Tuesday, November 19, 2019

So what's the deal with New Belgium? Read on.



So the official press release's headline posted by New Belgium reads:
New Belgium Brewing to join Lion Little World Beverages

I heard the news about New Belgium joining Lion Little World Beverages from a text earlier this afternoon from one of my fellow craft beer homies and honestly, I was floored by the initial news. It has been an amazing run crafting the Piano Keys Dark Chocolate and Vanilla Imperial Stout with this very progressive, employee-owned brewing company that I have always respected. The experience has been one of the most rewarding things I have ever done in my entire career as a beer enthusiast, journalist, and entrepreneur. The team has become like a family to me with so many endeavors we have accomplished to promote diversity, including symposiums, working alongside Fresh Fest, pouring at Hunahpu, and so many other projects during our collaboration. It's been a crazy, enlightening, and unforgettable ride.
So when I received the news that New Belgium was joining with this Australasian
brewer as a 100-percent bought acquisition via all cash, I did not know what to initially think, but I do know that their staff, business practices, and efforts with sustainability would not change with this merger. This note by Co-Founder Kim Jordan certainly shed some light of this probable transition including this last statement that concluded the letter:

*all of this is of dependent on our co-workers who also are our shareholders, approving the conditions of this deal.

There is also the official press release here.
So what happens next? I say we wait to see what the employees have to say and how this will change New Belgium going forward.
In the meantime, I appreciate everyone who has reached out and continues to on my behalf and supported my collaboration with New Belgium. I do not know what the next step is with Piano Keys, but I am certain we will make the best of the opportunity at hand. Stay tuned everyone. The first run with this beer has been incredible. I trust the marathon will continue and hope the people who have made New Belgium what it is and has always been will ultimately win.

Peep Kim Jordan's letter direct from New Belgium's website:



Hey New Belgium fans!

You’ve probably read the big news that New Belgium Brewing is set to join Lion Little World Beverages– the global craft beer division of Australasian brewer, Lion, which is part of Kirin.  I’m assuming you’re here to learn more.  If there are three things we’re known for at New Belgium, it’s our dedication to innovation and excellence in beer, our commitment to the culture and well-being of our coworkers and our crazy enthusiasm for being a business role model.  We were thinking about these three things as we began to explore being a part of the Little World family.  Lion, Kirin, and the Little World team liked that about us, and that paved the way for this decision.* 

We are a Certified B Corp.  Which means that we’re dedicated to being a force for good as a business.  Right away, the folks at Little World told us that they were captivated by this model, and they are asking us to retain our B Corp status. In addition, Lion announced last week that they’ve made a pledge to be carbon neutral in their Australian and New Zealand breweries starting in 2020.  That’s exciting! And now we will be accelerating our own journey toward Carbon Neutrality.  Imagine a world where publicly traded companies are dedicated to business as a force for good, taking into account an array of stakeholders- their workers, their shareholders, and the environment.  This is a model for a big, compelling future and is in line with the needs of our rapidly changing world. 

We’ve been brewing eclectic Belgian style beers, aging beer on wood, and generally pushing at the boundaries of beer innovation as pioneers for almost three decades. Little World are brewers’ brewers.  They loved the sour beers from our renowned wood beer cellar! When we noticed that they were really interested in the breadth of our beer portfolio, and they began to share stories about their own innovation, we felt their commitment to this ancient craft.  They are as devoted as we are, and their resources in R&D and innovation can only help to grow our own capabilities.      

We will no longer be employee owned and it would be easy to see that as a drawback.  But here’s another way to look at it. More than 300 employees are receiving over $100,000 of retirement money with some receiving significantly greater amounts.  Over the life of our ESOP, including this transaction, the total amount paid to current and former employees will be nearly $190 million.  We will have helped a significant number of people realize the upside of having equity in something, being a part of the American Dream!  Little World is committed to strategies to broadly share the wealth going forward, like profit sharing, best-in-class healthcare and a generous family leave policy.  Our on-site wellness clinic will carry on.  Continuing to practice the rest of what makes New Belgium so cherished by its coworkers: a playful, loving vibe, a culture that encourages learning and experimentation, and an entrepreneurial spirit, will be up to all of us. We are more than up for that challenge and Little World will support us all the way. 

We all know the world of craft brewing is dynamic.  In the US, the number of breweries has nearly doubled in the last four years to 7,500.  At New Belgium, we’ve needed to balance the cash demands of our ESOP and selling shareholders, with the operational need for more capacity (hence the brewery in Asheville) and the need to grow our brand by reaching more beer drinkers with our brand message.  These are a lot of competing priorities and it has been difficult to do all of them as well as we’d like. As we surveyed the landscape over the last several years, we found that options to raise capital while being an independent brewer weren’t realistic for us. Some of the most widely used options by craft brewers were going to compromise a lot about what makes New Belgium great; environmental sustainability, and a rich internal culture.  Some of these were going to lead to cost-cutting or a lack of focus on sustainability. Having the support and resources of Lion Little World Beverages, allows us to attend to those competing priorities and utilize our brewery capacity to its fullest. 

Joining Little World Beverages to anchor a US Craft Beer platform is so congruent with all the things we’ve committed ourselves to at New Belgium that we jumped at the opportunity to offer this to our shareholders. We’re thankful for Lion and Kirin’s support of our values and I’m excited to help to build a collective of breweries along with the management of New Belgium, who share the same commitment to delighting beer drinkers: with great beer, great businesses and great collaboration amongst us. 

Of course, there are always people to thank: boundless thanks to all our passionate customers: you smuggled beer across state borders a la Smokey and The Bandit, you got tattoos, you make our hearts swell with pride with your care.  To our retailers and distributors: nothing we’ve done could have been done without you, huge props! To all of our friends inside the craft brewing industry and in so many other places, thank you thank you --we treasure your friendship now and in the future.  And last, but certainly not least to our amazing New Belgium Family, what can I say, but we have created the most loving, curious, warm, interesting fun thing together and I burst with pride every day.  This is not the last chapter, there’s more fun to be had.

We can’t wait to see what happens next.  We are as committed to being a vibrant, values-driven enterprise as we’ve ever been, and we look forward to having a beer with all of you along the journey! 

Here we go.

Much love,

Kim

*all of this is of dependent on our co-workers who also are our shareholders, approving the conditions of this deal.