Is this the most significant deal in the U.S. craft brewing industry?

The Press Democrat is billing the partnership between Lagunitas Brewing Co. and Heineken International “the most significant deal yet in the American craft brewing industry.” Is it?

Tony Magee, founder of Lagunitas Brewing Co. Photo via the Press Democrat.

Tony Magee, founder of Lagunitas, has happily partnered with Heineken. Photo via the Press Democrat.

Last week’s announcement, which also appeared on the Lagunitas and Heineken websites on September 8, described the 50-50 deal as a powerful new partnership that will allow Lagunitas to export their craft beer globally. A strategic move for both parties, to be sure, but what does it say about Lagunitas as a member of the craft beer industry? Is it worth losing the status as “small and independent,” as the Brewers Association defines craft brewery, for an export deal?

Here are the key points of the deal:

  • Lagunitas will continue to operate independently in the US
  • Tony Magee, Lagunitas founder, will remain at the helm
  • Leadership and staff, recipes, suppliers and distributors will remain the same
  • Lagunitas will be able to sell their beer worldwide
  • To keep up with growth, a third Lagunitas brewery is under construction in Azusa, Calif., scheduled to open in 2017

Lagunitas, based in Petaluma, Calif., was listed in as No. 6 in the Brewers Association’s Top 50 U.S. Craft Brewing Companies of 2014. For the Top 50 Overall, it sat at No. 11. Since ratings are based on 2014 sales volume, it’s clear Lagunitas is selling a lot of beer.

So, why stop there? Isn’t that the purpose of starting a brewery in the first place? By sacrificing their status as sixth among the craft brewers, Lagunitas is elevating its status as a brewer, period. If given the opportunity to sell your beer overseas, wouldn’t you take it?

Basically, what I’m getting at is, they’re not wrong.

In the words of Tony Magee, founder of Lagunitas, the partnership is “a profound victory for American craft. It will open doors that had previously been shut and bring the U.S. craft beer vibe to communities all over the world.” That all sounds great, but consider the reverse: isn’t Lagunitas giving Heineken the opportunity to gain a foothold in the craft beer industry here? Aren’t those “doors” swinging doors?

A lot of questions will continue to surface as the deal unfolds. (Will Lagunitas grasp more market share with Heineken’s fists? Will Heineken be brewing Lagunitas’ beer, and vice versa? Will Heineken “partner” with more U.S. craft breweries, taking hold of similarly positioned companies like Sierra Nevada, New Belgium and Gambrinus? Is this as bad as Anheuser-Busch snatching up Elysian, Blue Point and Goose Island?  Will what happened to Dick Cantwell at Elysian happen to Magee?)

After the sudden trepidation passes (if it ever does pass), maybe we’ll start to see that these partnerships aren’t such a bad thing. All we can hope for is that our still-small, still-independent breweries aren’t pushed out further by one of their own.

Read Tony Magee’s (thoughtful, very verbose) blog post on the recent news here.

 

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One thought on “Is this the most significant deal in the U.S. craft brewing industry?

  1. This reminds me so much, of the constant debate about Independent Film directors going to studio* (big budget) films, which is happening more and more. I think one of the most telling quotes that works for both industries here is by Director Gareth Edwards: “the reality is, if I’d been hit by a car and gone into hospital, the film would have finished itself. Everyone is so experienced that the film could just make itself to some extent, and maybe some films do. So your job as a director is to constantly try to stay at the steering wheel and pull it hard left or hard right. To try to give it a voice” (www.denofgeek.com/movies/blockbusters/30972/are-we-losing-interesting-directors-to-blockbuster-films#ixzz3lpRy0cN4)

    Is Lagunitas going to lose some of its fun, some of its flair because it will become part of a well oiled, but soulless machine? Will Lagunitas “keep its voice”? Or will everything just wash together into the big budget world? Will be interesting to see how this affects the business.

    *10 points for Film industry tie in.

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