Following Sale to VC Firm, Smuttynose Regroups

Less than one month after announcing plans to purchase Smuttynose Brewing Company from Provident Bank, New Hampshire’s Runnymede Investments has finalized its deal for the struggling Portsmouth-area craft brewery and launched a 90-day plan aimed at helping it return to growth.

Speaking to Brewbound, newly appointed CEO Rich Lindsay said he and other Runnymede principals will layout their turnaround strategy during a company-wide meeting on April 10.

“They’re not trying to position it for a sale in the future,” he said. “They’d like to keep it for what I heard was multiple generations.”

The company’s first objective? Beefing up the sales team.

According to Lindsay — who briefly served as the CFO of Massachusetts-based Night Shift Brewing before parting ways with that company last November — Smuttynose has hired two new sales account managers and it intends to hire two more before the end of the month.

Additionally, the company will place more emphasis on distributing a steadier flow of cans to the marketplace. The brewery’s flagship Finestkind IPA will be packaged in 6- and 12-packs, Lindsay said, and the company is aiming to secure retail placements before the July 4 holiday.

“That’s the immediate priority based on discussions with our wholesalers,” he said.

From left: Jake Broom, Chris Broom Jr. , Jason Frechette, Andrew Hart, Rich Lindsay, Joanne Francis and Peter Egelston

To meet the July target, Smuttynose will initially work with a yet-to-be-determined mobile canner, Lindsay said. He added that Runnymede intends to place a deposit on a permanent canning line in the coming weeks with hopes of having the machine installed and operational by the end of the year.

In the meantime, production of Smuttynose products is expected to resume in the coming days following a brief shutdown while new vendor agreements were negotiated, Lindsay added.

“Materials are starting to roll in, and we should probably be in full swing within the next seven days,” he said.

Smuttynose is still in the process of forecasting for the remainder of the year, so Lindsay said it’s too soon to know exactly how much beer will flow out of the brewery this year. The company’s 32,000 sq. ft., LEED-certified gold production facility is capable of producing about 75,000 barrels annually, however, declining sales of Smuttynose products over the last two years reduced output to just 35,000 barrels in 2017.

To help fill some of that excess capacity, Lindsay said the company would look to sign contract brewing agreements with other breweries in need of tank time.

“We’re going to fairly aggressively go out and find partners that are a good fit for our facility,” he said.

Massachusetts-based The Tap Brewing Company is the first contract brewing partner under the new management, Lindsay said.

Peter Egelston (left) and Joanne Francis

As for Smuttynose founder Peter Egelston, who launched his company after purchasing used brewing equipment from the Frank Jones Brewing Company at an auction in 1993, Lindsay said his future role with the company is still being discussed.

“They’re trying to figure out, basically, what works for both sides,” he said. “Peter and I are friends, and I would like to see him continue to work with me and the brand, but it has to make sense for Peter as well.”

Lindsay said Smuttynose has maintained all but one employee who accepted another job during the transition. He added that the company has also retained all of its wholesaler partners, who he’s been meeting with during the transition.

“People are really rooting for the brand,” he said.

Runnymede, based in North Hampton, closed on its deal to purchase Smuttynose last week for an undisclosed sum. During a March 9 foreclosure auction, Provident Bank ended up buying back the beer company for $8.25 million. Three months earlier, Egelston, in a last ditch effort to identify a buyer prior to the bank auction, said increasing competition and a “major infrastructure investment” had led to the company’s distressed financial situation.

“As the turmoil in the marketplace stabilizes, Smuttynose, a trusted brand with strong consumer loyalty, can regain its footing with a major infusion of capital,” he said at the time.

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