Anheuser Busch-InBev Buys Another Craft Brewer

December 18, 2015, 6:01 PM UTC
Bottles of Budweiser beer sit on display at a pub in Hornchu
UNITED KINGDOM - JUNE 27: Bottles of Budweiser beer sit on display at a pub in Hornchurch, Essex, on Friday, June 27, 2008. Inbev NV, the Belgian brewer pursuing a takeover of Anheuser-Busch Cos., may have to offer an additional $7 billion to persuade the U.S. company's board to sell. (Photo by Chris Ratcliffe/Bloomberg via Getty Images)
Photograph by Chris Ratcliffe — Bloomberg/Getty Images

Anheuser Busch-InBev is buying another craft brewer—its sixth in the past five years.

The deal adds Four Peaks Brewing Company, the largest craft brewer in Arizona, to a portfolio that includes Goose Island, Blue Point, 10 Barrel, Elysian, and Golden Road, AB-InBev’s most recent purchase.

Four Peaks, which first started in 1996, is expected to sell about 70,000 barrels of beer this year. The brewery’s flagship Scottish-style ale called Kilt Lifter accounts for more than 60% of sales. InBev said the brewery would continue to produce its own beers.

“Arizona has a rapidly-growing fan base for craft beer, and we look forward to more opportunities to share what Four Peaks is about within our local community, and beyond,” said Randy Schultz, Four Peaks co-founder.

Terms of the transaction weren’t disclosed.

The bet is that brewers like InBev can use their expansive distribution networks to bolster the popularity of local hits. When big beer companies buy craft brands, they often select breweries in different regions of the country. All six craft brewers that InBev has acquired so far have been based in different states.

M&A action is a prevailing trend in the craft beer industry as big brewers like InBev and MillerCoors scoop up smaller rivals. Those deals are tapping rising interest in the craft category, but they won’t move the sales needle much for their acquirers—at least not initially. InBev, for example, reported total global volume of 121.7 million hectoliters in the third quarter of this year.

But the world’s biggest brewer can’t completely ignore the success of the category. Craft brewers generated $19.6 billion in retail sales last year and now account for 11% of the total beer market, according to industry trade group the Brewers Association. InBev’s volume grew a slim 1.2% in North America for the latest quarter.

Analysts are more closely watching the progress of a $100 billion-plus acquisition of No. 2 brewer SABMiller. Earlier this month, InBev CEO Carlos Brito defended that deal at a U.S. Senate hearing, aiming to assure Congress that his company’s deal wouldn’t hurt competition.

Subscribe to Well Adjusted, our newsletter full of simple strategies to work smarter and live better, from the Fortune Well team. Sign up today.

Read More

Great ResignationInflationSupply ChainsLeadership