AB-InBev buys craft brewer Wicked Weed in Asheville
The latest craft brewery sale to AB-InBev has more of a fall-out than usual. Within hours of announcing the deal, Wicked Weed, located in North Carolina’s beer city Asheville, lost its voting rights in its craft beer guild, was publicly evicted from collaborations with two independent breweries and exiled from at least a handful of local craft beer shops and bars.
The deal reported on 3 May 2017 between AB-InBev’s High End division and Wicked Weed drew a lot of criticism although Wicked Weed’s co-founder Walt Dickinson tried very hard to contain the damage.
“Our consumers are very, very passionate consumers,” Mr Dickinson was quoted as saying. “They feel passionate about the brand. I’m respectful of their feelings. It’s going to be our job going forward to win them back and show them that we’re the exact same people.”
However, craft beer lovers seem to take the sale of Wicked Weed harder than other recent deals, said Paul Gatza, Director of the Brewers Association. He believes that could be because of Wicked Weed’s reputation for creativity, particularly sour beers.
Founded in Asheville in 2012 by Walt and Luke Dickinson and their friends Ryan, Rick and Denise Guthy, the brewery had already become a local institution.
Media say that there has been interest from larger companies about an acquisition in recent years, but Wicked Weed didn’t reach out to The High End until January.
The company believes that joining The High End will be good for the brewery, which expects to produce about 48,000 hl beer in 2017, up from 8,000 hl in 2015 and perhaps 12,000 hl in 2016. Wicked Weed is particularly known for the company’s barrel-aged sour beers, even though they contribute less than 20 percent of total volume. The brewer currently sells its beers in eight states, with half of the business derived from North Carolina, Beer Marketer’s Insights reported.
Asked whether any production could shift to AB-InBev’s other breweries, Mr Dickinson said it’s a “very real possibility,” but he wouldn’t be worried about quality declining.
The North Carolina Craft Brewers Guild announced that the Asheville brewer would no longer be a voting member, adding it was “disheartened” by the sale.
Craft brewers Jester King in Texas and Black Project Spontaneous & Wild Ales in Colorado said they were backing out of joint projects with Wicked Weed.
Before the Wicked Weed deal, AB-InBev had bought Texas-based Karbach Brewing in Texas in November 2016.
As its previous takeovers underline, AB-InBev prefers to buy craft breweries that are located in different regions. They are likely to be small (read: little entanglement with distributors) but well-known. Wicked Weed perfectly fits this pattern.
The pressing question is now: how many more craft breweries will AB-InBev need to buy before it has completed its geographical strategy In our opinion, there cannot be many states left where AB-InBev might like to buy a craft brewer.
That the craft beer industry has already turned into a buyer’s market with Big Brewers being able to take their pick and determine prices was emphasized by Mr Dickinson’s comment that it was Wicked Weed that had reached out to AB-InBev and not the other way round.
Obviously, Wicked Weed’s founders must have come to the conclusion that it was now or never if they wanted to secure a profitable exit. Other craft brewers pondering a sale will need to take notice.
