Hi, there.

If you've been paying attention to craft beer news lately, you've probably noticed something: It feels like every other week there's another big acquisition announcement.

– A regional brewer scoops up a beloved local taproom. 

– A production-focused brewery merges with a hospitality group. 

– Someone buys the rights to a legacy brand that's been sitting dormant for years. 

– A handful of breweries band together to form a larger collective.

It's everywhere. And it’s really exciting.

At CODO, we’ve worked on about a dozen of these deals — ranging from a few hundred thousand to several million dollars — and we’re seeing more come across our desk every month.

Even if you’re not thinking about M&A today, there’s a good chance you will be soon.

So for the first issue in this series, let's dig into what's driving all this activity and why we think it's an exciting development for the craft beer industry.

(Above): If you're planning on making any sort of Brand Architecture move — an acquisition, a line or Brand Extension, spinning up a Sub Brand — don't go into that process blind. Read the Beyond Beer Handbook. 

If you'd like to grab a copy (or copies) for your team, use code: Acquired to take $20 off your purchase for a very limited time.

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Why is this happening? 

Craft beer is heavily saturated 

Let's start with a painfully obvious point: There are ~9,250 breweries in the United States right now. That's a lot of competition for shelf space, tap handles, distributor representation and customer attention (all at a time when beer consumption is declining). 

The math here is simple. There is way more beer being produced than there are people who want to drink it. (I’m stunned — happily so — that we haven’t seen more breweries go under over the last few years. I hope this holds steady.)

Breweries are realizing they need to be smarter about how they grow, and sometimes that means teaming up instead of going it alone.

Exit ramps are appearing

If you founded your brewery 10, 15, 20+ years ago, you could be forgiven for feeling tired. (Look, we’re all tired.)

And for someone who might be in their late fifties or sixties, it’s a natural time to start stepping back and letting the next generation lead the charge. This can be your kids, your employees or another brewery itself. 

We’ve seen a few instanced where an acquisition ended up being a great way to handle succession planning. 

Business models are shifting

The craft beer industry is maturing, and with that comes specialization. Some breweries are incredible at production but terrible at hospitality. (Shout out to all the breweries out there cranking out phenomenal beer in an industrial warehouse out in BFE.)

Others have built a wonderful hospitality experience, but may struggle with distribution. Still others have built amazing brands but lack the infrastructure to scale.

Smart operators are recognizing these gaps and looking for partners who complement their strengths.

At a certain scale, you grow through acquisition

This is more of a niche scenario — but one we’ve been hearing more and more in recent projects.

At a certain point, your best path to growth really is through acquisition.

Maybe you’re fully enmeshed in your market. Maybe you’ve maxed out what you can produce in-house. Maybe you’re constrained by taproom capacity, distributor footprint or operational bandwidth. Whatever the case, there comes a stage where building entirely new brands or expanding your own presence organically becomes harder — slower — riskier.

And at that scale, it can often be faster, smarter, and more efficient to acquire a well-performing brand (or facility, or taproom, or customer base) than to build one from scratch.

This isn’t the right play for every brewery. But for those at this inflection point, M&A becomes less about “Can we do this?” and more about “Where does it make the most sense to buy?”

(Above): It's been so far back that it's hard to remember, but our rebrand work with Prost came after the brand was acquired. 

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What does this actually look like?

The cool thing about M&A in craft beer is that it can take any number of forms. Here are a handful of deals we’ve seen firsthand in our project work at CODO, or just out in the wild. 

Traditional brewery-buys-brewery deals

This is what most people think of when they hear "acquisition." One brewery purchases another one, usually for their existing volume, IP, distribution network or established customer base.

A common arrangement we see here is a hospitality-based brewery merging with a production-focused one. And this makes a lot of sense. Think of this as finding the yin to your brewery’s yang to create a more complete, well-rounded business. 

We've also seen several instances where a brewery buys another brewery primarily to grab one or two specific brands. In doing so, you can bolt on several thousand bbl per year to your overall output, and the important revenue that follows.

(Above): A handful of brewery-on-brewery acquisitions, including: 1. Left Hand x Dry Dock, 2/6. Jack's Abby x Night Shift, 3. Saucy Brew Works x Cartridge Brewing, 4. Hog Island x Mayflower, 5. Sawdust City x Lake of Bays

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Brewery buys taproom 

Not every acquisition involves buying an entire brewery or brand. We’re also seeing breweries buy just the taproom from another brewery — while the original brewery continues to operate elsewhere.

In these cases, the seller might be consolidating operations, shifting focus to production and distribution or simply getting out of a particular market. And for the buyer, this can be a great way to expand taproom presence quickly — often inheriting a turnkey space complete with FF&E (fixtures, furniture, equipment), taproom staff and an existing local following.

In most cases, you're buying this taproom to rebrand under your own parent brand or to establish a local presence in another market. But we've also seen a few instances where a taproom is acquired and left more or less alone. This latter case can work well if the operation is already in good place and the acquired brand is well established.

(Above): Examples of breweries buying taprooms, including: 1. Braxton x Hi-Wire, 2. Hop Butcher For The World x Half Acre, 3. Mission Brewing x Rough Draft, 4. Kings & Convicts x Saint Archer.

