Heineken has bought out the remainder of Lagunitas, having entered into a 50/50 JV with the California brewer back in 2015.
The transaction been completed with immediate effect. Financial terms were not disclosed.
Back then, Lagunitas founder Tony Magee had stressed that the deal was with Heineken global, and had little to do with HUSA.
Today's announcement purports that Lagunitas will continue to operate as a separate business entity within Heineken, reporting into their Americas region. (For context, HUSA, Heineken Mexico and Heineken Brazil are among those reporting into the Heineken Americas region; Lagunitas will as well now.)
Presumably, this is about Lagunitas' global prospects, as the tie-up was two years ago.
Tony will reportedly remain active as executive chairman of the company, supported by his current management team.
"In addition, Tony will take a leading advisory role to Heineken and its Executive Team on the global and local craft strategy," per official announcement.
And it seems as much about global prospects as ever. Since the initial tie-up, the global company says it has "helped to expand Lagunitas' international presence, including entry into new markets such as France, Mexico, Italy and Spain, and extended the brand's availability in markets including the UK, Canada, Netherlands, Sweden and Japan.
"Following this transaction HEINEKEN will accelerate the export of Lagunitas to many more markets around the world."
Indeed, Tony told BBD just recently that their international business is up about 160% this year. Sweden is their biggest market. But the "UK will catch up soon." What of that big Mexico City push? "It's coming," Tony said.
Another initiative reportedly in the works is a Lagunitas production facility overseas. Tony has said in the past that they will "likely" build a brewery in the United Kingdom to provide for the European Union [see CBD 08-24-2016].
Lagunitas overall is growing 13.6% in volume YTD through 4/16/17 in IRI MULC. That outpaces the craft category, up 2.6% YTD.
And they're still seeing very strong growth in their California backyard.
"So far this year, the Southwest region is adding the most incremental depletions growth for us," Tony told BBD. "It is our second largest region by volume behind Northern California and is growing +15.5% YTD."
They'll do more than a million barrels this year. More on trends in CBD.
LOOKING BACK. It seems Heineken owning Lagunitas outright was kind of inevitable. Since the two first started talking, Heineken always wanted more. Tony has shared in the past that the deal's original conception was a 35% minority stake [see BBD 09-21-2015]. But Heineken sought more, so it moved to a 50/50 deal. And now it seems that even half of Lagunitas wasn't enough to satiate their appetite. They wanted all of it.
YOUR CHEAT SHEET: BURNING QUESTIONS ANSWERED
We've spoken to the powers that be, to answer your burning questions (we can't help you with any other burning sensations) about the Heineken-Lagunitas marriage:
DOES THIS MEAN MORE COLLABORATION WITH HUSA?
HUSA and Lagunitas will be working "shoulder to shoulder," but there will be "no consolidation of operations." As we understand, the two only cooperate on some marketing activities, and some national accounts info sharing.
WHAT'S THE BIG PUSH TO FULLY CONSUMMATE THE DEAL?
The way we understand it, the JV was like shacking up, and the full buyout is the marriage.
The JV "effectively built useful walls between us; those walls served a purpose that everyone agreed was beneficial, and allowed us to get to know each other," said Tony. But the walls have become obstacles - particularly, for Lagunitas' international run room, and ability to share resources like brewing capacity or money.
WHAT'S THE NEXT BIG INTERNATIONAL MARKET?
Heineken does business in roughly 160 countries. Lagunitas is up about 160% internationally.
If much of this marriage has to do with global aspirations, what's their next big move?
Tony wouldn't go into too much detail, but we understand they've just rolled out Portugal, and are expanding in Canada. Mexico is growing, and New Zealand is happening now. Seems they want slow growth in many countries.
So could Tony see a day in the near future where global volumes surpass that of those in the U.S.? That's a ways off.
DOES THIS AFFECT DISTRIBUTORS ?
"Nah," said Tony. They've long disavowed the conception distribution alignment - although Lagunitas and Heineken do have a lot of distributor overlap.
A HIGH END FOR LAGUNITAS?
We asked how the deal would affect their partnerships with craft brewers (like their deal with Texas' Independence, for example), which Tony maintains are totally under the Lagunitas, not Heineken, umbrella. In fact, they're establishing their own sort of "High End" unit, presumably a stable of craft entity partners. At this point, it's largely a blank slate.
IS THIS TONY'S EXIT STRATEGY?
Not even close. "In all honesty, I don't see myself transitioning out," says Tony. This is actually Tony "taking on a bigger job."
He's remaining executive chair, "doing the things I still do here: labels, copy, branding, working on recipes… none of that changes. But I'm also gonna be consulting directly to the Heineken Executive Board."
Harry, Jenn, and Jordan
"Success is a journey, not a destination. The doing is often more important than the outcome." - Arthur Ashe
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