Craft beer industry gets major boost from foreign investors

Foreign beer makers are taking some big swigs of the frothy US craft beer business.

Just this week, the number of breweries in this country surpassed 5,000 for the first time, up 1,000 in the past year and light years ahead of the 50 in operation in the mid-1980s, according to the Brewers Association.

Fueling some of this growth is the capital flowing in from foreign breweries, including giant conglomerates like Anheiser-Busch InBev, which bought nine US breweries over the past couple of years and even smaller operations like Agrial, a French organization that bought Seattle Cider Company and Two Beers Brewing in September.

“The craft beer industry has gone global and these overseas breweries see the US as the most developed and best market for it,” said Benj Steinman, president of trade publication Beer Marketer’s Insight.

“Their own markets are frequently declining and they have the resources to invest,” Steinman said. “There are a lot of them sniffing around here.”

The US craft beer industry has generated 50 investments over the past two years, according to Beer Marketer’s Insight, including Heineken taking a 50 percent stake in California-based-Laguintas last year, and Japan’s Kirin Holdings buying 24.5 percent of Brooklyn Brewery this year.

When UK-based BrewDog opens a $30 million, 110,000-square-foot brewery in Columbus, Ohio, early next year it will become the first major overseas brewery to open its own facility here.

“If they are successful, we’ll see more like it,” said Bart Watson, an economist at the Brewers Association. “I’m sure there are other foreign brewers who are watching BrewDog.”

BrewDog, known for its Punk IPA, is hiring 130 Ohioans, and is on track to start brewing in February. It’s already made a splash here before its first cans begin rattling on a conveyor belt.

Two months ago it successfully lobbied the Ohio legislature to eliminate a law that limits the alcoholic strength of beer to 12 percent.

“As a company we have a history of changing laws we don’t like,” boasted BrewDog, co-founder James Watt.

BrewDog makes several beers that pack a punch including one that holds the world record for the strongest beer — “The End of History” a 55 percent alcohol beer.

The Scottish brewery has plans to add brew pubs in the US, and has launched a $50 million crowd-funding campaign. It’s raised $3 million thus far. It also has distribution deals to ship its beers to six states, including New York and New Jersey.

BrewDog was available in the US for several years until 2015, when it pulled out of the market because, according to Watt, it became too cost prohibitive to ship its suds here.
“It was also almost at the end of its shelf life by the time it arrived in the US,” Watt said. “Now we’ll have much fresher beer to offer.”