New Belgium Gobbled Up By Lion Little World Beverages
You read that right.
New Belgium has announced today that it will be selling the brewery to Lion Little World Beverages (LWB) in an all-cash transaction. The sale is expected to close by the end of 2019 pending approvals by regulators and the Employee Stock Ownership Plan. In what would be an odd twist, the employees could still turn this deal down.
I’ve gotta say, this one hurts a little bit.
New Belgium has always been the role model for other breweries, and selling out never seemed like part of the plan. Not only is New Belgium not a US-owned business, it’s not going to be an employee-owned business—two hallmarks that made it so great. Don’t get me wrong—this sale is not unexpected, though I personally thought they would go more of the route that Sam Calagione went in merging with another leading US-based brewery.
One positive that comes out of the brewery moving away from the ESOP structure is that over 300 employees are receiving at least $100,000 of retirement money, thanks to the liquidation of their stocks. That’s a good chunk of change.
Anyways, we’ll keep you updated as more develops.
Well that was quick. If you head to the “Ownership” page on New Belgium’s site, where they used to tout their Employee-owned, “Human-Powered” mission, it’s now a 404 error:
Will this age of new-ownership threaten that element that made all New Belgium employees so passionate? What will happen to New Belgium’s practice of open-book management with their new owners? Will the employees still be able to run the best business possible even though they can’t see the books and without the fiscal transparency of the ESOP? Only time will tell.
Here’s Lion’s press release about the acquisition:
19 November 2019 – Lion‘s global craft beverages division, Lion Little World Beverages (LWB) and New Belgium Brewing today announced that the companies have signed a definitive agreement for Lion Little World Beverages to acquire 100% of New Belgium in an all cash transaction. The transaction is expected to close by the end of 2019, pending approvals by regulators and the Employee Stock Ownership Plan (ESOP) in addition to other customary closing conditions.
New Belgium Brewing is a pioneer of world-class beer and wood-aged sours in the United States. Since the company was established in 1991, it has grown to become a leading craft brewer with adored brands, such as Fat Tire Amber Ale and Voodoo Ranger IPA, in addition to two state-of-the-art brewing facilities in Fort Collins, Colorado and Asheville, North Carolina, and a national distribution platform.
Lion and parent company Kirin, combined, have a significant craft beer portfolio outside the U.S. but until now have had a limited presence in the domestic U.S. craft beer market.
"We’re excited to welcome New Belgium Brewing into the Lion fold and take a significant step forward in the largest craft beer market in the world. We’re confident that our shared values and commitment to purpose and culture will provide the foundation for a great partnership in the U.S.,” said Lion CEO Stuart Irvine.
“Kirin has entrusted Lion with leading its global craft beer strategy and today’s announcement is an important milestone for all of us as we look to drive growth in markets beyond Australia, New Zealand and Japan.”
Kim Jordan, Co-Founder of New Belgium Brewing said: “If there are three things we’re known for at New Belgium, it’s our dedication to innovation and excellence in beer, our commitment to the culture and wellbeing of our co-workers and our crazy enthusiasm for being a business role model. We were thinking about these three things as we began to explore being a part of the Little World Beverages family.”
“We’ve been pushing the boundaries of beer innovation as pioneers for almost three decades. Lion Little World Beverages are brewers’ brewers and we have really felt their commitment to this ancient craft. We’re absolutely excited about helping to build a collective of breweries – each with their own vibe – who share the same commitment to delighting beer drinkers with great beer, great businesses, and great collaboration among us.”
Lion Little World Beverages is committed to protecting and nurturing New Belgium’s unique identity, culture and brand as a leader in craft beer. New Belgium Brewing headquarters will remain in Fort Collins, Colorado and Steve Fechheimer will continue as Chief Executive Officer with the management team remaining in place. Kim Jordan will also play a key advisory role in collaborating alongside other leading founders within the Lion Little World Beverages network ensuring the core tenets of craft beverages are aligned with the strategic vision for Lion Little World Beverages in the U.S. and around the world.
And here’s Kim Jordan’s letter to New Belgium fans:
Hey New Belgium fans!
