Maui Brewing co-founder and CEO Garrett Marrero believes he’s found the people to lead the Modern Times Beer brand into its next chapter.
Last week, Maui parent company Craft ‘Ohana unveiled a pair of “strategic partnerships” that will see Josh Landan, the founder of the Saint Archer craft beer brand and Ashland Hard Seltzer, steward the daily operations of Modern Times’ sales and distribution business while San Diego businessman Duncan Ward will guide the brand’s coffee and retail hospitality businesses.
Marrero told Brewbound that Craft ‘Ohana is retaining “a healthy interest” in both sides of Modern Times’ business. However, he declined to get into percentages of equity.
“It’s a strategic move to ensure the growth and return to the numbers that we want to see for Modern Times,” he said.
The reason behind the move is to return focus to Maui Brewing’s beer and hard seltzer portfolio, which is recording “significant growth,” Marrero said.
“If we’ve got a brand that’s contracting a few points versus a brand that’s growing +30%, where do we need to spend the lion’s share of our time? It’s obvious that it needs to be on the +30% and lever down while that’s still continuing that growth trend,” he said. “And we have a lot of potential to grow.”
Marrero said Maui’s hard seltzer brand is growing by nearly +100% in Southern California and +3% companywide, while the beer portfolio is growing “roughly +25%.” He credited Da Hawaii Life Lite Lager for helping drive those trends as the company’s third best-selling beer brand by volume, trailing Bikini Blonde lager and Big Swell IPA. He added that Pineapple Mana Wheat and OMG Hazy IPA are also posting “massive growth.”
Maui’s upward trajectory follows the retrenching of its distribution to its core markets of Hawaii, California, Oregon, Washington, Nevada and Arizona, while also rebounding from the wildfires in Maui last year, Marrero said.
“The fires certainly kind of knocked us off our path for a little bit,” he said. “But we’re positive growth on all fronts, Hawaii and mainland, and focusing on that to continue to lead the charge in craft beer but also seltzer growth.”
Craft ‘Ohana was already in the process of separating Modern Times’ beer and hospitality businesses and in talks with Ward when Landan reached out to express interest in combining sales forces with his Ashland Hard Seltzer brand, Marrero explained. He added that both Landan and Ward looked at Modern Times when the brand was in receivership two years ago, an auction process that Craft ‘Ohana eventually won and paid $10 million to acquire.
Marrero said he was drawn to Landan’s “passion” for Modern Times, his shared vision for the future of the brand and their already aligned distributor networks.
“He loves, like loves, Modern times,” Marrero said of Landan. “Even before we got to a place where we’re really having true discussions about what it would be like to work together, just hearing some of his thoughts about where he sees the brand’s capabilities, identifying the strengths and weaknesses of the brand, what would make-it-great-again-type-of situation.
“We were literally starting to make the same moves that he was mentioning, as far as what he would do,” he continued. “Josh living in Encinitas, the sales team in Southern California, being still brewed in San Diego through the AleSmith side, it’s just a win.”
Marrero compared the deal on the hospitality business with Ward to how Maui operates in Hawaii, with a retail arm that operates the restaurant business.
Ward will take over the existing taprooms in North Park and Encinitas, while adding Modern Times branded coffee and beer bars, starting with one in West Hollywood in 2025 and a second to follow, Marrero said.
Several members of Modern Times’ coffee team will also transition to roles on Ward’s businesses, Marrero said.
The dual partnerships, the closure of Modern Times’ San Diego production facility and arrangement to contract brew at AleSmith and subsequent auction to sell off its equipment assets next month were moves that were “a long time coming,” Marrero said. Although he stressed that he would still make the deal to acquire Modern Times, he explained that he would have sooner made the moves he’s making now.
“We have been conscious and strategic about the decisions we’re making,” Marrero said. “Where everybody’s focused on the individual press release, that’s just a color on the palette of the mural that we’re painting. And we are very clear on what we want to do with our companies, and we feel we’re making the right decisions for them going forward.
“Nothing is getting punted, nothing is getting dropped,” he continued. “We are just simply looking at the world and thinking a little bit differently about how beverage needs to be handled. I mean, this cannot be a hobby business. This has to be operated very strategically.
“This is not the world of 2010 to 2015, ’16, ’17 of just make beer and it goes out the door. We are being mindful of what it takes to be a successful business. And then, frankly, our strategies are working when many others out there are not.”
Marrero said Craft ‘Ohana isn’t done acquiring.
“That was our first M&A transaction, probably not our last,” he said. “I see the world through a different lens now. So I’ve learned a ton through this process.”