By Ezra Johnson-Greenough
For the Oregon Beer Growler
The internet was supposed to make life easier and solve humanity’s problems, so who figured it would take an online bookstore more than two decades just to get beer deliveries to your home right? When Amazon rolled out its Prime Now service in late 2014, home beer and wine deliveries were discussed, but it wasn’t until August of 2017 that the service launched in Oregon. Amazon is famous for helping kill off local and big-box book retailers, and some are now concerned they could do the same to grocery stores and bottle shops.
Prime Now is an app for your phone or device that lets you order items you’d normally find at large grocers: food, household supplies and gadgets. To use this service, you must be an Amazon Prime member, which for $99 a year is easily worth it if you do any other online shopping or video/music streaming. Products are shipped through the company’s regional partners, and based on my zip code that would be New Seasons Market, Whole Foods Market or Amazon’s local product center.
Ordering from each incurs a separate delivery fee (typically about $5) that’s waived when the purchase amount reaches a certain threshold. Amazon then adds a suggested $5 tip for the driver, which can be edited. Users choose a two-hour arrival window and it can be scheduled days in advance. If you’re in a hurry, one-hour delivery is available for a fee ranging from $4.99-7.99. Prices are comparable, if not exactly the same, as what’s in stores. Another benefit is the option to have your package left on a safe porch without signature (though you must be present with identification if purchasing alcohol).
Amazon’s Prime Now store is the only outlet in my zip code to ship beer, cider and wine (none of the hard stuff). There is a “Cold Beer” section with subcategories for “Local and Craft Beer” along with domestics, imports and specific styles. At this point, your choices are limited to the lineup you might find at your local mini-mart, but I suspect that will change — especially if there’s demand.
Under “Local and Craft Beer,” some might quibble with listings for Not Your Father’s Root Beer, Blue Moon, Elysian, 10 Barrel and Hop Valley, but that’s neither here nor there. More important to most is the local beer selection, which includes new and classic — but safe — hits from Breakside, BridgePort, Crux, Full Sail, Deschutes, Ecliptic, Fort George, Ninkasi, Oakshire, Pyramid, Rogue, Widmer and Worthy. National/international players are even more basic, like Corona, Guinness, New Belgium, Pacifico, Stella and, interestingly, Schofferhofer Grapefruit Hefeweizen.
I have now ordered from Amazon’s Prime Now service five times, three of them specifically for beer, finding mostly good results. The delivery often arrives on the early side of the two-hour window, and they take care to put the beer in a thin, but still temperature-holding, Mylar bag along with an ice pack. I encountered one issue with my first purchase of two bottles of Breakside’s flagship IPA in 22-ounce bottles (well-priced at $4.29 each) and a six-pack of Pelican’s Beak Breaker Double IPA. Shortly after placing the order, I was notified via email that the Pelican beer wasn’t available. The rest of the items came as usual, and there was no charge for the six-pack — though it was still listed as being available more than a week later.
Polling the hive mind known as my social media connections, I came across one other interesting snag that I tested myself. When requesting a seasonal release, you may not end up with the beer you intend. For instance, one person discovered that an order placed for Fort George’s Suicide Squeeze IPA actually resulted in the brewery’s 3-Way IPA being delivered. I attempted to replicate this by ordering Suicide Squeeze along with Breakside’s Toro Red (the site actually pictured the brewery’s What Rough Beast beer). I ended up receiving the 3-Way as well and the India Golden Ale by Breakside. The lesson: beware of accuracy when it comes to ordering seasonals. On the plus-side, it’s nice to get a refund and still keep the beer by sending in a complaint. This, however, highlights areas where online beer delivery will most likely always fall short — in selection and depth of knowledge.
“Delivery works best for replenishing staples,” says Carl Singmaster, one of the proprietors of Belmont Station in Southeast Portland. “For the consumer that prefers to drink primarily one widely available brand consistently, it makes a lot of sense. But for those who are constantly exploring and learning, I think they'll prefer to shop at bricks and mortar.”
