Good Beer Hunting

Nobody Suspects the Spanish Acquisition — Founders-Mahou Deal An Expected End for Rapid-Growth Partnership, And It’s Not Done


Immediately after you step through the front doors of Mahou San Miguel's production facility, located almost 40 miles outside of Madrid, an upward staircase leaves you standing in front of a gift shop. There are Mahou-branded beer glasses, clothing, and more, but American visitors may notice a familiar name on a six-foot-tall cooler near a corner: Founders Brewing Co.

Since selling a minority stake valued at $96.3 million to the Spanish company in 2014, Founders has ramped up production at its Michigan HQ, and shifted some production of flagship All Day IPA to Avery Brewing Co. Founders is on pace to make about three times more beer in 2019 (about 600,000 barrels) than it did when it first sold 30% of the company to Mahou five years ago.

The investment into Founders has been pivotal for its growth, and the brewery is now sold in all 50 U.S. states. But in the wake of its latest 60% sale to Mahou for an undisclosed sum (Founders’ founders Mike Stevens and Dave Engbers own the remaining 10%, split evenly between them), a new plotline has emerged that isn't always seen in modern mergers and acquisitions in today's beer industry.

Yes, there's money to be made, and these businesses are looking to boost bottom lines—but among the multinationals that have expanded in or entered the U.S. through buyouts, Mahou has telegraphed a unique interest in learning from its subsidiaries as much as finding new sources of revenue. Down the line, GBH is told that Mahou’s interest could turn into further acquisitions. 

"Those brands sometimes need innovation and reinvention of themselves," says Stevens. "The Mahou family is smart in looking to the U.S. marketplace and creativity, because they've been very open about, ‘We don't brew like you guys, but we're very intrigued by how you operate your business and how innovation works here.'"

For almost all of its 130 years, Mahou San Miguel has focused on a collection of Lagers, now led by its Cinco Estrella and Clásica Pilsners. But a look at its current lineup—which includes a Radler, Wheat, and a Bock, aptly named Doble Lúpulo for its "double hops joviality and elegance"—makes it clear things are changing. The company now has non-alcoholic brands in its portfolio, and perhaps most noteworthy, a fast-growing barrel program.

In 2017, Mahou had about 600 barrels, including American and French oak, as well as ex-bourbon and -whiskey barrels from Heaven Hill and Jack Daniels. That number more than doubled to 1,300 last year, and continues to grow. All are kept in temperature-controlled rooms that go no higher than 50 degrees Fahrenheit (10 degrees Celsius). It’s this entry point that has made stakes in Founders (the brewery’s barrel program is perhaps second in popularity to its All Day IPA) and Avery Brewing Co. (its Barrel-Aged Series is now a decade old) particularly valuable.

In a statement made to, Alberto Rodríguez-Toquero, Mahou’s managing director, said that deepening the company's investment into Founders consolidates Mahou's position "as the most advanced Spanish brewer in promoting the craft world and strengthening our commitment to becoming global in this segment with the best possible partner.” It's a sentiment that was echoed last year by Bruno Martínez Falagán, one of Mahou's master brewers, who also oversees Mahou’s Department of Beer Culture and International Brewing.

"In Spain, it's a Lager and Pilsner world," he told me at the time. "It's good, but it's narrow."

In recent years, Mahou began the work of pushing three barrel-aged Lagers, with the hope of enticing Spaniards to expand into a premium space of offerings: Barrica Original (three months in undisclosed barrels), Barrica 12 Meses (12 months in French oak barrels), and Barrica Bourbon (12 months in bourbon barrels). Talent exchanges among Mahou, Founders, and Avery, in which American brewers visit Spain to share insights about working with wood, have also taken place.

According to Stevens, Founders saw an opportunity to give "help and guidance.”

“They hadn’t lived in a world where you don’t filter and pasteurize beers, so this has been a whole new process for them,” he says. “Our ways may be a bit more ‘barbaric’ than theirs, but they’re learning to brew in our style and fashion.”

Now that Mahou has taken a majority stake in Founders, that exchange is going to be a two-way street more than ever.

According to, 2019 will represent Founders’ slowest growth rate by far since Mahou first took a minority stake in 2014. Year-end estimates hover around 600,000 BBLs, which would be an increase of about 6.5%. That’s well above craft’s average national growth rate, which is around 4%, but a significant drop from the previous four years, when year-to-year production went up by no less than 21%.

