Bell’s Brewery to Sell to New Belgium Parent Co. Lion; Larry Bell to Retire

Two craft beer pioneers are joining forces in a blockbuster deal.

Kirin-owned Lion Little World Beverages has struck a deal to acquire Bell’s Brewery, the second largest craft brewery in Michigan and the seventh largest Brewers Association-defined craft brewery by volume in 2020.

Bell’s will join New Belgium as the second piece in the international beer manufacturer’s U.S. craft brewery platform, following the 2019 acquisition of Fort Collins, Colorado-based New Belgium. Once complete, the deal will create the fifth-largest craft brewery control group, trailing Anheuser-Busch’s Brewers Collective, D.G. Yuengling & Son, Molson Coors’ Tenth & Blake, and Boston Beer Company.

“The Lion team was really clear that part of the relationship with New Belgium was about building out a larger platform in the U.S.,” New Belgium CEO Steve Fechheimer told Brewbound. “As we’ve thought about that over the past two years, most of which was during the pandemic, it was pretty clear to us that there’s not really a better cultural fit, brand fit, legacy story than there is with Larry Bell and the wonderful company he’s built here.

“This is a significant step in terms of bringing that platform together,” he continued. “I’m super excited about where this takes us as companies.”

Financial terms of the transaction were not disclosed, although Lion will acquire 100% of the Michigan-based craft brewery, which operates in Kalamazoo and Comstock. Founder Larry Bell will retire. The deal is expected to close within the next couple of months, pending regulatory consents and other customary closing conditions.

“This isn’t a money grab. It’s not a hostile takeover. This is a rational, mature adult decision that I feel is the best thing for the company and my employees,” Bell told Brewbound.

With Bell’s, Lion adds one of the first craft breweries, a workforce of 550 and around 500,000 barrels of capacity in the Midwest.

For its part, New Belgium is on pace to cross the 1-million barrel-threshold this year behind the IPA heavy Voodoo Ranger franchise, which makes up about 65% of the brewery’s business.

Year-to-date through October 3, New Belgium has posted nearly $273.2 million in off-premise dollar sales (+19.9%), while Bell’s has recorded $88.2 million in sales (-4%) in multi-outlet and convenience stores tracked by market research firm IRI. Combined, New Belgium and Bell’s hold a little more than 1% share of beer category dollar sales, according to the firm.

Bell’s portfolio will give Lion iconic craft beer brands, including flagship offerings Two Hearted Ale, Oberon wheat ale and seasonal Hopslam IPA, in addition to New Belgium’s Fat Tire amber ale. The combination of two decades-old craft breweries results in an “unrivaled portfolio, which we think allows us to better serve customers, better serve partners,” Fechheimer said.

In making the announcement of the deal to sell the brewery he created, Bell cited two factors.

“First, the folks at New Belgium share our ironclad commitment to the craft of brewing and the community-first way we’ve built our business,” he said. “Second, this was the right time. I’ve been doing this for more than 36 years and recently battled some serious health issues. I want everyone who loves this company like I do to know we have found a partner that truly values our incredible beer, our culture, and the importance of our roots here in Michigan.”

Speaking to Brewbound, Bell said he recently beat a second bout with cancer.

“There comes a time where you realize you need to make some important decisions in life. And for me that time is now,” Bell said. “I’ve been CEO of Bell’s for over 38 years. I founded it in 1983 at age 25. That’s a long time to be CEO.”

Bell explained that Bell’s board of directors approved plans to explore a potential sale process in January.

“I really wanted to make sure that Bell’s would get transitioned to a good company to carry on the legacy of brewing and community commitment and valued employees,” he said. “I’m really fortunate to have this agreement with Lion, who’s going to have us join forces with New Belgium. I’d rather be around and help in that transition for everybody that I care about at Bell’s. It’s not fair to have some trustee of mine to take care of my personal business.”

In mid-January, Bell’s named long-time employee Carrie Yunker to the newly created role of EVP, as part of the company’s succession plan. Once the transaction closes, Yunker will continue in her role guiding the Michigan craft brewery’s daily operations. Yunker will report to Fechheimer and also join the combined entity’s leadership team. Also joining the leadership team will be Bell’s VP of operations, John Mallett, who will be focused on integrating the two organizations.

