Oskar Blues, Canarchy Breweries, Sold to Monster Energy Drinks Maker

There was always going to be an exit strategy. That's how big business works. On January 12, Monster Beverage Corp. announced that it has purchased the Canarchy Craft Brewery Collective, which includes Longmont-based Oskar Blues Brewing and five other craft breweries.

The publicly traded energy-drink maker will get into the booze market for an all-cash price tag of $330 million, according to a company statement. The deal is just the latest involving the country's largest or best-known craft beer brands. In November, the Japanese beverage giant Kirin bought Michigan's Bell's Brewery and merged with Colorado-based New Belgium, while the Canadian cannabis company Tilray added two San Diego breweries, Green Flash and Alpine, to its Sweetwater Brewing division.

The sale doesn't include the restaurants that are associated with Canarchy, including the Oskar Blues-branded eateries in Colorado, according the Monster.

“The team at Canarchy is thrilled to be joining Monster,” said Canarchy CEO Tony Short in the same statement. “We look forward to capitalizing on the combined expertise of Monster and Canarchy to further strengthen our current alcoholic product offerings, expand our product portfolio to meet the ever-changing needs of our customers and to grow our business.”
Short will stay on with the company, which Monster said will "function independently, retaining its own organizational structure and team," and continue to oversee the breweries. The transaction is expected to close in the first three months of this year and is subject to regulatory approval.

Oskar Blues was founded by Dale Katechis as a restaurant in Lyons in 1997 before he added a brewery to the operation in 2002 and became the first craft brewery in the U.S. to can its beer — something that was seen as heresy at the time. The company grew quickly and eventually opened a huge production facility and taproom in Longmont, where it embarked on an aggressive distribution and sales plan. Its free-spirited image, bold beers and subtle marijuana references made it very popular inside and outside the state.

In 2015, a Boston private equity firm called Fireman Capital Partners quietly bought a majority stake in Oskar Blues, injecting it with financial aid that helped the brewery expand even further; it now has production facilities in North Carolina and Texas in addition to Colorado. Then, in 2017, Fireman (which already owned two Utah breweries) bought two more beer makers, Perrin and Cigar City, and created Canarchy to oversee them. Over the next few years, Canarchy added Deep Ellum Brewing and Three Weavers Brewing, which it later sold back to its original owners.
Katechis couldn't immediately be reached for comment.

The moves sparked a heated debate inside the craft brewing industry about what it means to be an independent company, whether or not independence matters when it comes to beer, and whether big money would have a negative effect on the industry's direction. Oskar Blues was able to remain a member of the Brewers Association, the trade group for independent breweries, since it still met the nonprofit's definition of independence — meaning it wasn't owned by another non-independent alcohol maker. On the surface, the Monster deal doesn't seem like it would change that situation.

“This transaction provides us with a springboard from which to enter the alcoholic beverage sector,” said Monster’s co-CEO Hilton Schlosberg in a statement. “The acquisition will provide us with a fully in-place infrastructure, including people, distribution and licenses, along with alcoholic beverage development expertise and manufacturing capabilities in this industry.”

Oskar Blues is planning several activities this year to honor the twentieth anniversary of canning its first beer back in 2002. It remains to be seen what will happen to the Oskar Blues restaurants in Lyons, Longmont, Denver, Boulder and Colorado Springs.