“When customers need friendly interaction, real opinions, industry gossip or tips, that's where we come in. There's nothing virtual about it,” says Sarah Pederson, owner of North Portland’s Saraveza tavern and bottle shop.
With Amazon’s recent acquisition of Whole Foods, there’s a lot of concern that the massive company could push out mom-and-pop grocery and beer retailers. While most bottle shop owners I talked to think that Prime Now is more of a threat to big-box stores, they are still considering the possible consequences.
“We may lose some sales,” says Sean Campbell (aka John Beermonger), owner of The BeerMongers bottle shop and bar in Southeast Portland, “but I feel that is always a threat either from grocery stores or big liquor stores. Knowledgeable staff, good prices and good atmosphere should help keep the little guys in business.”
Sarah Pederson agrees, “I think Amazon grocery will affect grocery stores in the beer departments more than small bottle shops such as Saraveza. I can't imagine that all the time, effort, devotion and education we put into our selection on a weekly basis could be mimicked by a ginormous online store.”
In addition to the selection and expert customer support, Prime Now doesn’t offer details consumers want, like where their beer is coming from.
“I have so many customers who are very conscientious of what brands they purchase in regards to the ownership of the brewery,” says Sarah Pederson. “I don't know if these people refuse to shop at Walmart or on Amazon, but I'm curious to hear from them.”
The area where Amazon really could hurt small businesses is pricing. “The biggest concern is that a company of the scale and with the cash on hand of an Amazon can subsidize their service to undercut other retailers. The other concern would be if producers and distributors give them outsized allocations of limited-release beers,” comments Singmaster.
Beermonger is more concerned about the beer itself. “I know not all beer is stored properly. I see it in big stores, but also specialty stores. If people get inferior product that was stored and shipped under less-than-ideal conditions, they may blame the brewery for making bad beer. This is a problem that often comes up and I see this new delivery system increasing the likelihood of beer that is ‘off.’”
Overall, these craft-centric retailers were interested in following this new wave of beer delivery, but didn’t seem overly worried about competition. In some cases, they were even encouraging.
“I am all for consumers having as many options and choices available to them as possible,” says Singmaster. “For those that prefer to have their groceries delivered rather than visiting stores in person, there is no reason they shouldn't be able to put beer and wine into the mix.”
“Convenience sells. This move by Amazon and Whole Foods is a sign of the times, and we shouldn't be surprised by it. In fact, we should be prepared for more of it. People are very emotional, and often fearful, about big business and how it takes over. It's not necessarily a bad thing for the craft beer movement, but it sure is an interesting twist in this ever-changing industry.”
One thing is for sure, now that there are more ways to get beer delivered, Amazon won’t be the only one to get into the business. Additional specialty retailers are likely on the way. We already have draft growler beer subscription services in companies like Hopsy and bottle subscription through Tavour, among others.
A large part of 10 Barrel’s success in Portland is due to head brewer Whitney Burnside’s unique beers. As far as the AB InBev purchase, she said, “There will always be those who frown upon it.” But she hasn’t had any issues with the acquisition and gets “complete creative freedom.” Photo by Patty Mamula
By Patty Mamula
For the Oregon Beer Growler
10 Barrel Brewing Co. opened its newest brewpub in the trendy Pearl area of downtown Portland in February 2015. The opening was just months after 10 Barrel shocked the craft beer world by selling to AB InBev.
It seems the Portland location had been in the works before the sale, but there was much local speculation about how selling out to the corporate beer giant would affect business. Predictions were negative.
Surprise. The Pearl location has been busy from the day it opened.
A large part of its success is due to brewer Whitney Burnside and her unique brews.
Burnside said, “The original plan was that I would make new beers and one-offs for limited release. I have complete creative freedom here.”
The core beers, such as Apocalypse IPA and S1NIST0R Black Ale, are still brewed in Bend.