“As a shareholder and board member, I am excited to support the sale of Bell’s to Lion and to join forces with New Belgium,” Laura Bell, Larry’s Bell’s daughter and the company’s former CEO, said in a press release. “Our job as owners is to ensure the best future for Bell’s and I believe this step is an important and critical part of our journey to continue the Bell’s legacy long into the future.”

Asked about wholesaler alignment, Fechheimer said adjusting those relationships is not a Day One priority. Bell has been vocal about his refusal to accept successor wholesalers that are owned by Anheuser-Busch InBev, Molson Coors or the Reyes Beer Division. The Bell’s portfolio was notably excluded from Reyes’ acquisition of Indianapolis-based Monarch Beverages in October 2020. However, New Belgium has actively sought out partnerships with Reyes in California and the Chicago area.

New Belgium has gained distribution in all 50 states, but Bell’s has not yet filled out the entire U.S. footprint. The brand is distributed in 43 states, Washington, D.C., and Puerto Rico, excluding northern and central California, Oregon, Washington, Idaho, Montana, Utah, Alaska and Hawaii. Similar to the companies’ wholesaler alignment, expanding Bell’s reach is not an immediate goal.

“As we think about the entire strategy and entire opportunity, we’ll obviously look at those seven states,” Fechheimer said. “There’s benefits when you’re that close to being national to becoming national, how do you service some other large national customers, and I’m sure we’ll get there. But that’s not a Day One priority that we’re going after.”

Bell’s, however, will align with New Belgium’s business practices, including seeking B Corporation certification, 100% carbon neutrality by 2030, $1 per barrel philanthropy, and 100% score on the Human Rights Campaign Corporate Equality Index.

The acquisition will place Bell’s outside of national trade group the Brewers Association’s definition of a craft brewery, notably “less than 25% of the craft brewery is owned or controlled (or equivalent economic interest) by a beverage alcohol industry member that is not itself a craft brewer.” Bell’s volume will no longer be counted among the BA’s craft brewer data set and will have to cease use of the BA’s independence seal on its packaging and marketing materials. However, Bell isn’t fretting over the brewery losing its craft designation.

“Both of these companies were forged in the early fires of craft beer, and may not have BA certification, but certainly — certainly — these two companies have the spirit of craft beer from when the movement started,” Bell said. “So I don’t think anybody’s gonna worry about that. I’m not going to lose sleep over it. And I’m guessing Steve isn’t either.”

 

Bell first ventured into the world of beer while working at a bakery in 1976 following his graduation from Kalamazoo College, according to the brewery’s website. Working with yeast sparked his interest in fermentation and he began homebrewing, eventually opening a homebrew shop, the Kalamazoo Brewing Supply Co., in 1983. Bell sold his first batch of beer commercially in 1985 and self-distributed locally until signing on with Ann Arbor-based Rave Associates in 1989 to expand its footprint within Michigan. The brand expanded to Wisconsin and Indiana in 1990.

In 1992, Bell’s expanded to Illinois and launched its iconic summer seasonal Oberon wheat ale, which was originally titled Solsun but renamed four years later due to trademark concerns.

“Larry picked the name because he played Oberon, King of the Fairies, in his sixth grade production of Shakespeare’s A Midsummer Night’s Dream,” the brewery website reads.

Bell’s crossed the 100,000-barrel mark in 2008 and doubled its volume in four years when it shipped 200,000 barrels in 2012. Upper Hand Brewery, a sister company based in Escanaba on Michigan’s Upper Peninsula, opened in 2014. The brewery, which produced 4,958 barrels of beer in 2020 according to the BA, is included in the Lion transaction.

The BA honored Bell with its Recognition Award in 2010 as a leader “whose inspiration, enthusiasm and support have contributed to the brewpub and microbrewery movement.” In September, the trade group gave the same award to Mallett, who also serves as president of the Master Brewers Association of the Americas and chairperson of the American Malting Barley Association in addition to his long career at Bell’s. Mallett received the BA’s Russell Schehrer Award for Innovation in Craft Brewing in 2002.

In retirement, Bell said he will be focused on the Larry J. Bell Foundation.

“I intend to be rooting around the stacks for a while,” he said.

And maybe a few more Chicago Cubs games?

“Well, let’s get some pitching,” Bell, a long-time Cubs fan, said.

“And some hitting, as well,” added Fechheimer, who Bell said also roots for the Cubbies.