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Expect cheers and tears across Fort Collins this week, as a multinational beverage corporation based in Australia announced yesterday its all-cash purchase of New Belgium Brewing Co.
The transaction ends close to 30 years of independent ownership of the iconic craft brewery, the largest in Colorado and the fourth largest in the country. The loss of the brewery’s independence to Lion Little World Beverages, which has ties to Australia, New Zealand, and Japan, may sting. But more than 300 New Belgium employees, who collectively own the company, will receive $100,000 of retirement money, with “some receiving significantly greater amounts,” wrote New Belgium co-founder Kim Jordan in an open letter on the company’s website.
“Little World is committed to strategies to broadly share the wealth going forward, like profit sharing, best-in-class healthcare, and a generous family leave policy,” wrote Jordan. “Our on-site wellness clinic will carry on.”
Pending approvals by regulators and New Belgium’s Employee Stock Ownership Plan (ESOP), the deal should close by the end of this year. In her letter, Jordan extolled Lion Little, saying the company shares New Belgium’s commitment to sustainability and vows to retain the company’s B Corp status. “Lion announced last week that they’ve made a pledge to be carbon neutral in their Australian and New Zealand breweries starting in 2020,” she wrote. “And now we will be accelerating our own journey towards carbon neutrality.”
The company has toiled to raise capital while remaining independent, and finally decided doing so in any meaningful way was not realistic. As New Belgium considered options for expansion, many led to cost-cutting, or jettisoning ambitious plans for sustainability. Joining with Lion Little, Jordan wrote, “allows us to attend to those competing priorities and utilize our brewery capacity to the fullest.”
Lion Little World Beverages is the craft beverage arm of Lion, a leading Australian brewer owned by Japanese conglomerate Kirin Holdings Company Limited. The company employs about 4,000 people around the world. Its portfolio includes craft beer brands like James Squire (UK), Little Creatures (AU), Emerson’s (NZ), and Panhead (NZ).
“Since meeting the New Belgium team, we’ve been incredibly impressed not just with their commitment to world-class beer and the way they bring their brands to life, but their purpose-led business model and connection to community,” says Matt Tapper, managing director of Lion Little World Beverages, in a press release. “Over time, we see a great opportunity to work together with New Belgium Brewing to grow a wider portfolio of craft beverages in the U.S., and build on the great business that Kim, Steve, and the entire New Belgium team have created.”
Jordan and then-husband Jeff Lebesch founded New Belgium in the basement of their Fort Collins home in 1991, after cycling across Belgium and falling in love with the country’s breweries. Upon returning to Colorado, Lebesch began brewing his own Belgian-style beers, while Jordan worked as a social worker.
Over the years, the company grew dramatically and introduced significant changes to how it does business. In 2012, New Belgium became 100 percent employee-owned, moving on to achieve B Corp certification, which requires independent assessments of a company’s governance, employee treatment, environmental impact, and effect on the local community. In 2016, New Belgium expanded into Asheville, North Carolina, opening a $140 million brewery.
A press release announcing the purchase says Lion Little World is “committed to protecting and nurturing New Belgium’s unique identity, culture, and brand.” Headquarters will remain in Fort Collins; CEO Steve Fechheimer will stay in place with the existing management team; and Jordan will adopt an advisory role within Lion Little World. The Australian company anticipates expanding its worldwide growth in craft beer, with the purchase of New Belgium serving as a first significant beachhead in the United States. To date, the company’s domestic footprint is the importing and distribution of an Australian craft beer brand and ownership of a San Francisco brewpub.
The purchase is one of a parade of changes in the craft beer market, which is undergoing consolidation as growth diminishes. In Colorado, for instance, OG Boulder Beer Company announced it was shutting down its production and distribution arm, and returning to its roots as a brewpub. And in 2017, Boulder’s Avery Brewing sold a minority stake of its business to Spanish brewer Mahou San Miguel.