The founders of Ninkasi Brewing Company have reacquired the majority stake in the business they sold in April 2019 to Legacy Breweries.
In a press release Friday, Ninkasi said the two companies “signed a separation agreement” about a year ago so the Eugene, Oregon-headquartered craft brewery and Legacy Breweries could “focus on each company’s strategic imperatives” and “allow both companies to build on their core competencies.”
Financial terms of the transaction were not disclosed. However, Ninkasi founders Jaime Floyd and Nikos Ridge have taken back control of the craft brewery’s operations, with Nigel Francisco, who owns a stake in the business, continuing as CEO.
Meanwhile, EPR Properties, a specialty real estate investment trust (REIT), remains involved as financing partner of Ninkasi, without an equity stake, Francisco told Brewbound.
“This separation agreement will allow Ninkasi to continue to invest in its brand, people and position here in the Northwest,” Francisco said in a press release.
“Ninkasi is positioned for significant success going forward, but this separation agreement will allow Legacy to focus on its other assets as well as drive further investment and resources against a major national initiative we will be launching in the next few months,” Legacy CEO Don Bryant added.
Francisco told Brewbound that with Ridge and Floyd back in control of the business, the plan is to continue investing behind the Ninkasi brand and “bring it back to its vibrant state of what we know we’re capable of.” That starts with continuing to produce “compelling products that the craft consumer wants” and reopening the Ninkasi Better Living Room on May 25.
So far this year, Ninkasi has continued to deal with the fits and starts of reopening restaurants and closing again as COVID-19 case counts rise, Francisco said. Nevertheless, draft sales are beginning to pick up, while the company cycles tougher comps on the package side of the business from the pandemic’s fridge-stocking period and consumer shift away from the on-premise.
“We’re not having these high, high growth months on the chain side anymore, but I think that was expected,” he said. “As things were going to open up, we knew that people were going to go back to the draft side. So, right now it’s a little bit lower than expected, but by the end of the summer I think we could be back on track.”
In terms of a recovery to 2019 levels, the expectation is for that to happen in 2022, Francisco said.
“It’s gonna be rebuilding with everything,” he said, with both wholesalers and retailers still reluctant to come back with a full set of taps.
During the pandemic, Ninkasi recorded a couple of months of zero draft sales during the initial lockdowns, Francisco said. However, the company finished 2020 with depletions up 2.2%, and shipments trailing slightly, he added.
“Being positive 2.2% in a pandemic year is fairly phenomenal when people were having all sorts of hardships,” he said. “We definitely didn’t hit the numbers we were expecting to hit, but I think that’s sort of across the board, right?”
Focus areas for Ninkasi this year include Hazematic IPA, which will launch as a draft-only offering initially in the Pacific Northwest before joining its G.O.A.T. variety 12-pack and launching as a standalone offering during the fall resets. Meanwhile, the core will be built around Tricerahops Double IPA, Prismatic Juicy IPA, and Total Domination IPA, which still make up the majority of the company’s volume, Francisco said.
In addition to making and distributing the Laurelwood Brewing brand, which was acquired in October 2019, Ninkasi will continue its contract production. Ninkasi also sells and distributes the Alesong Brewing and Blending brand.
“We’re continuing to invest in the Laurelwood brands, whether that’s Workhorse [IPA], Free Range Red [Ale], or two of the new ones we had come out with Megafauna [Imperial IPA] or Sunshine Daze [IPA],” Francisco said. “That relationship stays intact.”
News of the re-acquisition of majority control by Ninkasi’s founders comes just days after Legacy’s Bryant told Brewbound that his focus moving forward is on building his craft brewery rollup in Colorado. Last week, Legacy-owned Aspen Brewing struck a deal to acquire Capitol Creek Brewery in Basalt, Colorado.
Bryant, an industry veteran, indicated Legacy is working on several partnerships that would build the platform’s capacity to as much as 125,000 barrels by 2022.
Legacy acquired Aspen in October 2019. In 2020, Aspen produced about 6,000 barrels of beer, while Capitol Creek produced about 600.