So far, Burnside has made a mix of ales and lagers. She likes to throw in unusual beers that incorporate different processes and ingredients. A few examples:
— A lychee sour made with the fruit native to Asia that has a white grape flavor
— A Belgian ale made with ginger, honey and hibiscus
— A gose made with Casper pumpkins (the white ones) and bay leaves
The day we met, she had just released a witbier. This style is often brewed with coriander and dried orange peel, but she used dandelion root, toasted cardamom, fresh zested Meyer lemons and true cinnamon.
“We’re slowly starting to put these beers out in the market,” she said. They’re available at the Bend and Boise pubs.
One of her most popular beers, the first one she ever brewed here, is the Pearl IPA. “We keep making it. People love it. It’s the No. 1 best seller,” she said.
Burnside’s path to brewing started in culinary school. The Northwest native from Seattle traced her interest in cooking to TV celebrity chef Alton Brown. “I watched his show all the time,” she said. He’s the one who got her hooked on cooking with his technical, “sciency” style. His shows often focus on a single drink, dish or snack — such as shortbread cookies.
She attended Johnson & Wales University’s College of Culinary Arts in Denver with plans to become a chef. During an externship at The Herbfarm restaurant in Woodinville, Wash., she started making artisanal cheese and homebrewing. She fell in love with brewing and decided she wanted to become a brewer. For her, brewing is similar to baking. They both require detailed measurements, fermentation and meticulous attention to detail.
With her culinary school diploma and a little homebrewing experience, she started looking for a brewing job. She was a tough sell, as much for her lack of experience as her size. Although she finds people in craft brewing are open-minded about female brewers, her petite size didn’t help. “I had a hard time. Finally, Chad Kennedy, the brewmaster at Laurelwood, gave me an internship,” she said.
That was the chance she needed. From there, she put in a short stint at Upright Brewing, a brewery near the Moda Center in Portland that specializes in farmhouse beers. Both of these opportunities were steppingstones to her full-time job at Elysian Brewing Company in Seattle. She stayed there for a year before moving to Pelican Brewing Company in Pacific City, where she was the head brewer for three years. She took the job at 10 Barrel in December of 2014, several months before it opened. That meant she was there for the buildout and installation of the brewhouse.
“The cool part about being here from the get-go was I was able to acquire parts I needed to make the system complete,” Burnside said. She was involved with decisions regarding the piping, plumbing and changes in water.
Burnside brews twice a week, making one 20-barrel batch at a time. Right now, the facility doesn’t have a mill and all the malt is ordered pre-milled. “Bag by bag, we (she has a part-time assistant) climb up the stairs and empty the bags, usually around 25 in all, into the mash tun.” The bags, by the way, weigh around 50-55 pounds. “We’re usually mashed in by 7:30 a.m., well before we open at 11 a.m.,” she said. On the days she is not brewing, Burnside is cleaning, taking care of cellar work, monitoring or doing something with the beer that’s in-process or finished.
The 500-square-foot brewhouse is open on two sides to the pub, separated by a low, black metal railing from the guests. “It’s compact, but works well,” said Burnside. One challenge is finding space for barrel-aging. Right now, she’s managed to squeeze three barrels in between the fermenters. The previously used barrels that once held merlot are now filled with a Belgian dark strong called Alton Bruin after the chef who inspired her.
The craft brew world has been a welcoming place for female brewers, but people who aren’t in the industry are often less so. Burnside said it’s not unusual for a delivery driver to repeat his request to see the head brewer when she appears. As far as the AB InBev purchase, she said, “There will always be those who frown on it.” Personally she hasn’t had any issues.
“I’ve never been told to make a certain beer,” said Burnside. Her only direct contact with the corporation is with one of the people who oversees hop growing and availability. She likes being able to get some of the newer varieties of hops. Ultimately, Burnside is happiest when her hand controls the finished product.
