When it launched in 1989, Odell Brewing’s mission statement was simple: become the Colorado’s “premier craft brewery.”
One could argue that, after 26 years, the company is nearly there. According to IRI, Odell is the number two best-selling craft beer brand in Colorado, behind only New Belgium and ahead of those from larger competitors like MillerCoors, Anheuser-Busch InBev, Boston Beer and Oskar Blues.
Based in Fort Collins, Odell has, on average, grown production about 12.5 percent each year since it opened. And while its current mission statement is now more broadly focused on becoming a premier regional craft brewery, the company, which sold about 110,000 barrels across 11 states in 2015, still maintains a set of core objectives that help it succeed at home and away: grow slow and don’t overreach.
In 2016, however, Odell plans to press more firmly on the accelerator, projecting 21 percent volume gains and 23 percent revenue growth. It also plans to add one new state, introduce a new pale ale, package four additional styles in cans and grow its self-distribution business.
For a company that prides itself on a slow growth model, those decisions feel like a deliberate strategy adjustment, especially at a time when competition amongst more than 4,100 U.S. craft brewers is the toughest it’s ever been. But a deeper dive into the rationale behind those moves reveals a more carefully measured five-year plan.
Last July, founders Doug, Wynne and Corkie Odell sold 51 percent of the company to three members of the executive management team — director of sales Eric Smith, COO Brendan McGivney and CFO Chris Banks — and 19 percent to about 100 employees participating in a newly created employee stock ownership plan.
At the time, the founding trio said they would remain active in the business for at least five years, at which point control would shift to Smith, McGivney and Banks.
Just two weeks after the deal was announced, however, the newly appointed owners, along with the Odell family, were tasked with making a critical decision that would impact the company’s future growth potential in its most local and arguably most important market — Larimer County.
Anheuser-Busch InBev had just announced the purchase Loveland-based American Eagle Distributing, one of Odell’s top wholesalers, and the brewery was left with two choices: Double down, and capitalize on a chance to buy back its distribution rights, or let another wholesaler takeover the responsibility.
60 percent of the company’s sales volumes are concentrated in Colorado — about 67,000 barrels in 2015 — and it remains the focal point of an Odell operation that has been growing steadily in all 11 states.
So, after careful consideration, Odell chose to buy.
In addition to the cost of repurchasing its brand rights, however, the move requires Odell to invest in expanded warehouse storage space, additional trucking capabilities and more sales personnel to service about 150 new accounts. At the same time, it allows Odell to control its own fate close to home, enables the company to recapture additional revenues that are no longer given away to a third party distributor and gives the company a better chance of becoming Colorado’s premier craft brewery.
Which brings us to the company’s five year-plan.
An accelerated 2016 growth strategy should help Odell more quickly service the debt incurred from both its ESOP transaction and the Larimer County buyback. Then in 2017, and beyond, the company can return to more modest growth in line with its 26-year (12.5 percent) average.
“We don’t feel like 25 percent revenue growth is outside of our normal growth boundaries,” CFO Chris Banks told Brewbound. “And we’ve always had the strategy of paying our debt faster than we need to and the debt levels we assumed are not driving the decision. It is more the tools we are putting in place.”
Those tools include the expanded availability of cans — which could account for as much as 50 percent of the company’s growth in 2016 — and a new pale ale brand that director of sales Eric Smith believes will be the company’s number four SKU behind 90 Shilling, Odell IPA and its seasonals. An entry into Iowa is also planned for April.
Though no concrete plans are in place, Odell, like many small breweries, is also considering expansions in new markets and some export opportunities in the coming years. It is also discussing the feasibility of a second brewery or taproom location as well as a distillery.
Those projects are still just ideas on paper, but could one day become reality if enough of the company’s employee-owners believe in the approach.
“We are a very inclusive company and we try to harness everyone’s ideas,” said Banks, who noted that all employees are encouraged to share their thoughts on how the company should grow.
“We are looking at our horizon and thinking about what kinds of legacies we can create for the future. We are very measured, but that doesn’t mean we are going to do the same things we have always done,” Banks added.
Odell by the numbers
- 37 percent: growth that came from Colorado in 2015
- 14 percent: taproom sales growth in 2015
- 9 percent: growth in Texas and Arizona
- 133,000 barrels: expected 2016 volume