AB InBev Acquires SpikedSeltzer Creator Boathouse Beverage
September 09 2016 - 6:00PM
Dow Jones News
Anheuser-Busch InBev NV is bringing its alcohol expertise to the
carbonated-water category with the acquisition of SpikedSeltzer
creator Boathouse Beverage LLC.
Financial terms of the deal announced Friday weren't
available.
SpikedSeltzer is made from fermented sugar that creates a
carbonated-water beverage with 6% alcohol by volume. It comes in
flavors like Valencia Orange, Cape Cod Cranberry and Indian River
Grapefruit.
The acquisition highlights the pressure on AB InBev and other
brewers to expand beyond beer, which has been losing share of the
total U.S. alcohol market to liquor and wine over the past 15
years. The erosion has led market-leader AB InBev and MillerCoors,
the No. 2 brewer in the U.S. by volume, to create an array of
hybrid brews like Bud Light Lime-A-Rita and Redd's Apple Ale, which
are made like beer but flavored to taste like a cocktail.
The expansion has sparked the creation of alcoholic sodas and
spawned brands like Not Your Father's Root Beer and Henry's Hard
Soda, which comes in ginger-ale and orange-soda varieties.
Retail sales of flavored malt beverages last year topped $2.04
billion, up 21% from $1.68 billion in 2012, according to market
research firm IRI. The beer category had $33.34 billion in sales
last year.
Flavored malt beverages also appeal to brewers because they
command a higher price. A case of flavored malt beverages cost
$34.30 as of Aug. 7, 50% more than the $22.88 a case of beer
commanded, according to IRI.
Boathouse Beverage has helped expand the category. It began
making alcoholic, carbonated-water beverages in 2013 and has
increased sales to more than 36,000 barrels from 5 gallons.
Its success attracted other brewers. Mark Anthony Group Inc.,
which makes Mike's Hard Lemonade, this year launched White Claw
Hard Seltzer, and Boston Beer Co., which makes Samuel Adams Boston
Lager, launched Truly Spiked & Sparkling.
"Everyone looks at this as a new hot category," said Townsend
Ziebold, a managing partner at First Beverage Group, which advised
SpikedSeltzer on the deal. "It's gluten free, low in carbs, and
it's a versatile drink."
AB InBev plans to expand SpikedSeltzer sales by plugging the
brand into its national network of 500-plus distributors.
Currently, SpikedSeltzer is only available in 14 states, and
Northeastern states like Connecticut and Massachusetts account for
a significant portion of sales.
Boathouse and AB InBev said the deal allows SpikedSeltzer to
expand its capacity so that it can meet current demand. Production
will shift from Boathouse Beverage's current producers, North
American Breweries and Blues City Brewery, to AB InBev's
Baldwinsville, N.Y., brewery.
The deal is the first craft acquisition by AB InBev since it
reached an agreement with the Justice Department last month. Under
that agreement, AB InBev needs Justice Department approval for the
acquisition of any brewers that generate at least $7.5 million in
annual gross revenue, but a person familiar with the deal said that
SpikedSeltzer fell below that threshold.
AB InBev has acquired eight craft brewers since 2011 when it
bought Chicago-based Goose Island for $38.8 million.
Write to Tripp Mickle at Tripp.Mickle@wsj.com
(END) Dow Jones Newswires
September 09, 2016 17:45 ET (21:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Boston Beer (NYSE:SAM)
Historical Stock Chart
From Aug 2024 to Sep 2024
Boston Beer (NYSE:SAM)
Historical Stock Chart
From Sep 2023 to Sep 2024