AB-InBev buys homebrewers’ supply company

You don’t need to be paranoid to believe they are after you. This ancient bus-stop graffiti comes to mind when reviewing responses to AB-InBev’s latest US acquisition in the craft beer sector. In October 2016, ZX Ventures, the venture capital arm of AB-InBev acquired Northern Brewer Homebrew Supply and its sister company, Midwest Supplies. The two homebrewing companies generated combined annual sales of USD 50 million, according to Brewbound. No details of the transaction were disclosed.

According to the American Homebrewers Association, 815 homebrewing stores sold USD 764 million worth of beer-making supplies in 2015 to the country’s estimated 1.2 million homebrewers. They also say this is a conservative number because a lot of homebrewing equipment is now available at retailers other than specialty local homebrewing stores.

Given that the purchased company has some USD 50 million in annual sales, it represents a little more than 6 percent of the industry’s total, meaning that homebrewing supply is still a highly fragmented business.

Still, it is possible that the purchase will not sit well with many homebrewers. While Northern Brewer’s distribution will improve as a result of the acquisition, homebrewers might not like their money to go towards bolstering AB-InBev’s profits, whom they think of as the evil empire.

Northern Brewer, which operates stores in Minneapolis, St. Paul and Milwaukee, has been selling beer-brewing and winemaking supplies and equipment since 1993. AB-InBev said there will be no management changes at Northern Brewer.

Earlier this year, ZX Ventures acquired Beer Hawk, an online beer retailer based in the United Kingdom.

It’s clear that AB-InBev is looking to expand its e-commerce presence via ZX Ventures. But it’s also clear that some nice profits can be made peddling homebrewing supplies.