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Lagunitas Is Going Global in New Deal With Heineken

by Emily Lee on Sep 10, 2015 in Beer

On Tuesday, Lagunitas Brewing Co. and Heineken International announced a partnership to take the Petaluma-based company’s hoppy craft beers and iconoclastic image across the globe. Some believe this could be the most significant deal yet in the American craft brewing industry.

The size of the deal, along with its international ambitions and the reaction it has generated on social media, eclipses any of the recent mergers and acquisitions transforming the U.S. craft beer industry.

Though best known for its flagship IPA, Lagunitas sells two-dozen different beers with snarky labels as Sucks, Hop Stoopid, and Undercover Investigation Shut-Down Ale, named after a 2005 marijuana bust at the main plant.

Founder and owner Tony Magee described the agreement with Heineken as a 50-50 partnership. Under the deal, Lagunitas will be able to utilize the Dutch company’s global production and distribution network while retaining control over its business operations. Magee will remain chairman, and the marketing, sales, and production teams — as well as its suppliers and distributors — will stay the same.

Still, news of the deal has irritated longstanding Lagunitas fans – a population made up of craft beer loyalists who, by and large, detest the growing corporatization of the industry. Ultimately, the appeal of going global trumped the demands of the craft beer community — which should come as little surprise. In its twenty plus years of operation, the California-based brewery has been expanding constantly.

“There is the whole world to think about,” said Magee, who started running Lagunitas from his own kitchen in 1993. As of 2014, the company is the fifth top-selling craft brewery in the US. “We can partner with one of the world’s greatest family-owned, really beer-centric companies to find our way into all of these markets globally.”

Indeed, it seems as though the global market is ripe and ready for a craft beer expansion. In 2014, craft beer sales jumped 17.6% in the U.S., while the overall beer market grew just 0.5%. As of right now, Lagunitas is already available in the United Kingdom, Sweden, and Japan. Their next international target will be Mexico.

According to Magee, Heineken also stands to gain a lot from the deal. “It would give them a platform for them to tap into some of that excitement around (craft beer). For a long time, they have been one of the world’s great specialty brewers,” said the veteran brewer. “As I learned about their culture, (we) saw ourselves in it. We weren’t very different people at all.”

It’s true. Though Heineken was founded in 1864, the company is still family-owned — controlled by Charlene de Carvalho-Heineken (one of the world’s richest women with an estimated worth of $11 billion).

The deal is expected to close in the fourth quarter. Financial terms were not disclosed though it’s estimated that Lagunitas was valued at roughly $1 billion. 

Photo via Lagunitas Brewing Co.


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