You’ve probably read the big news that New Belgium Brewing is set to join Lion Little World Beverages– the global craft beer division of Australasian brewer, Lion, which is part of Kirin. I’m assuming you’re here to learn more. If there are three things we’re known for at New Belgium, it’s our dedication to innovation and excellence in beer, our commitment to the culture and well-being of our coworkers and our crazy enthusiasm for being a business role model. We were thinking about these three things as we began to explore being a part of the Little World family. Lion, Kirin, and the Little World team liked that about us, and that paved the way for this decision.*
We are a Certified B Corp. Which means that we’re dedicated to being a force for good as a business. Right away, the folks at Little World told us that they were captivated by this model, and they are asking us to retain our B Corp status. In addition, Lion announced last week that they’ve made a pledge to be carbon neutral in their Australian and New Zealand breweries starting in 2020. That’s exciting! And now we will be accelerating our own journey toward Carbon Neutrality. Imagine a world where publicly traded companies are dedicated to business as a force for good, taking into account an array of stakeholders- their workers, their shareholders, and the environment. This is a model for a big, compelling future and is in line with the needs of our rapidly changing world.
We’ve been brewing eclectic Belgian style beers, aging beer on wood, and generally pushing at the boundaries of beer innovation as pioneers for almost three decades. Little World are brewers’ brewers. They loved the sour beers from our renowned wood beer cellar! When we noticed that they were really interested in the breadth of our beer portfolio, and they began to share stories about their own innovation, we felt their commitment to this ancient craft. They are as devoted as we are, and their resources in R&D and innovation can only help to grow our own capabilities.
We will no longer be employee owned and it would be easy to see that as a drawback. But here’s another way to look at it. More than 300 employees are receiving over $100,000 of retirement money with some receiving significantly greater amounts. Over the life of our ESOP, including this transaction, the total amount paid to current and former employees will be nearly $190 million. We will have helped a significant number of people realize the upside of having equity in something, being a part of the American Dream! Little World is committed to strategies to broadly share the wealth going forward, like profit sharing, best-in-class healthcare and a generous family leave policy. Our on-site wellness clinic will carry on. Continuing to practice the rest of what makes New Belgium so cherished by its coworkers: a playful, loving vibe, a culture that encourages learning and experimentation, and an entrepreneurial spirit, will be up to all of us. We are more than up for that challenge and Little World will support us all the way.
We all know the world of craft brewing is dynamic. In the US, the number of breweries has nearly doubled in the last four years to 7,500. At New Belgium, we’ve needed to balance the cash demands of our ESOP and selling shareholders, with the operational need for more capacity (hence the brewery in Asheville) and the need to grow our brand by reaching more beer drinkers with our brand message. These are a lot of competing priorities and it has been difficult to do all of them as well as we’d like. As we surveyed the landscape over the last several years, we found that options to raise capital while being an independent brewer weren’t realistic for us. Some of the most widely used options by craft brewers were going to compromise a lot about what makes New Belgium great; environmental sustainability, and a rich internal culture. Some of these were going to lead to cost-cutting or a lack of focus on sustainability. Having the support and resources of Lion Little World Beverages, allows us to attend to those competing priorities and utilize our brewery capacity to its fullest.
Joining Little World Beverages to anchor a US Craft Beer platform is so congruent with all the things we’ve committed ourselves to at New Belgium that we jumped at the opportunity to offer this to our shareholders. We’re thankful for Lion and Kirin’s support of our values and I’m excited to help to build a collective of breweries along with the management of New Belgium, who share the same commitment to delighting beer drinkers: with great beer, great businesses and great collaboration amongst us.
Of course, there are always people to thank: boundless thanks to all our passionate customers: you smuggled beer across state borders a la Smokey and The Bandit, you got tattoos, you make our hearts swell with pride with your care. To our retailers and distributors: nothing we’ve done could have been done without you, huge props! To all of our friends inside the craft brewing industry and in so many other places, thank you thank you --we treasure your friendship now and in the future. And last, but certainly not least to our amazing New Belgium Family, what can I say, but we have created the most loving, curious, warm, interesting fun thing together and I burst with pride every day. This is not the last chapter, there’s more fun to be had.
We can’t wait to see what happens next. We are as committed to being a vibrant, values-driven enterprise as we’ve ever been, and we look forward to having a beer with all of you along the journey!
Here we go.
Much love,
Kim
*all of this is of dependent on our co-workers who also are our shareholders, approving the conditions of this deal.
