Bevscape DEALTIME 2 Brooklyn Brewery Sells Stake Brooklyn Brewery revealed in October that it had struck a two-pronged deal with Japan’s Kirin Brewery that would include the sale of a minority stake and the establishment of a new joint venture in Japan. As part of the two companies’ capital partnership, the Japanese beer company will acquire “an approximately 24.5 percent stake” in Brooklyn Brewery. Specific financial terms of the sale were not disclosed, but Nikkei Asian Review, citing sources close to the transaction, valued it at “several billion yen.” The deal will also include the founding of a new joint venture in Japan, which Kirin said would launch in January. Brooklyn Brewery will control 40 percent of that company. Additionally, the two companies plan to “consider the development of original products for the Japan market and the launch of a restaurant business,” accord-
ing to the release. Kirin will also help Brooklyn expand distribution into Brazil. Brooklyn’s minority sale to Kirin is one of the higher-profile craft beer deals in 2016. Other notable transactions this year include Victory Brewing’s sale to Ulysses Management-backed Artisanal Brewing Ventures, Cigar City Brewing’s sale to Fireman Capital Partners-backed Oskar Blues Holding company, Devils Backbone’s sale to AnheuserBusch InBev, a trio of small craft brewery purchases by MillerCoors and VMG Partners’ $90 million investment into a limited partnership called “VMG Stone Brewing Coinvestment.” In 2015, Kirin Brewery posted sales of approximately $3.97 billion, according to public financial statements. Through the first six months of 2016, however, sales have declined more than 12 percent, to $1.76 billion.
Selling less than 25 percent to Kirin — Japan’s second-largest beer maker — means that Brooklyn, which last year produced 277,000 barrels and was ranked by the Brewers Association as the 12th largest U.S. craft brewery, will be able to remain an independent craft brewery in the eyes of the trade organization. The BA only recognizes beer companies that are less than 25 percent owned or controlled by “an alcohol industry member that is not itself a craft brewer” as “independent.” In a posting to his company’s website, Brooklyn Brewery president Robin Ottaway pointed to the BA definition and said his number one goal when negotiating a deal was to remain independently owned and operated. “Let me be entirely clear – Eric [Ottaway] and I will continue to control and operate the Brooklyn Brewery for many years to come,” Robin Ottaway wrote. First Beverage Group acted as the financial advisor to Brooklyn Brewery and Nomura Holdings Inc. advised Kirin.
LEGAL Barefoot Bucha Owner Settles Lawsuit With Gallo, Agrees to Change Brand Name Conscious Cultures, the maker of Barefoot Bucha, a Virginia-based kombucha brand, has agreed to settle a trademark infringement lawsuit filed against the company by Barefoot Wine owner E. & J. Gallo. Conscious Cultures issued a press release stating that founders Ethan and Kate Zuckerman have not admitting to any wrongdoing, but agreed to change the name of Barefoot Bucha. In 2015 Gallo filed a notice of opposition with the Trademark Trial and Appeals Board (TTAB) seeking to block Conscious Cultures’ trademark application for Barefoot Bucha. Gallo described the kombucha brand’s name and logo as “confusingly similar in appearance, sound and meaning” to those of Barefoot
Wine. In the following months, the two sides engaged in litigation and sought a resolution determined by the TTAB. However, things changed in April, when Gallo decided to sue Conscious Cultures in federal court. “The lawsuit… alleging trademark infringement asking for monetary damages, that’s a very, very different kind of scenario you’re looking at as a small business,” Kate Zuckerman told BevNET. “Looking at it as small business owners, the time and energy expenditure, not to mention financial, we realized we were out of our league going through a federal trademark trial process which is very different from that from the TTAB.” In an emailed statement to BevNET, a
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Gallo spokesperson said that the company is “pleased that Conscious Cultures and E. & J. Gallo Winery have reached a mutually agreeable resolution.” Complete details of the settlement were not disclosed by either company, however, Zuckerman said that Conscious Cultures has a goal of completing the rebrand by the beginning of next year. Although she said that “it’s hard to let go” of the Barefoot Bucha name, Zuckerman is excited about plans to crowdsource a new name, logo art and tagline for the brand. The company launched a contest to rename Barefoot Bucha. The winner will receive a year’s worth of kombucha, supplied by Conscious Cultures in a partnership with Whole Foods Market.