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April 16, 2015
Portland, OR
Brew Talks CBC 2015
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Brew Talks CBC: Joe Bisacca On Selling Elysian to Anheuser-Busch

10_barrel

When we initially booked our special CBC edition of Brew Talks at 10 Barrel Brewing’s Portland brewpub, we wanted to start the afternoon with a dialogue between Joe Bisacca and Dick Cantwell, two of the three founding partners at Elysian Brewing.

The goal was simple: have a conversation about succession planning and the circumstances that led Elysian to explore a sale to Anheuser-Busch InBev.

Shortly after the deal was announced, both Cantwell and Bisacca suggested there was an internal disagreement about the company’s future. And when Cantwell officially announced his resignation from the company on Monday, he told Brewbound that working again “for any duration” with Bisacca – and the other founding partner, David Buhler – was an “intolerable prospect.”

As we eventually came to learn, the relationship between Bisacca and Cantwell had deteriorated to the point where the two no longer spoke. But despite their differences, we still believed we could push forward, feature both on Thursday’s panel and get both sides of the story. Perhaps we were naive in believing that the two could parse out the mechanics of the deal over a couple pints.

Unfortunately, 24 hours before Brew Talks was set to kickoff, we got the call from A-B that we had been dreading: Cantwell was “no longer able to participate.” But the show, as they say, had to go on. With Bisacca still in tow, we were still able to pull back the curtain and learn a bit more about how the a sale to A-B InBev took shape.

What follows are some of the more salient points Bisacca made during yesterday’s 1-on-1 conversation with Brewbound editor Chris Furnari.

On what’s changed since the deal closed:

Bisacca said it’s been “business as usual,” save for his now reduced role in the “minutiae” of running all aspects of a company.

“I don’t want to deal with the day-to-day junk anymore, but I want to be involved with it,” he said. “How does that model work where I can relax a little bit but I can be involved in innovation, I can be involved in the brand development and the graphics? How can I still do both of these things?”

While business might be the same, the company is now planning to make some adjustments at its brewery.

“Were looking at improving things at the plant but you can’t just jump in there and do it, you’ve got to think about what you want to do, what we want to add in there for capacity, and for the ability to keep innovation going forward,” he said. “That’s being mapped out now and we’re really in the drivers seat.”

On alternative options

While selling to A-B InBev may be the surest way to grab headlines, it’s hardly the only method of succession. If not for the strategic partnership, Elysian could have aligned with a private equity company or even implemented an employee stock ownership program (ESOP). Bisacca explained why neither of those alternatives was fit for the Elysian model.

ESOP:

“You can do ESOP, selling to your employees. Sometimes that works, sometimes not,” he said. “You need to have a certain critical mass. With the restaurant chain, the ESOP kind of falls apart quick because those are very transient employees and it’s hard to encompass them.”

Private equity:

“When you go to private equity firms, well great you’re along for the ride for three-to-five years but then they’re going to sell it and you don’t know where that’s going to go.”

Before ultimately selling to A-B, the company had talked with five private equity firms, he added.

On considerations before “signing on the dotted lined.”

“I think of stewardship of the brand; I think of customers that we have, doing right by them because they’re the ones that supported us and kept us in business all these years; I think of my staff more than anything else. Are they in a good home? Are they going be treated well? What do their benefits look like?” he said. “Who’s going to take this package that we created and treat it the best?”

“At the end of the day, the A-B model sort of answered those questions for me,” he added.

On disagreeing over succession plans

Bisacca said that as a C corporation, Elysian had a fiduciary responsibility to their shareholders to vet the prospect of selling when the opportunity is presented.

Bisacca said there were “four or five pockets” among company executives who were split on succession.

“If you have one person that’s very critical of the opportunity you have, it makes you think about it, ‘is this really the right thing? Should we really do this?’ It makes you want to vet things a little bit more. That process, even though if it’s painful, you want to go through because it makes the decision more valid.”

And of course, on the controversial pumpkin peach beer

“We’ve taken a lot of snipes at Bud over the years and rightfully so. So they took a snipe at us. Big deal. Were all in the same industry, we do the same thing, it’s a sibling rivalry,” he said. “We have latitude to poke fun at them and they have latitude to poke fun at us.”