Report: Magic Hat, Pyramid Breweries close to being sold to NAB
(South Burlington, VT) – A major shakeup reportedly looms with two of the top 10 regional craft breweries in the mix.
[7/28 Update: More speculation from a Magic Hat employee: "IBU is selling because Basso Capital Management (the investment group that financed the purchase of Pyramid / formation of IBU) pulled out (this is my understanding of the situation, it may not be completely accurate) which means that we are selling out of necessity." More here.]
According to a Beer Business Daily report, “North American Brewers is days away from closing the deal to purchase IBU (Pyramid and Magic Hat), say sources…” Harry Schuhmacher is probably the most connected beer reporter in the country (and this rumor has been floating about for at least a couple weeks now) so this appears to be reliable material.
IBU (or Independent Brewers United) is the merger between Magic Hat and Pyramid Breweries that formed back in 2008. Together, the two breweries sold almost 350,000 barrels in 2009 (New Brewer May/June ‘10) which would rank IBU as the eighth largest entity among all regional breweries (craft or non-craft). IBU made up 3.8% of all craft beer sales last year.
Who is the rumored buyer? That would be North American Breweries, Inc.:
“Headquartered in Rochester, NY, North American Breweries is a national platform for investments and growth in the beer and malt beverage industries. Formed in 2009, North American Breweries owns High Falls Brewing Company, one of the largest and oldest continually operating breweries in the United States, and is the exclusive marketer and seller of Labatt brand beer and Seagram’s Coolers in the United States. The company’s brands include the complete line of Labatt beers, including the flagship pilsner Labatt Blue and Labatt Blue Light; the Genesee line and the Dundee Ales & Lagers family, which includes the Original Honey Brown Lager; and Seagram’s Cooler Escapes and Seagram’s Smooth. It is also America’s exclusive distributor of several imports, including Steinlager from New Zealand, Toohey’s New from Australia, Thwaites from the U.K. and Imperial from Costa Rica; and a manufacturer of beer and other alcoholic and non-alcoholic beverages under contracts on behalf of other companies. North American Breweries is a portfolio company of KPS Capital Partners, LP.” – (KPS Capital Partners)
Going back to the statistics mentioned above, why are they important? There is the potential that these breweries will no longer qualify as “craft breweries” if sold to NAB though the specifics around how that plays out is better left to Brewers Association reps (who were unavailable for comment). As an example, some of the breweries involved with the somewhat recent formation of the Craft Brewers Alliance are no longer listed as “craft” and their production/sales figures excluded from craft beer charts.
One entity that certainly cares about whether this happens is the Brewers Association, an association that works for small brewers and cares a great deal about where our beers come from (see the Declaration of Beer Independence and BA Director Charlie Papazian’s small brewers poll). A lot has been made this year about legislation that could save Samuel Adams from being excluded from craft status once it reaches 2 million barrels in a year which could be in 2010. This is likely to concern the BA for those same reasons. Among the many goals that are possible for craft breweries to hit this year are ten million barrels brewed in 2010 and 5% volume market share domestically.
Otherwise, core craft beer consumers may be concerned because of the perceived quality hit that the brands could take under new ownership. A look at ratings on Beer Advocate, however, shows that Dundee, Magic Hat and Pyramid rate comparably. It goes without saying that being sold to a corporation doesn’t necessarily translate to lesser quality . . .
Be on the lookout for more on this story in the coming days and weeks.
You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
July 27th, 2010 at 8:15 pm
[...] Beer News is reporting, via Harry Schuhmacher, that the Magic Hat/Pyramid Breweries is very close, possibly days away, from announcing that they’re being acquired by North American Breweries, the entity created to take over Labatt’s distribution in the wake of the Anheuser-Busch / InBev merger. NAB also owns the Genesee and Dundee beer brands. Check out the full story at BeerNews.org. [...]
July 28th, 2010 at 8:42 pm
[...] rolled the merger of Vermont based Magic hat and Seattle based Pyramid breweries is now looking to sell the group. This is a case of get in strip the fat and then sell the money making business of selling beer. We [...]
July 28th, 2010 at 9:44 pm
[...] than 2 million barrels a year). The big breweries continue to gobble up craft brewers as well: Just this week, it was announced that Magic Hat (one of my favorite breweries) and Pyramid Breweries are close to [...]
July 28th, 2010 at 10:37 pm
[...] they are all stupid, much like dirty hippies. I kid, we love dirty hippies. Anyway we found this article that has apparently uncovered the selling of Magic Hat and Pyramid to NAB. North American [...]