And our work with Mission Brewing itself is a great example of a post-acquisition rebrand. Here's a case study on this project as well as a bonus podcast conversation with Mission CEO, Dan Partelow. 

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Brand / IP acquisitions

Sometimes you don't need the whole brewery — you just want the brand. We're seeing this take a few forms, from breweries buying the rights to dormant legacy brands, purchasing emergent brands outright, or buy an equity stake in a brand or specific product lines that fits their portfolio.

Check out Garage Beer for more details on how quickly this set up can evolve. This was originally a beer from Braxton Brewing. An outside investor acquired the brand from Braxton (Braxton continued to produce it). Then a year or two later, the brothers Kelce invested in the brand. Interesting case study in spinning out and scaling the Sub Brand Ladder. 

(Above): A collection of recent investments and/or brand acquisitions, including: 1. Garage Beer, 2. Gallo x Montucky Cold Snacks, 3. Hamdi Ulukaya x Anchor, 4. Urban Chestnut x O'Fallon, 5. Stem Cider x Howdy Beer

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Strategic partnerships and joint ventures (JVs)

Not every deal involves a full buyout. We're seeing more breweries form partnerships to tackle specific challenges — like breaking into a new market or launching a new product category.

Or, one group sheds its production brewery entirely and brews at another group’s facility, whether under contract or some sort of alternating proprietorship (Alt Prop) arrangement.
 

Rollups and collectives

Here, multiple breweries band together under a shared umbrella, often keeping their individual identities but sharing resources like distribution, marketing, talent, buying power or back-office operations.

This approach is cool because it’s no longer limited to (capital B) Big Beer. We’ve seen mid-market and even smaller breweries join forces across the country over the last few years. 

> Is a House of Brands right for your brewery?

(Above): Rollups & Collectives will become a major part of the craft beer landscape over the coming years. Some big examples of this today, include: 1. Artisanal Brewing Ventures, 2. Monster Brewing, 3. Ackley Brands, 4. Fort Point HenHouse, 5. Two Roads x Bald Birds x Yards, 6. Tilray, 7. Wilding Brands, 8. Great Frontier

We first worked with the Barrel One Collective on Wachusett's rebrand. Keep an eye on this group — they're making a series of smart, aligned acquisitions to bring together legacy New England brands. 

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Cross-category Acquisition (when it's easier to buy vs. build)

We're seeing a lot of investment and/or acquisitions cross category. Here, a brewery will acquire an equity stake, or take ownership of a Fourth Category brand outright. 

This is an easy way to acquire turnkey revenue and gain a foothold in an emergent category like RTD cocktails or cannabis. And as such, expect to see a lot more of these moves (particularly in the THC beverage space) in the next few years. 

(Above): Create examples of breweries buying into emergent Fourth Category brands, including: 1. Big Grove x Climbing Kites, 2. Firestone Walker x Cali Squeeze, 3/4. FX Matt x Ohza & 'Merican Mule

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Why this is all so exciting 

All of this consolidation and partnership activity isn't a sign that craft beer is dying — it’s a sign that the industry — that you — have decided to stick it out and evolve as needed. 

It's forcing people to take their Brand seriously 

When you're looking to acquire or merge with another business, you can't just think about physical assets (FF&E), recipes and production schedules. You’re not just buying stainless steel and chairs — you’re buying a story, a customer base and everything that makes that brand meaningful.

You have to think about brand positioning, customer experience, Brand Equity and long-term strategy. 

Going this route will require you to get serious about what makes your own brand different and valuable. And even if you never buy another business, or sell yours, this will help you in the long run.

 

It's driving innovation in customer experience

Breweries that are thriving in this environment aren't just brewing great beer — they're creating experiences that keep people coming back. Whether that's through taproom design and cool amenities (patios, playscapes food programs), community events, or digital engagement, the focus is shifting from just brewing to building deeper relationships.

It's preserving brewing heritage

Some of the most interesting deals we're seeing involve securing legacy brands or giving new life to a brewery that might otherwise close. There's something beautiful about a brewing tradition getting a second chance under new stewardship.

As a small business owner myself, it's hard to imagine walking away and just shuttering something I've spend decades building. Forget the big buy out and fancy retirement — (healthy or not) it's an important part of your personal identity. 

This is actually one of our biggest predictions for the beer industry over the next decade — some heavy hitter, fan favorite brands shuttering physical operations and living on as co-manufactured brands.

(Above): A few examples of Legacy Brands merging, selling off IP and/or shifting their overall model to live on in another form, including: 1. Lost Abbey, 2. Drake's x Bear Republic, 3. Calicraft x Heretic, 4. FX Matt (Saranac) x Flying Dog, 5. River Horse x DuClaw 6. Anchor

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What this means for you

Whether you're considering an acquisition, thinking about selling, or just trying to understand how the industry is changing and what it means for your business, the key here is to think strategically about your brand.

– What makes you stand out in a crowded market?

– What would make you an attractive acquisition target? 

– Or, what would you look for in a partner?

– Where do excel? Fall short?

– How does your brand fit into the broader story of where craft beer is headed?

In our next issue, we're going to dive deep into the practical side of integration: What to do with your brand (and the new one!) once a deal is done, how to make sounds Brand Architecture decisions and how to communicate this new vision with fans who care deeply about the brands they support.

We'll catch up with you here in a few weeks.