Dan Gordon has regained majority control of Gordon Biersch Brewing Company.
A new investor group assembled by Gordon has acquired the San Jose, California-based production brewery from the Fertitta family — founders of Nevada’s Station Casinos and Zuffa, the parent company of the Ultimate Fighting Championship, which sold for more $4 billion to WME-IMG in 2016.
Financial terms of the deal, which closed on March 1, were not disclosed. Speaking to Brewbound, Dan Gordon declined to share the sale price but said Frank and Lorenzo Fertitta were “extremely generous” and sold the business back “at an incredible rate.”
“It was basically an exercise in generosity on their part,” he said. “They wanted me to realize my dream is basically what it came down to.”
Nearly 24 years ago, Gordon and co-founder Dean Biersch sold a controlling interest in the company to Fertitta Enterprises. Gordon and Biersch, who owned 75 percent of the business at the time of the 1995 sale, retained a minority stake in the business, according to a San Francisco Chronicle report.
The most recent transaction did not include 35 Gordon Biersch-branded brewpubs. Those restaurants were sold in 1999 to what is now Craftworks Holdings, which also operates the Old Chicago Pizza and Taproom and Rock Bottom Restaurant & Brewery chains.
Gordon described his new investor group as “close-knit friends who have been very successful in life.” Those investors include the Fox family, the former owners of San Jose-based beverage wholesaler M.E. Fox & Co., who now control a 15 percent stake in Gordon Biersch.
In addition to investing in the brewery, Terence Fox will hold a seat on the company’s board of directors, while his 82-year-old father, Michael Fox Sr., will serve as a special advisor to the board. Other members of the Fox family, including Michael Fox’s wife, Mary Ellen Fox, and his children Michael Fox Jr., Dennis Fox, Catherine Bernal Bloyd, Mary Beth Suhr and Margaret Lewis invested in the business.
Other minority investors include James Ellis, a lecturer in Stanford’s Graduate School of Business; David Gensler, the former co-CEO of global design and architecture firm Gensler; and California real estate developer Gary Dillabough.
“I’ve really got a strong group of individuals that I can call on for expertise in just about anything,” Gordon said.
Moving forward, Gordon Biersch, the 37th largest craft brewery, according to national trade group the Brewers Association, will continue to focus on its contract brewing business. Gordon estimated that about 90 percent of the 90,000 barrels Gordon Biersch produced in 2018 was for other companies.
In an effort to bolster its production for contract partners, Gordon Biersch has invested nearly $2 million in a high-speed Krones canning line. Gordon said the line, which is expected to be operational by November, will be capable of packaging 250 cans per minute and about 4.2 million cases annually.
Gordon is bullish on the new line leading to additional contract partners. In 2019, he is targeting 104,000 barrels of production. Once operational, he expects to produce about 500,000 cases on the new line in the first year.
“That tells you how much interest there is in cans,” he said.
Gordon Biersch is looking to add about five large breweries with “established track records” to its contract roster, Gordon said. Potential partners may come from outside of the traditional beer space. He added that the company is exploring the production of hard seltzer, non-alcoholic beer, and other non-alcoholic offerings, including canned water and the base products for THC- and CBD-infused beverages.
The company is also working on a joint venture with Advanced Beverage Technologies, which has a proprietary method for dealcoholizing alcoholic beverages. As part of that partnership, a dealcoholizer will be installed at the brewery, and could be operational by November.
Speaking to Brewbound, Terence Fox said the company wouldn’t “put up walls” on who it would work with.
Although Gordon declined to share the names of his contract partners, he said the brewery produces beer for a pair of California-based craft beer companies as well as three cider labels. The company also creates private label products for grocery store chain Trader Joe’s and big box retailer Costco.
As Brewbound reported in March, Canadian cannabis co-packing company Growpacker is partnering with Gordon Biersch for contract production of beverages for large producers in California. Hangar 24 also produces most of its core beer volume at Gordon Biersch Brewing Company via an alternating proprietorship arrangement.
Once the canning line is operational and more contract brewing partners are added, Gordon Biersch will turn its focus to its own beer brand, as well as its Wildcide Hard Cider label, Fox said.
“We’d like to get those brands in growth mode again, especially in Northern California,” he added.