Popular Japanese beer company Kirin (or, rather, its parent company Kirin Holdings Company) has agreed to take on a minority stake in Brooklyn Brewery. This is actually the first of five investments in which a Japanese company is taking on a US beer company. This one just so happens to be a Japanese beer company acquiring a US beer company.

Kirin admits that this investment is an attempt to compensate for a) Japan’s shrinking population and b) the country’s overall decline in traditional beer brands. For example, shipments of beer (and related potables) fell in Japan by about 20 percent—from 573 million cases to 425 million cases, in 2015—according to data from the Brewers Association of Japan.

Obviously, this is an international trend—more interest in craft and local breweries—so this move might make a lot of sense. Indeed, Kirin (among others) have been experimenting with specialty brews because craft beers are on the rise.

“The current beer market is in a transition period,” Takayuki Fuse, president of Kirin Brewery, said in a briefing in Tokyo on Wednesday. “We need to vitalize the market, need to make it attractive, or there’s no future.”
By acquiring an American brewery, the Japanese company would have immediate access to a handful of American craft beers to sell at home.

“The country’s top four beer makers are competing ruthlessly with each other, so with value-added products like craft beers, we can get our heads above such competition,” explains Kirin core beer unit president Takayuki Fuse.

At the same time, Brooklyn Brewery is getting ready to expand. For example, earlier this year the company signed a 40-year lease on a 75,000 square feet at Brooklyn’s Navy Yard, where the company plans to establish offices and a brewery with beer garden.

“This helps us execute those strategies,” explains Brooklyn Brewery chief executive Eric Ottaway. “We did not want to have to take on crushing amounts of debt or go to private equity and face pressure to flip the company. This gives us long-term, patient capital.”
Brooklyn Brewery was co-founded by former war correspondent-turned banker Steve Hindy. He insists that the company will remain independent with its management intact. The company is based in Brooklyn, of course, and is actually the 12th largest maker of craft lager (based on Brewer’s Association 2015 beer sales volume).

LEAVE A REPLY