Not Done with M&A

Posted by: Timothy A Nemeckay Publish Date: Oct 24, 2017

Ales Beers Ciders
Not Done
with M&A
MC Craft Cos To Get More
Taprooms, Mkts, Brands/Pkgs
MillerCoors’ craft “mandate is to consistently out-perform the segment” in both short and long-term, new Tenth and Blake prexy Pete Marino shared during MC mtg at NBWA this wk. “All four of our partners are already doing just that,” he said, noting Hop Valley +25% in PacNW, Saint Archer +60%, Terrapin +45%. “We’re going to pick up the pace,” Pete promised, sharing 2018 initiatives including a few more taprooms at stadiums, new brands & packages, mkt expansions and more. Plus, MC ain’t done with craft M&A quite yet.
Terrapin “will soon” add WI and MI after adding OH, KY, MS and DE earlier this yr. It’ll also launch new 15pk cans of Recreation Ale and new brand Good to Gose will launch as “year-round sessionable sour.” Co again highlighted success of new branded taprooms at Atlanta Braves and Falcons stadiums. All in, Terrapin is up 45% YTD thru late Sep.
Hop Valley will continue to “build awareness” through Hop Box taprooms at sports stadiums, adding Arizona Diamondbacks Chase Field to list in 2018, Pete confirmed. MC to expand brand into competitive SoCal mkt where craft segment -2% this yr. Hop Valley up 25% in home PacNW where total craft off 3.3% in scans, Pete highlighted. New Hop Mixer IPA variety pk is “leading case-growth package” there too since debut.
Saint Archer adding salespeople and marketing support next yr, including new taprooms and sponsorships such as branded bar in LA Angels stadium. It will add 12pk cans of Blonde Ale. Saint Archer is up 60% YTD , driven by IPA up 100%. That makes Saint Archer fastest growing among top craft brewers in CA, said Pete. Some of that lift comin’ from new states added this year, but same store velocity up 52% too.
Revolver will expand to NM next year, its first state outside of TX. MC to consider “additional Central region markets” for brand too, said Pete. Leaning into continued flagship Blood & Honey growth, Revolver will get 12pk bottles of Blood & Honey later this year, and cans comin’ next spring. But co also lookin’ to develop “a more sessionable brand that we will share with you in the spring,” Pete hinted. Revolver continues to be fastest growing MC craft brand family in scans, off smallest base. Blood and Honey 6pk already #2 craft 6pk sold in TX, only behind Shiner Bock, in terms of $$.
Not Done on M&A Front, MC Seeks “Complement” Cos at “Realistic Valuations”
Revolver will expand to NM next year, its first state outside of TX. MC to consider “additional Central region markets” for brand too, said Pete. Leaning into continued flagship Blood & Honey growth, Revolver will get 12pk bottles of Blood & Honey later this year, and cans comin’ next spring. But co also lookin’ to develop “a more sessionable brand that we will share with you in the spring,” Pete hinted. Revolver continues to be fastest growing MC craft brand family in scans, off smallest base. Blood and Honey 6pk already #2 craft 6pk sold in TX, only behind Shiner Bock, in terms of $$.
Excerpt from Craft Brew News
Cider Continues
To Grow
Reverend Nat’s Hard Cider Signs
Lease for Production Cidery,
Accepts New Investment
Portland, Oregon’s Reverend Nat’s Hard Cider announced plans last week to move its operations into a 21,000 sq. ft. building that will allow the company to double its capacity and meet growing demand for its products.
Reverend Nat’s has signed a five-year lease on a property owned by Shobi Dahl, the co-founder of baking company Dave’s Killer Bread, and will move into a new production facility located about a mile from the its existing cidery in early 2018.
“My team has been looking for a larger cidery for more than a year, but we had very high expectations, including staying in the historic Albina township of Portland,” Reverend Nat’s founder Nat West said in a press release. “Shobi approached me about a building he was looking to lease to an entrepreneur, and we immediately found common ground. I couldn’t be happier with the arrangement.”
West told Brewbound that Dahl has also made a “very minor, far less than majority” investment in the cidery.
“It’s a better-than-market-value lease term, and that represents his investment,” West said. “There is a small amount of money, but it’s related to tenant improvement. So the value is in the lease terms.”
Last year, Hawthorne Capital purchased an undisclosed minority stake in Reverend Nat’s and obtained seats on the company’s board. However, West said he, along with family and friends who initially helped fund the business, have retained a “controlling interest” in the company. As new investors have come on board, Hawthorne Capital’s interest in the cidery has been diluted, West said, while he and other investors have retained the ability to increase their own stakes in the company.
“It all worked out according to plan,” West told Brewbound.
Reverend Nat’s, which was founded in 2011, moved into its existing production space in 2012. That location will undergo renovations, and its taproom and retail operations will be expanded, West said. The company also leases two additional spaces for warehousing and packaging, adjacent to its production facility. It plans to vacate those spaces over time and as it moves into its new location.
The new, larger facility, along with additional fermentation tanks, will allow Reverend Nat’s to immediately double its output to about 10,000 barrels annually. The company will eventually be capable of producing 25,000 barrels of cider annually, West said. Last year, it made 4,500 barrels of cider, and the company is on pace to produce 5,500 barrels in 2017.

Excerpt from BrewBound for full article visit: www.brewbound.com/news/everend-nats-hard-cider-signs-lease-production-cidery

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