March 29, 2024

Press Release

Craft Brew Alliance Acquires Three Partner Brands, Unlocking Full Potential of Expanded Portfolio

CBA will increase investments and resources to build on growth that Appalachian Mountain Brewery, Cisco Brewers, and Wynwood Brewing Company have achieved as partners

| 10/11/2018

Craft Brew Alliance, Inc. (“CBA”) BREW, -0.40% a leading craft brewing company, is cementing its strategic brewing and distribution partnerships with Appalachian Mountain Brewery (AMB), Cisco Brewers, and Wynwood Brewing Co. through three separate purchase agreements. Formally launched in 2015, CBA’s craft partner strategy has contributed significantly to the evolution of the company, and today’s agreements represent a milestone in enabling CBA and its shareholders to fully participate in the value that the partners will bring as wholly owned CBA brands.

Over the past several years, the partnerships with North Carolina-based AMB, Massachusetts-based Cisco Brewers, and Florida-based Wynwood Brewing Co. have bolstered CBA’s portfolio with strong local brands and breweries in key markets, complementing Kona Brewing Co. as the anchor of CBA’s portfolio strategy. Further, these partners have supported CBA’s strategic brewery evolution by leveraging the capability and location of the Portsmouth, New Hampshire brewery to increase production for partner brands as CBA rebalanced its brewing footprint.

As CBA partners, AMB, Cisco Brewers, and Wynwood Brewing Co. have each grown volume and share in their respective markets, and with these agreements, CBA will more significantly invest to unlock their full potential. CBA plans to increase marketing spend and resources to fuel each brand’s growth and help drive continued innovation and greater levels of support for their local communities.

“We are thrilled to welcome AMB, Cisco, and Wynwood fully into the CBA family,” said CBA CEO Andy Thomas. “From the beginning we knew that our shared values and complementary interests gave us a platform to grow together. Over the past few years, as we’ve gotten to know each of these exceptional breweries and their passionate teams, it became increasingly clear that the future would be brighter for all of us working together as one. In addition to Kona and the rest of the CBA portfolio, Cisco, AMB, and Wynwood will all play an important role as CBA focuses on sustainable topline growth for the future.”

The terms of each agreement are unique and reflect the distinctiveness of each craft brewery partner. Additionally, as the agreements build on successful existing partnerships, the companies anticipate a smooth integration.

Highlights of the CBA and Appalachian Mountain Brewery Agreement

CBA and AMB were introduced in 2014 through the first-ever Startup Brewery Challenge, a CBA-sponsored beer and business competition hosted by industry publication Brewbound. The two companies announced a strategic partnership in early 2015 to increase production and grow distribution of the pioneering craft brewer’s core portfolio, including Long Leaf IPA, Boone Creek Blonde, Spoaty Oaty Pale Ale, and Porter, across North Carolina. Building on that success, CBA began expanding AMB’s portfolio into South Carolina and Tennessee earlier this year. The partnership has complemented AMB’s brewing capacity in Boone and helped bring AMB’s award-winning innovative new beers to market, such as Not an IPA, which earned a silver medal in the highly competitive IPA category at this year’s Great American Beer Festival. Throughout the relationship, CBA has supported AMB’s focus on community, sustainability, and philanthropy – contributing to We Can So You Can, a nonprofit foundation started by AMB’s founder, and donating proceeds from every case of the brewery’s flagship Longleaf IPA toward reforestation efforts with the Longleaf Alliance.

Under the purchase agreement with AMB, CBA will acquire the AMB brand, brewery, and pub and will continue to invest in the local community through ongoing support of We Can So You Can Foundation and other nonprofits. AMB Brewmaster Nathan Kelischek will continue to manage the brewery. The transaction is expected to close by the end of the year, pending regulatory approval from the federal Alcohol and Tobacco Tax and Trade Bureau.

