Green Flash CEO Discusses ‘Tough’ 2018, Bullishness for the Future

Green Flash Brewing Company chief executive Michael Taylor is “bullish” on the San Diego craft brewery’s prospects for a turnaround in 2019.

In a conversation with Brewbound, Taylor — a former Anheuser-Busch executive who was hired as CEO last summer — said he’s projecting 20 percent growth for a Green Flash business that ran into significant financial turmoil around this time last year.

In 2018, Green Flash was forced to close two production facilities, lay off 76 employees and pull distribution from 42 states. Midway through the year, the WC IPA LLC holding company acquired the business via a foreclosure sale and hired Taylor to restabilize the business.

“It’s clearly a stretch and a challenge,” Taylor said of the company’s growth goal, “but we believe the new portfolio that we have, [along] with our new packaging, come together in a way that should make that achievable.”

Taylor described his first eight months as CEO as “interesting, thrilling, crazy, and disappointing, all in one.”

“We had a tough year,” he explained. “There’s no doubt about it. Part of it was we were still operating the old way and really had to change the mindset of the company and begin to change our way of thinking and executing.”

Indeed, Green Flash — ranked as the 43rd largest craft brewery in 2017 by industry trade group the Brewers Association — took a big step backward in 2018.

After producing 72,254 barrels of beer in 2017 — already down 10 percent versus 2016 — the company and its acquired sister brand, Alpine Beer Company, brewed a combined 35,000 barrels (split 55/45 percent between the two brands, respectively) in 2018, Taylor said. He described Green Flash’s sales performance thus far as “disappointing.”

“We weren’t doing the things to be a successful long-term brand in the past,” he said.

Among those issues, according to Taylor, were a lack of innovation and packaging that neither resonated with consumers nor communicated anything about its home market of San Diego.

In an effort to reverse those negative trends, Green Flash is updating its packaging design — tapping two agencies, Ebbing Branding + Design of Wilmington, North Carolina, and Mighty Few of Chicago — and calling out its San Diego connection.

“We were missing out on something that was fundamental to the DNA of the company,” he said. “Going forward, our new packaging has a San Diego badge included and prominently featured.”

The company also reformulated its flagship West Coast IPA to check in at 7 percent ABV instead of 8.1 percent ABV, after numerous consumers voiced their desire for the original recipe. That beer should begin hitting store shelves in the next couple of weeks, Taylor said.

Moving forward, Taylor said the company’s focus is on growing points of distribution for its key brands, including Green Flash’s West Coast IPA and a new year-round hazy IPA, Tropical DNA, as well as Alpine’s Duet IPA and HFS IPA.

According to Taylor, the Alpine brand continues to grow. In fact, Duet is the company’s single largest brand in San Diego, outperforming Green Flash’s portfolio.

“Alpine is a hidden gem that we have in our portfolio that consumers in San Diego know about and consumers throughout California and the Southwest will get to know about over the coming months and years,” he said.

Green Flash’s sales team has also undergone some changes in the last couple of months. In January, the company hired Bracken Todd as vice president of sales.

Like Taylor, Todd brings an Anheuser-Busch pedigree to Green Flash, previously serving as senior director of national retail sales. He replaces Dave Mills, who WC IPA initially tapped to lead its sales team. Mills departed the company in November.

Meanwhile, Green Flash founder Mike Hinkley, who remains on the company’s payroll, is not involved in the day-to-day operations of the business.

Over the last eight months, the company also hired 14 sales and marketing reps to re-engage with the company’s wholesalers and retailers.

“Where we are as a company really is about expansion, but expansion in a very targeted way,” Taylor said. “We want to make sure that we are expanding with our key brand priorities in the right locations with the wholesalers and aligned with the wholesalers’ goals and objectives.

“Really, from our perspective, it’s engagement with the wholesalers that’s going to ultimately lead to that simple distribution gain in the various territories that we distribute,” he added.

Currently, Green Flash ships beer to eight states, with 75 percent of its volume sold in California, Taylor added.

“While we have good distribution in San Diego, we have relatively poor distribution in the entire state of California,” he said. “And then when you go out of state, whether it’s Colorado, Arizona, Texas, Nevada, we’ve got very little distribution in those states.”

If the company is successful in growing distribution in those states, Taylor said it would consider reopening markets in the latter half of 2019 or 2020. However, the company won’t do so without supporting those markets with “manpower.”

Nevertheless, the downsized Green Flash finds itself with around 70,000 barrels of excess capacity. To fill some of that extra tank space, the company has begun offering contract brewing services to another craft brewery, which Taylor declined to name due to a non-disclosure agreement. He added that the company is open to producing beer for other companies.

As for Green Flash’s brewpub in Nebraska, which opened in June, Taylor said the satellite location has been “challenged.” However, he said the pub only accounts for a small part of the company’s business. With a long-term lease on the property, Taylor said Green Flash is committed to the project.

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