10 Barrel’s founders, Garrett Wales and brothers Jeremy and Chris Cox, continue to run the brewery, which has expanded to the tune of $10 million, six new 400-barrel tanks and an increased capacity of 120,000 barrels a day. So far, even with increased production and new facilities, the quality has remained consistently high and business continues to increase.
Elysian Brewing in Seattle, Wash. throws a Great Pumpkin Beer Festival, which in 2014 featured 92 pumpkin brews, a costume contest and 1,200-pound pumpkins filled with beer. Dick Cantwell, formerly of Elysian, said it’s important to have unique ideas for festivals. Photo courtesy of Elysian Brewing Company
By Patty Mamula
For the Oregon Beer Growler
“Staging a Kickass Beer Event” takes planning, planning and more planning, according to the four presenters of the “DIY Beer Fest” at the 2015 Craft Brewers Conference, held in Portland in April.
Dick Cantwell, former head brewer and co-founder of Elysian Brewing Company in Seattle, said it’s important to differentiate the event and make it special. “If you don’t have a unique idea, it’s not worth doing,” he said.
For example, Elysian certainly brings plenty of unique elements to its two-day Great Pumpkin Beer Festival, which features pumpkin beers front and center, a costume contest and giant 1,200-pound pumpkins filled with beer.
“We try to retain the Christmas-morning effect,” he said. “Last year we had 92 pumpkin beers and 18 were ours. We have beers people have never tasted before or heard of before.”
Cantwell helps guest brewers with beer ideas for the event with only one restriction — they have to contain pumpkin. The brewer from Allagash Brewing in Portland, Maine, named last year’s contribution Drunken Promise in reference to his promise to Cantwell to make a pumpkin brew.
Barnaby Struve, co-founder of 3 Floyds Brewing Co. in Munster, Ind., said to, “plan ahead to manage the crowds. Our Dark Lord Day is the only time to buy Dark Lord Russian Imperial Stout.” He recommended coding tickets with different groups, such as A, B and C, to control times and lines for pickup “if you have a special beer release at your festival.”
Other considerations: “Know what is legal in your municipality. Check for permit requirements and get the necessary ones. Go to events as a consumer and take notes. From the customers’ perspective, they are experiencing what you’re all about,” said Struve. “Make sure that your customers leave happy. It’s important to have this goodwill experience.”
Just the opposite happened last year at the Cigar City Brewing Hunahpu’s Day Festival in Tampa Bay, Fla., said director of marketing Geiger Powell. Named for a Mayan myth, the festival is a release party of Hunahpu’s Imperial Stout. In 2014, they tried something different. “We wanted to streamline the event and shrink the population. The $50 ticket included all the beer from the festival and the opportunity to buy beer bottles,” said Powell.
Originally, the attendees name was required to be on the ticket. “We changed our mind because so many people complained,” said Powell. “We should NOT have changed our mind.”
They had many fraudulent tickets and ran out of bottles. People were unhappy. “Riots broke out and yes, you can watch it all on YouTube,” he said.
The next day, Cigar City offered full refunds, free beer in the tasting room and paid out $200,000. “Ultimately it was positive with lots of press, and the next month we had our best sales ever,” said Powell.
This year was a different story. The tickets cost $200 and included food and four bottles of stout, plus access to more than 200 beers from 60 different breweries. “We insisted the name on the ticket match the ID of the attendee. We treated our brewers in town right. That’s essential because brewers will tell everyone,” he said.
Beau’s All Natural Brewing in Vankleek Hill, eastern Ontario, Canada holds an authentic Oktoberfest for two days in early October that swells the population of the small town. CEO and co-founder Steve Beauchesne said, “We have 8,000 people and 2,000 cows in town. Last year we had 20,000 attendees.”
They also had a big problem last year with their shuttle service. Since Beau’s is 50 minutes east of Ottawa, they offer a shuttle option as an add-on to the base ticket price.
“Last year it poured rain all day, creating a real mud fest,” said Beauchesne. “At the end of the day, everyone wanted to get on the bus at the same time and go home. But we had people waiting in line for more than an hour. We had mistakenly decided to go with less buses because we could loop them.”
