Harpoon Co-Founder: Excess Capacity, Specialty Offerings Drove Interest in Clown Shoes Acquisition

Mass Bay Brewing Company, maker of the Harpoon and UFO brands, today announced the purchase of Massachusetts-based contract brand Clown Shoes.

Specific financial terms of the deal were not disclosed, however Mass Bay Brewing co-founder and CEO Dan Kenary told Brewbound that his company had acquired 100 percent of Clown Shoes’ assets.

“We have every incentive now to grow this brand and make it successful,” Kenary said of wholly acquiring the business, “which is ideal.”

Mass Bay already has minority investments in Barrel House Z, another Massachusetts craft brewery, and Latitude Beverage Co., the Boston-based wine company behind the popular 90+ Cellars label.

Clown Shoes founder Gregg Berman and seven other employees will join Mass Bay Brewing and have an opportunity to participate in the company’s Employee Stock Ownership Plan (ESOP), Kenary added.

“Gregg’s team, they’re all coming over — every single one of them,” he said. “They’re all excited to take their beer and their brewery to another level, and we’re excited to help them do it.”

Berman first approached Kenary in March with an offer to buy the Clown Shoes brand.

“We were not looking,” Kenary said. “I think Gregg Berman just decided that he had driven this thing as long and as far as he was able to with the resources, and decided if I can get a great partner to help me take this to the next level, I want to do it.”

But after taking a more serious look at the deal, Kenary said he was attracted to the brand’s “irreverent” and “fun attitude.” He also saw the opportunity to fill gaps in Mass Bay’s portfolio.

“The more we got to know Gregg Berman and his team, the more we thought that this could be a nice fit for us,” Kenary said. “They’re looking for a home; we have excess capacity. They really sell in the speciality, higher end of the craft segment, which is not our strong suit. Great overlap. Good team. Good values. They love the idea of employee ownership and the ESOP, so things just kind of clicked.”

For his part, Berman said a sale to Harpoon didn’t mean the company was “selling out.”

“For this partnership to work, everyone needs for us to continue to be Clown Shoes,” he wrote on the company’s blog. “We will still produce innovative, high quality beers with signature graphic marketing. We will, in fact, create small batch, state specific, and barrel aged beers at an accelerated rate in 2018.”

Clown Shoes, which was founded in 2009, will continue on as its own distinct brand. Berman, along with head brewer Dan Lipke and designer Michael Axt, will oversee the creation of new products, labels and artwork.

“We’re not looking to Harpoonize Clown Shoes,” Kenary said.

However, Mass Bay will have say in the final product, ensuring the company avoids the controversial imagery that has plagued Clown Shoes in the past.

“We’re all on the same page on that,” Kenary said. “We will absolutely have a say when they’re coming out with new labels.”

Mass Bay will also take over a majority of Clown Shoes’ production.

According to Kenary, “80 to 90 percent” of Clown Shoes’ beers, including year-round core, limited-release and barrel-aged products, will shift from Ipswich Ale Brewery to Harpoon’s facilities in Boston and Windsor, Vermont. Production of Clown Shoes’ beer is expected to begin next week in Boston and in late November in Vermont, he added.

Clown Shoes’ beer is currently sold in 28 states and five countries and Kenary told Brewbound that there’s “not as much” distribution alignment as he’d like.

“That’s the story of every beer acquisition,” he said. “We have to deal with the reality of franchise laws.”

Clown Shoes and Mass Bay do share wholesalers in parts of Massachusetts, New Hampshire, Upstate New York and all of New Jersey, however.

“They are not in Vermont,” Kenary said. “We’ll have them aligned in Vermont, so that’s a great start with at least a presence in half the New England states.”

In the remaining states, Mass Bay will seek alignment on a “market-by-market” basis, Kenary said.

In Boston, where Mass Bay operates “Harpoon Distributing Company,” a wholly-owned subsidiary of Mass Bay Brewing, Kenary said he would look strike a deal with Horizon Beverage, which distributes Clown Shoes as well as Harpoon and UFO offerings.

“If we can work something out, we absolutely will,” Kenary said of carving out Clown Shoes’ distribution in the greater Boston area.

More details are available in a press release below.

