• 🤝 Asahi to Acquire Octopi Brewing
• 🚚 Matagrano to Acquire Bottomley
• 🧮 Constellation’s Q3 By the Numbers
• 🍋 Boulevard Adds 2 Non-Alc Offerings
• 🐉 Sapporo Year of the Dragon 6-Packs

Japanese brewing giant Asahi announced it has struck a deal to acquire Octopi Brewing, a Waunakee, Wisconsin-based contract brewer.

In late 2022, Reuters reported that Asahi and other Japanese brewers were on the hunt for brewing capacity in North America, and Octopi, one of the country’s largest craft-focused contract brewing companies by volume, fit the bill. 

Asahi managing director for EMEA and Americas Victoria Segebarth said in a press release: “By making this investment we are taking a major step forward in accelerating the growth journey of our global brands, expanding awareness, reach and access across North America through existing and new on and off trade partners.” 

Founder Isaac Showaki opened Octopi in 2015 with six employees. Octopi's output grew exponentially during the pandemic, with a +443% increase in volume in 2020, according to the May/June 2023 issue of Brewers Association’s (BA) New Brewer magazine. In the following years, Octopi sustained that growth, with a +51% increase in 2021 and a +38% increase in 2022. 

Octopi produced 220,000 barrels of beer for its contract partners and under its own brand, Untitled Art in 2022, the most recent year for which BA data is available. But beer is only one piece of Octopi’s business. 

Last year, the company was on track to produce 7 million case equivalents of beverages, roughly 508,000 barrels, Showaki said in an interview on the Brewbound Podcast.

Showaki will continue to lead the Octopi team, which will keep working with contract partners for beer and other beverages. 

Asahi is one of the last large Japanese brewers to transact in the U.S. market, following blockbuster deals such as Sapporo’s acquisition of Stone Brewing in 2022 and Kirin’s acquisition of New Belgium in 2019 and Bell’s Brewery in 2021 and minority investment in Brooklyn Brewery in 2016. 

Octopi’s craft beer output made it the 13th largest craft brewery in the country by volume in 2022, according to the BA. 

Read more about Asahi’s plans for stateside production of Asahi Super Dry.

Listen to Showacki’s Brewbound Podcast conversation.

Matagrano, an independent South San Francisco-based Anheuser-Busch distributor, has inked a deal to acquire Bottomley Distributing, which services Silicon Valley and the South Bay Area.

Brewbound has confirmed that Matagrano will add roughly 1.8 million cases, taking its total case volume to as much as 6.5 million cases. The transaction is expected to close in February, pending supplier approvals. OMAC Beverage advisors represented Matagrano.

In 2020, Bottomley had lost the rights to the Constellation Brands portfolio of Mexican imports to the Reyes Beer Division during the supplier’s forced consolidations in California. Other large suppliers also defected from Bottomley and Matagrano (Sierra Nevada, Diageo), while Boston Beer Company moved from Bottomley and Lagunitas from Matagrano.

Matagrano has since bolstered its business through acquisitions, including the Stone Brewing portfolio in Northern California in 2021 and the wholly owned A-B One distributor in northern Santa Clara County and San Jose in 2022.

Bottomley’s territory included San Jose, Milpitas, Los Gatos, Morgan Hill, Gilroy, Campbell, San Martin, and Coyote. The distributor’s portfolio includes A-B brands, Golden State Cider, Heineken USA, Gordon Biersch and bottled water brand Essentia, among others.

This appears to be among the first distributor deals of 2024. In a newsletter earlier this week, Ippolito Christon & Co. president Andy Christon noted that deal activity in the middle tier “slowed 30-40% in 2023 to about 20 transactions, mostly small A-B and craft deals.” 

Christon attributed the slowdown to the A-B Bud Light “Black Swan event” along with “high interest rates; an uncertain economic outlook; tightening lender policies; and growing concern and uncertainty about brand values.” 

However, Christon expects softer interest rates in 2024 to help “stimulate deal flow as banks loosen their purse strings.”

Constellation Brands held its fiscal year 2024 Q3 earning calls with investors today, following the release of its quarterly results.

Lookout for coverage of the call later today. For now, here’s a quick look at the Q3 numbers:

• Beer shipments (sales to wholesalers): +3.4% year-over-year (YoY), versus +8.7% in Q2;
• Beer depletions (sales to retailers): +8.2% YoY, versus +7.9% in Q2;
• Net beer sales: +4%, to more than $1.98 billion;
• Beer operating income: +7%, with operating margin increasing 100 basis points to 38.5%
• Overall net sales: +1%, to more than $2.47 billion;

Constellation also raised its FY24 operating income guidance for beer to +7% to +8% (previously +6% to +7%). The company’s overall full year guidance remains at 8% to +9%. 

Boulevard Brewing Company has added a pair of non-alcoholic (NA) offerings to its portfolio: Non-Alcoholic Wheat with Lemon and Quirk Non-Alcoholic Superfruit Seltzer. 

Those NA products join Flying Start Non-Alcoholic IPA, which launched in 2021. 

NA Wheat with Lemon will be available year-round in 12 oz. can 6-packs. 

Quirk NA Superfruit Seltzer (25 calories per can) is a limited-release offering sold in 12 oz. can 6-packs. 

Boulevard noted that Quirk is the top-selling hard seltzer brand in Kansas City and accounts for one-third of the company’s sales. 

Sapporo is releasing limited-edition 6-packs to celebrate the “Year of the Dragon.” The packages will be available nationwide. 

The dragon-themed packaging is the work of tattoo artist Tokyo Hiro, who has also designed album covers and merch for Bad Religion, The Offspring, Mötley Crüe, Motörhead, Fender, Adidas and Hurley, among others. 

Hiro said: “When I was learning to tattoo under Bob Roberts of Spotlight Tattoo, he would always tell me, ‘east meets west, that’s your style.’ I feel so lucky to work with Sapporo on this project because we both understand what this means. Sapporo adopted German brewing in Japan in the same way I’ve combined my Japanese and U.S. experiences.”

The partnership between Sapporo and Hiro was highlighted in a three-minute documentary-style video. Sapporo will also be giving away a limited number of signed 18”x24” screen prints via a text-to-win sweepstakes. 

A small portion of the 6-packs will be imported from Sleeman facilities in Canada, with the majority produced at Sapporo-Stone breweries.