Capitol Hill’s Redhook Brewlab in middle of big decision in big beer as Anheuser-Busch passes on purchase of Portland’s Craft Beer Alliance

Inside the Brewlab

Corporate beer, supposedly, sucks. Does smaller corporate beer suck… less? The Capitol Hill-based future for Redhook’s Brewlab isn’t exactly independent but it won’t fall fully under the shadow of global beer giant Anheuser-Busch InBev now that the international behemoth has let the deadline pass for an option to fully purchase Redhook’s Portland parent, the Craft Brew Alliance.

“While disappointing, with this decision made, management can turn its attention to refining strategic alternatives to maximize shareholder value,” CBA head Andy Thomas said in a statement.

 

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“Over the past several years, we have built a sustainable infrastructure, optimized our footprint, and amassed a diversified portfolio of brands to support future profitable growth anchored by robust growth in the Kona brand and the addition of our three newly acquired brands.”

Under terms of an agreement with AB InBev — which already controlled 31% of the brewing collective that includes Pacific Northwest and regional brands including Redhook, Kona Brewing Company, Appalachian Mountain Brewery, Cisco Brewers, Omission Brewing Co., Square Mile Cider Co., Widmer Brothers Brewing, and Wynwood Brewing Co. — “must pay $20 million to the Portland-based brewing consortium and to continue providing it with the global brewing giant’s network of production facilities and distribution networks,” the Oregonian reports.

CHS reached out to representatives for Redhook’s Brewlab pub and brewery on Capitol Hill but were told that no further statements would be made at this time.

The E Pike pub and super tiny eight-barrel Brewlab became Redhook’s sole Seattle brewing operation in late 2017 after it announced it was shutting down beer production at its Woodinville facility. The E Pike brewery now specializes in smaller, sometimes experimental batches while Redhook’s larger production undertakings originate at plants including CBA’s Portland brewing facility. The Brewlab debuted on Capitol Hill in the summer of 2017.

While many in the industry were expecting AB InBev to swallow up the rest of the Craft Brew Alliance company, the decision not to buy the rest could be good news for the smaller brands like Widmer and Redhook — and the cities the breweries call home “It may well have been good news for shareholders and executives at CBA, and possibly even the workers who survived the transition, but it wouldn’t have been good for Portland,” beer industry writer Jeff Alworth writes. “Call the company what you will, but the physical space it occupies is the Widmer Brewery, a huge part of the state’s brewing legacy. Under AB InBev management that brewery and the Widmer brand would become line items on a sheet of thousands, overseen by someone in New York or Leuven—or who knows where.”

The development also paints the relationship between Redhook and Capitol Hill’s *other* Big Beer breweryElysian Brewing — in a new light. AB InBev owns 100% of the 1996-founded brewery and its Seattle locations after its 2015 acquisition of the company.

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7 thoughts on “Capitol Hill’s Redhook Brewlab in middle of big decision in big beer as Anheuser-Busch passes on purchase of Portland’s Craft Beer Alliance

  1. Sorry, but Redhook including Brewlab has always disappointed. All their beers are transparent, forgettable, mass-market. Give me some cloudy soulful suspension in my beer!

  2. Besides the 20 M failed buyout payment and exclusive distribution agreement, bottom end value is 20/share. And Kona, it’s on. Someone will jump on opportunity at 22-24 per share

  3. “…management can turn its attention to refining strategic alternatives to maximize shareholder value.” That’s not much of a formula for making good beer. So sad. How about maximizing beerholder value instead? What a concept!

  4. Another problem with AB InBev and their subsidiaries is that AB InBev also owns some distributors and favors their own product in the areas those distributors operate, thereby reducing the shelf space for other (generally smaller) brewer’s products. I loved Elysian’s beer, but quit I buying their beer after the AB InBev takeover for this reason.

    I’m not going to put down anyone who drinks Redhook, Widmer, Elysian, or Bud (OK, maybe Bud (hehe)), but we should be fully informed when making a decision. The more you know… (flying sparkly rainbow thingy).

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