Elysian Sells to AB-InBev: Success without Succession

By now every beer blogger, tweeter, consumer, and curmudgeon has volleyed barbs at Seattle-based Elysian Brewing, founded in 1995, via every channel of social media to voice their dissatisfaction with today’s announcement that the Emerald City’s biggest little brewery has sold out, in toto, to Big Bad Bud (NYSE:BUD). By tomorrow we should all shut up about this and continue doing whatever it is we do to further the cause of good brewing either by making great beer, serving it, covering it, or the way that matters most, buying and enjoying it.

This image is blowing up the int-beer-net: Elysian's collab beer with indie label Sub Pop). Ouch.

This image is blowing up the int-beer-net: Elysian’s collab beer with indie label Sub Pop). Ouch.

The bottom line is that the three co-founders, Joe Bisacca, Dick Cantwell and David Buhler, collectively decided to sell their baby to the largest brewing conglomerate on the planet. Terms were not disclosed but it’s safe to assume none of them ever has to work another day in his life yet all of them, at least for now, will continue to work at the company they once owned for twenty years. God bless them. Starting a brewery is hard work. Running one for that long is much, much harder. They deserve to reap their financial rewards. But here is what inspired this whole blog post: they collectively decided to sell their baby and I highly doubt selling to AB-InBev was ever something they’d considered two decades ago or probably even two years ago.

Did they consider its future at all? Did they ever develop a succession plan? All breweries are founded by mortal men and a few mortal women. People perish, but what happens to the breweries–that some people cherish as if they’re living entities–don’t have to die with them.

My next point is one I sincerely wish I didn’t have to bring up or even think about, but in 2012, Dick Cantwell’s son, Nap tragically died from a bike accident suffered while leaving the Elysian brewery he worked at on Capital Hill. As a father, I can’t think of a single worse tragedy than losing your young kid. I can only suspect that Dick, known for espousing independence in all forms, aspired to pass his share of his brewery onto him. (Since this is all conjecture, I don’t know what the cards held for Dick’s daughter Lucy but I know she’s the executive director at the New Belgium Family Foundation. Elysian and New Belgium share more than just their Trip Series of collaboration beers.) Nap’s passing perhaps altered his vision for the company’s future and even if that had nothing to do with this transaction, at the very least it shows that people face much bigger issues and dilemmas in life than crying about the sale of one of your favorite breweries (none of us has one single favorite).

So as the entrepreneurial men and women who’ve created this small but mighty segment of the brewing industry start reaching retirement age or face challenges that impede their ability to further helm the breweries they established, what should they do? Should they simply fold ’em? Should they bequeath them to offspring or employees who possibly aren’t equipped to manage them? (Point of interest: the attrition rate of family businesses shows that 30% successfully become Gen. 2 companies and only 12% make it to third generation, which I wrote about in this 2010 All About Beer story) Or should they cash in their chips? And if so, how much does it matter whether the buyer is a fellow craft beer stalwart, some faceless VC firm, or the evil-doers at the behemoth brewing brands?

I’ve never been nor will I ever be in that position–much like 99.9+% of you–so I don’t know if I’d rather take pride or mounds of cash to the bank. What I do know is this: In my first book, Red, White, & Brew, each chapter focused on a different brewery but it’s really a beer book that’s not about beer, it’s about the people. And one question I asked all of the subjects was about plans for the brewery’s future. Here’s a quick run-down because even when I started working on it in 2005, I didn’t realize how relatively quickly this issue would come to the fore. In order:

1. Yuengling (Pottsville, PA). The full name is D.G. Yuengling & Son, Inc. and for five straight generations beginning with David Yuengling in 1829, a son has always succeeded as the head of the company. Current jefe Dick Yuengling has no sons but all four daughters work there and represent the sixth generation of ownership. They will not change the name.

2. Geary’s (Portland, ME). David Geary and his then-wife started the brewery in 1986. Their daughter Kelly works at the brewery and hopefully still represents its future ownership. Their son Matt currently works in the beer industry for Pilsner Urquell. Considering their longevity, there are far worse places he could be learning the ropes.

3. Bell’s (Kalamazoo, MI). Larry Bell launched his brewery in 1985, making it one of the most veteran companies in the game. Today it’s the 7th largest craft brewing concern; 13th largest overall. His daughter is currently the VP!

