Craft or Not Craft? Exploring the Definition of Craft Beer in the Wake of Tilray's Acquisition of Breckenridge Brewery
Key Highlights :
The craft beer industry has seen a massive surge in popularity in recent years, with craft brewers becoming a major player in the beer market. But what exactly is craft beer? The answer to this question is more complicated than one might think, and it has become even more complicated with the recent announcement of Tilray's acquisition of Breckenridge Brewery.
Breckenridge Brewery has been owned by beverage giant Anheuser Busch InBev since 2015, when it was acquired in a deal that sent shockwaves throughout the industry. This acquisition made Breckenridge Brewery ineligible to be considered a “craft” brewery according to the definitions set by the Brewers Association and the Colorado Brewers Guild. But with Tilray's acquisition of Breckenridge Brewery, that may soon change.
The cash deal, valued at $85 million, includes eight AB InBev brands: Shock Top, 10 Barrel Brewing Co., Blue Point Brewing Co., Redhook Brewery, Widmer Brothers Brewing, Square Mile Cider Co., HiBall Energy, and Breckenridge. When the acquisition is complete, the Brewers Association will begin reporting production data from all of Tilray's brands in its craft beer figures. According to the BA, Tilray is considered craft since it is owned by a company that is not yet large. The BA considers breweries that make fewer than 6 million barrels per year and aren’t more than 25% owned by another alcohol manufacturer that isn’t itself a craft brewery to be craft breweries.
The Colorado Brewers Guild, meanwhile, limits the production threshold for a “craft” brewery to 2 million barrels annually. Executive Director Shawnee Adelson said she believes Breckenridge Brewery will now qualify and be able to rejoin the guild should it so choose. Individually, Breckenridge Brewery produced 100,000 barrels of beer in 2022, a decrease of 9% compared to 2021, the BA reports.
Ownership or designation may not matter to many people, but Adelson maintained that it’s an important factor when it comes to a company’s access to resources like ingredients, hop contracts or advocacy. The Guild, for example, advocates on behalf of more than 300 small beer makers across the state to ensure their perspectives are represented when laws are changed.
Tilray's Chairman and CEO Irwin Simon believes the company will crack the top five craft breweries in the nation once the acquisition is complete. He plans to market to different generations of drinkers and explore high-alcohol, low-alcohol, and alcohol-free products. He also plans to create synergy between Breckenridge Brewery and Breckenridge Distillery, which Tilray also owns.
The craft beer industry has become increasingly competitive, with giants like AB InBev and Constellation Brands making acquisitions nearly a decade ago. But Tilray is now entering the market, and with their acquisition of Breckenridge Brewery, they are poised to make an impact. This acquisition will not only change the definition of craft beer, but it could also change the beer industry as a whole.
