13 Jan Monster Beverage To Purchase Oscar Blues, Other Breweries of CANarchy
from Wall Street Journal Online, 1/13/2022
Monster Jumps Into Booze Business With $330 Million Acquisition of CANarchy
Deal includes Cigar City, Oskar Blues, Deep Ellum, Perrin Brewing, Squatters and Wasatch brands
Monster Beverage Corp. markon Thursday said it is entering the alcoholic-beverage sector with a deal to buy craft-beer and hard-seltzer company CANarchy Craft Brewery Collective LLC for $330 million.
Monster, a Corona, Calif., beverage maker best known for its namesake energy drinks, said the acquisition includes the Cigar City, Oskar Blues, Deep Ellum, Perrin Brewing, Squatters and Wasatch brands but excludes CANarchy’s stand-alone restaurants.
Monster’s deal comes as beverage companies across the spectrum move into new categories in a bid to spur growth.
Coca-Cola Co. , which last year pulled the plug on an energy drink it had hoped would compete with Monster, last week said it struck a deal with Corona beer brewer Constellation Brands Inc. to launch cocktails based on its Fresca soda brand. Rival PepsiCo Inc. and Samuel Adams brewer Boston Beer Co. are set to roll out an alcoholic version of the Mountain Dew soft drink.
Monster said it expects to complete the transaction during the first calendar quarter, adding that the organizational structure for the energy-drinks business will remain unchanged and that CANarchy will function independently, retaining its own organizational structure and team.
The Brewers Association issued a statement today after the announcement that Monster Beverage Corp., makers of Monster Energy Drink acquired CANarchy Craft Beer Collective.
Monster Beverage is a multi-billion dollar mainstream company, boasting more than 3,000 employees and $4.6 billion in revenue in 2020. Does this acquisition strip the 6th largest craft brewery (collective) out of their craft brewer/independent designation?
According to the Brewers Association (BA), the answer is “no.”
The designation of “craft brewer” and its ever-changing perception lies in the hands of the BA, a not-for-profit trade organization that represents America’s craft and independent breweries.
While the definition has been tweaked over the years, today the BA clarified. “Based on our current information, CANarchy meets the [Brewers Association’s] craft brewer definition under the ownership of Monster Energy as it is presently constituted,” the association said in a statement.
This determination is based on the fact that Monster was not previously an alcoholic beverage industry member, so this new ownership doesn’t affect how the BA views CANarchy’s independence.
CANarchy does not exceed 6 million barrels (the association’s defined cut-off) in annual production, which is currently shy of 500,000 barrels annually, as well as meeting the criteria that less than 25% of the ownership or controlling interest is by a beverage alcohol industry member that is not itself a craft brewer.
CANarchy and the breweries operating as a part of the collective – Oskar Blues, Cigar City, Perrin Brewing, Deep Ellum, Wasatch, and Squatter’s will all maintain “Independent” and “craft” designations by the Brewers Association.
Most recently, Bell’s Brewery was sold to Kirin which previously acquired New Belgium Brewing. Both breweries lost or will lose the craft brewer status according to the BA. Bell’s production numbers will be included in 2021 ranking reports, but not considered for 2022.
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