More on a potential sale of New Belgium Brewing

Jason Sandford

Jason Sandford is a reporter, writer, blogger and photographer interested in all things Asheville.

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Some follow-up of Friday’s news that New Belgium Brewing was exploring a sale:

-The official New Belgium response to the initial Reuters report:

“New Belgium’s Board of Directors has an obligation to have on-going dialogue with the capital markets with the goal of making sure that we remain strong as leaders in the craft brewing industry.” -Kim Jordan, New Belgium founder

-The Denver Post offered some savvy analysis of the New Belgium deal, noting that a sale to a big corporate owner could turn off customers loyal to the independence of the New Belgium brand. The company has taken steps to protect that independence, according to the story, by moving to employee ownership in 2013 and adopting a B-Corp structure that allows it to focus on more than just the bottom line. Still, a sale could have some upside, according to the Post:

For an independent brewer, a sale offers easier access to capital and a wider distribution network, not to mention a payoff for years of hard work, said Bart Watson, chief economist of the Boulder-based Brewers Association.

Watson said that without more concrete details, it can’t be ruled out that New Belgium might be looking at another strategy short of a sale to protect its independence — say, raising money in stock or debt offering.

“It is hard to know what their motivation is,” Watson said.

Beer sales in the U.S. are flat, and craft brewers have grabbed about 11 percent of the total market. To preserve their market share and appeal to younger consumers, larger corporate players have been buying more-successful independents at a steep premium.

–Amid Rumors of Sale, New Belgium Core Growth Slows, Brewhound.com.

The story notes that New Belgium has been slowly expanding toward a 50-state distribution presence, and the opening of its Asheville brewery will help New Belgium become a national brand by 2017. More:

The brewery’s geographic expansion takes place during a critical time for New Belgium. In an October interview with Shanken News Daily, the company’s newly appointed CEO, Christine Perich, said 2015 would likely be the first down year in the company’s history.

Calling it a “capacity management year,” Perich explained that sales have suffered because of New Belgium’s choice to focus on its new Asheville brewery and expansions at its Fort Collins facility.

Sales have taken a hit as a result. Fat Tire and Ranger IPA are down 1.4 percent and 1.9 percent, respectively, for the year-to-date period ending Nov. 29, according to IRI.

Sales for Fat Tire have continued to drop even as New Belgium enters new territories, however. The brewery has entered eight new states in the 29 months since Jordan first announced the company’s plan for national distribution. It also plans to enter three additional markets — Hawaii, West Virginia and New Jersey — in the first quarter of 2016.

-In Fort Collins, home base for New Belgium, The Coloradoan noted that 2015 was a transitional year for the employee-owned New Belgium. Kim Jordan stepped down from her role as CEO andChristine Perich became chief operations officer and brewery president.

The newspaper also noted that, aside from preparing to open its new Asheville brewery, New Belgium is also spending $7 million to expand its Fort Collins headquarters with a new taproom, beer garden and office space. There’s also an on-site health-care center for employees and their families according to the story. The expansion is scheduled to be complete in June.

-The Asheville Citizen-Times, in a Dec. 10 story, noted that New Belgium had begun test brewing beer at its new Asheville brewery.