Avery Brewing Sells 30 Percent Stake to Mahou San Miguel, Joining Founders Brewing Co.

Founders Brewing Co. is no longer alone in the portfolio of U.S. breweries (partially) acquired by Spain’s Mahou San Miguel. Today it was announced that the Spanish brewing conglomerate, in business since 1890, had acquired a 30 percent stake in Boulder, CO’s Avery Brewing Co., in business since 1993. Specific terms of the deal haven’t been revealed, but it’s expected to close in January.

Mahou had previously acquired the same 30 percent stake of Grand Rapids, MI’s Founders Brewing Co. in 2014, which at the time made them something of a unique case in the craft beer community. On one hand, selling a portion of the business to a Spanish company without much in the way of a U.S. presence was hailed by some as a better outcome than selling to the likes of AB InBev or MillerCoors, while others contended that American private capital would have been a better choice. One thing is certain: The choice to sell more than a 25 percent stake to a “non-craft” entity means both companies lose their “craft” status as designated by the Brewers Association—which is also situated in Boulder, only a few miles from Avery Brewing Co. Co-founder Adam Avery, the longtime face of the company, spoke to Brewbound, saying that losing this label no longer bothered him.

“I don’t care,” he said, adding that brewers should be more concerned about private equity flipping their brewery purchases to “big beer” down the line, if they’re considering that route in order to sell their companies. “It is so funny how ‘big beer’ is demonized. The only way private equity makes money is by selling the business to someone else. Guess who will be the highest bidder in four or five years? Probably big beer. As far as the BA’s definition of what ‘craft’ is, I couldn’t disagree more.”

Most Popular

It’s the latest move in an increasingly blurred field, as the question of “what is craft?” has spun far out of the Brewers Association’s ability to control. Each acquisition must now be approached on a case by case basis, looking at the business practices of the parent company and impact on the U.S. craft beer market, at least for those drinkers who are still passionate about the value of “independent” breweries. Many others are not, and therein lies the biggest problem for the Brewers Association—you can’t expect the average consumer to do a ton of research into brewery ownership, and even if they do, you can’t force them to care. You simply have to let them decide how much ownership means to them for each brewery that is acquired.

The Avery acquisition comes three years after the company built a new, $27 million brewery in Boulder, greatly expanding long-term production. This year, the company will produce around 75,000 barrels following a year of 26 growth—pretty good, in a slowing beer market for regional craft breweries—but the facility will one day be capable of producing as many as 500,000 barrels. That would presumably make Avery into a truly nationwide brand, selling such core brands as White Rascal, Avery IPA and Ellie’s Brown, alongside the brewery’s well-regarded barrel-aging program.

Adam Avery, meanwhile, says that Mahou’s resources will enable the brewery to pay back debts, while simultaneously denying that the sale was necessary BECAUSE of said debts. He also notes that a portion of the sale cash will be distributed to longtime employees as an “appreciation bonus.”

“We didn’t ‘have’ to do this,” he said. “It was an unbelievable opportunity. Mahou came to us nine months ago, and we spent several months figuring out what kind of partnership would make sense. And my dad and I were ready to accept the opportunity. There is a huge debt reduction, a bunch of cash to the balance sheet and quite a large sum of money going to employees. We definitely wanted to put some money into some people’s pockets, so they could have one hell of a Christmas.”

Eduardo Petrossi, the CEO of Mahou San Miguel, likewise made the sort of comment you’d expect from such an acquisition:

“This new alliance, between two family companies, has been possible thanks to the passion we share for beer and tradition, and that we have similar values,” he said. “We share the commitment with the communities in which we are present, our long-term vision, concern for the development and well-being of individuals and our aim of doing things right, placing the consumer always at the centre of our decisions.”

Judging from the warm reception that Founders continues to receive from craft beer fans in the wake of their 2014 investment from Mahou, it’s hard to imagine this move souring many in the craft beer community against Avery. As long as the beer remains interesting, we expect the company’s fortunes will likely remain bright. But it does push the still-fermenting “Brewers Association vs. brewers” clash even further into the spotlight. It’s never been harder to see this industry in black and white—there are more shades of gray all the time.