![#](https://e-malt.com/Images/left_top_corner16x200.gif) | E-Malt.com News article: USA, FL: Craft Brew Alliance purchases 24.5% stake in Miami upstart Wynwood Brewing Company![Brewery news](https://e-malt.com/Images/BeerBullet2.gif)
Craft Brew Alliance on December 15 announced it has signed a letter of intent to purchase a 24.5 percent stake in Miami upstart Wynwood Brewing Company, Brewbound reported.
The deal, which is valued at less than $30 million, is expected to close in the first quarter of 2017.
Described by CBA as a “strategic partnership,” the deal will allow Wynwood to tap into the larger company’s nationwide network of Anheuser-Busch wholesalers and will give the Miami brewery access to additional production capacity at CBA’s brewing facility in Portsmouth, N.H.
“Our success over the past several years hasn’t come without its challenges, and we’re now at a turning point if we want to fully satisfy our growing customer base,” Wynwood co-founder Luis G. Brignoni said via a press release. “While exploring our options, we wanted to find a way to meet demand without sacrificing creative control over our day-to-day.”
By selling a 24.5 percent stake, Wynwood will retain its “independent” status in the eyes of trade group the Brewers Association, which defines a craft brewer to be one that is less than 25 percent owned or controlled by an alcohol industry member that is not itself a craft brewer. Any investment over the 25 percent threshold would have jeopardized that status, because Anheuser-Busch InBev already owns 31.6 percent of CBA and has the right to review any CBA transactions over $30 million.
“I have been very vocal about what we think about the 25 percent threshold,” Craft Brew Alliance CEO Andy Thomas, who has routinely objected to the BA’s definition, told Brewbound. “I think 25 percent is arbitrary, but that is what it is and that’s the game.”
For his part, Brignoni said his company was interested in selling a stake of that size because it dictated that CBA would have “skin in the game” as opposed to just contract brewing and master distribution agreements.
“The fact that they do have a stake means our interests are very much aligned, and that was very important,” Brignoni said.
“We did talk to a lot of investors before we settled on CBA,” he added. “But what made CBA attractive to us was the full package. It is not just money from an investor looking to get a rate of return after a set amount of years. They want to see us succeed and make sure the beers coming out of Portsmouth are beautiful. We preferred a partnership with industry folks that can take us to the next level.”
For CBA, the investment into Wynwood gives the company access to an increasingly more important Florida market, with a regional brand better positioned to capitalize on a growing desire for locally produced beer.
“Wynwood is a perfect fit market-wise,” Thomas said. “Florida has always been on the top of our list. If you look at what these guys are doing down in Miami, and what we can do to help develop that, and if you look at the synergies we have in terms of the brewing footprint, the fit is great. There isn’t anything about this partnership that isn’t right off the wishlist for either of us.”
Wynwood, which has outgrown its 7,200 sq. ft. facility in Miami’s famous art district, had been searching outside of the area for a place to build a larger secondary location. Once more serious negotiations began with CBA, around October, those plans were tabled, Brignoni told Brewbound.
“This is obviously our top priority at the moment,” he said. “We want to launch with CBA and work on the master distribution agreement, and then come back to the drawing board. We have always wanted to build in the neighborhood, rather build outside, and now we have an opportunity to evaluate our original plan.”
The investment into Wynwood marks CBA’s third small brewery partnership in the last two years. Last September, it signed a contract brewing and distribution agreement with Nantucket, Mass.-based Cisco Brewers.
At the time of that deal, Thomas said CBA intended to purchase a less than 25 percent stake in the company, something that has yet to come to fruition.
CBA also struck a similar brewing and distribution arrangement with Boone, N.C.-based Appalachian Mountain Brewery (AMB) in early 2015.
CBA is currently engaged in active discussions with both Cisco and AMB to acquire equity positions, Thomas said, and the company is still thirsty for additional deals.
“We are not done yet,” he said. “ We are looking to support the Kona brand with strong brands in key markets. The southeast was a priority for us, and we got that checked off.”
The company’s next priority is inking a deal with a craft brewery in California, Thomas added.
“There are a lot of interesting opportunities, and California is something that is important to us,” he said.
For now, CBA has shored up significant gaps along the east coast where its Redhook and Widmer brands were suffering. Thomas added that there were still areas around the “Portsmouth orbit” where CBA could look to invest, but most of the company’s focus has shifted west.
The relationship between Craft Brew Alliance and Wynwood Brewing developed as a direct result of the Brewbound Startup Brewery Challenge. Wynwood Brewing won the CBA-sponsored business pitch competition in December 2015. After the two companies brewed a collaboration beer together, the idea of exploring a longer-term partnership emerged.
16 December, 2016
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