When it comes to corporations catastrophically overspending on craft breweries, it’s really a race for second place. Constellation Brands’ acquisition of Ballast Point Brewing Co. for a billion dollars set a dubious benchmark for the industry a decade ago, and no one has come close since. The frothy days of four-figure-per-barrel valuations have long since receded, and they aren’t coming back. As the craft brewing market has gotten tougher, though, even conglomerates that bought in well past its peak have been taking haircuts.
On a percentage basis, Sapporo-Stone Brewing is leading this race of latter-day losers, if only by a nose. The firm, then named Sapporo USA, acquired its namesake San Diego outfit for $165 million in 2022; in January 2025, it announced that it would take a $91 million impairment charge on the investment, a 55.1 percent reduction. Its newest largest investor torched the move as yet another example of Sapporo “destroy[ing] shareholder capital through acquisition,” and, yes, that’s a lot of value to vaporize in less than three years. But the Japanese subsidiary is in good company on its bad asset stewardship. In February 2025, Monster Beverage Company (MBC) reported a write-down on the craft brewery rollup formerly known as the CANarchy Collective. The purchase price in January 2022: $330 million. The total tally of impairments, including the nine-figure L Monster recorded in the most recent fiscal frame: $181.5 million, or 55 percent. They’re neck and neck, folks!
With all due respect to the impairment enthusiasts at Sapporo-Stone, today I want to take a closer look at Monster’s folly. Because while it’s impressive to send half of a single brewery’s paper value up in smoke in less than half a decade, the Japanese firm has had some practice; the activist fund 3D Investment Partners helpfully calculated its write-downs across Sleeman’s, Anchor Brewing, and Stone at an astonishing $250 million in an open letter published just weeks after it revealed itself as the Japanese conglomerate’s biggest shareholder.
“[S]uch an uninterrupted track record of failure is unprecedented in the alcoholic beverage industry,” the Singapore-based fund wrote. Maybe word of Constellation Brands’ misadventures in microbrewing has yet to reach the Lion City’s shores.
But I digress. I want to focus on Monster’s write-downs today because while Sapporo-Stone never really seemed to have a plan beyond panic-buying breweries and hoping for the best, the energy drink juggernaut entered the segment with something that looked like a thesis. With something that looked like discipline.
Rumors had swirled for years that the high-flying firm wanted a piece of the beverage-alcohol business before it finally pulled the trigger. Recall that just months prior to announcing its all-cash purchase of CANarchy in January 2022, Bloomberg had reported Monster was in merger talks with Constellation. A popular meme about the company’s flagship, Monster Energy, is that it’s the drink of choice for Kyles with bad impulse control and a vendetta against intact drywall, but MBC’s move into the brewing industry was anything but impulsive. The restraint carried over into its early operations: As I wrote last time MBC recorded an impairment charge, it waited nearly a year before rolling out Beast Unleashed, resisting the urge to join the gold rush then underway.
Crucially, logic of this deal also made sense, unlike, say, Sapporo’s 2017 acquisition of Anchor. Monster long believed it could successfully parlay its famously successful brand-building chops across the ABV Rubicon, and understood there was a big enough difference in distributing energy drinks and alcohol that it ought not try to build a distribution network from scratch. That may seem like obvious wisdom in hindsight, but at the time, other Big Beverage interlopers were taking different tacks. The Coca-Cola Company, which owns around 20 percent of Monster, opted to cobble together middle-tier partnerships the old-fashioned way. PepsiCo did something decidedly newfangled, trying to license brands like Hard MTN. Dew to Boston Beer Company and route it to market through a new business unit it created for the purpose, Blue Cloud Distribution. (RIP.) With CANarchy, Monster got a nationally scaled set of middle-tier relationships to use as a “platform” from which to launch its own beverage-alcohol ambitions, and legitimately good craft breweries like Oskar Blues Brewing Co. and Cigar City Brewing from which it could learn the nuances of the business.
(I should note that disciplined though this approach may have been, it’s yielded mixed results. In early 2025, the firm’s co-chief executive, Rodney Sacks, admitted to investors that MBC had struggled to retool CANarchy’s distribution network to suit its strategy for its new “beyond beer” offerings.)
When MBC did finally roll out the Beast Unleashed, it experienced some splashy early success, posting massive growth on a small base and turning some heads in the process. “MNST is all-in on alcohol and thinks it could be big for them by 2025,” wrote Goldman Sachs’ veteran beverage-industry analyst Bonnie Herzog in a note to investors following the National Association of Convenience Stores’ annual conference in fall 2023. The flavored alcoholic beverage was, however improbably, seeing good uptake with women, a demographic MBC’s non-alcoholic flagship has traditionally struggled with (due in part to the aforementioned Kyles). Everything was looking good.
Less than 18 months later, considerably less is looking good. In the intervening stretch, Monster recorded some $48 million in impairment charges and shuttered Deep Ellum and Oskar Blues breweries in Texas. It also pivoted Cigar City’s Tampa plant to “research and development” in a move that presaged Molson Coors’ language when idling Leinenkugel’s in Chippewa Falls, Wis., earlier this year. As Brewbound reported last week, MBC’s overall bev-alc sales slid 6.7 percent from 2023 and 2024, worse than the beer category writ large. The firm’s filings suggest it was very much a lack of demand rather than snafus with supply: It also wrote down $14.7 million in excess product last year
Looking closer at the results, it’s a tale of two sub-portfolios. The Beast Unleashed et al. has performed well: In the 52 weeks through Jan. 26, scan data for multi-outlet grocery, mass retail, and convenience stores tracked by market research firm Circana shows Monster Brewing’s non-CANarchy sales up over 10 percent in dollars and volume. But its craft brands, which observers figured were never the point of the acquisition, have continued to be a drag on it. In that same period, they’re down 6.6 percent in dollars and 8.6 percent in volume. Of the top 30 craft brands in Circana’s data, only one — Cigar City’s venerable Jai Alai India Pale Ale — belongs to Monster Brewing. It’s down around 2 percent in volume and dollars through Jan. 26, slightly outperforming the overall cohort on both measures.
So what happened? How did MBC do things right and still go so wrong? Sacks told investors late last month that the latest impairment charge is “primarily the result of operating and financial performance not meeting projections due in part to challenges in the category, as well as the decrease in projected ongoing operating and financial performance,” which doesn’t say a whole lot we don’t already know. (Monster did not respond to Hop Take’s request for comment.) Sacks also warned last week of more moves to “optimize our personnel and facilities” in the coming months; that says more layoffs and more craft brewery closures.
It’s bad news, but it also gets at the core of the problem. The craft brewing industry was always going to go through more layoffs and closures, more millions in paper value to be written down in the books of more breweries. MBC just bought CANarchy at a point where it was going to have to be the one to do it.
