In another major blow to the Colorado beer industry over the past two months, New Belgium Brewing announced on Tuesday that after nearly 30 years in the craft beer business, the employee-owned company is selling to Australian-based Lion Little World Beverages, a subsidiary of Japanese company Kirin Holdings Company Limited.
Today, New Belgium is the largest craft brewery in Colorado and the fourth largest in the United States, behind Yuengling, Boston Beer and Sierra Nevada, according to the Brewers Association. The Fort Collins-based brewery's cash sale, for an undisclosed amount, is expected to be completed by the end of the year, pending approval from the owners of employees.
More than 300 of the new Belgian employee owners will receive more than $ 1
According to New Belgium CEO Steve Fechheimer, the brewery employs nearly 700 people between Fort Collins, Denver and Asheville, NC – where another New Belgium brewery opened in 2016 – and across the country on the sales team.
None of these employees – nor any of the company's taproom or breweries in Fort Collins, Denver and Asheville – will be affected by the sale, Fechheimer said. He and his "leadership team" will also remain in their positions.
"We will no longer be owned by employees and it would be easy to see it as a disadvantage," Jordan wrote in his letter. "But here's another way to look at it … During the lifetime of (employee stock plans), including this transaction, the total amount paid to current and former employees will be nearly $ 190 million. We will have helped a significant number of people to realize the upside of having equity in something, being part of the American dream! "
Matt Tapper, CEO of Lion Little World Beverage, told The Denver Post that New Belgium's" ethos to be a force for good "is something his company wants to continue to advance.
For nearly 30 years in Fort Collins, New Belgium has grown to become one of the nation's largest craft beer companies, while also becoming 100 % Employed-Owned and Received B-Corporation Status, which means that the business "meets (s) the highest standards of verified social and environmental performance, public transparency and legal accountability to balance profits and purpose, ”according to the B Corps website.  Tapper said that his company will maintain this mission while growing the New Belgium brand.
"This investment in New Belgium … is a pretty significant stake in the United States when it comes to the United States," Tappe r said. "In the long term, we want to work with the New Belgium team to establish a pretty substantial craft beverage business."
Lion Little World is now Australia's largest brewery and New Zealand's largest alcoholic beverage company, with large beer and minor brands from XXXX to Boags, Malt Shovel and the original Little Creatures microbrewery, which also has outposts in Hong Kong, Singapore, London and San Francisco, according to the site.
In 2012 Kirin Holdings-owned Lion bought Little World Be drinks, which became the first craft brewer to be listed on the Australian Stock Exchange.
"Imagine a world where listed companies are dedicated to business as a force for good, with a range of stakeholders – their workers, their shareholders and the environment," Jordan wrote in his letter. "This is a model for a great, compelling future and is in line with the needs of our rapidly changing world. "
Jordan says that after 29 years in the beer industry, she will continue to be active in the company under the new ownership. In her letter to customers, she discussed difficulties "balancing (cash) the cash requirements of our ESOP (employee share plan) and selling shareholders" with the need to grow in both beer-producing capacity and beer-drinking audiences.  "These are many competing priorities, and it has been difficult to make all of them as well as we want, "she wrote." As we surveyed the landscape in recent years, we found that alternatives to raise capital while being an independent brewer were not realistic to us s. "
New Belgium was first reported to be looking for a buyer in 2015, the same year that Colorado's Breckenridge Brewery sold to Anheuser-Busch InBev (which just last week bought Portland, Ore.s Craft Brew Alliance – including brands such as Kona and Redhook – for a $ 221 million deal). In 2017, New Belgium led a group effort to save another longtime craft brewer, San Francisco's Magnolia Brewing, out of bankruptcy in a $ 2.7 million deal.
That year, Spanish company Mahou San Miguel bought a 30% stake in Boulders Avery Brewing. And earlier this year, Avery announced that the company was selling 70% of its brewing operations to Mahou San Miguel and other business partners Founders Brewing Co. The sale means that Avery can no longer classify itself as a craft brewer, a title with standards defined by the Brewery Association. With this sale, New Belgium will no longer be a craft brewery.
It's been a turbulent couple of months for the Colorado beer industry as a whole. In October, Boulder Beer Company, the state's oldest craft brewery, announced plans to downsize, terminate distribution and lay off more than a third of its workforce.
Late last month, Molson Coors announced that the company is closing its Denver office, relocating its headquarters to Chicago and laying off 500 employees internationally. While the company will continue to operate the Coors brewery in Golden, the move means that Colorado has lost one of its most iconic, long-term brands – and with it, a large part of the state's corporate identity.
Bart Watson, chief economist with the Colorado-based Brewers Association, says that businesses like these can be expected in a mature beer economy.
"The craft brewing market has also become significantly more competitive in recent years, especially for regional breweries with a wide distributed footprint and substantial capacity," he told The Denver Post. "Each brewer will make their own independent decision on how to respond to this competitive market, and we've seen a number of independent breweries choose the acquisition of a strategic partner as their route."
In this case, New Belgium Kirins is the first full-fledged brewery in the United States, which could mean that the brewery maintains more autonomy, Watson said. But it remains to be seen.
"I think this situation may be different than some of the acquisitions we've seen where the acquiring company already had significant operations in the United States," he said.
The question for New Belgium and other craft breweries, then, is what strategic partner and what price – or profit – for the company.
“Some of the most widely used options from craft brewers were to compromise a lot on what makes New Belgium great; environmental sustainability, and a rich internal culture, ”Jordan wrote. “Some of these should lead to cost cuts or a lack of focus on sustainability. Having the support and resources of Lion Little World Beverage enables us to meet our competing priorities and utilize the brewing capacity to its fullest. ”
Jordan and her ex-husband Jeff Lebesch took out a new mortgage to start New Belgium Brewing in their basement in Fort Collins in 1991. While Lebesch focused on making beer, Jordan, a social worker by training, used his work background and Quaker schooling to run the business. She started with practice as open book management and eventually sold the entire company to employees.
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