacock and Overland Park, Kansas-based private equity firm VantEdge Partners.
A-B and CBA’s relationship dates back 25 years — predating CBA itself — when Seattle, Washington-based Redhook Brewery and Portland, Oregon-based Widmer Brothers sold minority stakes to A-B in exchange for access to A-B’s wholesalers. Those two breweries merged in 2008 to form CBA, which now includes Kona, Omission Beer, Cisco Brewers, Square Mile Cider, Appalachian Mountain Brewery and Wynwood Brewing. CBA shareholders will receive $16.50 per share as a result of the sale, and CBA’s stock (BREW) will stop trading on the NASDAQ Global Select Market today.
The union marries CBA’s eight brands to the 15 Brewers Collective brands. To manage the 23 brands, the company will split them into three divisions: national brands, eastern brands and western brands.
“CBA’s dynamic breweries have the same commitment to authenticity and entrepreneurial spirit that has enabled our craft partners to grow as members of Brewers Collective,” Brewers Collective president Marcelo “Mika” Michaelis said in the release. “By prioritizing home markets, building an unmatched innovation pipeline, and developing effective marketing, we have been able to achieve success locally and nationally, and we’re excited to take this next step with CBA.”
The heads of the national brands will report to Michaelis. Andy Thomas, the CEO of CBA, will serve as general manager of Kona’s mainland operations, Omission and the Brewers Collective’s eastern region. CBA chief financial and strategy officer Christine Perich will serve as general manager of the Brewers Collective’s western region.
National brands’ general managers include:
- Todd Ahsmann, Goose Island and Virtue Cider;
- Kyle Fitzsimmons, Elysian;
- Dan Hamill, Golden Road.
Brewers Collective VP of marketing Meg Gill will oversee beyond beer brand LQD and the pH Experiment, CBA’s innovation arm.
The eastern division, which Thomas will manage, includes:
- Blue Point, in Patchogue, New York;
- Devil’s Backbone, in Roseland, Virginia;
- Platform Beer Co., in Cleveland, Ohio;
- Wicked Weed, in Asheville, North Carolina;
- Veza Sur, in Miami, Florida;
- Cisco Brewers, in Nantucket, Massachusetts;
- Wynwood Brewing Co., in Miami, Florida;
- Appalachian Mountain Brewery, in Boone, North Carolina.
The western division, which Perich will manage, includes:
- 10 Barrel, in Bend, Oregon;
- Breckenridge, in Littleton, Colorado;
- Four Peaks, in Tempe, Arizona;
- Karbach, in Houston, Texas;
- Widmer Brothers, in Portland, Oregon;
- Redhook, in Seattle, Washington;
- Square Mile Cider, in Portland, Oregon.
“It’s a pretty elegant model, and one that really brings the best of both worlds: a lot of great resources, some shared values, and a lot of attention to be able to get to brands that might not have had as much time with Mika,” Thomas told Brewbound.
Thomas and Michaelis discussed their vision for the Brewers Collective’s regional brands, which is to shore up local support and drive market penetration at home.
“Every brewery can expand from their home market to regional adjacent states, which we do very often, and to national distribution,” Michaelis said. “Right now, we are going to continue to strengthen our home markets. We know that consumers, they love their local options, and we’ve been learning that.”
Michaelis pointed to Wynwood Brewing’s New York expansion as an exception to the rule.
Brewers Collective brands are also leaning into occasion-based variety packs and larger pack sizes as a result of the shifts in consumer preferences during the COVID-19 pandemic.
“One of the things that we’ve been doing with our brands is betting bigger,” Michaelis said, adding the company will introduce Elysian’s Contact Haze IPA, which debuted earlier this year, in larger pack sizes as a result of consumer demand.
Michaelis added that “consumer-led experimenting” has pushed the Brewers Collective toward variety packs. Wicked Weed, Veza Sur, Elysian and Golden Road will all release new variety packs.
Both Thomas and Michaelis are optimistic for Kona’s continued rise. The brand’s flagship, Big Wave Golden Ale, has increased off-premise dollar sales 21.7% year-to-date through early September, according to market research firm IRI.
“We’re excited about where Kona can go in terms of the relevance Kona has to consumers,” Thomas said. “Rooted in the ethos of Hawaii and the notion of liquid aloha — that just cuts across geographies, and it’s almost universal in its appeal.”