Arrow-right Camera
The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Anheuser-Busch to sell craft beer brands to New York cannabis company, a sign of industry changes

The headquarters of Anheuser-Busch, Inc. is seen June 26, 2008, in St. Louis, Missouri.  (Tribune News Service)
By Hannah Wyman St. Louis Post-Dispatch

ST. LOUIS – Anheuser-Busch said this week it would sell several craft beer brands to a marijuana company, a deal experts said hinted at larger troubles inside craft brewers and beer giants alike.

The marijuana company, New York-based Tilray Brands, announced the deal on Monday, promising to reinvigorate the craft beer industry.

“Tilray is fully committed to invest in and champion the future of the U.S. craft beer industry by fueling new innovation that excites and further accelerates the growth of its consumer base,” Tilray CEO Irwin Simon said in a statement.

Benj Steinman, editor at Beer Marketer’s Insights, said the Tilray and A-B deal is an indicator that things for both the craft beer industry and A-B have become more difficult.

“It’s a different moment for craft beer,” Steinman said. “It’s not the shiny new toy, not the growth engine it once was. It’s not as attractive of a (market) segment.”

Sales of A-B products have been wavering, and the Belgium-based beer maker recently reported lower North American sales during its second quarter earnings. Craft breweries have also struggled with economic hardships and continue to grapple with post-pandemic recovery efforts.

The deal, which is expected to close at the end of the year, includes Shock Top, Breckenridge Brewery, Blue Point Brewing Co., 10 Barrel Brewing Co., Redhook Brewery, Widmer Brothers Brewing, Square Mile Cider Co. and HiBall Energy.

The acquisition will move Tilray Brands, a New York-based cannabis and packaged goods company, up from the ninth-largest craft beer business in the U.S. to the fifth, according to a company statement. Terms of the agreement were not disclosed.

Andy Thomas, president of premium and specialty brands at A-B, said Tilray reached out at the beginning of the year with interest in buying the brands and breweries.

“Winning in craft remains a key pillar of our strategy to lead and develop the premium segment,” Thomas said in an email to the Post-Dispatch. “We remain committed to the amazing craft brewery partners in our portfolio and focused on working with them to lead growth in the segment.”

A-B kept the vast majority of its craft brands and key beers, as the eight brands within the deal make up less than 1% of A-B’s craft volume and are some of the company’s “less stellar-performing assets,” said Steinman, of Beer Marketer’s Insights.

“Both companies stand to gain from this,” he said.

The acquisition is part of Tilray’s diversified growth strategy, Steinman said.

Also part of the transaction are four production facilities and eight brewpub locations associated with the brands.

Anheuser-Busch’s U.S. revenue dropped by over 10% in its second quarter, following Bud Light’s declining performance since April, when the brand partnered with transgender star Dylan Mulvaney.

Earlier this summer, Bud Light lost its crown as the country’s top-selling beer for the first time in more than two decades.

A-B also announced in late July the slashing of 2% of U.S. corporate employees, as a result of restructuring within the brewing company’s corporate side.

In 2022, small and independent brewers collectively produced 24.3 million barrels of beer, similar to 2021. U.S. craft beer sales volume increased 0.1%, according to data from the Brewers Association

But some established breweries have struggled recently. Anchor Brewing Co. of San Francisco closed its doors last month after 127 years due to declining sales and tough economic conditions. Locally, Maryland Heights’ O’Fallon Brewery filed for bankruptcy via a Chapter 11 petition in mid-June. The warehouse is currently up for sale.

Tilray’s current portfolio includes SweetWater Brewing Co., Montauk Brewing, Alpine Beer, Green Flash Brewing, Breckenridge Distillery and Happy Flower CBD sparkling nonalcoholic cocktails.

A-B’s craft partners include Devils Backbone Brewing Co., Elysian Brewing, Four Peaks Brewing Co., Golden Road Brewing, Goose Island Beer Co., Karbach Brewing Co., Veza Sur Brewing Co., Virtue Cider and Wicked Weed Brewing.

©#YR# Distributed by Tribune Content Agency, LLC.