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Tilray’s recent buy of several Anheuser-Busch brands is the latest effort by the Canadian company to expand into the beverage business as it weathers ongoing challenges in its core cannabis business.
On Monday, Tilray announced that it had closed on an all-cash deal to buy eight beer and beverage brands from Anheuser-Busch (BUD). The acquisition makes Tilray the fifth largest craft beer brewer in the US, giving it a market share of around 5%, and triples its beer sales volume to 12M cases per year.
The company’s latest acquisition includes beer and beverage brands Shock Top, Breckenridge Brewery, Blue Point Brewing Company, 10 Barrel Brewing Company, Redhook Brewery, Widmer Brothers Brewing, Square Mile Cider Company, and HiBall Energy. The deal also includes eight brewpubs located in Oregon, Washington state, Idaho, Colorado, and New York, along with four production facilities.
Tilray said on Monday that the craft beers are expected to generate pro forma revenue of around $250M. It said the US craft-beer market was expected to generate revenue of around $30B in 2023, with an expectation to grow at a CAGR of approximately 7.2% annually through 2030.
To put those revenue numbers in perspective, in its fiscal 2023 earnings report released in July, Tilray reported that beverage alcohol sales jumped 33% year-over-year to $95M, accounting for 15% of its topline.
In comparison, Tilray’s fiscal 2023 net revenue dipped to $627M from $628M, due in part to currency issues and underlying challenges in its core cannabis business. The company is still operating in the red but said it achieved positive adjusted free cash flow across all operating units.
Tilray said when the Anheuser-Busch deal was announced in August that it expected the Anheuser-Busch brands along with its existing alcohol brands to generate pro forma revenue of around $300M.
The Anheuser-Busch deal is the company’s latest foray into the alcohol business. The company already owns SweetWater Brewing Company, Montauk Brewing Company, Alpine Beer Company and Green Flash Brewing Company.
It also owns spirits maker Breckenridge Distillery and Happy Flower, which markets CBD-infused cocktails. In August, the company acquired THC beverage maker Truss from Molson Coors Canada (TAP).
Tilray is expected to release its fiscal Q4 earnings report on Wednesday, Oct. 4.