USA: Constellation Brands buys Florida based Funky Buddha Brewing

The consolidation of the American craft beer industry is going on: Funky Buddha Brewery, Florida’s fastest growing craft brewery has been sold to Constellation Brands, the No. 3 beer company in the United States. Financial terms of the deal were not revealed. Founder Ryan Sentz, who serves as head brewer and his brother KC Sentz, who is acting as general manager, will continue to run the day-to-day operations, according to a today’s press release

The purchase of Funky Buddha Brewing is Constellation Brands second inroad into the booming craft beer segment. In November 2015 the company already bought Ballast Point Brewing in a $1 billion all cash deal. This reflected an EBIT multiple of 8.7, which many experts said was overpaid. Despite a  positive development of the brand – Ballast Point recorded 7% growth in the first quarter of 2017 -  the San Diego based craft brewer has “not performed up to expectations from a growth standpoint,” according to Constellation Brands CEO Rob Sands. Therefore Constellation Brands recorded this year an $87 million non-cash impairment charge to the brewery’s trademarks.

Funky Buddha Lounge & Brewery was founded in 2010 in Boca Raton, Florida, by husband and wife Ryan and Giani Sentz. As the demand for Funky Buddha’s beers skyrocketed, Ryan and Giani invited Ryan's brother KC Sentz, and his wife Melissa Sentz, to join the business. In 2013, the Sentz family started Funky Buddha Brewery, located in the heart of Oakland Park’s burgeoning Culinary Arts District, about 30 miles (48 km) north of Miami, Florida. At 54,000 sq ft and with a capacity of 45,000 BBLs, Funky Buddha Brewery is South Florida’s largest craft microbrewery by size and volume, and is Florida’s busiest tap room by beer sales.

The brewery is known for its culinary-inspired beers, fusing wild combinations into brews like Pineapple Beach, a blonde ale with pineapple, Sweet Potato Casserole, a strong ale with sweet potatoes, vanilla, and spices or Maple Bacon Coffee Porter, winner of the World Beer Cup 2016 gold medal in the specialty beer category, with aromas of sticky maple syrup, coffee, and cream. But the brewery’s core beers, such as the hoppy Hop Gun IPA and Floridian Hefeweizen helped the name spread into the mainstream and grocery stores.

Constellation Brands was founded in 1945 by Marvin Sands as Canandaigua Industries, selling bulk wine to bottlers in the eastern United States. In 1973 the company went public. In 2000, Canandaigua Wine Company changed its name to Constellation Brands to reflect the scope of the company and its range of brands. In 2007, Rob Sands, one of the sons of the founder, was named president and CEO. He managed to acquire Grupo Modelo's U.S. beer business from AB InBev in 2013, following a request by US antitrust authorities after AB InBev’s purchase of the remaining 50% stake in Mexican brewer Modelo in 2012.

From its beginnings 72 years ago, Constellation Brands has become a significant player in the beverage alcohol industry with more than 100 brands in its portfolio, about 40 wineries, breweries and distilleries, and approximately 9,000 employees. In the beer market, the company is mainly known for importing Mexican beer brands such as Corona Extra, Corona Light, Modelo Especial, Modelo Negra and Pacifico.

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