July 29th, 2010 at 12:39 pm
[...] no knowledge of the Magic Hat deal, nor am I a “Braggot,” there is much being batted about on discussion boards and blogs this week, and it remains likely we’ll know more soon. This much is fact; in 2008 Independent [...]
July 31st, 2010 at 11:49 am
[...] For additional information on this story, check out BeerNews’ coverage here. [...]
August 12th, 2010 at 7:34 pm
[...] first surfaced with a Beer Business Daily report two weeks ago. [Ed. note: Check out my own analysis at the time here.] After news of the sale leaked, Newman [...]
July 27th, 2010 at 7:08 pm
I’ve lumped these two together in my mind, already. I’m sure this will rock the overly-fruity hefeweizen market.
This comment was originally posted on Reddit
July 27th, 2010 at 7:22 pm
Oh my god, I just came home to post this. I work at Magic Hat. :*( Edit: Alright, I just deleted my submission – should have looked first! I think I have a good understanding of what is going on if anyone has any questions.
This comment was originally posted on Reddit
July 27th, 2010 at 10:00 pm
I think I speak for pretty much everyone who I know who has tried your beer: Don’t move the brewery and don’t change the beer!! Thank you for sharing, very interesting seeing behind the scenes. Also, thanks for sending us a bottle opener when we sent in the bottle caps, it gets a lot of use. And thanks for the cool things under the bottle caps, we currently have "The Wierd should never be Feared", "Be here now", and "Truthsayers beat Soothsayers" stuck to our fridge via magnets. Oh, and the beer is great too
This comment was originally posted on Reddit
July 27th, 2010 at 10:26 pm
Thank you, I will pass along your kind words. My favorite cap is, "Help! I’m Trapped in the Brewery!"
This comment was originally posted on Reddit
July 27th, 2010 at 10:31 pm
Has anything changed with #9 recipe over the years? It’s been something I’ve heard many times in last few years, "Is it me or do these not taste like they used to?". And also, when are Fat Angel’s gonna make a comeback?
This comment was originally posted on Reddit
July 27th, 2010 at 10:51 pm
Magic hat always seemed like a "gateway" beer Into the craft beer scene. Either my taste has improved, or they have gone downhill since my first experiences. Either way, this news will probably mark a decline, and maybe an end to the quirky small time brewery we all know and love. Here’s to hoping I’m wrong.
This comment was originally posted on Reddit
July 27th, 2010 at 11:04 pm
Roxy Rolles is good, #9 is ok, but I think you are about right, they are mostly "ok"
This comment was originally posted on Reddit
July 28th, 2010 at 12:09 am
I’m a big fan of their Hefe, but the rest are average.
This comment was originally posted on Reddit
July 28th, 2010 at 1:00 am
Haha came to say something similar but yours is much better.
This comment was originally posted on Reddit
July 28th, 2010 at 6:56 am
The ingredients haven’t changed. The co2 level for all of our beers has been raised a bit throughout the years, although I doubt that it would be all that noticeable to most folks (present company excluded). I supposed the biggest change would be our switch from open top fermentation to closed fermentation. We still do some open top fermentation, but our volume has surpassed our capacity in that regard. As far as Fat Angel goes, we make small batches every now and then to serve in the artifactory (our in house growler bar / retail store). I think that if NAB in fact purchases the company that the odds of it making a come back are quite slim. I miss it too!
This comment was originally posted on Reddit
July 28th, 2010 at 1:10 pm
Others hearing too: http://bit.ly/aJ5M1u RT @Cicerone_org: Hearing rumor that Magic Hat/Pyramid has been sold to North American Brewers…
This comment was originally posted on Twitter
July 28th, 2010 at 1:23 pm
Do not want! RT @beerpulse Magic Hat, Pyramid Breweries close to being sold to NAB & may lose craft brewery status http://su.pr/2Da7mm
This comment was originally posted on Twitter
July 28th, 2010 at 2:04 pm
Magic Hat and Pyramid Breweries may be sold in a few days?! http://bit.ly/99WXNX #beer #craftbeer
This comment was originally posted on Twitter
July 28th, 2010 at 3:57 pm
@ShayTotten Thx for the link to the magic Hat story http://bit.ly/aJ5M1u #beer #takeover #VT #BTV
This comment was originally posted on Twitter
July 28th, 2010 at 4:03 pm
Beer News Report: Magic Hat, Pyramid Breweries close to being sold to NAB …: (South Burlington, VT) – A major sh… http://bit.ly/aiqWEI
This comment was originally posted on Twitter
July 28th, 2010 at 4:31 pm
No American Breweries spokeswoman sez @magichat sale story is “speculation”, won’t comment further: http://bit.ly/aJ5M1u #vt #btv
This comment was originally posted on Twitter
July 29th, 2010 at 1:15 am
If you want to have more faith in the future of "craft" brew….move to Northwest. There are 10 breweries within 5 miles of me and 100 within 50 (thanks seattle)…and Seattle is a second-class city compared to Portland. I predict a very slow progression, but steady progression (except for the south, sorry Barley but you’re always going to live in a red state). End of the day, local is always better…people in the northwest want IPAs and CDAs (Cascadian Dark Ales), but elsewhere people want lighter (blander) fair….the brilliance of brewing craft beer is that fresher is better and a lager is always going to taste like water.