He said they have a full-time person now in charge of Oktoberfest. “When we did our first one, we pulled it off in six weeks. Last year was our worst because it was the latest in the year that we started planning for it.”
Cantwell said planning for the Great Pumpkin Festival begins the minute the current one is done. “We have to pick a date and people want to plan,” he said.
He also recommends a thorough, detailed checklist, before and after. “We always underestimate the peak,” he said. To keep lines short, they split the beer into 25 serving stations, each with three or four beers. They also have a roving special beer.
Struve said they begin planning in December for the Dark Lord Day in April.
The group had different opinions on volunteer help. Powell said Cigar City has all their staff work the festival as well as volunteers from homebrew clubs. But Struve said that 3 Floyds does not use volunteers, only paid staff because of liability issues, regulations and required licenses. And Cantwell said Elysian does use volunteers, but they have to be licensed pourers. However, all agreed on the importance of paying participating breweries for their beer.
The takeaway? Diversify with food, music and other breweries, so it’s good for the whole industry.
At the 2015 Craft Brewers Conference, stainless steel was the order of the day for brewing tanks, bottling machines and tap systems that were on display at the trade expo. Exhibitors came from the United States, Germany, Canada, Chile, China, Italy, the Czech Republic, France, Belgium, the United Kingdom, Denmark and Spain. Photo by Patty Mamula
By Patty Mamula
For the Oregon Beer Growler
If the size of and attendance at the 32nd annual Craft Brewers Conference indicate the health of the industry, it’s thriving. The largest-ever event drew more than 11,000 brewing professionals and 600 exhibitors to Beervana in April for discussion, education, off-site events and tours.
Craft brewing continues its impressive surge. Benj Steinman, president of Beer Marketer’s INSIGHTS, said that 2014 was the fifth straight year of double-digit growth.
Craft breweries opened at a rate of 1.7 per day -- 615 for the year — with 2,051 breweries in planning stages, according to Bart Watson, chief economist for the Brewers Association. He and Paul Gatza, the association’s director, presented an optimistic outlook at the opening session.
Total sales of craft beer were at 22.2 million barrels last year. Growth of 18 percent from the previous year continues to build as does pricing, which increased 3 percent. In fact, last year was the first where case sales increased by more than $1.
To further segment the market, brewpubs are leading the growth at 20 percent with incredible diversity in the brewpub model.
Steinman in his seminar “Halfway Home? Craft Continues Climbing, but Ascent Gets Complicated” said the hottest trend in craft right now is hyper local.
As examples he mentioned GoodLife Brewing Company and Worthy Brewing Company in Bend.
There are marked regional differences across the country, with Portland being the most developed (craft is nearly half of the market here), San Diego being the hottest (craft gained five shares for a total of 30 market shares) and Florida coming in as the most underdeveloped.
The consumers’ love affair with IPA continues. Half of craft growth was IPA and 20 of the top 50 brands are IPAs.
Storm clouds are brewing. Steinman noted that the first big shifts in the craft industry happened last year with several deals and acquisitions. “Growth is still turning the industry upside down. Big brewers and big money see this,” he said.
He counted 12 deals in the past 15 months with Anheuser-Busch InBev buying up Seattle-based Elysian Brewing Company, Blue Point Brewing Company out of Patchogue, N.Y. and, of course, Oregon’s own 10 Barrel Brewing. Steinman projected himself inside the mind of A-B InBev, a $47 billion dollar company, and figured their logic was pretty simple — something along the lines of, “if you can’t beat ‘em, buy them” or even more transparent, “drop the price.”
Private equity groups accounted for six of the deals over the past year with several notable breweries selling part of their company -- Founders Brewing Co., Sweetwater Brewing Company, Oskar Blues Brewery and Southern Tier Brewing Company.
