Anheuser-Busch Just Sold Several of Its Beer Brands to a Cannabis Giant
Anheuser-Busch is looking to restructure its business amidst struggling stock prices and declining sales. Over the last decade, AB-InBev became a craft beer industry player thanks to successful in-house brands like Shock Top and acquisitions of other popular labels like Blue Point and Goose Island. But the conglomerate is slowly retreating from the business with its latest move.
Anheuser-Busch just announced that it's cutting eight craft brands from its portfolio and selling them off to a burgeoning player in the craft industry: Canadian cannabis company Tilray. With the buy, Tilray expands its growing craft holdings, which currently includes SweetWater Brewing, Montauk Brewing, Green Flash, and Alpine Beer Co. The deal is valued at $85 million in cash, according to an 8-K filing by Tilray—a steal considering the 2020 SweetWater acquisition alone was $300 million.
Tilray's arrangement with Anheuser-Busch will give the cannabis giant control of some recognizable craft brands: Shock Top, Breckenridge Brewery, Blue Point Brewing Company, 10 Barrel Brewing Company, Redhook Brewery, Widmer Brothers Brewing, Square Mile Cider Company, and HiBall Energy. This also includes current employees, breweries, and brewpubs associated with these brands. The deal is predicted to triple the size of Tilray's beer arm, upping its output from 4 million to 12 million cases a year.
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“Today’s announcement both solidifies our national leadership position and share in the U.S. craft brewing market and marks a major step forward in our diversification strategy," Tilray CEO Irwan D. Simon said in a statement. "We are excited to work with the teams behind these iconic brands that command great consumer loyalty and have a history of delivering strong award-winning products with tremendous growth opportunities."
"Tilray is fully committed to invest in and champion the future of the U.S. craft beer industry by fueling new innovation that excites and further accelerates the growth of its consumer base," he added. "In a matter of three years, Tilray has solidified its leadership position in the craft beer industry, and we fully intend to be that change agent that reinvigorates the sector."
He also noted that the company is looking forward to when (not if) marijuana is legalized across the country as a way of flexing its already established power in the field. "Upon federal cannabis legalization, we expect to leverage our leadership position, wide distribution network, and portfolio of beloved beverage and wellness brands to include THC-based products and maximize all commercial opportunities," he said.
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AB-InBev isn't exiting from the craft business entirely. After the deal, it will still have 12 craft beer offerings, most notably Goose Island and Elysian. Andy Thomas, president of Anheuser-Busch's craft division, explained that the sell-off has been in the works for some time.
"Tilray Brands reached out to us early this year with interest in purchasing these brands and breweries, and since then, we’ve had many positive conversations that led to today’s announcement," he shared. "The talented people behind these brands and breweries, along with our significant investments in them over the years, have positioned them for a bright future with Tilray Brands. We are committed to working with Tilray Brands over the coming months to ensure this is a smooth transition for the people who are working every day to get these amazing beers and beverages to consumers across the U.S.”
Who knows? You might even be able to sip on some THC-infused Shock Top sooner rather than later.