Anheuser-Busch InBev continues to add to its craft beer bar tab. On Wednesday the company said it has bought Los Angeles-based Golden Road Brewing. This is AB InBev’s fifth craft deal since it first started making these acquisitions five years ago to better position itself within the broader U.S. beer market.
Golden Road Brewing is the largest craft beer operator in L.A. County but a tiny competitor among craft brands nationwide—it’s expected to only sell about 45,000 barrels of beer in 2015.
"We didn't have a 'for sale' sign in the ground, we weren't looking to sell our business," Meg Gill, Golden Road president and co-founder, said in a video that also featured Andy Goeler, CEO of craft at AB InBev. Gill said she was encouraged by what AB Inbev (bud) had done with its other craft brands, which include Goose Island, Blue Point, 10 Barrel and Elysian, and that Golden Road wanted to be with "the winning horse."
The deal comes in a big month for M&A activity among brewers. MillerCoors bought Saint Archer Brewing Company earlier in September, with only 35,000 barrels projected for 2015. Dutch brewing giant Heineken's entry into the craft beer category was more bold with a 50% stake in Lagunitas, the sixth-largest craft brewer in the U.S. Meanwhile, AB InBev’s Goose Island unit bought a majority stake in Virtue Cider Co.
The world's biggest beer makers have been angling to tap rising interest in the craft category, which generated $19.6 billion in retail sales last year and now accounts for 11% of the total beer market, according to industry trade group the Brewers Association. As craft brewers continue to churn out strong volume growth, bigger brewers are facing flat or even declining growth. Sales to retailers slipped 2.2% for AB InBev in the second quarter of 2015, worse than the industry's 1% drop.
AB InBev said it began to rethink its role in the U.S. beer industry about five years ago, starting with its purchase of Chicago-based Goose Island. The world’s largest brewer is also thinking much bigger: Earlier this month it confirmed talks of a possible merger with SABMiller.
The heightened M&A in the space has rattled some fans of local breweries who fear that the beers they've come to love could go flat under the ownership of a big brewer. But with almost 3,500 U.S. breweries in operation as of the end of last year, and 1,000 new operations opening in just the past two years, there’s no shortage of small competitors to keep the craft taps running.