Spain & USA: Mahou San Miguel teams up with Founders Brewing to acquire 40% in Avery Brewing

Mahou San Miguel is upping its stake in Colorado’s Avery Brewing, and the Spanish beer company has teamed up with its other U.S. craft brewery partner, Michigan’s Founders Brewing, on the new investment, Brewbound reported on April 2.

Mahou, along with Founders, will purchase a 40 percent stake in Avery Brewing for an undisclosed sum.

The newly acquired stake will be combined with Mahou’s original 30 percent minority interest in Avery that was purchased in early 2018.

The deal, which was negotiated over “the last few months,” gives Mahou and Founders a 70 percent controlling interest in the Colorado craft brewery.

Brewery founder Adam Avery and his father, Larry, will own the remaining 30 percent of the business, but executives from Mahou will now play a bigger role in the “day-to-day” decision making, Adam Avery told Brewbound.

“We can use all the expertise we can get,” he said. “There is some crazy shit going on in our industry, and it is awesome to have investors who look at this as a long-term play and not as a short-term, turn-and-burn type of thing.

“They think generationally,” he added.

Mahou also owns a separate 30 percent stake in Founders, which was ranked by the Brewers Association as the 14th largest beer company in the U.S.

According to Avery, the new investment was used to pay down debt incurred when the company spent $30 million to build a 96,000 sq. ft. brewery that is currently capable of producing as much as 150,000 barrels annually.

“Our debt load was very high,” Avery said. “We’ve paid down almost all of our debt, which is a pretty nice feeling.”

According to Avery, the transaction will “free up” cash flow that is needed to invest behind sales and marketing initiatives as the company looks to rebound from its first year of decline in 17 years.

“It was a tough year for us, but this year we are back on the positive side of things,” Avery said.

Midway through 2018, Avery cut 4 percent of its employees, restructured its sales force and added three new departments focused on national accounts, supply chain, and sales analytics.

Moving forward, Avery said the company would work alongside Founders to evaluate synergies, such as cross brewing or shared buying initiatives, but maintain separate sales forces.

“The road map has not been laid out,” Avery said. “It is definitely an evolution and nothing is set in stone. With our industry being as fluid as it is, we will develop a game plan as we move on.”

Nevertheless, in an effort to help offset production declines and maximize the utilization of its capacity, Avery will begin brewing and co-packing Founders’ popular All Day IPA within the next 30 to 45 days.

“The added barrelage is obviously going to do wonders for us, and there is probably an opportunity for additional contract brewing as well,” Avery said. “We will be taking care of the majority of the western half of the U.S. as far as their needs out here.”

Meanwhile, Avery said sales of his company’s own brands are “back in the positive,” and he’s excited to have “unbelievable partners” in Mahou and Founders.

01 April, 2019