Anheuser-Busch In-Bev announced that it has agreed to acquire its ninth craft brewer, Texas-based Karbach Brewing Co. for an undisclosed amount.
Karbach will join Anheuser-Busch’s craft division known as The High End along with existing acquisitions including Blue Point, Elysian, Golden Road, Four Peaks, Devils Backbone, SpikedSeltzer, Goose Island and others.
Founded only in 2011, over the past five years Karbach Brewing has become one of Houston’s fastest growing breweries producing 17,000 barrels in 2013 and 40,000 in 2014. The brewery then expanded its capacity with the addition of a new brewhouse at the end of 2014 and a restaurant, tap room, and biergarten in May 2015. Anheuser-Busch announced that it plans to invest in the craft brewer to bring production up to 150,000 barrels by 2019.
“We are so grateful for the growth we’ve experienced in this first phase of Karbach, but we have maxed out our growth potential on our own, and a partnership with The High End will open doors to keep innovating and experimenting with our unique styles and continue to expand,” said co-founder Chuck Robertson.
Texas has nearly 200 craft brewers, but Karbach has set itself apart through its core brews including its flagship brand, Hopadillo IPA, as well as Weekend Warrior, Weisse Versa Wheat, Love Street, and its seasonal offerings that include the award winning Karbachtoberfest.
“Karbach is the heart and soul of our beer industry careers, and we are thrilled about this new partnership with The High End and what it will mean for our dream to give more Texans the most unique, unexpected and exciting beers they’ll have fun drinking,” said Karbach co-founder, Ken Goodman.
This acquisition follows closely on AB InBev’s acquisition of SABMiller for $104 billion – a transaction that created the largest brewing company in the world. Throughout the acquisition process, ABInBev has been pursuing a string of craft brew additions to its newly launched craft brew portfolio of companies referred to as The High End.
In 2015, the craft brewing industry posted 13 percent growth for the year marking the eighth consecutive year of double-digit growth. Reaching 4,269 brewers, the sector accounted for 12 percent of the total U.S. beer market last year, up from a market share of 5.7 percent in 2011, indicating a more than doubling of the market share in just four years, reports Fortune.
“The figures show there is still strong growing demand for fuller flavored products from small brewers,” Bart Watson, chief economist of Brewers Association told Fortune. “It shows the premiumization trend that we’ve seen the last few years has room to run.”
It is this “premiumization” trend within the beer sector that AB InBev is tapping into with their High End portfolio of companies. Must like premium coffees or spirits which account for up to 40 percent of their respective markets, the Brewers Association has a target in sight of craft beer gaining 20 percent of the total U.S. beer market by 2020 Mr. Watson told Fortune, reflecting the potential for growth that still exists in the segment.
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Lynda Kiernan