For only the second time in its 43-year history, Sierra Nevada has invested in another beverage company, albeit for a minority stake.
The Chico, California-headquartered craft brewery announced it has made a minority investment in Riot Energy, a Venice, California-based energy drink maker. The deal closed on March 1.
Sierra will first serve as an investor, but will take on a portion of the production and packaging of Riot’s products once its CanDo Innovation Center opens in September.
The CanDo Innovation Center will be an 85,000 sq. ft production facility with 500,000 barrels of annual capacity – all dedicated to beyond beer offerings, including non-alcoholic beers.
Robin Gregory, Sierra Nevada director of communications, told Brewbound that the “goal with this partnership – and likely any going forward – is to provide support for brands to continue the good work they are doing.”
The strategy behind the investment, as opposed to creating a brand from scratch, was due to the energy drink space not being a core competency of the craft brewery.
“While we will certainly continue to focus on innovation and brand building in-house, we recognize that we are brewers, not energy drink producers,” Gregory said. “As we explore new territories and complete construction on our innovation center, we hope to partner with brands in other categories to support them in what they do best.”
Sierra Nevada’s first M&A was the 2019 acquisition of San Francisco-based Sufferfest Beer Company, a craft brewery whose gluten-reduced offerings were marketed toward athletes and made with ingredients such as bee pollen and sodium. However, by the end of 2020, Sierra Nevada discontinued the Sufferfest brand.
The deal with Riot, with the company not taking ownership of the business, allows Sierra to play in the space while also filling out some of its 500K capacity, which feels like a win-win.
In other news …
Stone Brewing’s Delicious IPA mixed 6-pack is the Escondido, California-headquartered craft brewery’s “largest launch of all time,” according to CEO Maria Stipp. She provided an update on Stone’s priorities for 2023, integration progress with Sapporo and more.
Jess hit the road this week to Constellation Brand’s Gold Network Summit. Among the eye-opening quotes from the show, Constellation beer division president Jim Sabia told wholesalers: “Our world has changed; this beer industry has changed. You’re not an A-B house with Constellation. You’re not a Molson Coors house with Constellation. You are a Constellation house.” More on Constellation’s plans for Modelo Especial to overtake Bud Light as the top-selling beer in the U.S. in the link.
Canadian cannabis firm and U.S. craft brewery platform Tilray’s expansion plans Montauk Brewing Company is beginning to unfold, adding Rhode Island and Connecticut and filling out its distribution in New York and New Jersey. Zoe has an update.
The crossover alcoholic beverage trend continues. Next up, SunnyD Vodka Seltzer. Plus, new flavors of Simply Spiked and Bud Light Seltzer.
U.S. beer shipments aren’t off to a great start, -4.4% in January 2023, according to the Beer Institute, citing domestic tax paid shipment estimates from the Alcohol and Tobacco Tax and Trade Bureau. It gets worse. Volume comps are down more than 2 million barrels since January 2021.
Deborah Brenner, the founder and CEO of Women of the Vine Wine & Spirits, answered six questions from BevNet spirits editor Ferron Salniker on International Women’s Day.
Lots of bev-alc legislation working through Legislatures, including a self-distribution bill in Virginia that’s a signature away from becoming law. Jess has updates on that and more in the link.
Also on the distribution front, Vice revealed a leaked document from Amazon in 2021 that showed that the e-commerce giant wanted to grow its alcohol sales by covertly lobbying to change liquor laws. Amazon, ultimately, didn’t go through with the plan, but the document outlined the company’s plans for a multi-state lobbying campaign to eliminate state licensing caps, further legalize alcohol delivery and defend against legal challenges to its self-checkout physical stores. Read on for more.
Boston Beer CFO Frank Smalla is leaving the company in mid-April. Boston has started the search for his successor.
On this week’s Brewbound Podcast, Bump Williams Consulting’s Dave Williams and Brian “B.K.” Krueger share early year trends and offer insights on expansion. Listen for free here.
Also this week, Jess and Zoe chatted with the team at Arryved on how their merchants are finding higher check values and tips using various service models enabled by the company’s POS technology. Brewbound Insiders can watch the latest episode of Data Club here.
Cheap Plugs ….
Brewbound’s first Brew Talks meetup is set for May 7 in Nashville to start the Craft Brewers Conference week. We’ll be discussing the dichotomy between low- and no-alcoholic offerings and the higher ABV products, which are driving growth within the craft beer industry, and much more. Confirmed speakers include Dogfish Head’s Sam Calagione, Athletic Brewing’s Bill Shufelt, and Greater Good Imperial Brewing Company’s Colleen Quinn. More speakers to be announced. Join us for an afternoon of networking, business conversations and beers at Nashville Underground.
Also, Jess, Zoe and I will be at the California Craft Brewers Summit in Sacramento starting on March 20. Come see us on the expo floor in the Brewbound Studio, where we’ll be recording podcasts and hanging out.
And that’s a wrap on this week. A big thanks to Jess and Zoe for all of their hard work, and a big thanks to all of you for your continued support of Brewbound. We’ll be back next week.