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Early 2025 brought a bit of a mixed bag for Japanese brewing giant Sapporo's US biz. It closed out 2024 with its combined volume up a solid 1.5%, about 10K bbls to 674K bbls, Sapporo-Stone shared with Craft Brew News. Those results were driven by strong growth of Sapporo brands offsetting softer Stone trends. Indeed, early in the yr, the co recorded a $90+-mil impairment charge on its Stone biz, it acknowledged while responding to critiques about its overseas investments from a Singapore-based investor with more than 19% stake in the co. Recall, Sapporo acquired Stone for a little less than $170 mil in 2022, then invested tens of mils of $$ in US production facilities. At very same time, long-running lawsuit with Molson Coors over Keystone Light mktg finally closed when that co paid Stone Brewing $60.6 mil on Jan 29, MC reported last wk. Core Stone Shipments Up 2%; Total Brand Fam Likely Back Below 300K Bbls for First Time Since 2014 Of Sapporo-Stone's 2 namesake brand fams, which dominate its US biz, the former outperformed the latter by quite a bit. Sapporo grew by 12% last yr, CEO Zach Keeling shared in statement to Craft Brew News. And shipments of Stone's core brands, the majority of that biz, grew 2%, he continued. But the total Stone brand family took a tougher hit, off-premise scan data shows. Sapporo brand fam $$ jumped high single digits in NIQ scans last year, while Stone declined mid-to-high singles. Fast growing Delicious IPA variety packs essentially offset softness in Stone IPA, original Delicious IPA and co's main vty pk. So other, smaller brands declined more precipitously.As volume continues to shift toward Sapporo brands, looks like the co's major craft brand fam slipped below 300K bbls last yr, we estimate. That would be first time Stone's total shipments volume didn't cross that threshold in a decade. Back in its indie days, co finished 2014 at 286K bbls, our data shows, in the middle of a 100K-bbl leap between 2013 and 2015. Stone kept growing and hit 400K bbls in 2018. It's been thru some ups and downs since, but in all lost about a quarter of its volume in the last 6 yrs.Sapporo Took $90+-Mil Impairment Charge on Stone, Triggering Investor Ire; Committed to Overseas Biz Then too, Sapporo joined an ever-growing list of large brewers to invest in craft and later write-down those assets. In late Jan, Sapporo issued notice to investors recording a 13.9 bil yen (about $91 mil today) impairment loss as Stone's "sales volume and recent profit level remained below expectations," citing ongoing challenges within craft segment and higher input costs. The charge "reflects a change in the timing of financial expectations compared to the beliefs held at the time of the Stone Brewing acquisition," Zach told CBN, reiterating tuff trends "across the US beer market" and higher costs.The largest single investor in Sapporo wasn't pleased, however. Singapore-based 3D Investment Partners, which holds a 19% stake in the co, according to Bloomberg's analysis, "censured the management over 'impairment losses on all of its overseas alcoholic beverage acquisitions' and questioned the responsibility of the board of directors" in a letter this wk. Letter claims Sapporo acquired Stone at a price-to-book ratio of 3.4x, or multiple times the asset's value on the co's balance sheet, according to Bloomberg's reporting published in Japan Times.Sapporo's board brushed aside the critiques. The co will keep building "the management foundations for stable business operations, namely strengthening of its organization and of its talents" in its "important" overseas biz, according to letter published yesterday. Globally, co shifted responsibility for its intl biz to a new mgmt committee "to improve the quality and speed of the managerial decision-making." Sapporo-Stone has a "long-term commitment" from parent co Sapporo Holdings, CEO Zach commented. In 2024, "the two-year integration of the Sapporo and Stone businesses was completed, resulting in both revenue and profitability growth compared to 2023," he reminded. "Moving forward, Sapporo-Stone aims to continue growing its legendary brands while optimizing its business structure and manufacturing footprint to build a strong, enduring enterprise."

Sapporo-Stone +1.5% in 2024 as Co Takes $90-Mil Impairment Charge, Investor Grief; $60+ Mil from MC

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