It’s that time of the year for big deals in the beer world. On the heels of Anheuser-Busch InBev’s announcement that it had acquired Houston’s Karbach Brewing Co., word came in Thursday that Michigan-based New Holland Brewing will enter a long-term partnership agreement with Pabst Brewing Co. beginning in early 2017. The partnership will focus on the national distribution and sales of New Holland’s full beer portfolio, according to a release sent out Thursday morning.
The deal, says New Holland founder and president Brett VanderKamp, had been in the works for several months and was especially appealing because it allowed his brewery to retain independence.
“I didn’t get a ‘no’ when I said we wanted to remain 100 percent independent. Most other organizations would say that’s not in their business plans, but Pabst was open to it from the beginning, and the deal reflects that.”
According to the release, all of New Holland’s beers will continue to be brewed in Michigan, and the brewery’s spirits, restaurant and retail operations will continue to operate as they currently do. The deal does not give Pabst equity stake or put and call options (the ability to buy or sell company stock), and does not include ownership transfer plans, VanderKamp says. It does, however, allow Pabst to sell all of New Holland’s beers to wholesalers nationwide as part of the brewery’s high-end portfolio, and leaves room for the production of New Holland beers at Pabst facilities, though VanderKamp says there are no plans for contract brewing to occur anytime soon.
“I don’t have a crystal ball, but the current plan calls for all the beer to be produced in Holland, and we have a lot of room to continue our growth there,” he says.
The deal did not include investment in a new brewing facility or additional equipment, VanderKamp says. New Holland will produce around 35,000 barrels of beer this year; the current facility has the capacity for up to 100,000 barrels.
A major focus of the partnership, according to the release, will be increasing market share of Dragon’s Milk, New Holland’s 11% ABV, bourbon barrel-aged imperial stout. The beer currently represents about 35 percent of New Holland’s production and 50 percent of its sales.
“Our challenge has always been getting to market,” VanderKamp says. “Our Dragon’s Milk distribution, if you were generous, is at 2 or 3 percent of what it could be. There’s massive upside to a partner coming in and increasing that distribution.”