Kirin Just Bought Bell's Brewery. Why Is Bell's Concealing That Fact?
Earlier this morning, the owner of one of the most successful and important breweries in the world announced he was selling the company. Sort of. Here’s how Larry Bell’s official statement reads on the website.
[T]his week, Bell’s finalized a sale agreement that will see us join forces with New Belgium Brewing in Fort Collins, Colorado. By bringing together two of the largest and fastest-growing craft brand families in the country and unifying our companies under a single business model, we’re creating one of the best and largest craft portfolios in the country.
Larry does acknowledge that New Belgium is in turn owned by Lion’s (true as far as it goes), but then skips the actual context. Lion is one of the smaller figurines inside a Russian nesting doll of companies, like so many very large beer companies. New Belgium is an even smaller piece deeper in the core, and inside New Belgium is Magnolia. But the real owner is Japan’s Kirin, which formed Lion in 2009 when it purchased the New Zealand/Australian company of the same name.
So why didn’t Larry ever mention the name Kirin?
A Unicorn in Craft Brewing
It’s hard to overstate what an important brewery Bell’s is. It’s one of the key pioneer-era American craft breweries, founded in Kalamazoo in 1985. It has grown to become one of the most successful breweries in the world. Good Beer Hunting reports that Bell’s was approaching a half million barrels in 2020, making it the 16th-largest US brewery, and the second-largest family-owned brewery after Sierra Nevada.
But what really made Bell’s special was its incredible brand, which has peers in perhaps only New Glarus for fan loyalty. The most important example is Two Hearted Ale, an early American IPA made solely with piney Centennial hops. It’s got that classic caramelly profile that was mandatory in the 1990s. There have been a million beers like it since Bell’s released it 26 years ago. That’s a fact super fans—millions of them—will heartily dispute. To them, there’s no beer like Two Hearted, which contains the essence of place, a sense of aching romance, and a thousand memories in each glass. In a country in which novelty fuels IPA sales, it’s the sixth best-seller and is still growing decades on..
Two Hearted isn’t the only Bell’s that causes a warming in the hearts of fans even before they’ve had a sip. Oberon is a simple wheat beer so beloved it has its own day—the moment it is released anew (and unchanged) each spring. Kalamazoo Stout and Amber are two of the brewery flagships that have been chugging along since the early days. No brewery in the US has had this kind of sustained success on the chassis of a 1980-’90s brewery. It’s a unicorn. If you want to understand “brand” in the context of beer, study Bell’s closely. Very few breweries have ever produced one as strong as Bell’s
Larry has been the brewery’s avatar since day one. Since his name is on the bottle (and now cans), he’s often referred to by first name only, even by people like me who have never met him. If you’re talking craft beer and you say the word “Larry,” people know who you mean. He’s always been the guy who vouches for the brewery, the marker of authenticity. The whole thing is a package—the beer, the state, the brewery, the owner. It’s why when the time came to announce the sale, it had to come from Larry.
The Most Valuable Property in Craft Beer
A few years ago, it looked like Larry’s plan for transition would keep the brewery in the family. His daughter Laura, who had worked at the brewery a decade, became CEO in 2017. It looked like the brewery’s legacy was safe for at least decades to come. Yet she abruptly stepped down after little more than a year. In his announcement today, Larry also mentioned that he’d be retiring almost immediately and would be gone in a couple months. In short order, no Bells will be associated with Bell’s.
Perhaps someday we’ll hear the backstory about how Kirin came to win this prize, but it was surely the most valuable in craft brewing. We’ve seen a lot of weird purchases over the years, but I have to think every big brewery has had Larry on their speed dial for years—there just isn’t a brewery to be had for any price like it.
But that’s exactly the contradiction that lies at the heart of this sale, and the reason Larry’s announcement seemed so odd. The beer doesn’t make Bell’s valuable. As much as its devoted fans will dispute it, there are lots of breweries making great beer. What makes Bell’s valuable is the history, the place, and most importantly, Larry Bell. Few brands would be placed in as much risk by distant foreign ownership as Bell’s.
So it makes sense that Larry positioned the brewery to work in a portfolio with New Belgium. In the couple years since its sale, it still seems pretty New Belgium-y. It’s another important legacy brewery that has managed to buck trends and find a second wind in IPAs. And sometimes these things do work out. The two owners of Pilsner Urquell have managed to keep the old brewery doing the same thing it always has. Yet anytime owners sell a brewery, they transfer power and all that goes with it to the new company. We have no idea what Kirin will do with Bell’s. Pairing it with New Belgium is a hopeful way to send it out of Michigan and into the harsh world of international competition. (In his announcement video, Larry even used the passive voice when announcing the sale, as if owning it personally was too challenging: “…the decision has been made to sell the company.”)
Usually when these announcements come out, we expect the purchasing brewery to use weasel words and passive language to downplay what actually happened. It’s in their interest for customers to believe everything they love about the brewery is fully intact. I feel different about this one. Larry clearly tried to keep the brewery independent. After 38 years, he’s tired and ready to retire—and he also mentioned recent health problems. Running a business like this is incredibly stressful, and he’s earned his retirement. Yet I don’t doubt he wanted it to go a different way. Thus, I suspect, the strange way he delivered the news.
Bell’s was distant enough from Oregon that I didn’t experience it the way Midwesterners have. I never really got what made it so magical in their eyes. But I hear the same thing from Michiganders when I try to convey my appreciation of Deschutes. We love breweries like Bell’s for reasons even we don’t fully understand. As a consequence I can’t predict what folks will do with a Kirin-owned (and possibly New Belgium-allied) Bell’s. Time will tell—and maybe you will too, in comments.
But I think I get why it was hard for Larry to lay out the facts in the clinical, antiseptic language of mergers and acquisitions. For him and millions of fans, the brewery meant more than the sum of its parts. I hope Kirin understands what it bought.
Cover Photo: Kirin