Agrial Group, a leading French agricultural and food-processing cooperative group, has acquired Two Beers Brewing Company and Seattle Cider Company in what is being described as a merger. Agrial is a farmer-owned cooperative based in France that owns, among other things, some of the largest apple orchards in Europe and operates across the food, dairy and beverage industries. Along with its many holdings, Agrial is partnered with a few craft breweries in France.
The deal was closed earlier this month but the announcement came today. In plain language, Two Beers Brewing and Seattle Cider have been sold to Agrial. Financial terms of the agreement were not disclosed, nor were other terms of the agreement, which is discussed in the press release and the letter below.
Last week I had an opportunity to sit down with Joel VandenBrink, founder of the two Seattle-based companies, to talk about this development in some detail. Joel explained that he will act as the Chief Executive Officer of Two Beers Brewing and Seattle Cider, making daily business decisions as well as directing the overall vision and direction of the companies. To the public, it will appear as though nothing has changed. In reality, only the future will tell if that is entirely true, but for now that is what we know.
Joel said he already had a plan in place for the continued growth of the two companies, referring to it as a five-year plan, and that Agrial agrees with the strategy. Those growth plans require capital that the agreement with Agrial provides.
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According to Joel, “As Two Beers Brewing Company enters its tenth year and Seattle Cider enters its fourth year, it became clear that my desires for both companies far exceeded our ability to grow them sustainably – something I have always held as a high priority. I want nothing less than Two Beers Brewing Company and Seattle Cider Company to be premier companies in their fields, and have the continuous ability to keep up with the ever changing demands of a very crowded industry.”
I encourage you to read Joel’s letter below to gain better insight into his decision.
No doubt, some local beer lovers will feel betrayed and treat this like a death in the family. There will also be plenty of consumers who will not care, opting to instead focus on the quality of the products Two Beers and Seattle Cider produce. Given the manner in which the beer loving community has grown and evolved in recent years, I assume there will be more of the latter and less of the former, though the vitriolic minority is sure to more loudly voice their opinion.
As you sip your beer at the bar, you may not realize how incredibly common it is for breweries to have any number of unseen investors. Behind the scenes, away from what most beer drinkers and cider drinkers see, Joel spends a lot of time messing with business that does not have to do with brewing beer or making cider. In particular, as the company continued to grow, Joel found himself spending a lot of time trying to find capital to fund the growth.
Contrary to popular belief, few breweries operate on capital provided by the one owner whose face and name they recognize. In most cases there are investors behind the scenes. When a beloved local brewery decides that it wants to open a new, large production brewery across town, the money it takes to realize that dream does not typically come from “the owner’s” pocket. Very, very few brewery owners have millions of dollars laying around in the bank. Very few people who have millions of dollars laying around in the bank decide to open breweries, though that is not unheard of.
When he was approached by Agrial, Joel did his due diligence, considered other capital investment offers (there were other suitors), and eventually brought the Agrial deal to his existing investors. They voted in favor of the deal almost unanimously. As he explains in his letter, there are reasons why Joel considered this a better fit than some other offers.
Joel VandenBrink founded Two Beers Brewing in 2007 when he began brewing out of an ActiveSpace location in Fremont. In 2009, Joel began leasing space in the current location in Seattle’s SoDo neighborhood. After signing that lease, he had just $17 in his bank account but steadily began growing the business with the help of his investors. Joel expanded his business in 2013, when he launched Seattle Cider Company.
At the time, Washington’s liquor laws required that Seattle Cider operate as an independent company. Although the law has changed, it is still unusual for a brewery to crossover into the world of cider and operate in both market spaces. Interestingly, Agrial also operates in both realms. That is one reason Joel found this opportunity intriguing.
According to Joel, Agrial is aware of his companies’ core values and is not interested is changing much. For instance, Two Beers/Seattle Cider will continue to support the Washington Trails Association, the Mountaineers, and Crohn’s and Colitis Foundation of America.
Joel will continue to have final say as to the beers and ciders the company produces, employees will continue on in their same positions, and so on.
The merger/acquisition opens a lot of new doors for Seattle Cider Company and Two Beers Brewing, including the potential to export its products to foreign markets in Europe, Asia and Africa. It also gives Seattle Cider access to French cider apples that are otherwise unavailable in the USA.
Joel is still passionate about both beer and cider and says he is excited about the long list of opportunities this agreement offers for the two businesses into which he has poured so much hard work.
The industry has changed a lot since Two Beers opened nine years ago and Joel sees no shortage of opportunities to further advance the two brands he’s built, but all of his visions involve capital investment from somewhere. This is the path he’s chosen.
Below I share a letter from Joel VandenBrink, as well as the official press release.
You can also read more about this deal on Brewbound.com.
