There’s buyouts, sellouts, equity positions, but everyone forgets about those sneaky mergers! It was just announced that Southern Tier and Victory are merging breweries under the title Artisanal Brewing Ventures (ABV.) According to the Unionville Times, the new partnership provides “provides capital, security and vision for the future.”
Under the umbrella of ABV, Victory and Southern Tier will independently operate their breweries,commanding a joint capacity of over 800,000 barrels of potential annual production. This alliance creates one of the largest brewers in the Northeast and ranks within the top 15 craft brewing companies in the United States according to Brewers Association criteria with combined 2015 shipments of over 250,000 barrels.
According CNBC, the two breweries will operate independently, but combine distribution, retail and marketing efforts. The two breweries combine for more than 250,000 barrels, which equates to all of the production in Vermont. In 2014 Victory was the 29th largest brewery in the US and Southern Tier was the 35th.
The merging of these two prominent breweries stems the tide and, possibly, redirects the strategies of other breweries looking for buyouts. While the strategic goal of a buyout is different than a merger, it can help to obtain some of the same end goals. For those breweries looking to become national brands, mergers, instead of buyouts, retain full independence, but it lacks the backlash of a “buyout.” They also allow breweries to utilize the other’s assets connections and create strategic distribution partnerships, since distribution has become a raging battleground.
The founder of Victory Brewing, Bill Covaleski seems to agree.
The craft beer community is at its most critical moment since its inception as larger brewing corporations have bought into our grassroots movement, irrevocably changing the marketplace. Like-minded brewers such as Victory and Southern Tier can preserve our character, culture and products by standing together. Allied we can continue to innovate and best serve the audience who fueled our growth through their loyal thirst.