What a surprise: Danish craft brewer Mikkeller has sold a 20 percent stake to Carlsberg for an undisclosed sum. Mikkeller’s CEO and founder Mikkel Bjergsø will retain majority ownership, though, and will continue to run the firm. Carlsberg bought the stake from US private equity firm Orkila, which first invested in Mikkeller in 2016. Thanks to several cash injections, Orkila had since upped its stake to 49 percent. Per the website thedrinksbusiness.com, Carlsberg wanted to buy Mikkeller outright for reportedly DKK1 billion (USD 146 million) last year, but neither Orkila nor Mr Bjergsø were prepared to fully exit yet. Probably, Carlsberg’s offer was deemed too miserly. With Carlsberg on board, Mikkeller expects to widen its distribution in Denmark. After having struggled through several challenging years – in 2021 it faced charges of harassment in the US and in 2022 it had to close its San Diego brewery – Mikkeller’s business was profitable again in 2023.
AB-InBev will sponsor the Olympic Games through 2028, becoming the first-ever beer sponsor for the next three Olympic and Paralympic Games. Rather than use the sponsorship to advertise an established beer, though, AB-InBev will promote its non-alcoholic brand Corona Cero globally. This is meant to underline the company’s and International Olympic Committee’s commitment to responsible consumption. However, Pilsner Urquell (Asahi) an official partner of the Czech Olympic Committee, announced that it would not support the 2024 Olympic Games in Paris, in response to the International Olympic Committee’s decision in December 2023 to allow Russian and Belarusian athletes to compete.
After nearly two years of talking, AB-InBev finally gifted its stake in its joint venture to its partner, Turkey’s Anadolu Efes. The Russian regulator still needs to ok the transaction. That should not be a problem given Turkey’s friendly relations with Russia. If the Big Brewers thought that, by exiting Russia, they could close their books on this tumultuous episode, they were obviously mistaken. Carlsberg not only lost Baltika to President Putin’s crony Taimuraz Bolloyev, Baltika’s new chief also wants to keep the Carlsberg licences, which the Danes unilaterally terminated a few months ago. This being Russia, he may prevail. It has also since come to light that Arnest was not Heineken’s preferred buyer, but Carlsberg’s. However, once Baltika had been confiscated, Arnest probably needed consoling and was given Heineken’s assets instead. The Dutch will keep their fingers crossed that Arnest will repay USD 100 million in debt to Heineken. While Mr Putin continues to re-organise Russia’s business landscape at whim, it is too early to say who will ultimately own Heineken’s and Carlsberg’s former units.
German beer continues to lead beer imports into Russia. Beer imports dipped 30 percent in 2022 after Russia’s invasion of Ukraine, but they went up again in 2023. Germany remained the major supplier of beer, accounting for 30 percent of total imports, followed by Lithuania and Latvia. Compared to 2022, German brewers increased the volume of supplies by 32 percent, but may still fail to reach 2021 sales.
Over in the US, beer sales dipped to their lowest level in 24 years. It was not just Bud Light that took a hit in 2023. It was a tough year for the beer industry in general. Volume sales were down 5 percent in the US for the first nine months of last year – and on track for the lowest annual level since 1999. In real terms, this means beer shipments could fall below 200 million barrels – about 9 million barrels fewer than in 2021. Constellation Brands defied the market trend in 2023, by finishing the year (its third quarter) with depletions growing 8 percent, thanks to its thriving Modelo Especial and Corona brands.Beer now accounts for some 80 percent of Constellation’s revenue, as demand for its spirits and wines slowed down in the face of inflation. In fact, Constellation has completely rejigged its business from an erstwhile wine company to a brewer with a drinks firm attached. Well, it took Constellation the better part of 30 years. Today, Modelo Especial is the leading US beer brand by dollar sales.
Craft beer saved Tilray Brands from cannabis slowdown. Its acquisition of eight craft beer brands from AB-InBev in August 2023 for reportedly USD 85 million, paid off in its fiscal second quarter (ended November 2023). Net revenue from alcohol shot up by 117 percent and represented a quarter of Tilray’s total revenue. Cannabis firms face hard times and need to get creative. So Tilray Brands will start planting vegetables and fruit in Quebec to make money from its unneeded cannabis cultivation space.
Japan’s Asahi to make Super Dry beer in US after acquisition. With rivals Sapporo (Stone Brewing) and Kirin (New Belgium, Bell’s) already having entered the US market, it cannot be ruled out that Asahi suffered from a bit of FOMO (Fear Of Missing Out). It must have jumped at the opportunity to buy Wisconsin-based Octopi Brewing, a contract beverage producer, when it came on the market. Financial details and sales figures were not disclosed. But the website goodbeerhunting.com said that Octopi already produced 220,000 barrels beer in 2022 for its contract partners and under its own label, Untitled Art. With an estimated 7 million barrels of capacity and 200 employees, Octopi is one the largest contract producers in the United States.
As the current agreement between the Teamsters, a union, and AB-InBev expires on 29 February, 99 percent of the Teamsters voted to authorise a strike, if thebrewer does not offer a “strong new contract”, including improved wages, job protection, and healthcare and retirement benefits. An authorisation to strike does not necessarily end up in a walkout if the two sides can find a compromise. It is just part of the usual aggressive noises ahead of negotiations. The Teamsters represent 5,000 workers (out of 19,000) at AB-InBev’s 12 US breweries.
More on AB-InBev: Brazilian billionaire investor Marcel Herrmann Telles is getting his succession planning underway: Mr Telles donated his stake in the world’s largest brewer, AB-InBev, to his son Max Van Hoegaerden Herrmann Telles, Fortune magazine reported. Not only did Max inherit shares worth USD 6.1 billion, according to the Bloomberg Billionaires Index, he also obtained his father’s voting rights at the company. With a net worth of around USD 11.2 billion, Mr Telles is one of Brazil’s wealthiest men.
BrewDog’s decision to abandon real living wage for employees sparked a bit of a backlash from union Unite Hospitality, Punks With Purpose (a group of former BrewDog employees), and large parts of the media.Staff will receive the UK government’s national minimum wage of GBP 11.44 (USD 14.50) an hour from 1 April – below the GBP 12 cost of living-based rate. The Real Living Wage has been a cornerstone of BrewDog’s public identity for years. The firm said the move was necessary as it seeks to return to profitability. Although BrewDog’s revenue grew to GBP 321 million (USD 407 million) in its 2022/2023 financial year, it booked an operating loss of GBP 24 million (USD 30 million).