Japanese brewing giant Asahi announced it has struck a deal to acquire Waunakee, Wisconsin-based contract brewer Octopi Brewing.
In late 2022, Reuters reported that Asahi and other Japanese brewers were on the hunt for brewing capacity in North America, and Octopi, one of the country’s largest craft-focused contract brewing companies by volume, fit the bill.
“By making this investment we are taking a major step forward in accelerating the growth journey of our global brands, expanding awareness, reach and access across North America through existing and new on and off trade partners,” Asahi managing director for EMEA and Americas Victoria Segebarth said in a press release.
Founder Isaac Showaki opened Octopi in 2015 with six employees after observing a void in the contract brewing sector during his time at 5 Rabbit Cervecería, which he co-founded in Chicago in 2011 and departed in 2013.
Octopi’s output grew exponentially during the pandemic, with a +443% increase in volume in 2020, according to the May/June 2023 issue of Brewers Association’s (BA) New Brewer magazine. In the following years, Octopi sustained that growth, with a +51% increase in 2021 and a +38% increase in 2022.
In 2022, the most recent year for which BA data is available, Octopi produced 220,000 barrels of beer for its contract partners and under its own brand, Untitled Art. But beer is only one piece of Octopi’s business. Last year, the company was on track to produce 7 million case equivalents of beverages, roughly 508,000 barrels, Showaki said in an interview on the Brewbound Podcast.
Showaki will continue to lead the Octopi team, which will keep working with contract partners for beer and other beverages.
Octopi’s explosive growth and state-of-the-art facility, which was built in 2014, made it an attractive target for Asahi.
With the investment of “additional capital to help meet the technical standards required to produce Asahi Super Dry,” Octopi will produce its new parent company’s flagship brand and Kozel for North America, according to the release. The switch will mark the first time Asahi Super Dry will be brewed in the U.S.
“Local production in North America has been an ambition of ours for some time because of the benefits it will bring,” Asahi Europe and International CEO Paolo Lanzarotti said in the release. “With complementary strengths and a shared growth mindset, Asahi and Octopi maintain a commitment to creating meaningful connections with our partners, the communities in which we operate and the planet.”
Asahi is one of the last large Japanese brewers to transact in the U.S. market, following blockbuster deals such as Sapporo’s acquisition of Stone Brewing in 2022 and Kirin’s acquisition of New Belgium in 2019 and Bell’s Brewery in 2021 and minority investment in Brooklyn Brewery in 2016.
In last year’s Brewbound Podcast interview, Showaki said his original goal for Octopi was to hit 50,000 barrels, which would land the company among the top 50 craft breweries by volume in the U.S.
“After the second year, I saw the craft beer industry specifically going nowhere and I decided to completely revamp my business plan and become a beverage co-packer,” he said. “We invested a ton of new money and brand new equipment that could do many different beverages. We also invested in people to make sure that we bring people on board that could do different beverages, and then from there, the industry and our business completely grew like crazy. It was an explosion.”
Its craft beer and contract brewing output made Octopi the 13th largest regional brewing company in the country by volume in 2022, according to the BA, which compiles lists of the largest craft brewers who produce beer under their own brands and the largest regional craft brewing companies, which produce both own-brand beer and contract production of beer and non-beer offerings.