4. Leinenkugel (Chippewa Falls, WI). I got some guff for including them in my book but at no time did I state it was about the craft brewing industry or exclusively craft brewers. Leinies had been an independent brewery in the Northwoods of Wisconsin for 121 years from 1867 to 1988. Today it’s a wholly owned subsidiary of MillerCoors. For what it’s worth, Jake Leinenkugel and his sons, the great-great-great-great-grandsons of Jacob Leinenkugel, still have jobs at the company.

5. Free State (Lawrence, KS). Chuck Magerl opened this brewpub in 1989 and fairly recently launched a production brewery. He told me during the interview that he envisioned going the employee-owned route as the succession plan.

6. New Belgium (Ft. Collins, CO) Co-founded in 1991 by Kim Jordan, she remained the majority owner until the tail end of 2012 when the brewery became 100% employee owned through an ESOP (Employee Stock Ownership Plan). It’s one of the very few breweries I’ve ever dreamt of working for. Fort Collins is a rad place to live and work.

7. Grand Teton (Victor, ID) Formed as the Otto Bros. Brewery in 1988, one of the Otto brothers died and the other, Charlie, sold it to the current owners–a husband and wife–in 2009. Well worth a road trip to visit no matter where your road starts.

8. Widmer Bros. (Portland, OR). Around here this story is already legend. Kurt and Rob Widmer started a tiny little brewery in 1984 helping to kickstart our whole Beervana thing. Neither has kids. They sold a minority interest to Anheuser Busch–more than the arbitrary 25% that the Brewers Association defines as sufficient to remain independent and “craft”–and now the parent corporation, Craft Brew Alliance, owns breweries from New England to Hawaii.

9. Anchor (San Francisco, CA) The makers of Anchor Steam Beer led the charge for craft brewing in 1965 when Fritz Maytag (yes, that Maytag) bought the funny little brewery that had existed, barely, since 1906. America wouldn’t see its first post-prohibition brewery open for another eleven years. Like a lot of people, I suspected his nephew who ran much of the operation would take over but in 2010 Fritz sold it to the Griffin Group (Sky Vodka). They don’t run it exactly how Fritz did, but it remains an integral player in the industry IMO.

10. Electric (Bisbee, AZ). I think the chapter on “Electric” Dave is everyone’s favorite in the book  Arizona’s still a literal and figurative beer desert, but bless ol’ Electric Dave, he tried to change that back in 1988. He actually did sell the company to a couple guys who seemed like Jimmy Buffett “parrotheads” back around 2010 who couldn’t keep it afloat. Russian River‘s Vinnie Cilurzo can also tell you some stories about this guy!

11. Spoetzl (Shiner, TX). Not many breweries ever make it to their 100th anniversary but this one did. Granted, by that time it was owned by the Gambrinus Co. based not in the tiny town of Shiner but over in San Antonio. FYI, it’s the same company that owns “Oregon’s oldest craft brewery,” Bridgeport.

12. Dixie (New Orleans, LA). This one’s just sad all around. Another heritage brand that may not have been terribly relevant in today’s beer culture, but their Blackened Voodoo black lager was my A-HA beer back in the ’90s and the latest (and technically still current) owners lost it to a bunch of down-south, back-room bureaucracy and hypocrisy after the building was destroyed by Hurricane Katrina and subsequent looters. Any bottles of Dixie you see on shelves anywhere are brewed up in Wisconsin or Minnesota or something.

13. Alltech’s Lexington (Lexington, KY). This was really just a side business when I was there but I wanted to an excuse to visit Kentucky and drink bourbon and their excellent bourbon-barrel ale gave me that. Now it’s one of the biggest brands in Ireland. Read the chapter.

14. Dogfish Head (Milton, DE). Huh, whatever did happen to this guy? If you hear about ‘im lemme know. (But seriously, Sam does have two young kids and I’d love it if they run the brewery and accompanying Annual Intergalactic Bocce Tournament.)

So cry in your beer today for the “loss” of Elysian. But at least we know they won’t be the next to close and that someone’s looking out for it in the long term to get their investment’s worth. I think it’s safe to predict we’ll start seeing “shocking” news like this breaking on the order of once a month for the next few years. Who’s next? And when it’s not them, let’s not pretend we’re stunned when we find out who it is.

One thought on “Elysian Sells to AB-InBev: Success without Succession

  1. Pingback: What they’re saying about the Elysian-Anheuser-Busch InBev deal: why they sold, the ‘Loser’ joke, what’s next | CHS Capitol Hill Seattle

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