“From the beginning, AMB’s mission has been to brew quality beer while focusing on our core tenets of sustainability, community, and philanthropy here in the Appalachian Mountains. It’s about sharing our passion and fulfilling our potential while inspiring others to do the same. In every way, this partnership with CBA has embodied that mission,” said Kelischek. “We’re so excited to be taking this next step and continue working more closely with Andy, Scott, and the entire team at CBA to keep fulfilling our vision.”

Highlights of the CBA and Cisco Brewers Agreement

CBA and Cisco Brewers entered into a strategic brewing and distribution partnership in December 2015, which supported the Nantucket, Massachusetts brewery’s efforts to evolve its core portfolio and bring more of its island-inspired beers, including Whale’s Tale Pale Ale and Grey Lady Ale, to consumers throughout New England. Earlier this year, CBA spearheaded the launch of Cisco’s newest year-round beer, Gripah, a refreshing grapefruit IPA, that is the #4 new IPA as measured by Nielsen Boston Liquor. This summer, the Cisco team helped re-brand CBA’s Portsmouth pub, bringing a slice of its renowned Nantucket experience to the New England mainland, and opened a new outdoor pop-up pub in Boston’s Seaport neighborhood.

Under the unique agreement between CBA and Cisco, which closed today, the two companies will continue to work closely and collaboratively together in the future. Going forward, CBA will own the Cisco Brewers brand and beer business, while the Cisco founders will continue to own and operate the Cisco Brewers brewpub properties and retail merchandising, including the original brewery and grounds in Nantucket.

Said Jay Harman, CEO of Cisco Brewers, “By having CBA invest in our beer brands we’ll be able to serve our customers better than ever on Nantucket and take the island experience on the road to more fun-loving people and dogs. This past summer, we helped transition CBA’s pub in Portsmouth, New Hampshire to a Cisco pub and opened a pop-up in Boston’s Seaport district, and the positive reception has been really encouraging. Our founders will remain personally involved with CBA’s team on the wholesale business while operating the retail side independently, and we’re all psyched because everyone sees this as a win-win.”

Highlights of the CBA and Wynwood Brewing Co. Agreement

CBA’s partnership with Wynwood Brewing Co. also traces its origin to the CBA-sponsored Brewbound Startup Brewery Challenge, which Wynwood won in December 2015. The two companies announced a strategic partnership in December 2016, which included CBA taking a 24.5 percent minority investment in the award-winning Miami-based craft brewery. Since then, Wynwood has increased production of its fast-growing flagship La Rubia Blonde Ale and expanded distribution to meet demand across South Florida. During this time, the Wynwood team has also invested in enhancements in its original brewery and taproom and rolled out a total portfolio redesign in celebration of its fifth anniversary and unique heritage as Miami’s first craft production brewery.

Under CBA’s agreement with Wynwood Brewing Co., which also closed today, CBA purchased the remaining 75.5 percent interest in the Miami-based brewery, which will become a wholly owned subsidiary of CBA. Co-founders Luis and his father “Pops” Brignoni will continue to lead Wynwood’s operations autonomously.

“Today is a great day for Pops, myself, and our entire Wynwood Family,” said Luis Brignoni, co-founder of Wynwood Brewing Co. “Since day one we’ve worked hard to instill a family culture, and we’re excited to now be part of a larger family. Since the beginning of our relationship with CBA we’ve felt at home, and we look forward to continuing to work together in growing our family and brands.”

Additional Details

Financial details of the Cisco Brewers agreement are included in a Form 8-K report filed with the Securities and Exchange Commission today. Financial terms of the AMB and Wynwood Brewing Co. transactions were not disclosed. As a result of the purchase agreements and planned investments to support topline growth, CBA will be adjusting certain aspects of its full-year financial guidance, to be announced with third quarter 2018 earnings being released Nov. 7, 2018.

CBA was represented by Paragon Beverages Advisors, LLC, and the law firm Davis Wright Tremaine LLP in the transactions. Appalachian Mountain Brewery was represented by Akerman LLP and Moffatt and Moffatt, PLLC. Cisco Brewers was represented by Cascadia Capital LLC and the law firm McDermott Will & Emery. Wynwood Brewing Co. was represented by Holland & Knight LLP.

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