The craft beer pioneer is getting into the "functional" beer space with the purchase of San Francisco's Sufferfest Beer Company.
When evaluating historical turning points, not every event is “launch of the iPhone” caliber. More often than not, we’re left retrospectively looking at changes that might have gone unnoticed at the time but had big impacts in the long run. However, major signposts do come along, and yesterday, Sierra Nevada made an announcement that could point to not one, but two major shifts in the craft beer industry moving forward. America’s third largest craft brewery and, by all accounts, a billion dollar business has acquired the San Francisco-based Sufferfest Beer Company, a brand launched in 2016 that produced just 3,000 barrels of beer last year, . By comparison, Sierra Nevada brewed over a million barrels. So if Sufferfest is so small, why is this deal so big?
The first reason is that this move is Sierra Nevada’s first buyout of another brewery — and small or not, buyouts are always a source of discussion in the craft beer world. Over the past decade, large beer companies like Anheuser-Busch InBev, MillerCoors, Heineken, Constellation Brands, Asahi… yeah, a lot of companies… have turned to buyouts to broaden (or even start) a craft beer portfolio — often with the criticism of undermining independent brewers. However, as the landscape has become more crowded, smaller craft breweries have also been merging to stay more competitive. As a result, Sierra Nevada’s first buyout isn’t a shock, but it certainly signals a switch for one of America’s oldest and most respected craft brands. It’s not crazy to think that other brands may see that Sierra Nevada has gotten into the acquisition game and wonder if the stigma of buyouts has officially been shed.
But second, the fact that Sierra Nevada is grabbing Sufferfest specifically is a very big deal. Though the Chico-based company has certainly kept up with the times in some regards — jumping on the hazy beer trend with their very popular Hazy Little Things IPA and acknowledging the power of the Mexican beer market with their Sierraveza Easy-Drinking Lager — Sierra Nevada’s flagship brew is still its old-school Pale Ale. Meanwhile, Sufferfest is anything but old-school: The brewery is part of the growing “functional” beer market — brands the purport to sell beers with benefits. Sufferfest says it “fuels active, healthy, passionate humans” — putting just as much emphasis on numbers like parts/million gluten (for gluten-free beers) and sodium levels (to aid athletes in hydration) as the traditional metrics of ABV and IBUs.
The fact that Sierra Nevada and Sufferfest are so different is why this acquisition make sense, but at the same time, the acknowledgement that Sierra Nevada feels the need to compete in this space — and do so immediately instead of developing in-house — points towards just how important these kinds of functional beers may be to the industry moving forward.
For the record, Sierra Nevada CEO Jeff White told Brewbound that buying out breweries wasn’t part of their larger plan moving forward. Sufferfest is “a bit of a unicorn,” he was quoted as saying. Additionally, he didn’t yet commit to taking the newly acquired label nationwide. “Sufferfest and this whole space is in its early stages and its infancy,” he added. Still, this buyout indicates two major shifts for Sierra Nevada — a brewery who has been a leader in the craft industry since 1980. Yes, times have changed, but that doesn’t mean others won’t continue to follow.