A letter from Joel VandenBrink
Dear Two Beers Brewing and Seattle Cider Company supporters:
As many of you know, Two Beers Brewing Co. began in my 600-square-foot apartment in the fall of 2006. My first homebrew was barely five gallons and was a recipe from Bob’s Homebrew near the University of Washington. It was supposed to be a Winter Warmer. I proudly boiled, fermented and bottled it. It turned out to be more of an Amber, and I learned my first lesson in brewing. It’s unpredictable, fun as hell and in the end, there’s always someone to share a beer (or two) with.
From our 170-square-foot active space in N. Seattle to the 29,000 square foot space we occupy today, our growth has been the labor of love and sacrifice by a team that all believes in what we are doing. We’ve grown Two Beers Brewing to become one of Seattle’s most beloved local breweries, supporting our community through great beer and partnership with organizations such as the Washington’s National Park Fund, The Mountaineers, WTA and more. Then Seattle Cider Company came along and helped change an industry, proving that cider doesn’t have to be sweet, can be made with amazing local ingredients and can be enjoyed every day. It’s been amazing, thrilling, scary and humbling all at the same time.
And while we continue to grow, keeping up with demand for a company our size can often be a challenge.
As Two Beers Brewing Co. enters its tenth year and Seattle Cider enters its fourth year, it became clear that my desires for both companies far exceeded our ability to grow them sustainably – something I have always held as a high priority. I want nothing less than Two Beers Brewing Co. and Seattle Cider Co. to be premier companies in their fields, and have the continuous ability to keep up with the ever changing demands of a very crowded industry.
The challenges of being an entrepreneur are endless and every entrepreneur makes 100 decisions a day that they hope are the right ones. We are constantly thinking of our community, our employees, our product, the bills we need to pay, how to grow, how to innovate, how to be better at what we are doing, etc. It never ends. It’s a thrill. It’s a constant challenge. It’s incredibly rewarding. And when someone says they put their “blood sweat and tears” into their business, it’s not a cliché, it’s literal.
In March, I was contacted by a French cidery. Their desire was to partner with an American cidery to help grow both the American cidery and their French cidery. At first I was hesitant, but the more I talked with them, the more I liked the idea. They believed in everything we believed in. They understood our desire to grow Two Beers Brewing Co. and Seattle Cider Co. without changing any of the good we were doing.
We have all read articles about local breweries being purchased by a large brewery in Colorado or Saint Louis. We have also read articles about venture capital firms purchasing breweries in hopes of making a quick dollar and reselling them. None of us want this. We feel the immediate loss of something special. The disappointment of another “sell out” of a local dream. To many of us, it takes the thrill out of supporting them. We want to know our dollar matters. That our support in our local brewery makes a difference in the community we live and work in. Eventually all entrepreneurs are faced with the ultimate “live or die” tradeoff – partner with an organization that can help you achieve your goals, or continue to go it alone.
Agrial is a farmer owned co-op based in France. They are the owners of some of the largest apple orchards in all of Europe, as well as partners with one of the few craft breweries in France. What makes a co-op different from a major corporation is the undying dedication of the farmers who collectively share in its success, and the greater good they mutually serve. “Ownership” means something very special. They share the same values we do. They roll up their sleeves, dig in the dirt, harvest and create like an arm-linked community of entrepreneurs. As of this month Two Beers Brewing Co. and Seattle Cider Co. have entered into an equity partnership with them. We will eventually be exporting our products to Europe, Asia, and Africa, and we will be importing their products into the United States.
This is a huge opportunity for the businesses that I will continue to dedicate my time and energy to. I will maintain my role as CEO and all of my employees will continue to work with me. Our products and our distributors will stay exactly the same and our dedication to Seattle and beyond can only increase with the strength of such a strong partner alongside us.
I am very proud of everything we have accomplished thus far and I am incredibly excited for what the future holds for both Two Beers Brewing Co. and Seattle Cider Co. Thank you for your support in the past and on into the future. We are nothing without you! We will continue to give back to you in the ways that we always have, and are eager to find new ways to give that we couldn’t before.
Thank you in advance for taking this leap of faith with us to make a great dream even greater. In the end: life is just a little more honest after two beers. I’m excited to share a few more with all of you as we enter into this exciting adventure.
Cheers!
Joel VandenBrink
Founder & CEO
Seattle Cider Company & Two Beers Brewing
PRESS RELEASE
Seattle Cider Company and Two Beers Brewing Announce Merger with French Farmer-Run Cooperative
Merger with France’s largest cider producer allows for expansion to international markets and increased production for the fast growing companies
SEATTLE (September 27, 2016) – Seattle Cider Company and Two Beers Brewing have announced a merger with French farmer-run cooperative Agrial. The two Seattle based companies – which share the same leadership team and have seen immense growth over the past few years – will continue to operate independently in Seattle, while merging with the leading French cider producer.
