Devils Backbone, the eight year old craft brewery headquartered in Nelson County, was recently bought for an undisclosed sum by global beer giant Anheuser-Busch InBev. Now, some Virginia fans of the scruffy indie brand are questioning whether the label has sold out.
Hours after news broke that Devils Backbone, the beloved, locally owned craft brewery headquartered in Nelson County, was being sold to Anheuser-Busch InBev, one thing quickly became clear: Beer drinkers, particularly craft beer drinkers, can be territorial about their favorite local brew. The Devils Backbone Facebook page blew up with comments from many fans dismayed and disappointed by the company's decision to sell to what some perceived as “the man."
How does a local label built on edgy independence make the leap into the arms of the world's largest beer maker without alienating its core customer?
Tim Johnson from Lynchburg is one of those core customers. He's been drinking Devils Backbone's Eight Point IPA for about six years. He says that while he understands the company's decision to sell, he prefers to keep his beer dollars with the little guys. "My revenue, or money that I have to put into the industry [is] going to go to smaller groups that need my backing more so than to someone who now has the backing of a large corporation," says Johnson.
Devils Backbone CEO Steve Crandall is aware that some customers are skeptical of the sale. He says, "Brewers are interesting people. They're sort of anti 'the man'."
But he had to sell to keep thriving. The company had already grown at a fast clip, some 350% since 2008. Crandall says, "Yes, we sold to ABI a controlling interest and it was for the life span of this business something we had to do. From a financial standpoint, we were tapped out."
What does selling to a global corporate behemoth get you? Terms of the agreement were not disclosed, but ABI is expected to invest $25 million in infrastructure and equipment improvements in the company. This includes its brewpub in Nelson County and a 35,000-square-foot brewery in Lexington.
The brewery will expand by 50,000 square feet. The size of the workforce at the Lexington facility is expected to increase from 60 to 120. 401K matching funds for employees will go from 1 percent to 6 percent. Crandall says, "They have a seed bank of malt that we can go in and say, you know, we've never tried this, would you mind growing us some? And they will actually grow that malt."
He plans to get into barrel aging, in which beer ages in bourbon, whiskey and wine barrels. "We're going to be able to do amazing things with our beer. Not only with beer, but within our communities, more opportunities to support our communities and to improve the lives of our employees. People ask me, are you going to water down your beer? Are you going to change your ingredients? I'm like, let me think about that. Vienna Lager is our flagship beer, one of the most award winning craft beers in the nation. Why would we change the recipe?" says Crandall.
In the beer industry, craft is where the growth is. Total beer sales dipped .2 % last year while craft beer sales increased 12.8%, according to the Brewer's Association. Crandall says, "Craft is so exciting for the bigger guys because the bigger guys-their footprint is filled out. A little guy like me, we're just scratching the
surface. We have a huge amount of room to run."
News of the sale coincided with the announcement that Oregon-based Deschutes Brewery will begin construction on its East Coast production facility in Roanoke in 2019. The facility is expected to create more than 100 jobs.
Both announcements signal Virginia's growing significance in the craft beer industry, going from around 50 craft breweries in 2011 to roughly 124 in 2015, according to figures from the Brewers Association.
This is largely due to the 2012 passage of state legislation that allowed breweries to sell beer for on-premise consumption. Before the bill, breweries could only give out samples or sell beer to-go. Licensing requirements also relaxed, which opened the door to more competition.
Top Virginia breweries, including Devils Backbone, Starr Hill in Crozet and Hardywood in Richmond, as well as the Virginia Manufacturers Association, lobbied for its legislation.
