World’s Largest Cannabis Company Acquires 8 Anheuser-Busch InBev Owned Brands Including Shock Top for Only $85 Million
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Anheuser-Busch InBev (AB InBev), the parent company of Bud Light, announced yesterday that a deal is in place to sell six beer brands, along with a cider and energy drink brand, to cannabis company Tilray Brands. The sale will leave AB InBev with quite a few beer brands and craft beer partners including Kona Big Wave, Stella Artois, Goose Island Beer Co. and Elysian Brewing. The new deal with AB InBev is expected to close before the end of the year. It will make Tilray the fifth-largest craft brewer, giving it 5% of the market, and the fifteenth-largest brewer in the US.
The deal will see Tilray Brand acquire Shock Top, Breckenridge Brewery, Blue Point Brewing Company, 10 Barrel Brewing Company, Redhook Brewery, Widmer Brothers Brewing, Square Mile Cider Company, and Hiball Energy.
“Tilray Brands reached out to us early this year with interest in purchasing these brands and breweries, and since then, we’ve had many positive conversations that led to today’s announcement,” said Andy Thomas, President, The High End at Anheuser-Busch. “We are committed to working with Tilray Brands over the coming months to ensure this is a smooth transition for the people who are working every day to get these amazing beers and beverages to consumers across the U.S.”
Tilray is considered the largest cannabis company in the world but this isn’t its first move into the alcohol industry. The company currently owns several alcohol brands located across the US including SweetWater Brewery, Breckenridge Distiller, Green Flash Brewing Co., Alpine Beer Company and Montauk Brewing Company.
Tilray will also acquire all employees, breweries, four production facilities, and eight brewpubs across the US and its output will increase from 4 million to 12 million cases annually.
Although the purchase price was undisclosed, according to an 8-K filing by Tilray the price appears to be $85 million in cash. The cost of these brands seems relevantly low considering Tilray purchased SweetWater for $300 million in 2020.
Chairman and CEO of Tilray Brands, Irwin D. Simons said, “Today’s announcement both solidifies our national leadership position and share in the U.S. craft brewing market and marks a major step forward in our diversification strategy. We are excited to work with the teams behind these iconic brands that command great consumer loyalty and have a history of delivering strong award-winning products with tremendous growth opportunities. Tilray is fully committed to invest in and champion the future of the U.S. craft beer industry by fueling new innovation that excites and further accelerates the growth of its consumer base.”
After the merger of cannabis companies Aphria and Tilray, Tilray Brands was formed. Simons took leadership of the newly formed company and the deal with AB InBev is all part of his plan laid out less than three years ago. He introduced a plan to ready Tilray Brands to be the first cannabis company to aggressively enter the US market, assuming cannabis becomes federally legal.
Simon continued, “Leveraging the deep CPG expertise of Tilray’s leadership team and acquisition integration track record, we intend to drive both revenue and cost synergies, while significantly expanding national distribution to coveted markets across the U.S. and internationally. In a matter of three years, Tilray has solidified its leadership position in the craft beer industry, and we fully intend to be that change agent that reinvigorates the sector. Upon federal cannabis legalization, we expect to leverage our leadership position, wide distribution network and portfolio of beloved beverage and wellness brands to include THC-based products and maximize all commercial opportunities.”
The new deal positions Tilray to have important hubs across the nation.
Ty Gilmore, president of U.S. Beer at Tilray Brands said, “Looking ahead, we will further capitalize on the potential of these brands through product innovation, retailer partnerships, and expanded distribution into key markets, including the Pacific Northwest and California.”
The timing of this sale by AB InBev could suggest a recovery effort after the backlash and huge losses resulting from the Dylan Mulvaney controversy. Although, the beer giant may simply be reacting to the steady decline of beer sales in the US. In 2022, spirits overtook beer in total US sales and the trend appears to be holding steady.
In particular, craft beer sales have slumped over the last few years. The industry saw declines in 2022 with 2023 projected to also see lagging growth. It’s possible Tilray Brands will have the capacity to breathe new life into the large-scale craft beer market. However, it may end up being a risky gamble since part of the company’s strategy relies on federal cannabis legalization which has seen little movement in the government and remains politically divisive.
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