Weekly Growler Fill | National Beer News Roundup
The White House partners with Crazy Mountain, Labatt buys a craft brewery, and brewery stocks are on the rise. If you’re into politics, money, or beer, this week’s Growler is sure to spark your interest. Keep reaching to catch all of the details of the latest craft beer news.
The trade deal the U.S. just negotiated with 11 Pacific nations is getting a lot of flack for the potential downsides it could have on American businesses. The White House wants you to know that it’s not all bad; the Trans-Pacific Partnership might be good for craft beer. Kevin Selvy, CEO of Crazy Mountain Brewing Company in Colorado, teamed up with the White House to spread the word about the benefits of the trade deal. Selvy claims the foreign demand for craft beer is on the rise but because of high tariffs, U.S. brewers haven’t always been able to export to such nations as Japan and Australia. With this new partnership, brewers will be able to tap into these lucrative markets and expand their fan base. If you think it is strange that the White House press is talking up their trade deal with a craft brewery, it is. This is all part of the administration’s strategic plan to use more ‘hip’ companies, rather than ones like Big Pharma, to advertise their accomplishments.
AB InBev’s offer to purchase SABMiller has been rejected for a third time. This time around, SABMiller rejected a whopping $104 billion saying that AB InBev, ‘undervalued the firm and its potential for growth.’ After the announcement, stock prices increased for both companies so maybe SABMiller had a point. If the two companies ever reach an agreement, the combo-company would be responsible for one third of the world’s beer. Financial reporters believe that a deal seems likely in the near future.
Canadian brewing giant Labatt is dipping its toes into the world of craft beer. Labatt announced last week that it purchased Mill Street Brewery, based in Toronto, for an undisclosed amount of money. If you’re thinking, “Wow, it’s great to hear of an acquisition unrelated to AB InBev!” I have to burst your bubble — Labatt is owned by AB InBev. Nevertheless, the purchase of Mill Street is intended to increase awareness of craft beer throughout Canada and allow Labatt to push into new areas of the country.
The news of constant acquisitions may frighten those in the craft beer industry but for investors, it means more money. This year alone, the top 10 most valuable trading brewers have seen an an 8% increase on average in their stock prices. So while the rest of the stock market may be floundering, the big brewers are still raking in the big bucks. These rises in stock prices have nothing to do with beer sales, rather they are related to the constant buy outs I’ve been writing about. How much are they up exactly? Check out this example: “Shares of Molson, up $1.22 to $82.21 Wednesday, have benefited as many hope the company could buy former SABMiller U.S. assets if the company is bought by Anheuser.” Although it seems like the stock price increase may not last due to faltering beer sales, financial analysts actually predict that SABMiller’s stock will increase 10% more before the year is up. If you aren’t trading stocks, maybe it’s time to start.
All summer long we heard about how the Midwest was flooding and the West Coast was dry as a bone. Those drought conditions affected everyone in the area but one group got hit especially hard: brewers. While the demand for craft beer was increasing, many Californian brewers also saw their main resource, water, decreasing. Of course brewers could get as much water as they wanted, if they were prepared to pay thousands in fines. To stick within the allotted limits, brewers started installing new technologies to become more efficient users of water. Some of these technologies included wastewater treatment plants and digging wells. For some, even these improvements were not enough to sustain their production. One such brewery is Bear Republic, who had to pull out of 15 U.S. markets and 4 foreign countries after water shortages. You’d think that Bear Republic would move after such a hit but instead, they dug wells and utilized electrically active microbes to purify wastewater for cleaning equipment. Their case is not unique – breweries like Stone and Fallbrook are doing the same thing because while moving may be easier, these businesses are extremely loyal to the local populations and water conservation. They also won’t stop praying for rain.