Telling his employees that Breckenridge Brewery had been sold to Anheuser-Busch was “challenging,” says Breckenridge chief Todd Usry. “But it went well. I believe in what we are doing, but I understand the emotion.” A day after the sale was announced, Usry continued to walk around the facility, talking to the staff. “We have been fiercely craft forever," he explains. "This is an independent craft brewery. And this is taking the next step. I use the word family. It is very much family here. And you have to make sure they are okay.”
Fiercely craft in the past. But not anymore. On Tuesday, Anheuser-Busch InBev announced that it had agreed to purchase Breckenridge, Colorado's sixth largest brewery. It is the seventh U.S. craft brewery that the massive beer conglomerate has downed (including last week's purchase of Four Peaks Brewing in Arizona), most of them in the past eighteen months.
The deal includes the Littleton brewery, the original brewpub in Breckenridge and the Farm House Restaurant; all 383 employees will be retained for now. The seller, Breckenridge-Wynkoop Holdings, also owns the Wynkoop Brewing Company, Phantom Canyon Brewing in Colorado Springs and several restaurant properties. Those businesses weren't part of this agreement, says Breckenridge-Wynkoop head Lee Driscoll, who declined to comment on the sale, deferring to Usry.
Terms of the deal – as well as details regarding AB-InBev's other recent acquisitions – weren't disclosed, but Constellation Brands, which bought California's Ballast Point Brewing in November, spent $1 billion on that deal, or roughly $3,400 per barrel. Ballast Point will make close to 300,000 barrels in 2015, while Breckenridge Brewery will make around 70,000 barrels by the end of this year.
Usry says he and sales director George O'Neill have both signed contracts agreeing to stay on for at least five years, working with AB's newly-established High End group, which oversees craft-beer acquisitions and imports. In fact, Usry says he will be joining the High End's craft-advisory board, “which is made up of the principals and leaders of each of the breweries they have acquired. So I imagine I will be doing some traveling in the New Year, and doing some collaborative work. I am looking forward to a lot of growth.”
Founded in 1990 in its namesake town, Breckenridge is part of Colorado's old guard when it comes to craft breweries. The owners of the Wynkoop merged with Breckenridge in 2010 and together the companies made the decision several years ago to move out of Breckenridge's longtime headquarters at 471 Kalamath Street and into a new, twelve-acre, $36 million campus in Littleton. That facility opened in May and is still ramping up operations.
In the past, Breckenridge has enjoyed poking fun at the big brewers (although it never mentioned specific names) with a series of YouTube commercials. And Usry himself has been quoted as saying that he had no intention or desire to be owned by a mega brewer.
So, what changed?
“My partners got us together and said we were being approached by private equity group after private equity group after private equity group. They got together and convinced me to open my eyes to the High End group,” Usry says. Those partners include Driscoll and Breckenridge-Wynkoop president Ed Cerkovnik, as well as a fourth partner, whom Usry declines to name. Usry also declines to say how many investors there are in Breckenridge Brewery.
When he met with the High End, Usry says, he was “shocked by how normal and authentic they were. I was convinced that they were going to be a big brother and support us. No one is moving to Littleton from St. Louis... I was not forced into anything. I'm a brewer at heart, so I though it made sense to align with a brewer than a bank.”
Others would disagree. The Brewers Association, the Boulder-based trade group for craft brewers, will no longer define Breckenridge as a craft brewer now that it is owned by Anheuser-Busch.
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And Eric Wallace, the co-founder of Left Hand Brewing in Longmont, Colorado's fourth-largest craft brewer, says the sale is disheartening.
“It's a sad day when someone like that, who has been fighting the fight for more than twenty years, sells out. For me, it is inconceivable. How do you sell out to those guys?" he asks. "They are the ones who caused the scorched earth that [craft brewers] have repopulated and re-inhabited.”
AB InBev has been accused of trying to force craft brewers to the side by using its might when it comes to distribution. With the acquisition of several craft breweries, Wallace believes the situation becomes even more dangerous because AB InBev can now offer a lineup of former craft breweries to placate bars and restaurants that want them. The result is that there will be fewer opportunities for independent craft breweries to get tap handles at those restaurants and bars.
Usry says he doesn't want to see that happen, either. “I don't believe that this High End group is trying to put other craft breweries out of business," he adds. "They just want to participate So, that has been a big realization for me in the past few months. I'm flattered that they chose us for this journey that they want to go on. I'm not out there to kill any other craft breweries, and I would steadfastly speak against doing that.”