This comment was originally posted on
July 29th, 2010 at 7:14 am
@academicdave – i think you need to see this http://bit.ly/cOHNAs
This comment was originally posted on Twitter
July 29th, 2010 at 8:25 am
Re: the GQ list…I should point out that Allagash White does NOT take the top spot. It’s simply in alphabetical order.Leave it to the Professor to find the happy medium in the BrewDog debate. Between my extremist, anti-BrewDog blather and the Baron’s extremist, pro-BrewDog fellatio, the Prof has probably hit on the truth. The End of History is a ridiculous stunt, but it’s getting people talking. Like everything else in life, there is good AND bad in what BrewDog is doing.Although, in my defense, I’m only looking out for my own self-interests (as always). As soon as an Alabama state legislator holds up a picture of a Dead Squirrel Beer as proof that craft brewers are crazy, I’m flying up to Boston to smack the Baron. Afterwards, we’ll head to Lord Hobos for some beer since the sad truth is that I do enjoy sharing a pint with that daft, eccentric fruitcake.
This comment was originally posted on
July 29th, 2010 at 8:57 am
Sweeneyphi — couldn’t agree more. My wife is from Portland, and when we go out there for vacation it’s always a treat to visit breweries. This summer we’ll actually make it out to Deschutes brewery in Bend, which I’m really excited about. Expect a post about that sometime late August. The Portland beer scene is spectacular and it shows that the craft beer model works. Local is always better.With regards to the GQ list, I guess I misread it. But in all honesty, I was really only looking for an amusing angry comment from Ripped. Let’s not tell him and hope he responds anyway.
This comment was originally posted on
July 29th, 2010 at 11:32 am
What the fuck???? Allagash White makes the top of the beer list for GQ? Big surprise since the only thing that beer is good for is to loosen up the pants of pseudo Ivy league tramps. You might as well just stock your fridge with Zima and lemonade, it will attract the same type of ladies. GQ and Allagash White – Teaming together to drop panties since 1931.OK, rant is done. I tried to pick apart that GQ list back in April and did it again today. In all honestly, I’ll buy just about everything on that list including the shit beers that they added on the end (Except of course Tecate and Bud, since I can piss in a bottle for free and my urine is sterile and relatively safe. Can’t say the same about those beers). Since I’ve had all but maybe 3 beers on that list (Damn you Pliny!), maybe I’ll do my own ranking and post it up so you guys can tear it to shreds.In regards to Beer Wars, I’ve had that sitting on my Neflix Instant Queue for months and have only managed to get through about 20 minutes. It’s very dry, kind of boring, and gets a bit preachy from what I saw. At least the cast of brewers is pretty good. You’re better off DVR’ing "Modern Marvels – Brewing" from the History Channel. It actually made me appreciate the Big 3 brewers a little more after seeing what they had to go through to get to their current state.
This comment was originally posted on
July 29th, 2010 at 12:03 pm
I love the smell of rage in the morning.I’ll definitely check out the modern marvels, thanks for the heads up!
This comment was originally posted on
July 29th, 2010 at 10:32 pm
Lisa Lorimer, formerly of the Vermont Bread company, talked to my class at the Marlboro College MBA in Sustainable Management program about the moment when she realized the business would need outside investors to continue to grow naturally. Here is the video: http://www.youtube.com/watch?v=ElI2jh7Mhv4&feature=channel
This comment was originally posted on Vermont Family Business Initiative
July 30th, 2010 at 12:52 am
@JamesWT this can’t be good: Pyramid Breweries close to being sold to NAB http://bit.ly/b32nR2
This comment was originally posted on Twitter
July 30th, 2010 at 1:10 am
Interesting article (linked from Beernews.org), but wanted to let you know that Long Trail has nothing to do with Harpoon other than they both brew beer in the fine state of VT. Cheers!
This comment was originally posted on Vermont Family Business Initiative
July 30th, 2010 at 8:02 am
Thank you for the clarification. I believe I overstated my point and have corrected it.
This comment was originally posted on Vermont Family Business Initiative