The merger and further partnership will help Seattle Cider Company and Two Beers Brewing grow through Agrial’s international distribution network, gaining access to developing craft beer and cider communities around the world. It will also allow for needed capital expansion projects for the growing brewery and the cidery. Additionally, the partnership provides Agrial with the opportunity to gain access to the American craft cider and beer market, as well as distribute a selection of its French cidre brand, Louis Raison, to the US.
“The amazing growth and expansion we’ve seen over the past three years has taken us by surprise, and as I looked at where I wanted to take Seattle Cider Company and Two Beers Brewing into the future, I knew we would need a partner to be able to achieve our long term goals,” said Joel VandenBrink, founder and CEO of Seattle Cider Company and Two Beers Brewing. “Agrial has impressed me with their belief in our mission and vision, and even more so with their desire to support Seattle Cider Company and Two Beers Brewing Co. as we continue to grow our brands the way we have in the past.”
Through the partnership, Seattle Cider Company, Two Beers Brewing and Agrial remain dedicated to product quality, as well as maintaining the culture and dedication to craft built by Seattle Cider Company and Two Beers Brewing. Seattle Cider Company and Two Beers Brewing will continue to operate independently in Seattle, maintaining control of the day-to-day operations. Joel VandenBrink, founder of both companies, will remain as CEO. Leadership, staff, brewers, cidermakers, distributors and most importantly, the beer and cider people have come to know and love from the two companies will also remain the same.
“Seattle Cider Company has changed the face of cider in the United States in the past three years and it’s been exciting to watch. We’re thrilled to now be a part of it, and watch the companies continue to push the boundaries of cider and beer in the US and beyond. We feel strongly about the success of these brands, and share the same vision and mindset Joel has set forth for the companies,” added Franck Malinowski, the historical CEO of Agrial’s beverage division.
Seattle Cider Company, which celebrated three years in August, has quickly grown to become Washington’s largest cidery, seeing an expected production of 21,000 barrels in 2016. Now available in 12 states, it continues to push the boundaries of craft cider. Two Beers Brewing, nearing its ninth anniversary in November, continues to grow as one of Seattle’s beloved craft breweries, expecting to reach 8,000 barrels in 2016.
Famous for traditional French cidre, as well as a variety of brands valuing farmer developed products, Agrial is the number one cidre producer and seller in France. One of its missions is to support entrepreneurs transforming apples into value-added beverages and apples products. Owned by a large community of growers, Agrial offers more than 100 years of experience, a dedicated quality and innovation team, and distribution connections in more than 30 countries.
Cascadia Capital is serving as exclusive financial advisor to Two Beers Brewing and Seattle Cider Company in the transaction, while Miller Nash is serving as legal counsel.
For more information about the joint venture and thoughts from Joel VandenBrink, founder of Two Beers Brewing and Seattle Cider Company, visit the company’s blog at seattlecidercompany.com and twobeersbrewing.com.
About Seattle Cider Company®
Not your standard cider. Seattle Cider Company was founded in 2013 as the city’s first cidery since Prohibition, bringing true craft cider back to Seattle and across the country. Bridging the gap between wine and beer with flavorful, uniquely dry cider, Seattle Cider Company’s year round and seasonal offerings break the mold of overly sweet cider, bringing the natural flavors of Washington apples to the forefront. Naturally gluten free and made from a custom blend of fresh pressed, locally grown apples, Seattle Cider Company’s products are handcrafted with all natural ingredients and never from concentrate. For more information, visit seattlecidercompany.com, or follow Seattle Cider Company on Facebook, Twitter and Instagram (@seattleciderco).
About Two Beers Brewing Co. ®
Two Beers Brewing Co. began operations in a small Seattle basement in 2007 and today, produces more than 14 unique beers including year rounds, seasonal and a host of intricate infusions in its SoDo-based brewery. Two Beers Brewing can be found in Seattle-area bars and restaurants, with tastings kegs and growler fill-ups available at their tasting room located at 4660 Ohio Ave. S. in SoDo, open weekly Tuesday – Thursday from 3-9 pm, Friday from 1-10pm, Saturdays from 1-10pm & Sundays from 1-6pm. Select brews can also be found in 12-ounce cans and 22-ounce bottles through the tasting room, as well as local retailers in Washington, Oregon, Alaska and Idaho. For more information, visit www.twobeersbrewery.com.
About AGRIAL
AGRIAL it is one of the leading French agricultural and food-processing cooperative groups. Its beverage division also produces and sells other types of apple-related products such as cider, apple juice, vinegar. A major player in agricultural production in its area, AGRIAL as a cooperative aims to create sustainable added value for its members by providing, on a day-to-day basis, technical, economic and environmental support for its members on their holdings.
