New Belgium Acquires Magnolia Brewing, Forms Additional Partnerships

As of late, many craft beer buyouts are marked with controversy, confusion, and a cornucopia of internet hate from craft beer fans. This week, however, New Belgium Brewing announced its acquisition of Magnolia Brewing, a craft beer consolidation that brings the two brewers together in a new structure with New Belgium as owner and the partnership as a subsidiary.

In addition, Belgium’s Oud Beersel and Elysian Brewing founder, Dick Cantwell join as minority partners.

Even as Florida-based Funky Buddha Brewing makes a splash for “selling out” to Constellation Brands this week, New Belgium exemplifies the possibility of independent brewers joining together in a craft beer consolidation to remain independent, rather than selling out to a global conglomerate.

In this case, New Belgium formed a “group” to purchase the assets of Magnolia Brewing, an agreement entered into as part of a bankruptcy proceeding. The deal also includes minority partners, Dick Cantwell (who promptly left his position at Elysian after the brewery was acquired by Anheuser-Busch InBev in April 2015), and Oud Beersel, a Belgian lambic producer which has a longtime relationship with New Belgium.

In laymen’s terms, said Bryan Simpson, New Belgium PR director and employee owner (New Belgium is wholly employee owned), the new company—currently using the working title of “Ripple,” though that will likely be changed—is a subsidiary of New Belgium, with Dick Cantwell and Oud Beersel as minority partners.

As part of the deal, Cantwell will take over as head of brewery operations at Magnolia, working alongside Magnolia founder, Dave McLean. Simpson told Men’s Journal, “Dave’s title is still TBD, but he will be brewing right alongside Dick and they will be working on innovation together.”

In the announcement, Cantwell said the new partnership is “the natural evolution of a longstanding strategy of collaboration between myself, New Belgium and Oud Beersel.” He also said he’s “tremendously excited to be back in the beer business and looking forward to working with the team at Magnolia to develop new beers and new ideas.”

Oud Beersel’s role is to “[join] the partnership as a contributing experimenter, with the goal of eventually shipping containers of its traditionally-produced and spontaneously fermented beers for blending with Magnolia-crafted beers,” according to New Belgium. This will include the installation of a coolship, a flat, traditionally copper vessel used to cool wort and begin fermentation of lambic and other “wild” beers; and foeders, which are essentially giant wooden barrels that stand upright to ferment and age beers.

Since a beer can't technically be called a “lambic” unless it is produced in Belgium, the new beers produced at Magnolia in partnership with Oud Beersel “will not be called lambics but ‘blended’ beers, much like New Belgium’s Transatlanque Kriek,” Simpson said. “There will be ales, lagers, hybrids and blends using spontaneously fermented lambic beer from Oud Beersel and wood beer from New Belgium.”

New Belgium also said Magnolia's locations will continue to operate with its current staff and brands.

“The plan is to build an alliance that brings varied talent and experience to a combination of old and new, not to turn Magnolia’s Haight Street and Dogpatch locations into New Belgium brewpubs. ‘Brewing With Friends’ if you will. It is likely that much will seem unchanged in Magnolia’s tap lineup, even as new beers are developed and introduced, and over time, the fruits of more patient labors begin to appear,” said the release.

Kim Jordan, New Belgium co-founder and executive chair, added, “We’ve been looking for ways to diversify our assets and expand our community. These two tap rooms are right in the heart of historic San Francisco neighborhoods, a place Dick (Cantwell) and I call home. Magnolia makes excellent beer and plays an important role in the community. We’re excited about the possibilities and look forward to continuing our journey while honoring Magnolia’s history and presence.”