Appalachian Mountain Brewery to enter partnership with Craft Brew Alliance
December 4, 2014
A new wrinkle has entered the Appalachian regional craft beer landscape that could boost a small local brewery to the next level. It could also be a model for further growth of a major U.S craft brewer.
This week, Appalachian Mountain Brewery, Inc. (AMB) of Boone, NC, and the Oregon-based Craft Brew Alliance (CBA) announced their intent to explore potential opportunities to drive business growth and shareholder value through sharing resources in key strategic areas including, but not limited to, brewing, purchasing, distribution, and sales.
“Since AMB was founded, we have been consciously committed to finding ways to sustainably brew high-quality beer and give back to our communities in the Appalachian Mountains so that future generations can prosper and enjoy these great resources that we’re borrowing from them,” said Sean Spiegelman, chief executive officer, Appalachian Mountain Brewery, Inc.
“I can think of no better path forward for our company than to create a strategic partnership with a respected leader like CBA. We are extremely excited to look at how AMB can leverage their technical expertise and extensive experience helping brands grow while maintaining their focus on local community, philanthropy and the environment. We’re also looking forward to brewing a collaboration on both coasts in a much larger format so that more of our consumers can enjoy the outstanding craft beer.”
Appalachia: a craft beer battleground
The Appalachian region of North Carolina has become a battleground of sorts in the move of larger craft brewing entities seeking to expand markets. Oskar Blues, Sierra Nevada, and New Belgium brewing companies have all constructed new breweries in the Asheville area; however, this week’s announcement is a distinctly different approach. This strategic partnership promises to help a local brewery build its brand, rather than just boosting a larger national brewery’s own brands in the Appalachian region.
Down the road, could a true merger between the two companies be in the cards? We’ll just have to wait and see. If things go well with the strategic partnership, our guess is that a more complete alliance is a distinct possibility.
As it stands, the partnership would likely speed up AMB’s expansion plans, including getting its new canned beer in distribution across North Carolina. With CBA’s ability to assist AMB with brewing and distribution, it wouldn’t be a surprise to also see the AMB brand leaping into other close by states fairly soon.
Appalachian Mountain Brewery got familiar with CBA back in May 2014 when AMB won the Startup Brewery Challenge at the Brewbound Session in Boston. CBA is a three-time sponsor of the contest, in which craft brewery owners have three minutes to present their business models and pour one beer that receives immediate feedback from an expert panel of judges. Following the Challenge, the two companies had an opportunity to work together on a collaboration beer. The companies say it was during this experience that they discovered a strong cultural similarity and mutual interest in exploring a longer-term partnership that would align with both companies’ values and business objectives.s.
The statement on the strategic partnership released by CBA and AMB states that they share several similarities that reinforce the strategic alignment and cultural fit between both companies, including distinctive and identifiable brands that are rooted in real local heritage and a strong belief in the importance of community, philanthropy and sustainability.
CBA an industry powerhouse
CBA is primarily West Coast based, although its also owns a production brewery in New Hampshire. Its portfolio of brands includes three of the industry’s pioneering craft brewing companies. Founded in 2008 by a merging of Widmer Brothers Brewing and Redhook Brewery, CBA then added Kona Brewing in 2010. CBA formerly owned a 42% stake in Chicago’s Goose island Brewing Company but sold that to Anheuser-Busch in 2011.
Some camps within the craft beer universe have questioned CBA’s status as a craft brewer since about 32% of the company is owned by mega-brewer Anheuser-Busch InBev. But the A-B InBev connection provides CBA brands some distinct competitive advantages, the most important of which is access to A-B InBev’s distribution network.
While not specifically stated, the AMB-CBA agreement would likely give Appalachian Mountain Brewery brands access to this powerful wholesaler network as well as to the strong marketing resources of CBA.
This current move by CBA seems to be introducing a new brand development strategy that could foreshadow additional alliances between it and smaller craft breweries in other parts of the country.
Canning expands AMB footprint
AMB has recently begun canning its beers with the aim of expanding distribution of its cans throughout North Carolina. The company is initially focused on canning its three flagships: Long Leaf IPA, Blonde Ale, and Porter.
Sean Spiegelman had previously stated that adding can packaging is “a turning point in our history as a small-scale brewery.” He predicted that the brewery will look back on 2014 “as the year that put us on the craft beer map.”
The CBA strategic partnership can now be added to the list of AMB’s 2014 accomplishments — a partnership agreement that may be the most significant step toward really putting AMB on the craft beer map.
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