Two Beers Brewing sold to Agrial Group
Steve’s breakdown: Okay, three things:
• Brands involved in the deal include fast growing Seattle Cider Company.
• Agrial collects 427 million pounds of cider apples annually.
• Time to give the boys in Seattle a call
SEATTLE, WA: Two Beers Brewing – and its fast-growing hard cider brand, Seattle Cider Company – have been sold to the Agrial Group, a leading French agri-business cooperative that does business across the beverage, dairy and food industries.
Official financial terms were not disclosed.
The transaction closed earlier this month, according to Joel VandenBrink, the founder of both companies.
Agrial — which collects more than 427 million pounds of cider apples annually, according to its website — is the largest cider producer in France, VandenBrink told Brewbound. A sale to the farmer-run cooperative will provide his company the capital it needs to grow both domestically and internationally, he said.
Two Beers Brewing and Seattle Cider Company, located in adjoining production facilities in Seattle’s industrial district, had previously produced their offerings under separate manufacturing permits. Following the sale, the two entities have merged and will continue to operate independently as a single, wholly-owned subsidiary of Agrial.
VandenBrink will continue to oversee both brands as CEO, and all employees are being retained.
“There is a window of opportunity in cider that I need to step into really quickly,” he said, pointing to declining sales for the category’s largest brand, Angry Orchard, which is owned by Boston Beer Company.
“If I went about it alone, with my financial constraints, I wouldn’t have the chance to take advantage of the opportunity,” he added.
Sales of Angry Orchard were down more than 12 percent through August 14, according to market research firm IRI Worldwide.
Seattle Cider, meanwhile, has seen considerable growth since it launched three years ago. Currently ranked as Washington’s largest cidery, the brand is already sold in 12 states and production is expected to reach 21,000 barrels in 2016. Nevertheless, it’s a long way behind Angry Orchard, the largest cider brand in the U.S.
But VandenBrink has aspirations of growing Seattle Cider into a nationally-distributed brand – he said the company plans to enter as many as 13 new markets in the next two years — and feels the company should capitalize on Angry Orchard’s downward trend by expanding distribution quickly. A crowded craft beer and cider market, however, makes rapid expansion more costly, he said.
“It’s just not as simple as finding a distributor to take my product,” VandenBrink said. “There is a huge capital outlay on the front end and, if I were to do it on my own, I fear that I would overextend and put my business at an unnecessary risk.”
Enter Agrial, a company that had $4.7 billion in revenues in 2014, according its annual report.
“Agrial has impressed me with their belief in our mission and vision, and even more so with their desire to support Seattle Cider Company and Two Beers Brewing Co. as we continue to grow our brands the way we have in the past,” VandenBrink said in a press release.
The growth of Seattle Cider Company was a catalyst for the purchase, VandenBrink told Brewbound, and a deal with Agrial gives the Seattle-based company immediate access to international distribution opportunities in 30 countries.
For Agrial, an investment into Two Beers Brewing and Seattle Cider gives the French company direct access to a complicated and crowded U.S. beer and cider market. Agrial plans to begin importing its Louis Raison French Cidre to the U.S., VandenBrink added.
“Seattle Cider Company has changed the face of cider in the United States in the past three years and it’s been exciting to watch. We’re thrilled to now be a part of it, and watch the companies continue to push the boundaries of cider and beer in the U.S. and beyond,” Franck Malinowski, the CEO of Agrial’s beverage division said in a statement.
Agrial also has an equity investment in Brasserie Lancelot, a small brewery located in northwest France, VandenBrink added.
Cascadia Capital served as the financial advisor to Two Beers Brewing and Seattle Cider Company. Miller Nash acted as legal counsel.
Additional information is available in the press release below. A letter from VandenBrink to his company’s customers is also included.