California craft breweries Bear Republic Brewing and Drake’s Brewing will merge, according to reports.
In the transaction, which is expected to be announced on Thursday, Drake’s will acquire Bear Republic’s formulas, recipes and intellectual property, according to SiliconValley.com. Production of Bear Republic’s portfolio will shift to Drake’s San Leandro, California-based brewery in the next few months. Bear Republic’s brewery is not included in the deal.
“We have always admired Drake’s Brewing Company’s passion for craft beer and their community as well as their commitment to quality,” Bear Republic co-owner Rich Norgrove told SiliconValley.com. “Joining forces with Drake’s will allow us to bring our beers to even more customers, and we’re excited to be a part of the Drake’s family.”
In a memo to partners obtained by California-based beer news blog The Full Pint, Drake’s co-owners John Martin and Roy Kirkorian said Drake’s “commitment to maintaining the high standards of quality and creativity that you have come to expect from our brewery remains unchanged.”
Cloverdale-based Bear Republic, formerly a top 50 craft brewery by volume, has recorded double-digit declines since 2017, according to the Brewers Association (BA). In 2021, its volume declined -15%, to 36,827 barrels.
In 2021, Drake’s volume increased +5%, to 29,700 barrels, which followed a -36% decline in 2020. Drake’s operates three own-premise locations: Drake’s Barrel House at its San Leandro headquarters; Drake’s Dealership, a former Dodge dealership in Oakland; and The Barn in West Sacramento.
The breweries’ combined 2021 volume of 70,214 barrels would make the new entity the 39th largest craft brewery in the country by volume, according to BA data. The deal appears to be the first craft-on-craft acquisition of 2023, following a year with similar such deals, such as Maui Brewing’s acquisition of Modern Times Beer, Harpoon parent company Mass. Bay Brewing’s acquisition of Vermont’s Long Trail and Otter Creek, Wyoming’s Roadhouse Brewery’s acquisition of Melvin Brewing and New Orleans-based Faubourg Brewing’s merger with Catawba Brewing parent company Made By The Water.
Bear Republic closed its taproom for the winter in December in anticipation of decreased tourism traffic during the off-season for Northern California’s wine industry. In 2019, Bear Republic closed its Healdsburg brewpub, the company’s oldest own-premise establishment.
With the merger, Drake’s plans to introduce Bear Republic’s offerings to new markets, first with a focus on flagship Racer 5 IPA, which accounts for 92% of Bear Republic’s volume, and Racer 7 IPA, according to SiliconValley.com
Both Norgrove and Bear Republic brewmaster Peter Kruger will remain on staff following the sale, which Norgrove told SiliconValley.com is the equivalent of “not coming in and buying the car, but buying the engine and driver.”
Bear Republic and Drake’s each have long histories in California’s storied craft beer industry. The former was founded in 1995 by Rich and Tami Norgrove and Rich’s parents, Richard and Sandy Norgrove. The elder Richard Norgrove stepped down as CEO in 2019 and was succeeded by his son. At the same time, Kruger was promoted to chief operating officer.
Roger Lind founded Drake’s as Lind’s Brewing in San Leandro in 1989, according to the company’s website. He sold the brewery to a local coffee company in 1998, which operated it for a decade before selling to current co-owners Martin and Kirkorian in 2008.