“Many crafts are starting to make real money. They can project future earning streams. They might potentially even go public. Craft is cool and investors see this and the prospect of outsized returns,” he said.
“Eventually, this could change the meaning of craft,” Steinman said.
He feels big brewers and big money are a disruptive force in the craft segment and wonders if the “soul of craft” is starting to erode.
Other concerns, said Watson, are overexpansion with the consequent issue of keeping beer in stock and distribution problems with more reports of wholesale difficulties. The U.S. Food and Drug Administration created a fuss over spent grain last year that fizzled out and mostly went away, but the big issue now is menu labeling, which is required for all chain restaurants with 20 or more outlets. The concern is that small breweries will be responsible for providing the required nutritional components of their beers.
Long-term environmental conditions, like climate change and water availability, are a concern for brewers and all food producers. “The movement of hop breeding from public to private” is another red flag, said Watson.
Although Gatza said craft brewers are the “belle of the ball” with state legislators, Steinman cautioned that craft brewers still don’t rule politics, especially not the feds, and he does not think the Small BREW Act, which seeks to reduce the federal excise tax rate on the first 60,000 barrels by 50 percent, is likely to pass.
Still, craft is well on its way to putting up another year of strong double-digit growth.
Steinman proposed a couple of things to watch. First, it’s possible that those who sell a share to private equity could, because of the infusion of cash, do even better. Second, there’s also a chance the small, independent craft brewer retains an image advantage.
Watson noted some promising trends, including an overall growth of off-premise sales at places like sporting events, growing production of sessionable beers, convenience stores starting to figure out craft and a prevailing emphasis on quality.
By Ezra Johnson-Greenough
For the Oregon Beer Growler
It’s the end of an era. Full Sail Brewing’s employees and founders voted in March to sell to Oregon Craft Brewers Co., which is a local investment group formed by Encore Consumer Capital, a San Francisco-based private equity firm. “The votes were returned confidentially to our ESOP attorney. It passed nearly unanimously,” said Full Sail founder and CEO Irene Firmat.
While this news is sure to not make as big a splash as the recent sales of 10 Barrel Brewing and Elysian Brewing Company, it is in many ways more important. Full Sail has been one of the industry’s pioneers and produced more beer (115,000 barrels) in 2014 than 10 Barrel (40,000 barrels) and Elysian (50,000 barrels) combined, making it the 25th largest craft brewer in the country.
Both 10 Barrel and Elysian are also examples of quick growth in a very short period of time, which may have been one of the reasons 10 Barrel was in a difficult financial position and willing to sell. Full Sail has experienced its ups and downs, but has largely avoided pitfalls and continued on a steady stream of growth by going its own direction. Ignoring trends like barrel aging, fresh hops, double IPAs and sour beers (for the most part, though the brewery certainly has dabbled); Full Sail instead focused its energy on recreating the craft lager and session beers, a move that was way ahead of its time. Full Sail’s location in Hood River is also undoubtedly responsible for the explosion in the number of breweries in the town and the entire Columbia River Gorge. Former Full Sail brewers have opened favorites like Double Mountain, Logsdon Farmhouse Ales, pFriem Family Brewers and Everybody’s Brewing.
Full Sail’s growth has not always been smooth. In 1999 the company transitioned into an ESOP (Employee Stock Ownership Plan) rather than be put up for sale. That model has worked well, with other breweries -- most notably New Belgium -- following in Full Sail’s footsteps. Then in 2012, Full Sail lost its Henry Weinhard’s beer contract, which it had held for 10 years with SABMiller. That investment allowed Full Sail to reinvest in its brewery, keep debt low and sustain growth. Full Sail was making so much Weinhard’s beer that the Weinhard’s brand alone was ranked as the seventh largest in Oregon. At that time I worried for the future of Full Sail, but the company re-upped its No. 1 in-house brand, Session.
