Canarchy Craft Brewery Collective has finalized its second deal in as many months, today announcing the acquisition of Los Angeles-based Three Weavers Brewing Company.
Specific financial terms of the transaction were not disclosed, but Three Weavers co-founder Lynne Weaver described the deal with the Fireman Capital-backed brewery rollup as a “strategic partnership” that would put her company in a better position to “weather any possible economic storms.”
“When you are a small brewery like us, growing at 90 percent a year, it is scary when you see some breweries not doing so well,” she told Brewbound. “I don’t want to have to slow down. Unless you can find ways to deal with rapid growth like ours, it usually ends up being about capital – and those capital injections get larger and larger, and maintaining a 90 percent growth is hard.”
As part of the deal, Weaver, along with about a dozen or so investors, exchanged their equity in Three Weavers for shares of the larger Canarchy entity.
Speaking to Brewbound, Canarchy chief operating officer Matt Fraser characterized the deal as a “cash-free and debt-free” transaction and said the group paid off “any of the debt” that Three Weavers took on to build its brewery, which is located about two miles from Los Angeles International Airport.
Launched in September 2014, Three Weavers grew 93 percent last year, to 5,420 barrels, according to Brewers Association (BA) records (though Weaver said the company produced another 1,600 barrels that weren’t sold). The company is on pace to produce upwards of 12,000 barrels in 2018, and its facility is capable of being scaled to at least 45,000 barrels, Weaver added.
“This was the right time to take advantage of all of the hard work and perseverance that our team has put forth,” she said.
In joining the Canarchy portfolio — which also includes the Oskar Blues, Cigar City, Deep Ellum, Perrin Brewing and Utah Brewers Cooperative (Wasatch and Squatters) brands – Three Weavers will gain access to a litany of resources, including additional brewing capacity, built-in distribution networks, operational synergies and expertise from six other craft brewery owners.
“The amount of knowledge and willingness to share within the Canarchy collective is immense,” she said. “There is decades of experience. It is very much a community within a community.”
In a message posted to the Three Weavers website, Weaver wrote that the tie-up with Canarchy would enable the company to expand production and distribution “without compromising our quality or our community-based values.”
“Like most brewery founders, I have never done this before,” she wrote. “I have never led a brewery with 24 employees that makes thousands of barrels of beers per year. This has been a true on-the-job learning experience where I have applied my knowledge and strengths to the best of my ability. And luckily, we have done well.”
For his part, Fraser said Canarchy was interested in Three Weavers because of its location – Los Angeles is one of the largest beer markets in the U.S. – and its “quality beer, the people and the brand.”
“It was the perfect fit for us,” he said. “Lynne is a badass, and we didn’t have a presence in California. There is a whole bunch of people within a 100-mile radius.”
Fraser said Canarchy doesn’t have another specific region it is currently targeting, and that another deal is not imminent. He added, however, that the company aims to be “infinitely local and nationally accessible,” and that it is continuing to look for additional partners across the country.
“It’s about partnering with local brands and maintaining their identity,” he said. “Allowing them to operate independently but also have the resources of a national footprint, and the resources of the Canarchy platform.”
Canarchy, ranked by the BA as the ninth largest craft brewery in the U.S. last year, produced 360,000 collective barrels in 2017. Its recent acquisitions, coupled with the growth of existing brands, positions the holding company to produce upwards of 450,000 barrels in 2018.
When asked about Canarchy’s long-term plan, Weaver echoed remarks made last month by Deep Ellum founder John Reardon, who hinted at a possible future IPO.
“They are open to a lot of different options,” Weaver said, noting that the possibility of a public offering had been discussed. “I don’t know what will ultimately happen, but what is so attractive is that there is no time limit that is set. This could go on for a while.”
A press release with additional details is below.
INGLEWOOD, CA, JULY 17, 2018 – Three Weavers Brewing Company, one of the largest independent craft breweries in Los Angeles County, today announces a strategic partnership with the disruptive craft brewery collective, CANarchy.
Under the leadership of Founder Lynne Weaver and Brewmaster Alexandra Nowell, Three Weavers has built a strong local following through its passion for the craft beer industry, award-winning craft beers, and mission to promote a positive sense of community.
“Our decision to join the CANarchy collective spans far beyond us as a single craft brewery. It’s about supporting our independence and continuing to champion the fight for all craft breweries with a similar goal. It’s also about living our mission – it’s more than beer, it’s community – and supporting the current craft crusade,” said Lynne Weaver, Three Weavers Founder and CEO. “Now more than ever, it is vitally important for craft breweries to band together to preserve our collective livelihoods and legacies and grow the overall industry. By joining the CANarchy collective, Three Weavers will continue to support our community – the craft beer industry, fellow craft breweries, independent beer, and of course, local craft beer drinkers. We are truly excited to partner with the entire CANarchy Craft Brewery Collective and look forward to what we will accomplish together in the coming years.”
