Last week it was announced that Scott Metzger, the founder of Freetail Brewing Co. of San Antonio, had, after 10 years, left the company he created. Despite Freetail’s success, Metzger brought in the Turner family two years ago to provide support in growing the business. It is hard to know if this was part of Scott’s initial exit plan, but either way, Freetail will benefit from the increased support provided by the Turner family.
Freetail, like other breweries that have sold to a major brewery or capitalist, will grow in the short term. The question is, how do distributors see these somewhat successful, local breweries as continued players in their portfolios? Which would be of more interest to a distributor: a start-up local craft brewer or an established, successful, imported brand that had never attempted to develop the U.S. beer market?
Even if the local craft has the financial support, experienced team, lab, brewpub, and commitment, the distributor might look at the local brewery with some skepticism. Will that craft sell or will it fold? How much time, effort, and money should be invested in this brewery? If the brewery succeeds and sells out, will it sell out to one of my current suppliers? Remember what happened to Goose Island, Ballast Point, Lagunitas, Revolver, Karbach, Golden Road, and others who became a key part of their buyers’ companies, a move which made their wholesalers happy.
There are other crafts that employees purchased. Full Sail was acquired by their employees, who in turn sold the brewery to an investment firm, thereby maintaining their jobs. New Belgium employees still own their brewery. These breweries and others continue to do well. But at what point does the distributor take a risk and at what point are they forced to draw the line?
This summer, after almost 100 years in business, Great Western Brewing Co. of Saskatoon, SK, Canada brought their beer into the U.S. On the surface, a distributor might look at Great Western as a local craft. Great Western is the predominate brewery in that part of Canada with outstanding products and a top brewmaster. Its brewing capacity is well over 300K HL. Unlike a number of crafts, the Great Western strategy is to grow and build their volume while maintaining their long-term ownership. They know building a U.S. market will take time, and they are committed to doing so with a strategy.
The odds are that Scott Metzger will return to the industry in some capacity and, of course, Freetail will continue to be a viable brand for its wholesalers. Great Western will expand in the U.S. as planned. The success of either brewery, like other breweries, will be tied to their commitment. In the end, that is the distributor’s dilemma.
Get out, stay out, and don’t come back!