If you live in Houston, or have an interest in the beer industry, chances are you’ve already heard about (and possibly reacted to) the acquisition of local craft-beer brewer Karbach Brewing Co. by beer behemoth Anheuser-Busch InBev (AB InBev), the global volume and revenue leader in the beer industry boasting annual revenues surpassing $40 billion.
Personal positions on the matter may differ, but there’s still the need to consider the business ramifications of being acquired by another company, especially a larger one.
Due to operational limitations, Karbach has been unable to distribute its beer to a larger geographical base. The acquisition by AB InBev will provide funding and resources to allow for greater production and increases in delivery efficiency throughout the state of Texas. In fact, Karbach plans to grow to 150,000 barrels per year by 2019, according to Houston Business Journal.
But what about the behind-the-scene aspects?
Considerations for the Small-Business Acquisition
We’ve helped companies handle internal struggles through times of major change, including acquisitions and mergers, and there are several points to consider in this particular context:
- Retaining quality control small craft brewers are known for
- Staying true to the company’s set of values and small-business mentality
- Entering new markets as a non-local brewer and managing that growth while still catering to the Houston faithful
It’s easy for a company in Karbach’s position to become enamored with the numerous opportunities made available from the acquisition; however, to be able to successfully navigate these points, the company will need to invest in strategic planning focusing on their internal structure. After all, major growth and scale (especially over an accelerated timeline) often tests the limits of small-business operations.
Benefits for Both Parties
Of course, there would be no acquisition if both parties did not benefit in some way.
AB InBev is strengthening its product portfolio to stay consistent with market trends. They’re essentially making moves to ensure continued high market share, as craft beer has grown its share of the beer market ($105.9 billion) to over 21% ($22.3 billion), based on a report by the Brewers Association.
As for Karbach, this deal will allow it to continue its own growth to become better positioned as a major competitor over a larger geographical area. Employees, founders, and investors of Karbach stand to benefit from this increased growth, along with the pride of sharing their beer-inspired passion with more people.
With careful strategic planning and persistent communication with its consumer base, Karbach will be equipped to survive the kneejerk backlash reactions and move forward in producing craft beer while staying true to the methods and care that propelled them over the last several years.
However, it’s important for Karback to remember that solid business strategy alone is not enough to ensure success. As numerous engagements have taught us, change starts from within, and committing an equal amount of focus on internal aspects helps to better align all facets of the organization to enable its vision to be realized.