KALAMAZOO — Craft brewing pioneer Bell’s Brewery Inc., known for its popular Two Hearted Ale and Oberon brands, will be transitioning to new ownership.
Founder Larry Bell told the company today at an all-employee meeting that he was selling the popular Kalamazoo-based brewery — the 16th largest in the country — to Australian brewing conglomerate Lion Little World Beverages, which also owns Fort Collins, Colo.-based New Belgium Brewing Co.
The transaction, which Bell’s Brewing frames as a partnership with New Belgium, marks a complete exit for Bell, who founded the company in 1985, and daughter Laura Bell, who formerly served as CEO and is the brewery’s only other shareholder.
“To be able to join forces with New Belgium is really a good fit,” Larry Bell told MiBiz in an interview this morning. “The thing I like is that the two companies share so many values around safety for workers and sustainability and around philanthropy and commitment to the community — and, of course, to quality beer.”
Bell declined to disclose the price or terms of the deal, which will require regulatory approvals.
“New Belgium is known for having a great quality program, as is Bell’s, and when you put these two companies together, it’s going to be formidable,” Bell added. “It’s really going to be something.”
The deal also includes the sale of Escanaba-based Upper Hand Brewery, which Bell’s Brewery founded in 2014.
Bell assured that beer drinkers would detect “virtually no changes” upon completion of the deal as the company will continue to produce its brews in Comstock, Kalamazoo and Escanaba. Bell’s currently distributes to 43 states in addition to Washington, D.C. and Puerto Rico.
All 550 Bell’s employees are expected to retain their employment after the close of the deal.
Bell’s Executive Vice President Carrie Yunker, who has been with the company for 18 years, will lead day-to-day operations for Bell’s in Kalamazoo and report to New Belgium CEO Steve Fechheimer, a Michigan native. Vice President of Operations John Mallett, who has been with Bell’s for 20 years, also will join the leadership team, focusing on integrating the two organizations.
For Bell, the deal will allow him to step away from an industry he helped pioneer.
“I’ve had a couple bouts with my old friend cancer and one of them was last year. I’ve had very successful surgery,” Bell said. “I have a good prognosis. My age is getting into the 60s. It’s a bit of a wake up call that you need to make some mature adult decisions about what you’re going to do with things and that’s what this is.”
Bell’s found a kindred spirit with New Belgium, which went through a similar decision process when it navigated the tricky dynamic that comes when a grassroots local brewery sells to a multinational corporation.
In 2019, New Belgium — which at the time was 100-percent employee-owned and has locations in Fort Collins, Colo. and Asheville, N.C. — agreed to sell to Lion in the Sydney, Australia-based firm’s first foray into the U.S. craft beer market. The deal also included San Francisco, Calif.-based Magnolia Brewing, which New Belgium acquired in 2017 with Belgium-based Oud Beersel.
“We went through almost the exact same process and, in a lot of ways, came to the same conclusions as Larry did as Lion is a brewer’s brewer that really focused on making great beer and really focused on their communities in Australia, as well,” New Belgium’s Fechheimer told MiBiz. “We’ve seen that play out throughout the transaction.”
By Fechheimer’s assessment, the partnership has been a wildly successful one.
“We’ve seen increased investment in our people, increased headcount, spent more money marketing the brands. … We’ve been really successful for the past two years in terms of growing our business. It’s been a wonderful relationship with Lion and we’ve been very appreciative of that.”
Lion is owned by publicly traded Tokyo-based Kirin Holdings Company Limited, which itself is a part of the larger Mitsubishi Group. Kirin owns a range of beverage companies around the world, including Kentucky-based Four Roses Distillery and a 24.5-percent stake in New York-based Brooklyn Brewery.
Lion also imports and distributes international brands, including Heineken, Guinness, White Claw in Australia and Corona, Budweiser, Stella Artois, Beck’s and Pacifico in New Zealand.
In its fourth quarter 2020 financial reporting, Kirin indicated that Lion acquired New Belgium for the equivalent of $352.8 million, and noted the brand has helped propel beverages sales for Lion throughout a year marked by disruptions from the COVID-19 pandemic. Kirin also indicated in its year-end report that Lion was poised to anchor new investments in craft beer and hard seltzer.
New Belgium produced 886,500 barrels of beer at the time of the deal in 2019. As of 2020, it ranked as the 11th largest brewery by volume in the country, according to the latest data from the Brewers Association.
By comparison, Bell’s current capacity is about 500,000 barrels.
Bell’s Brewery is the fifth transaction involving a Michigan-based craft brewer and a multinational brewing conglomerate.
The trend started in 2014, when Grand Rapids-based Founders Brewing Co. sold a 30-percent stake to Spain-based Mahou San Miguel, which later increased to 90 percent in a 2019 deal.
Anheuser-Busch InBev in 2015 acquired a majority stake in Fennville-based Virtue Cider, and two years later acquired the remainder of the company. In 2017, Bellaire-based Short’s Brewing Co. sold a 20-percent stake to Petaluma, Calif.-based Lagunitas Brewing Co., a wholly-owned subsidiary of Dutch brewer Heineken International.
Most recently, Detroit-based Atwater Brewery, which operates a taproom in Grand Rapids, was acquired in January 2020 by Chicago-based Molson Coors Beverage Co., one of the largest international brewing conglomerates.
— MiBiz Editor Joe Boomgaard contributed to this report