July 20, 2016

MillerCoors Buys Majority Stake in Terrapin

Terrapin logo.jpg

Are Terrapin commercials coming soon to a Super Bowl near you?

Beer giant MillerCoors is buying a majority stake in the Athens brewery, the companies announced today. Terms were not disclosed.

Terrapin will become a unit of MillerCoors’ craft and import beer division, Tenth and Blake, the owner of brands like Blue Moon, Leinenkugel, St. Archer and Pilsner Urquell.

Co-founder and CEO John Cochran is leaving and will be replaced by Chief Financial Officer Frank Skorewski. Co-founder and brewmaster Brian “Spike” Buckowski will remain as vice president of brewing development.

Both sides urged Cochran to stay, but he’s frustrated by Georgia’s antiquated beer laws and ready for a change, reports. Buckowski and VP of Marketing Dustin Watts told the website that Terrapin will remain the “same beer, brewed by the same people.”

According to the Chicago Tribune:

"It's a highly regarded craft brewery. ... More than anything, it allows Tenth and Blake to offer award-winning IPAs," said MillerCoors spokesman Marty Maloney.

The deal also allows MillerCoors to dip a toe in the Southern craft beer market, which Maloney described as "underdeveloped and rapidly growing."

Much to beer nerds’ consternation, MillerCoors bought less than 25 percent of Terrapin five years ago, during a time when the company couldn’t meet demand and was feuding with investors. After Tenth and Blake bought out other investors, Terrapin expanded aggressively. Its Newton Bridge Road brewery now employs 120 people and produces 34,000 barrels a year.

But from MillerCoors' point of view, the deal “isn’t working out the best,” Chairman Pete Coors told the Denver Post in 2014.

The new deal could provide the cash for Terrapin to expand once again—this time beyond the 12 Southeastern states where it’s distributed—as similar purchases have for other former craft breweries, such as Lagunitas, Ballast Point and Goose Island. The trend is likely to continue as cash-poor small breweries struggle to expand and the big boys eye the ever-growing craft market.

MillerCoors said the brewery will remain in Athens, although Terrapin has looked elsewhere in the past and recently turned down Athens-Clarke County’s offer of incentives to expand locally.

Further clouding the picture, today the U.S. Department of Justice approved a merger between the world's largest beer conglomerate, Belgium-based Anheuser-Bush InBev, and the second-largest, SABMiller, which owns a majority of MillerCoors. To win anti-trust approval, SABMiller agreed to spin off its MillerCoors stake to minority owner Molson Coors. So Terrapin could have yet another owner soon.