Japanese beer brand Sapporo USA has made a deal to purchase San Diego's Stone Brewing Company for $168 million.
Sapporo will acquire Stone Brewing's production and sales operations as well as its restaurant business, although Stone's Southern California distribution business is not included in the deal. The acquisition agreement was signed Friday, with the deal slated for completion this August.
Sapporo intends to produce its Sapporo-branded beers for U.S. distribution in Stone’s breweries in Escondido, CA and Richmond, VA, with the goal of brewing 360,000 barrels in the U.S. by the end of 2024. This will essentially double Stone Brewing’s current production.
"We approached Stone Brewing seeking a partner for our growth plans in the U.S, and we quickly recognized they were an ideal partner with bi-coastal brewing capacity, loyal fans, superb management, shared cultural values, and commitment to the highest quality standards," said Sapporo U.S.A. Chairman Kenny Sadai. "This acquisition puts the resources and legacy of the largest Asian beer brand in America together with one of the most innovative and recognized craft beer brands in the world. It’s a perfect fusion of east meets west that is an ideal marriage for Sapporo’s long-term growth strategy in the U.S."
"We approached Stone Brewing seeking a partner for our growth plans in the U.S, and we quickly recognized they were an ideal partner with bi-coastal brewing capacity, loyal fans, superb management, shared cultural values, and commitment to the highest quality standards," said Sapporo U.S.A. Chairman Kenny Sadai. "This acquisition puts the resources and legacy of the largest Asian beer brand in America together with one of the most innovative and recognized craft beer brands in the world. It’s a perfect fusion of east meets west that is an ideal marriage for Sapporo’s long-term growth strategy in the U.S."
Under the agreement, Stone Brewing will continue to brew its craft beers at the two breweries, as well as operate its seven tap rooms and World Bistro & Gardens destinations with existing branding, management and workforce under the Sapporo umbrella. Best known for its award-winning beers like Stone IPA, Stone Delicious IPA and Stone Buenaveza Salt & Lime Lager, Stone will continue to brew with the same recipes and team as before.
"This is the right next chapter for Stone Brewing," said Stone Brewing Co-Founder and Executive Chairman Greg Koch. "For 26 years, our amazing team has worked tirelessly to brew beers that have set trends and redefined expectations. To have the interest of a company like Sapporo in continuing the Stone story is a testament to the great beers we’ve created and will continue to create for our fans across the globe."
Stone Brewing was founded by Greg Koch and Steve Wagner in 1996 in San Diego's North County city of San Marcos, CA. Stone is the second acquisition in the growing craft brew segment of Sapporo U.S.A.'s business. Anchor Brewing Co. was acquired in 2017 and operations at the San Francisco-based craft brewery remain unchanged.
"I am thrilled that we have the opportunity to join forces with Sapporo," said Stone Brewing Co. CEO Maria Stipp. "This unique partnership allows us to preserve the Stone legacy that our fans know and love and will add exponential opportunities for growth, from production to more investment in people, equipment, sales, and marketing."
Stone Brewing’s distribution business, Stone Distributing Co., is not part of the sale and will become an independent company under current ownership, maintaining its leadership of day-to-day operations. Stone Distributing is a leading distributor in the nation’s largest craft market and will continue to service Southern California with a portfolio of 42 distinctive craft brands, including Stone Brewing. As a separate entity from Stone Brewing, it will operate as it does today and with increased investment in its brands, people and future.
It came to light in Stone Brewing's trademark dispute trial against MillerCoors (now Molson Coors) that Stone Brewing has a $464 million debt to pay to their private equity investors in 2023 and had been entertaining a possible sale. Stone Brewing Co. former CEO and co-founder Greg Koch has previously stated on multiple occasions that he would never sell out to big beer.
"Stone Brewing will never sell out," said Greg Koch in an interview back in 2018 after he stepped down as CEO of the company he helped create. "Stone Brewing is sacrosanct. We’re not interested in participating in a cash grab. There are two ways of operating a business – commodity or artisan. We operate as an artisan. We make decisions based on our passions. … Anybody that thinks commodity can operate as an artesian is ignoring the basic facts about how businesses operate."
In a lengthy blog post posted on Stone's website, Koch announced he would be leaving the company in the very near future. Koch explains that although he has stated many times that he would never sell out, he has changed over the years, as has the craft beer industry as a whole.
"Sure. I’d said it dozens of times," wrote Koch in his announcement he is leaving Stone Brewing. "Quite possibly well over 100. I 1000% meant it every single time. It’s what I truly believed. I said it while pounding my fist both physically and metaphorically on the table. I’d said it over the telephone or on video with the narrative emphasis “…he says while pounding his fist on the table.” The words: I will never sell out."
With the sale of Stone Brewing Company and Modern Times Beer last week, San Diego, which was once considered a craft beer capital in the United States, will have no locally owned representatives in the Brewers Association's Top 50 Craft Beer Producers in the USA list. Ballast Point Brewing will remain on the list, but that craft brewery is owned by Chicago-based Kings & Convicts Brewing Co., who purchased Ballast from Constellation Brands in December 2019.
