Dive Brief:
- Anheuser-Busch InBev announced that its venture arm, ZX Ventures, has acquired two leading U.S. homebrew ingredient and supply companies, Brewbound reported.
- Minnesota-based Northern Brewer Homebrew Supply and its sister company, Midwest Supplies, run both brick-and-mortar and e-commerce operations selling homebrewers everything they need, from brewing equipment to ingredients like hops and yeast.
- David Kidd, former CEO of Midwest Supplies who oversaw Midwest's Northern Brewer merger, wrote in his personal biography that the combined companies' revenue exceeded $50 million.
Dive Insight:
AB InBev has made a number of inroads via internal investments and acquisitions in neighboring categories related to its primary domestic and imported beer portfolio. This most recent investment offers AB InBev a foothold into a burgeoning segment of homebrewers, who purchased more than $800 million worth of supplies and equipment last year, according to the American Homebrewers Association.
This deal could have craft brewers on edge. The craft beer industry was already concerned about AB InBev's acquisition of SABMiller and how that deal could impact domestic distribution and access to brewing ingredients. Before forming their businesses, many of these brewers started with homebrewing. If AB InBev controls one of the leading homebrewing ingredient and equipment supply companies, it could become an additional concern, especially if prices for brewing necessities increase.
AB InBev's interest in the homebrewing industry is another way for the beer giant to open its portfolio and resources to more enthusiasts. In that way, this venture is similar to the company's expansion into low- and non-alcoholic beer, which AB InBev announced earlier this year will comprise 20% of its sales by the end of 2025. It's unlikely homebrewing would become that large of a segment, but diversification and future top-line growth opportunities for the world's largest beer company are the drivers behind ZX Ventures .