Mass Bay Brewing Company to Acquire Clown Shoes Beer

BOSTON (October 30, 2017) – The Mass Bay Brewing Company, brewers of Harpoon and UFO beers, announced today its acquisition of Clown Shoes Brewing. Clown Shoes, launched in 2009 in Ipswich, Massachusetts, is a nationally distributed brand that produces a wide selection of year-round and limited release beers. Clown Shoes has experienced significant success with its Space Cake Double IPA and Clementine White Ale, among other innovative beers.

“The Clown Shoes team shares our passion for brewing excellent beer and their irreverent, boldly-flavored takes on classics have earned them a loyal following,” said Dan Kenary, Mass Bay Brewing Company CEO and Co-Founder. “We see tremendous potential for growth both regionally and nationally and are excited to work with Gregg and his team to take Clown Shoes even further.”

The Clown Shoes Story

It all started when Gregg Berman, Founder and CEO of the brand, brewed a small batch of “Hoppy Feet” Black IPA with Ipswich Ale Brewing, also located in Massachusetts. The offering was well received around Boston, prompting Berman to collaborate with Head Brewer Dan Lipke to develop and trial additional beers, with innovative takes on existing styles – such as Clown Shoes’ Josh the Guava King, a Double IPA brewed with guava puree. Clown Shoes more than doubled its production from 700 barrels to 1,500 in its second year. In 2011, they began distribution out of state, carefully selecting craft-oriented wholesalers. In 2017, Clown Shoes is on pace to produce over 13,000 barrels of beer. The brand is currently sold in 28 states and 5 countries.

“Harpoon and Clown Shoes are both fiercely loyal to our brands, to independent craft brewing, and to our employees,” commented Clown Shoes’ Berman. “I’ve been a fan of Harpoon for a long time and it’s very gratifying for me that our team will get to work alongside the expert brewers at Mass Bay Brewing to grow Clown Shoes and get our beer into the hands of more beer drinkers”

Employee Ownership

In 2014, Mass Bay Brewing Company became an employee-owned company through the establishment of an ESOP (Employee Stock Ownership Plan). The Clown Shoes team joining Mass Bay Brewing Company will have the opportunity to become employee owners through the Mass Bay Brewing Company ESOP, as well.

“The craft industry has changed a lot since we opened our doors in ’86,” Kenary noted. “The Clown Shoes team has an approach to brewing and selling great beer that is very different than ours, but their belief in independent brewing dovetails perfectly with the stake we have planted around employee ownership. We plan to have a lot of fun and success working together, enjoying a few beers along the way.”

About Clown Shoes Beer:

Clown Shoes Beer began as a single beer project. Somewhat miraculously, that project snowballed into a craft beer brand. Since then, which was late in 2009, Clown Shoes has released over one hundred different beers, with sales in 28 states and several countries outside of the US. The year-round lineup has been refined to include 12 oz. cans, 16 oz. cans, and 22 oz. bottles, each packaged with signature, intense graphic artwork. Creating a unique, “state-specific” beer program, Clown Shoes has brewed dozens of small batch variations that are exclusively available in specific states (such as Massachusetts, Texas, and Ohio). Clown Shoes also creates an extensive array of barrel-aged beers, experimenting with high-end barrels ranging from port and tequila to Cognac, rum and bourbon. The Clown Shoes team constantly push themselves to improve and to test the boundaries of craft beer.

About the Harpoon Brewery:

The Harpoon Brewery was founded in 1986 by beer lovers who wanted more and better beer options. When the Brewery was founded, Harpoon was issued Brewing Permit #001 by the Commonwealth of Massachusetts, since it was the first to brew commercially in Boston after a dormant period of about 25 years. Harpoon’s line of craft beer features its award winning IPA and UFO beers, along with special seasonal selections. In 2000 Harpoon purchased a second brewery in Windsor, VT, making Harpoon the 19th largest craft brewer in the US. Harpoon has since introduced the limited batch 100 Barrel Series and the as well as the all-natural Harpoon Craft Cider made from freshly pressed apples.

In 2012 Harpoon was the recipient of the Green Business Award from the City of Boston. Harpoon has been recognized by the Boston Globe as one of Massachusetts’ Best Places to Work. In 2016 Harpoon was named one of the Top Charitable Contributors in Massachusetts by the Boston Business Journal. In August 2014 Harpoon became an employee-owned company.

For more information about Harpoon visit www.harpoonbrewery.com.

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