A pair of Iowa craft breweries are formalizing their existing partnership.
Waterloo-based SingleSpeed Brewing is acquiring the intellectual property of Coralville-based Backpocket Brewing and its sibling brand Peace Tree Brewing.
Backpocket and Peace Tree operations will move an hour and 15 minutes northwest to SingleSpeed’s Waterloo production brewery, which will be expanded to accommodate capacity needs for all three brands.
“This is a win for Waterloo, for Iowa craft beer, and for every fan who has supported our breweries along the way,” SingleSpeed founder Dave Morgan said in the announcement. “By bringing these teams together at our WonderBread facility, we’re building a destination that showcases the best of Iowa beer and sets the stage for future innovation.”
The combination of SingleSpeed with Backpocket comes a little more than a year after the two breweries formed the Parallel Brewery Collective. The partnership allowed the two breweries to maintain their independent ownership while forging a shared-service agreement that included a shared sales team and joint supply chain procurement. Peace Tree was added to the collective in November after Backpocket acquired the brand and recipes from founder Megan McKay.
Speaking to Brewbound, Backpocket owner Aaron Vargas said he and Morgan will be equal partners in the new venture.
“It came down to, Dave and I are really good friends,” Vargas said. “We view business strategy the same.
“It started with Parallel, and it’s continued on to this project now,” he continued. “He’s been a good friend and good business partner, and now we’re just solidifying that.”
Backpocket will wind down operations in Coralville through the end of the year, with brewing operations expected to begin January 1 at The Brewery @ WonderBread in Waterloo, Vargas said. Backpocket will move six 100-barrel tanks, its chiller and silos to the facility to meet capacity needs.
Some members of Backpocket’s team will join the combined company, while others opted to not make the transition, Vargas said.
No supply gaps are expected as the companies continue producing at their existing facilities to build volumes of core products, Vargas said.
Distribution networks for Backpocket and SingleSpeed in Iowa, Nebraska and Illinois are “100% aligned,” Vargas said.
Both companies will continue to operate their respective satellite taprooms, including Backpocket’s spaces in Johnston and Dubuque and SingleSpeed’s in Cedar Falls and Des Moines.
“Even though we’re combining forces or merging just like others have, we still want them to have their own brand identity, especially with those locations,” Vargas said.
Parallel will continue to operate as usual, with some members, Five Cities Brewing in Bettendorf and Mississippi River Distilling in Le Claire, remaining independently owned. The collective will continue to provide route to market strategies and procurement savings for its members, Vargas said.
The merger follows a similar pattern to other craft brewers who have deepened partnerships as the industry navigates challenges. Last month, Virginia-based Aslin Beer Co. and New York City-based Torch & Crown Brewing merged after spending nearly a year in a contract brewing relationship. In Massachusetts, Hendler Family Brewing and Night Shift Brewing did the same last year.
Hear more from Vargas about Parallel’s formation in this conversation at Brewbound Live 2024.