Jim and Jason Ebel are nearly two decades into a career in the beer industry and about 15 months removed from selling Windy City Distribution to Reyes Beverage Group for a reported $50 million.
Now, the two brothers — who also own a craft brewery in Chicago by the same name (Two Brothers Brewing) — are getting back into beer wholesaling via a joint partnership with Cavalier Distributing founder George Fisher.
Jason Ebel told Brewbound that the trio plans to enter the Southwest with the launch of Cavalier Distributing of Arizona before September.
“We have always had the itch for this business,” said Ebel. “We love the distribution side and we love giving craft brewers access to market.”
Cavalier Distributing, which launched in 1992, also owns and operates craft beer wholesalers in Indiana, Kentucky and Ohio. To expand, the company has found a 13,000 sq. ft. warehouse in Phoenix and already has verbal distribution commitments from a number of craft brewers.
The Ebel brothers are investing over $1 million to outfit the Arizona facility with fully refrigerated warehouse space as well as refrigerated trucking capabilities.
“We have spent quite a bit of time doing market research out there; visiting accounts and seeing what brands are in the marketplace,” said Ebel. “We want to make sure we do this the right way.”
To get the project off the ground sooner, the company is also considering the acquisition of a small craft wholesaler in the state.
“We are in negotiations with another small distributor that we may purchase,” said Ebel. “We would get into the market very quickly if that happens.”
Ebel could not disclose the identity of the wholesale target and gave the acquisition a 50 percent chance of coming to fruition.
“We are going down both paths simultaneously,” he said. “When you have someone who knows the market, it makes sense to at least follow that path for a bit. Either way, the operations will be in downtown Phoenix.”
In addition to establishing a new wholesale operation in Arizona, Ebel said he’s also considering plans to build a secondary brewery facility in the state.
“The five year plans would be to have a Two Brothers production facility that would produce beer not only for that market, but the West Coast,” he told Brewbound.
“We will look to bring a division of our brewery to Arizona but keep our main plant here in Illinois. It is on our radar but right now the focus is on our distribution company.”
Still, the beer company is growing as well: Two Brothers produced over 36,000 barrels in 2013 and is on the verge of completing a $5 million expansion that will boost capacity to 75,000 barrels, Ebel said.
“We have intentionally stayed very close to home and now we are at a point where we can get out, spread our wings a little bit and start hitting other markets.”
Two Brothers beers will be available in Arizona once Cavalier opens its doors, Ebel said.
So what’s the long-term vision for the Ebel brothers?
“If it weren’t for a rule change in Illinois that forced us to sell Windy City, we never would have done it,” he said. “We have no desire to get in, make a splash and get out. We want to help Cavalier create a nationwide network of craft wholesalers that brewers can rely on for 100 percent craft distribution. Our goal is to make this a generational business.”