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Craft brewer M&A is heating up as cos increasingly seek partnerships to help navigate industry challenges. Ninkasi Brewing will merge with Ashland Hard Seltzer parent co, Wings and Arrow LLC, owned and run by Saint Archer founder Josh Landan, to create an all-new company dubbed Great Frontier Holdings, cos announced and Brewbound first reported. Great Frontier will be run by Josh as CEO while Ninkasi founders Nikos Ridge and Jamie Floyd maintain leadership roles and manage operations. Suggests this is a non-cash deal and both cos rolling up equity into the combined entity, one source shared with CBN. (A version of this article also appeared in sibling pub INSIGHTS Express.) Great Frontier will employ over 140 folks between Ninkasi's existing biz and Wings & Arrow's San Diego-based brand mktg teams, per release, adding that "no reduction in staff is anticipated." Rather, co will "increase" sales support in "coming months" as Great Frontier "launches new brands and looks to acquire other brands with unmet potential." Equity roll-ups have faced challenges in the past, both in attracting new cos and in determining payout if/when the collective co sells to another entity (i.e. CANarchy sale to Monster). But other cos like IndieBrew (Scofflaw and Bearded Iris) are also taking a stab at this (without private equity involvement) as a way to grow, diversify the portfolio and gain economies of scale to improve cost structures. Indeed, "rather than perpetually raising capital to achieve growth, Great Frontier is taking a different approach by creating a collective of successful, diverse, complementary brands under one roof, backed by a strong production pipeline and exceptional marketing capabilities," stated Josh Landan.From Contract Brewing Relationship to Merger; Wings & Arrow at 500K Cases in 2022 After being founded in 2020, Wings and Arrow portfolio quickly grew to over 500K cases (~36K bbls) sold in 2022 including Ashland hard seltzer, Villager Spirits and Mucho Aloha hard lemonade. Plus, it recently launched Wings & Arrow beer on draft with packaged sales comin' this Jul, and will launch Voyage Hard Iced Tea this summer in 12oz 6pks and 24oz cans. Ashland hard seltzer is its main brand, climbing the ranks within fast-falling hard seltzer segment, tho brand is declining in recent periods. Ninkasi also delved into RTD spirits realm last yr, on top of its sizable contract biz that makes all kinds of beyond beer products, including Ashland Hard Seltzer's main contract partner "for years," per release.That seems to have been impetus for merger, and marks 2d deal where contract brewing relationship led to M&A in just the last 2 wks (following FX Matt deal to buy Flying Dog). "We already had a great working relationship with Josh and his team through Ashland, so the transition into Great Frontier will be easy," Nikos said in released statement. "As a collective, we now touch almost every industry segment through the brands we own and our strong co-packing business, so we're set up to be successful no matter how consumer tastes shift this year or ten years from now."Ninkasi Brand Down Big vs Peak but Contract Biz Remains "Robust" with Montucky Cold Snacks Ninkasi's own brand declined considerably since peak of ~100K bbls, slipping to 61K bbls in 2022, according to Brewers Assn estimate. But despite challenges, Ninkasi expected to grow revs last year, co told CBN in Apr 2022. Co produced ~150K bbls/yr including contract biz, according to Craft Brewing Business profile from Sep. Its "robust" contract brewing biz includes Montucky Cold Snacks brand, which grew double-digits to 63K bbls in 2022, BA estimates. So Montucky now larger than Ninkasi brand and continues to grow solidly in early 2023. Gotta note, Great Frontier mentioned Montucky Cold Snacks thruout the press release for deal with Ninkasi, suggesting Montucky is already considered an important piece of this platform, with or without equity ties. Ninkasi will continue offering contract brewing services to select partners, cos assured, as combined co is targeting 250K bbls in annual production within 3 yrs.Then too, Ninkasi brand sales improved considerably in 2023, showing signs of stabilization. Brand family still generates nearly 4X more sales in tracked off-prem channels than Ashland hard seltzer, tho more like 2X all-channel.Another Go at M&A for Both Ninkasi and Josh Landan This is Ninkasi's 2d attempt at becoming part of a platform of cos after joining Legacy Breweries, selling majority stake to EPR Properties, which then acquired Laurelwood and Aspen Brewing before Nikos Ridge and Jamie Floyd bought back stake in Ninkasi, left Legacy platform and amicably split with Laurelwood (see Vol 12, No 24 and Vol 13, No 30). This also ain't Josh Landan's first rodeo with M&A, having sold Saint Archer Brewing to Molson Coors just two yrs after founding the co, and reportedly exploring sale of Ashland Hard Seltzer to AB last year (see Vol 13, No 29). While AB did not confirm deal talks, and Josh claimed he said "no" to AB deal, Josh chose very different route that will leave him heavily involved in the newly combined company as CEO and without a payday. At least for now.

Ninkasi to Merge with Ashland Hard Seltzer Parent Co; Landan CEO; Another Go at M&A for Both

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