“There is a squeeze coming in the craft beer world. True Craft’s goal is simple: Give craft brewers another option than selling a majority interest to private equity or selling out to big beer.”
— Greg Koch, Stone Brewing co-founder on new $100 million True Craft fund.
Greg Koch’s talk at EG 2016 where he announced, True Craft, an “alternative to being pushed out or bought out from the mega commodity world,” True Craft is Koch’s answer to “market forces that are beginning their march to recompress the beer industry,” he said.
Presenting to a group of eccentric innovators and entrepreneurs who gathered at Carmel-by-the-Sea for the very eclectic “e.g” conference, Stone Brewing co-founder Greg Koch this weekend revealed plans to launch a new $100 million fund for investing in “real” food and beverage companies.
“Some people start companies to sell out,” Koch said. “Some start companies because they are compelled to follow their passion. True Craft is for the latter. Craft beer needs an alternative model to the one that requires founders to sell their company in its entirety.”
Koch added: “In a world in which there are constant forces toward homogenization and fitting in, I specifically want to foster a world of uniqueness, depth and character.”
Beginning with an industry he knows quite well, craft beer, Koch said he’s secured $100 million from a group of “independent investors,” that will be used to acquire “minority, non-controlling” stakes in craft breweries. Discussions with additional investors looking to help finance the new venture as also in discussion, Koch said.
Called “True Craft,” the new platform “allows craft breweries to stay craft breweries,” Koch told the crowd at e.g., which bills itself as a conference that is attended by “the most industrious and iconoclastic talents of our time.”
Koch, Stone and crew have been planning the move for at least six months. Stone Brewing Company filed for the Trademark “True Craft Brewing” on Oct. 6, 2015.
“They can make their own decisions about their future,” he said. “They can stay independent. They can get financing and flexibility that they need to flourish, while keeping their soul and control.”
True Craft will welcome a handful of the best craft brewers in the business alongside Stone Brewing, according to Koch.
Each brewery may participate in True Craft. In turn, the company will provide minority investments to its members with minimal stipulations. All breweries will be aligned in the philosophical mindset of banding together to preserve craft while retaining full soul and control of their businesses for years to come.
It’s unclear exactly how the new venture, which Stone has described as a “craft beer investment company,” is structured or who its investors are, but Koch also said he was in discussion with a “small group” of craft breweries who are interested in joining the new consortium.
Describing the concept as an “alternative to being pushed out or bought out from the mega commodity world,” True Craft is Koch’s answer to “market forces that are beginning their march to recompress the beer industry,” he said.
“There is a squeeze coming in the craft beer world,” Koch said at the EG Conference. “True Craft’s goal is simple: Give craft brewers another option than selling a majority interest to private equity or selling out to big beer.”
True Craft, he claims, was built to “help misfit companies stick around in a world that is designed to help them assimilate like the Borg.”
During his presentation, Koch showed a photo of a bar at the Burbank Airport which featured taps from a number of craft brands such as Golden Road, 10 Barrel and Craft Brew Alliance. The common thread? Anheuser-Busch InBev either wholly or partially owned all of the beers on tap, Koch said, a phenomenon that creates the “illusion of choice.”
“We will not be commoditized and we will not be homogenized,” Koch said. “Some people start companies to sell out and some start companies because they are compelled to follow their passion. True craft is for the later.”
“This is about setting up a consortium so we can not just survive, but continue to thrive in a world in which craft is being co-opted by Big Beer,” Stone president and co-founder Steve Wagner said later.
“This allows companies like Stone to follow an ethos that involves independence and passion for the artisanal,” Wagner said. “By investing in True Craft now, we can be confident that our vision is locked in beyond our professional lifetimes and we feel privileged to help others in our industry do the same.”