Fresh off last week’s purchase of Georgia-based Terrapin Beer Company, MillerCoors, via its Tenth and Blake craft and import division, today announced it has acquired a majority stake in Oregon’s Hop Valley Brewing.
Specific financial terms were not disclosed and the transaction is expected to close in the third quarter of 2016.
In a conversation with Brewbound, Tenth and Blake CEO Scott Whitley said Hop Valley’s brands; its geographic location, and its leadership team drove MillerCoors’ interest in acquiring a majority stake in the company.
“This is the perfect example of a strategy we have been working to execute over the last year,” Whitley said. “What we look for first are complementary brands in our portfolio. Right now, we don’t have much in the way of hop-forward offerings to offer consumers.”
For Hop Valley, a sale to MillerCoors will mean broader distribution of its beer throughout the U.S., greater share of mind with wholesalers, and better access to raw materials, co-founder Chuck Hare told Brewbound.
“This craft business is getting more and more competitive,” he said. “The further we get away from home, the harder it is to sell our beer. We are really beginning to see how hard it is to get share of mind out there.”
Founded in 2009, Hop Valley Brewing is best known for bitter brews like Alphadelic IPA, Citrus Mistress IPA and Alpha Centauri Binary IPA.
The company has grown considerably since embarking on a significant brewery expansion in 2013, when it produced just 6,700 barrels. After moving production from its comparatively tiny 15-barrel brewpub in Springfield, Ore. to a new 60-barrel brewhouse in Eugene, Ore., Hop Valley grew production to 38,500 barrels in 2015, according to Brewers Association records.
Currently distributed throughout Oregon, Washington, California, Idaho and Vermont, the company expects to produce as much as 60,000 barrels in 2016, Hare said.
“We really see this as a large distribution deal,” he added. “It was important to find a company that could give us the distribution alliance we needed, that could give us buying power and help us understand the overall environment.”
MillerCoors, meanwhile, deepens its craft bench, one that now includes San Diego’s Saint Archer Brewing Company and Georgia’s Terrapin Beer Company in addition to large-scale craft brands like Blue Moon and Jacob Leinenkugel Brewing Company.
“Wherever this crazy craft business goes in the next five or ten years, brands are going to matter,” Whitley told Brewbound. “What occurred to me when I came to Tenth and Blake was that we had a strategy, but not one that had been adapted to what had been happening recently. Instead of making a minority investment, the best bet for us was to take a majority interest and maintain a partnership with these craft breweries. The board approved that strategy a little over a year ago and away we went.”
And now that Tenth and Blake has three strong craft brewery plays in three distinct regions of the U.S., will it still be on the hunt for more deals?
“We are always having conversations,” Whitley said. “We have this growing portfolio, and we have enough to say grace over for a bit. Now we have to go out and execute.”