(Courtesy Kona Brewing Hawaiʻi)

Kona Brewing Hawaiʻi has spent more than three decades making beer in the Hawaiian Islands, building one of the most recognizable names in American craft brewing along the way. But on August 7, the Brewers Association officially recognized the Hawaiian operation as an independent craft brewery, giving Kona something that has been surprisingly complicated for much of its history.

It’s a strange story because Kona has never really stopped being a brewery in Hawaii. What changed was who owned it, where its beer was brewed, and, eventually, how the business was divided.

Kona Brewing was founded in 1994 by father and son Cameron Healy and Spoon Khalsa, who wanted to create beers that reflected the spirit and culture of the islands. The original brewery was a converted warehouse in Kailua-Kona, where the first batches were brewed for the local market. The company soon became one of Hawaii’s best-known craft breweries, with beers like Longboard Island Lager and Big Wave Golden Ale helping put Hawaiian beer on the national map.

But Hawaii is a pretty inconvenient place to brew beer for the rest of America. Shipping heavy bottles of beer thousands of miles across the Pacific is expensive, so as Kona grew, it developed mainland brewing arrangements that allowed the brand to meet demand without sending every bottle and can from the Big Island.

That strategy worked. By the time Kona joined Craft Brew Alliance in 2010, it was already a major American craft beer brand. Craft Brew Alliance had been created through the merger of Redhook Brewery and Widmer Brothers Brewing, and Kona became part of the group through a merger completed in October 2010. Under CBA, Kona expanded dramatically, eventually reaching all 50 states and roughly 30 international markets.

There was just one problem for anyone trying to fit Kona neatly into the Brewers Association definition of an independent craft brewer.

Anheuser-Busch had been an investor in Craft Brew Alliance, and that ownership relationship eventually became significant enough that Kona no longer qualified as independent under the Brewers Association’s definition of craft. So while Kona continued to be marketed and widely regarded as a craft beer brand, the company behind much of the Kona beer sold outside Hawaii was no longer independent enough to meet the association’s formal criteria.

That distinction became even more important in 2019, when Anheuser-Busch proposed acquiring the rest of Craft Brew Alliance for approximately $220 million.

The U.S. Department of Justice took a very close look at that deal because of what it would mean for competition in Hawaii. The DOJ concluded that allowing Anheuser-Busch to acquire Kona’s Hawaiian business could hurt competition in the state’s beer market. The solution was one of the more unusual divestitures in recent beer industry history: the Hawaiian Kona business had to be sold to an independent buyer.

That buyer was PV Brewing Partners.

The 2020 agreement required the sale of Kona’s Hawaiian brewing facilities, including the new 100,000-barrel brewery then under construction, along with the rights necessary to brew, distribute and sell Kona beer in Hawaii. The deal effectively created two Kona businesses operating under the same familiar name but with very different ownership structures.

And that is where things get a little weird.

The Kona beer you see on the mainland is part of the Anheuser-Busch side of the business. The Kona operation in Hawaii is owned by PV Brewing Partners and operates independently, producing beer at its Kailua-Kona brewery for the Hawaiian market.

Kona’s new Hawaiian brewery began brewing in 2021. The company describes the modern facility as a sustainable brewery designed to support the local operation and says the beer produced there stays in Hawaii.

So when you drink a Kona beer in Hawaii, you could literally be drinking a beer from an independent Hawaiian brewery. When you buy a Kona six-pack on the mainland, you are dealing with a completely different corporate operation.

Same name. Same tropical branding. Same family tree. Very different ownership.

That distinction is what makes the Brewers Association’s new designation so interesting.

For years, Kona was one of those beer brands that occupied an uncomfortable middle ground in the American craft beer conversation. It was born as a genuine independent brewery, helped define the early growth of Hawaiian craft beer and became a nationally recognized craft brand. But as ownership changed and production expanded beyond the islands, the brewery no longer met the Brewers Association’s definition of an independent craft brewer.

But now the Hawaiian operation does.

And in some ways, the designation brings the story full circle. Kona started in 1994 as a small brewery in Kailua-Kona making beer for its neighbors. More than 30 years later, the Hawaiian operation is once again independently owned, locally operated and brewing beer in the same island community where the whole thing started.

And to be clear the Kona brand sold across the mainland U.S. is still a mass-market product. The unusual split created by the 2020 Anheuser-Busch acquisition and DOJ divestiture remains very much intact.

But Kona Brewing Hawaiʻi is now officially independent craft and after a long and very strange journey, that seems like a pretty appropriate ending for the brewery and Hawaii’s craft beer community.