CANarchy was recently ranked #9 on the Brewers Association’s list of the 2017 Top 50 U.S. Craft Brewers as ranked by sales volume. The CANarchy craft beer portfolio includes Oskar Blues Brewery, Perrin Brewing Company, Cigar City Brewing, Squatters Craft Beer and Wasatch Brewery, and Deep Ellum Brewing. The collective is the #1 provider of American craft beer in a can and has driven Cigar City Brewing’s Jai Alai IPA and Oskar Blues’ Dale’s Pale Ale to the #1 and #2 sold craft can six packs in U.S. Grocery. CANarchy delivers a diverse mix of innovative breweries and world class beers to distributors and retailers while providing modern beer drinkers the variety they demand.
“We founded CANarchy with the goal of bringing together like-minded breweries, supporting their growth and respective missions, and building a hyper-local presence in the largest markets in the U.S.,” said Matt Fraser, CANarchy President. “With their focus on quality craft beer and commitment to both independence and community, we believe Three Weavers Brewing Company is a perfect addition to the CANarchy collective and I am excited to partner with Three Weavers Founder, Lynne Weaver, in the coming years.”
2018 is shaping up as a momentous year for CANarchy. “With Three Weavers, we have added another world-class brewery to our portfolio – making CANarchy more valuable to both our wholesale and retail partners,” noted Keith Klopcic, former West Side Distributor [President] and current CANarchy Board Member. Earlier this year, Deep Ellum Brewing (Dallas, Texas) joined the collective. “As a brewery founder, it was vitally important to partner with a group of people that share my vision and have the expertise to help me get there,” said John Reardon, Deep Ellum Brewing Founder. “The entire CANarchy team is excited to welcome Three Weavers to our family and we look forward to partnering with Lynne and Alex.”
With the addition of Three Weavers, the CANarchy portfolio expands its reach across the U.S., from the East Coast to the West Coast, with leading regional breweries in California, Colorado, Florida, Michigan, North Carolina, Texas, and Utah. The aggressively growing collective provides a platform from which rapidly growing craft breweries seeking high level resources can expand and compete in the increasingly competitive craft beer segment, while maintaining their independence. Driven by individual brewery culture, CANarchy enables brewers to maintain control of their businesses and brands while providing the resources and support to scale their respective operations.
Terms of the partnership are not disclosed.
About Three Weavers Brewing Company
Three Weavers Brewing Company is an independent craft brewery with a mission to build a positive sense of community through the collective passion for craft beer. Founded by Lynne Weaver in 2013, Three Weavers is one of the largest independent craft breweries in Los Angeles County and currently expanding production and distribution on the West Coast. Led by award-winning Brewmaster, Alexandra Nowell, Three Weavers craft beers have received critical International acclaim, winning a World Beer Cup Gold Medal in 2016, a GABF Silver Medal in 2017, a European Beer Star Bronze in 2017, and the Australian International Beer Awards Best IPA and Champion International Beer in 2018. Three Weavers is proudly brewed in Inglewood, California. For more information, visit www.threeweavers.la
About CANarchy Craft Brewery Collective
Founded in 2015, CANarchy is a disruptive collective of like-minded brewers dedicated to bringing quality and innovative flavors to beer drinkers in the name of independent craft beer. The portfolio of craft breweries, partially funded by Fireman Capital Partners, including Oskar Blues Brewery, Perrin Brewing Company, Cigar City Brewing, Squatters Craft Beer and Wasatch Brewery, Deep Ellum Brewing Company and newly added Three Weavers Brewing Company, is challenging corporate convention to preserve independent craft beer culture. CANarchy is the #1 provider of American craft beer in a can by bringing value to distributors, retailers, and beer drinkers. CANarchy was recently ranked #9 on list of the 2017 Top 50 U.S. Craft Brewers as ranked by sales volume. Cigar City Brewing Jai Alai IPA and Oskar Blues’ Dale’s Pale Ale are currently the #1 and #2 sold craft can six packs in U.S. Grocery. The CANarchy platform brewed over 350,000 bbls in 2017, reaching all 50 U.S. states, Washington, D.C., parts of Canada, Puerto Rico, Sweden, Norway, Finland, Spain, France, the Netherlands, Belgium, Luxembourg, the U.K., Ireland, Australia, New Zealand, Chile, Brazil, and South Korea. For more information, visit www.canarchy.beer