- Constellation Brands purchased Florida-based Funky Buddha Brewery as part of the company's efforts to expand into the high-end beer segment in the United States, the company said in a statement. Terms of the deal were not disclosed.
- Funky Buddha Lounge & Brewery was founded in 2010 in Boca Raton, Florida, by husband and wife Ryan and Giani Sentz. As demand for Funky Buddha’s beers increased, the couple invited family members to join the business and in 2013 started Funky Buddha Brewery.
- Funky Buddha Brewery, South Florida’s largest craft microbrewery by size and volume, is known for a unique range of products including Strawberry Shortcake, Maple Bacon Coffee Porter and Coconut Coffee Porter.
Constellation Brands is no stranger to bulking up its presence in the craft brew space through acquisition. The alcohol company, better known for its Corona and Modelo beers and Svedka Vodka, gained entry into the growing craft beer space by purchasing American brewery Ballast Point for close to $1 billion in 2015.
It's unlikely the Funky Buddha purchase comes close to that lofty price tag, but the acquisition is an important step toward Constellation Brands' goal of enhancing its presence in the craft brew space. With the deal, it adds a roster of trendy and novel drinks to the fold such as Sweet Potato Casserole, Blueberry Cobbler Ale and French Toast Double Brown. While these brews are not likely to attract the attention of most older beer connoisseurs, it's a shrewd move that allows Constellation to capture the attention of millennials who are keen on bold flavors and clever names.
“The Sentz family has created a culture of bold creativity, innovation and entrepreneurship," Paul Hetterich, executive vice president and president of the beer division at Constellation Brands, said in a statement. "Those qualities, combined with our beer division’s market reach, distributor partnerships, consumer insights, and our craft expertise within Ballast Point, will help nurture and develop Funky Buddha’s distinctive brand.”
Constellation Brands said Ryan Sentz and his brother will run day-to-day operations, and Funky Buddha’s standard of brewing will remain the same. This could be an important part of the deal, allowing Constellation to continue benefiting from Funky Buddha's creative craft beer varieties and knowledge of the brewing process. Funky Buddha will benefit by tapping into Constellation's distribution network and global reach, though it's uncertain how much oversight Constellation will eventually exert over the smaller craft brewery.
Constellation Brands' efforts to expand into the craft beer space thorough acquisition is not unique among major beer producers. AB InBev closed its purchase of craft brewery Devils Backbone last September. Two months later, it announced it would buy Texas-based craft brewer Karbach Brewing Co., one of the fastest-growing U.S. craft beer brands. MolsonCoors also has bought several craft beer makers. AB InBev has even moved into the digital publishing business by investing in websites that cover the beer industry, raising conflict-of-interest questions and drawing criticism from the craft beer community.
To protect its industry, the Brewers Association, a trade group representing small and independent craft beer makers, introduced a new seal in July to show which beverages are really independently produced. The group said as big beer companies acquire craft brands, beer drinkers have become increasingly confused about which companies remain independent.
Craft beer growth slowed to 4% by volume last year. That’s the first time it hasn’t increased by a double-digit percentage since 2004, but with the beer industry as a whole floundering — volumes dropped 1.8% around the world in 2016 — the bigger breweries could see this as an opportunity to scoop up smaller craft breweries facing new challenges in a crowded market. It would not be a surprise to see more deals involving big beer and the smaller craft players taking place during the coming months.