Part of this decrease comes from the lack of new American markets to expand into. Now that it’s a fully national brand, Founders is forced to take on a challenge that only the biggest-of-the-big have faced in this new era of U.S. beer: organic growth. When so many breweries are pursuing a “mile-deep” plan, which involves focusing on home markets, Founders is both reaching further out and keeping its sights on its Michigan market: found that the brewery increased its in-state sales by 20% from 2017–2018.

That doesn’t mean broader audiences are out of play, however.

"Eighty percent of the beer drinking public does not drink craft. What does that mean? It means there’s a sea of opportunity," Stevens told "That opportunity is going to take a lot of resources—resources greater than any craft brewery in our industry has. We look at this opportunity with Mahou as our opportunity together to break into a much larger segment of the beer industry."

Expanding Founders’ reach and audience is a strategy Stevens has long been open about, whether through exploring new packaging sizes, going all in on its All Day IPA flagship, or recognizing the need to play toward price-conscious consumers. For years, translating those efforts into sales hasn't been an issue. According to figures from grocery, convenience, and other retailers tracked by IRI, a market research firm that compiles scan data from chain stores, Founders grew its packaged beer sales by 64%, 53%, and 38% in the last three years, respectively. 2019 may be its first true slowdown. On an annual basis, Founders’ entire portfolio of brands moved 72% of its 2018 IRI volume through almost all of August, but that left four more months of growth. When looking over the three-month period that ended Aug. 11, Founders was up 7% in IRI volume, with flagship All Day IPA increasing by 5%.

However, if you break these figures down on a week-to-week basis and look across the entirety of this summer, All Day's slowdown isn't far off—and is in fact better—than many of its direct competitors. Aside from Elysian Brewing Company's Space Dust IPA, which has received a massive boost in production, placement, and advertising due to the brewery's ownership by Anheuser-Busch InBev, most other leading IPA brands aren't showing game-changing growth.

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This has all been front-of-mind for Stevens, who spoke to GBH about how he's ready for "slow and steady" growth after years of non-stop increase. This decision is of particular note based on the original agreement between the two companies, which would have allowed Mahou to purchase Founders for "10 and 13 times EBITDA (earnings before interest, tax, depreciation and amortization), depending on Founders’ average financial performance in the five-year period," according to

The outlet was told by Founders' lawyers that the "old deal went away," although the strategic value of selling that minority stake in 2014 (when Founders was relatively "small") and a larger amount later (when it ranks among the biggest breweries in the country) could be worth millions. Now present in all 50 U.S. states and slowly expanding its international market, Founders has hit something of an artificial "cap," creating a perfect time to sell and slow down. It's also an incentive for Engbers and Stevens to stick around with 5% of the company each, as they can guide their business into its next phase. That insight will be a huge benefit to Mahou as it continues to learn the American market.

"We really now want to step back and look at some of that aggressive growth and think about strategic growth instead to pick our pace and dissect what we want brands to do for us or what campaigns may look like," he says. "We don't want to just ask ourselves, ‘What do next year's numbers look like?’, but, ‘What could they look like 10 years from now?’" 

One area in which this new ownership structure could be particularly beneficial isn’t just for Founders, but other companies, too. Stevens tells GBH that Mahou has had conversations about the potential of his company and Mahou to engage in further acquisitions, saying that the companies are "actively looking around and chatting with different people and for different opportunities."

Those opportunities might be in "a lot of different alcoholic beverages," Stevens says, adding that there are "interesting things going on in spirits, ready-to-drink, ciders, wines, you name it."

"We're not shutting the door on American craft beer, but in today's world, you have to broaden your horizons and look at opportunities to help others grow," he says. 

That part of this business has already taken hold with Avery.

In April, Mahou and Founders tag-teamed on buying a 40% stake in Avery, which was on top of the 30% it had already sold to the Spanish company in 2017. The plan was synergistic, as Founders had already shared its intent to brew All Day IPA at Avery's Colorado facility, as the business deepened its connections out West. The move was convenient for Avery, too: the brewery’s max capacity is about 150,000 BBLs, though it brewed a little less than half that at its peak in 2017.

Mahou’s and Founders’ joint purchase seems particularly relevant, given last week’s news.

"Systems and implementation, supply-chain management, quality metrics: they are masters of it," Bernardo Alatorre, Avery's production and safety manager, says of Mahou. As Avery works back toward higher production numbers—spurred on by new brands, among other efforts—Mahou’s skills, and the ongoing relationship with Founders, will be key.

“We’re not out here in this sea change in beer on our own,” Alatorre says. “We have the support of a well-established producer and a family company that has respect for its involvement and how to help.”

