![#](https://e-malt.com/Images/left_top_corner16x200.gif) | E-Malt.com News article: Japan & USA: Sapporo acquiring California-based craft beer maker Stone Brewing![Brewery news](https://e-malt.com/Images/BeerBullet2.gif)
Sapporo U.S.A. is acquiring California-based craft beer maker Stone Brewing in a deal valued at about $165 million. The acquisition is expected to close in August. Stone Distributing Co., the craft brewer’s distribution business, is not included in the sale and will become an independent company under current ownership, the Food Dive reported on June 24.
Sapporo plans to produce its branded beers for U.S. distribution in Stone Brewing’s two breweries in Escondido, California, and Richmond, Virginia, alongside Stone’s craft labels. Sapporo expects to brew 360,000 barrels in the U.S. by the end of 2024, which would double Stone Brewing’s current production level.
This marks the second acquisition for Japanese beer giant Sapporo in the past five years as it seeks to build out its U.S. footprint. It purchased California-based Anchor Brewing in 2017 for a reported $85 million.
It’s easy to see why Stone Brewing, founded in 1996, is such an attractive acquisition opportunity for Sapporo. As the ninth largest craft brewer in the U.S. and the largest in Southern California, Stone claims to have pioneered the West Coast style IPA, and also produces a range of lagers, stouts and sours. Its beer is sold across the United States and in more than 40 different countries, all bearing its familiar gargoyle logo.
In addition to its breweries in California and Virginia, Stone Brewing also has a chain of seven tap rooms and two World Bistro & Gardens restaurants. Stone will continue to operate these with their existing branding, management and employees under the Sapporo umbrella, according to a press release on the deal.
Sapporo noted Stone Brewing’s bi-coastal brewing capacity, brand loyalty, management and shared cultural values as drivers of the deal.
“This acquisition puts the resources and legacy of the largest Asian beer brand in America together with one of the most innovative and recognized craft beer brands in the world,” Sapporo U.S.A. Chairman Kenny Sadai said in a statement. “It’s a perfect fusion of east meets west that is an ideal marriage for Sapporo’s long-term growth strategy in the U.S.”
It also adds another strong U.S. craft brand to Sapporo’s portfolio at a time when beer sales in Japan have been on a long decline. Volume sales of beer in Japan hit a record low in 2020, according to data from Statista, while production volumes have also been on a steady decline over the past decade.
Many small craft beer makers in the U.S. suffered during the first year of the pandemic as local brewpubs and tap rooms were forced to close, and the segment’s early days of huge market growth slowed. The industry seems to have found its footing more recently. While U.S. beer volume sales rose only 1% in 2021, craft brewer volume sales jumped 8%, raising small and independent brewers’ volume share of the market to 13.1%, according to the Brewers Association. Craft beer’s retail dollar sales rose 21% to grab nearly 27% of the $100 billion U.S. beer market.
Stone Brewing also gains a powerful leg up at a time that sales are increasingly shifting off-premise, and competition is only growing. Despite a rough patch in 2020, the number of craft breweries in the U.S. has skyrocketed during the past 10 years to more than 9,200 in 2021, according to the Brewers Association.
“This unique partnership allows us to preserve the Stone legacy that our fans know and love and will add exponential opportunities for growth, from production to more investment in people, equipment, sales, and marketing,” said Stone Brewing CEO Maria Stipp in a statement.
Sapporo has much to gain too from Stone Brewing’s production footprint. In a notice on its intent to acquire the craft brewer, the Japanese beer giant said it had been looking to acquire U.S. production bases to further grow the Sapporo brand, create and acquire new brands and gain supply chain efficiencies.
“In terms of product strategy, the Sapporo Group aims to develop products adapted to the local markets by developing brands along both the national and regional axes,” the notice states. “In terms of its supply chain strategy, the Sapporo Group aims to reduce logistics costs and stabilize quality by acquiring production bases in areas close to consumer markets.”
24 June, 2022
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