The Session beer brand by Full Sail may have been the smartest and most successful product launch of any Oregon brewery since the start of the craft beer revolution. Short, stubby, highly-recognizable bottles of cheap (but still craft) tasty, light lager were a huge seller. And the brand has sustained with spin-offs Session Black, Session Fest and recently Session IPA. When growth started to go flat, Full Sail launched the beer into new markets and took Session beer to bar taps for the first time in a move the company said would never happen.
The pessimist might suspect the recent huge expansion of the Session brand was in anticipation of putting the brewery up for sale, driving up production numbers and the value of the company. Though Full Sail Chairman Irene Firmat says that the brewery was approached unsolicited last September, that doesn’t mean the brewery was not preparing for a buyer. Anheuser-Busch paid an estimated $400 per barrel times the annual 60,000 barrel production of Blue Point Brewing when it purchased that company in February of 2014. Given those figures, Full Sail’s estimated value would be $46 million.
As I mentioned before, a pessimist might also suspect that the Full Sail employee vote on approval of the sale was a formality and the sale was a foregone conclusion. Leaving the decision to the employees who own an estimated 58 percent of the company makes for a terrific PR move. Though that is a solid majority, founders Jamie Emmerson and Irene Firmat own 42 percent and would only need a small percentage of employees to agree to the sale. But according to Firmat, “The employee vote was not a sure deal. Jamie and I don’t have a majority position, so even though we felt that this was a very good offer for all our shareholders, it was not a sure thing until the votes were counted. We did an early reveal because once notices went out to 78 employees, we thought confidentiality would be difficult to maintain and it would be better to have the facts out to minimize speculation.”
Still, it would seem the deal was done since Firmat and Emmerson could reverse any “no” decision by the employees as they are the two sole trustees of the ESOP. Not that the deal is a bad thing for the employees who, based on their time at the company, will likely earn four to five figures in the buyout as well as keep their jobs. The other good news is that Full Sail would still be counted among the “craft” brewers as defined by the Brewers Association by selling to an equity firm rather than a macro brewer like Anheuser-Busch.
The bad news is that brewery sales to private equity firms might have a worse track record than those sold to SABMiller and Anheuser-Busch. While the previously mentioned companies’ business is at least making and selling beer, both are only concerned with making money. However, an equity firm will quickly sell off companies to make a buck and has no interest in continuing the products. That seems to be the case here. The formation of a new company called Oregon Craft Brewers Co. distracts from the fact that the real owners are Encore Consumer Capital, a group that holds no other breweries or beverage companies. Oregon Craft Brewers Co. is a brand new formation that also has no history in the industry. While Full Sail posits that its buyer’s lack of experience guarantees the current employees jobs (which may be true), it also underscores a potential turn toward primarily profit-driven endeavors. That could mean cutting costs and raising profit margins on products and perhaps launching into more states or countries.
After raising the value further, Full Sail could be sold off again, following the path of Portland Brewing/MacTarnahan’s, which has been bought and sold a few times and is now owned by a Costa Rican conglomerate. Encore Consumer Capital has an established track record of buying and selling companies a few years later. It has been alternately reported that Emmerson and Firmat would either plan their immediate exit or stay with the company. Firmat clarified this: “We have committed to stay a year to insure that this transition goes smoothly. After that we will see.” After seeing Full Sail through the transition, I think we can expect little substantial change immediately, but I worry what will happen in a few years after they continue to develop the Session brand. Will we see a day in the future where a craft brewery on the East Coast is contract brewing Full Sail beer as it becomes a version of the formerly-prestigious Henry Weinhard’s?
Firmat admits, “It is what they do, but they have a track record of holding on to companies for a longer period of time and, in the meantime, they invest to grow it. Our distributor alignments make a purchase by a big brewer very difficult and more expensive and they are very aware of that.”
Let’s hope she is right. At the very least, Firmat and Emmerson have followed through with their commitment to employee owners, giving them a nice bonus to their 401Ks while making a happy exit for themselves. That is much better than what Anheuser-Busch is offering to the casualties of its acquisitions.
This article originally appeared in The New School.
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