Whether you’re a skeptic or agnostic toward the “nothing is going to change” line that so often appears following the purchase of a brewery by a multinational company (the Brewers Association mocked the oft-cited phrase at the 2016 Craft Brewers Conference), staff from Founders and Avery have commended Mahou for being hands-off. For what it’s worth, Brian Krueger, Avery’s national director of sales and marketing, says Mahou will soon place a new chief operating officer at the Colorado brewery, filling a position that has been empty since last year, when Dustin LeMoine resigned from the job and COO responsibilities were shared out among leadership. 

The impact of that move has yet to be seen—both Krueger and Alatorre praised the collaborative spirit of the Mahou-Founders ownership—but it’s clear the Spanish company is using investment in its businesses as learning opportunities for the HQ back in Spain.

At Mahou’s facility, the company has used a 20-hectoliter (16-BBL) system for research and development since 2015, as well as a 1-hectoliter (26-gallon/.83-BBL) system since 2017. Alatorre says he's offered insight related to dry-hopping and IPA production for those systems, and both Avery and Founders have sent staff to Spain to help teach Mahou employees about American-style brewing.

Mahou is pursuing this approach to shared knowledge in Spain as well. Earlier this year, the company opened up a $12-million collaborative space for contract brewing operations, aimed at both startups and other breweries. That opening comes on the heels of Mahou’s Espacio Cervecero, a now-closed brewpub facility formally run by Igor Oyarbide Sangróniz, Mahou's product development technician, who has a background as a brewery owner and entrepreneur focused on American-style beers. The bar/restaurant featured American staples like IPAs, Pale Ales, Stouts, and more, all brewed to style as you would find in a modern, U.S. taproom.

Though Spain has traditionally been—and continues to be—dominated by Lager, Mahou has been proactive in trying to evolve consumer expectations of what beer can be, while also challenging assumptions of what the company can do. Aside from creating opportunities in Spain (including buying a 70% stake in Spain’s “new-generation” Lager producer Brutus) it’s also worked in the U.K. through its “Mahou Maestro” series to share Spanish culture and Mahou beers.

Taken holistically, Mahou’s expanding reach in the U.S. makes sense. It’s not just investing in breweries the company assumes will work out in the long run. The multinational is also gaining business partners that will be key to creating the kinds of beers Spain hasn’t embraced as much as other forward-thinking beer countries. Whatever the long game, it seems that Mahou’s increased ownership stakes in Founders and Avery are key pieces to expanding its global influence.

Multiple attempts in recent months to contact Mahou leadership through the company’s Spanish PR firm weren’t successful, so that side of this story is mostly inferred through previous interactions and more recent business decisions. Like so many multinational companies, leadership doesn’t offer much in terms of candid commentary.

But unlike recent moves made by companies the likes of Anheuser-Busch InBev, MillerCoors, or Constellation Brands, the reverberations following Mahou San Miguel’s investments have mostly flown under the radar. That could be chalked up to its relative anonymity in the U.S. and its hands-off approach to Founders and Avery leadership, the latter of which highlights an opportunity to learn, rather than force change in a market Mahou may not understand. Responses from Mahou staff last year about a need to better understand American beer and marketing, along with insight from its U.S. partners, all align.

That’s what makes last week’s increased stake in Founders Mahou’s most interesting move to-date. Given Mike Stevens’ forward-thinking approach toward additional acquisition, and given how both Founders and Mahou partnered on the increased ownership in Avery, perhaps now is the time that Mahou finally puts its five-year education in American beer to the test. 

There are plenty of examples of how the industry is slowing, and if a company with rich coffers and an interest in expansion wanted to strike, now’s the best time to make those moves in recent memory. Mahou has set its sights on two of modern craft beer’s longer-tenured companies: Founders has been in business for 22 years, Avery for 26. If you’re seeking examples of breweries teaming up to better take on industry headwinds, you don’t need to look beyond Craft Brew Alliance, CANarchy, Artisanal Brewing Ventures, and Boston Beer-Dogfish Head. All demonstrate the value in joining forces while taking advantage of long-established distribution footprints, sales forces, a chain-retail focus, and brand equity to cut through the still-increasing noise.

Based on Stevens’ interest in potentially expanding shared business and synergies beyond Avery, this could vey well be the next collective in the list—and suggests that there will be more from Mahou to come.

[Some reporting for this story was made possible by a 2018 trip to Madrid on the invite of Mahou San Miguel to Bryan Roth as an independent journalist. Travel and accommodations were provided by the company.]

Words by Bryan Roth