Kirin Holdings to Take 20% Stake in Brooklyn Brewery
October 12 2016 - 2:30AM
Dow Jones News
Kirin Holdings Co. of Japan has agreed to take a minority stake
in Brooklyn Brewery, people familiar with the matter said, in one
of the first investments by a Japanese company in a U.S. craft
brewer.
The investment will give Kirin a roughly 20% interest in
Brooklyn Brewery, the U.S.'s 12th-largest craft brewer by volume,
the people said.
With the investment, Kirin joins a host of Japanese companies
that are using acquisitions to expand beyond traditional markets.
Rival Asahi Group Holdings Ltd., on Tuesday closed a $3.5 billion
acquisition of several former SABMiller brands, including Peroni
and Grolsch.
Brooklyn Brewery, based in the borough's neighborhood of
Williamsburg, is one of the most established independent brewers in
the U.S. It dates its history to the late 1980s, and growth has
accelerated in recent years as the borough where it was born has
gained prominence and cultural influence world-wide.
The brewery produced 277,000 barrels of beer last year, up from
169,000 barrels produced in 2010, according to industry tracker
Beer Marketer's Insights.
Financial terms of the Kirin investment weren't immediately
available.
Brooklyn Brewery is one of the few American craft brewers that
has worked to build an international business. It has been shipping
its beer to Japan since 2003 and has a sizable business in
Scandinavia. In 2014, the brewery and Carlsberg A/S opened a joint
venture brewery in Stockholm. It struck an agreement earlier this
year for a similar partnership in Japan with Kirin.
Kirin's investment in the growing U.S. craft beer market comes
amid a prolonged downturn in Japanese beer sales. Shipments of beer
and related brews fell to about 425 million cases in 2015, compared
with a peak of 573 million cases in 1994, according to the Brewers
Association of Japan.
The investment will help Brooklyn Brewery as it gears up for a
major expansion. The company this year signed a 40-year lease for
75,000 square feet at Brooklyn's Navy Yard where it plans to have
offices, a beer garden and brewery operations. It also is planning
an expansion site in Staten Island to increase beer production.
The U.S. craft beer market has slowed lately, decreasing to 8%
growth in the first half of 2016 after six years of double-digit
growth. Large craft brewers like Sierra Nevada and Boston Beer Co.,
which makes Samuel Adams Boston Lager, have seen volumes decline as
more small breweries open across the country.
Write to Tripp Mickle at Tripp.Mickle@wsj.com and Atsuko Fukase
at atsuko.fukase@wsj.com
(END) Dow Jones Newswires
October 12, 2016 02:15 ET (06:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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