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Maryland-based Flying Dog Brewery has been bought by its US craft brewing peer FX Matt Brewing Company.

The New-York state based FX Matt, which had already been producing some of Flying Dog’s beers under contract, has agreed to purchase the brewer for an undisclosed sum.

Production of Flying Dogs beers will shift entirely to FX Matt’s Utica, New York-based production facility over the summer. Brewing at Flying Dog’s Frederick, Maryland facility, meanwhile, is expected to stop “sometime in August”.

Flying Dog CEO Jim Caruso said the decision had been driven by the limitations of its current facility, adding FX Matt was offering employment opportunities to “as many employees as possible”.

“Frederick is a great place to live and do business, unfortunately even though we have invested millions of dollars in the brewery, it has too many limitations and puts Flying Dog at too great a competitive disadvantage,” he said.

Flying Dog is expected to maintain a presence in Maryland, with FX seeking to open an “innovation brewery” and taproom for the brand in Frederick.  

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FX Matt CEO Fred Matt said the acquisition would present his company with “a great opportunity to grow in the mid-Atlantic region”

“When you think of craft beer in Maryland and the mid-Atlantic, Flying Dog is the first brand that pops into your head,” he said. “We are excited to join forces with such a great brand and look forward to helping Flying Dog reach new heights.”

As part of the terms of the deal, Flying Dog CMO Ben Savage will become president of FX Matt’s Flying Dog division.

Savage hinted Flying Dog would look to leverage FX Matt’s capabilities in the emerging ‘beyond beer’ segment to drive innovation for the brand.

“This acquisition gives our brand immediate capabilities and flexibility to adapt to the changing consumer preferences,” he said. “There will always be a market for great beer, but the lines between beer, cocktails, spirits, and wine continue to blur.

“FX Matt Brewing Company gives Flying Dog significant resources to not only optimize our current product portfolio but also quickly develop products in new, emerging categories.”

The deal combines the US’ 14th and 34th largest Brewers Association-defined craft breweries by volume in 2022, respectively. Combined, the two breweries would be a top-ten BA-defined craft brewer in the US.

The last transaction of such scale between two, independently-owned craft breweries in the US took place in 2019, when The Boston Beer Co. and Dogfish Head Brewery agreed a $300m merger.

FX Matt last year invested $35m in upgrading its brewery, using funds provided by the sale of 20% of its business to long-term contract brewing customer Brooklyn Brewery. Its brands include Saranac, Utica Club, Flying Bison as well as McKenzie’s Hard Cider and Jed’s mule RTDs.

Flying Dog Brewery was founded in 1990 as a brewpub in Aspen, Colorado. It moved operations to Maryland in 2007, shortly after acquiring Frederick Brewing Company in 2006.

The brewery’s branding was inspired by journalist Hunter S. Thompson, with whom founder George Stranahan was said to enjoy a close friendship.

Its beer, which include Raging Bitch IPA and Doggie Style Pale Ale have attracted criticism for their explicit, sometimes-sexual nature.

In 2017, the brewery terminated its membership with the BA after the organisation amended its Advertising and Marketing Code to curtail the use of “sexually explicit, lewd, or demeaning brand names, language, text, graphics, photos, video, or other images” in craft beer marketing.