Harpoon Brewery parent company Mass. Bay Brewing has disbanded its distributing company and sold the rights to sell its products in the Boston area to Randolph, Massachusetts-based Burke Distributing.
“Boston accounts for a disproportionate amount of our business,” co-founder and CEO Dan Kenary told Brewbound. “Our business — and our industry to some extent — has changed a lot, and so for us, the economics of it became more difficult. As the number of SKUs increased dramatically, it became less profitable.”
Mass. Bay launched Harpoon Distributing in 2002, when the company’s portfolio included just the Harpoon and UFO brands. Now, the company produces those two brands, plus Clown Shoes beer, Arctic Summer hard seltzer and City Roots cider.
“We need to concentrate on making great beer, seltzer and cider and marketing and selling it well,” Kenary said. “Our ability to deliver a keg economically to Dorchester or Beacon Hill and collecting a check — that’s not strategic for us anymore. There are other people that do that much, much better than we do.”
With the dissolution of Harpoon Distributing, the company laid off nearly 20 employees on June 11, which Kenary called “a tough day.” However, Burke and other Massachusetts beer wholesalers have shown interest in hiring the affected employees, he added.
Burke will begin delivering Harpoon and other Mass. Bay Brewing products on June 22, according to the wholesaler’s website.
The decision to end self-distribution wasn’t related to the COVID-19 pandemic, but came from a financial analysis Mass. Bay performed in December. Conversations began in February, Kenary said.
“I think it’s pretty amazing we got the deal done in the face of this pandemic,” he said. “I think it speaks to how much both sides wanted to make this happen because they’re convinced it’s the right thing.”
This won’t be the first time Burke and Harpoon have crossed paths. Kenary said he and co-founder Rich Doyle pitched the wholesaler after they launched the brand in 1986.
“They turned us down at the time; Bill [Burke] and I have laughed about that forever,” Kenary said. “They had other things going on, and I was dressed too much like a craft brewer, back in the day when they didn’t even know what microbreweries were.”
Boston is the only market in which Mass. Bay Brewing self-distributes. Between self-distributing after Harpoon’s debut in 1986 until 1997, and launching Harpoon Distributing in 2002, the company worked with now-defunct Metropolitan Distributing Company, a Miller-focused beer distributor in Boston.
Today, Harpoon’s wholesalers are a mix of Molson Coors and Anheuser-Busch InBev houses, Kenary said.
The Boston metro area that Burke serves accounts for about 20% of Mass. Bay’s volume. In 2019, the company sold 174,900 barrels in 31 states, which made it the No. 17 craft brewery by volume, according to the Brewers Association. That translates to almost 35,000 barrels — or 482,222 case equivalents — of beer moving into Burke’s warehouse.
Burke’s portfolio includes Molson Coors Beverage Company offerings (Coors Light, Miller Lite, Blue Moon), Boston Beer Company (Samuel Adams, Dogfish Head Craft Brewery, Angry Orchard, Twisted Tea, Truly Hard Seltzer), Constellation Brands (Corona, Modelo, Pacifico), and other New England-based craft breweries such as Shipyard Brewing, Two Roads Brewing, Long Trail Brewing, Narragansett Brewing, Wormtown Brewery and Notch Brewing.
Kenary said he isn’t concerned about ceding responsibility for the company’s sales to the salesforce of a wholesaler who also carries so many local competitors.
“We’ve worked with over 100 wholesalers, and we work with plenty of wholesalers that have Sam Adams or have other competing brands. It’s always a concern, right?” Kenary said. “But you learn to work with great wholesalers. They know how to prioritize different brands. They know how to work well with breweries.
“The perfect world would be a wholesaler that only sells our stuff and that’s never the case,” he continued. “So what we’ve found is that relationships are key, and we have had tremendous success at wholesalers with a very, very similar look to Burke — Atlas out in Central Mass. being a prime example of a phenomenal relationship with us.”
Both Burke and Atlas, which is also a Molson Coors house, sell Boston Beer products. Mass. Bay and Boston Beer have similar stories and offerings — both are Massachusetts-born breweries that debuted in craft beer’s first wave and have expanded their portfolios to include non-beer choices such as cider and hard seltzer.
Burke Distributing president Bill Burke called Boston Beer founder Jim Koch to break the news that Burke will be selling Mass. Bay Brewing products.
“Jim was very, very kind with what he had to say, which I would echo and I’m flattered that he said it — the first five years of our business we beat the crap out of each other, and he said we made each other better companies,” Kenary said. “I’ve said that many times, we would not be as successful a company as we’ve been — and we’ve been nowhere near as successful as Boston Beer obviously — if it hadn’t been for having to compete with the best in the craft beer business from Day One. So, the fact that we’re in the same house after all these years, Jim is a friend, and I hope that both of us go on to have continued success.”
Burke was founded in 1935 and remains family operated. The wholesaler bought the rights to sell Miller products in the 1950s and added Coors Brewing products in 2003. Burke added spirits to its portfolio in 2009.
The addition of the Mass. Bay Brewing portfolio is a shot in the arm for Burke, which was among three Massachusetts wholesalers that was terminated by Red Bull North America one year ago as the energy drink maker transitioned to a self-distribution model for off-premise accounts. The loss of the Red Bull business led Burke to lay off 72 non-union employees.
Harpoon Distributing had sold San Francisco-based Speakeasy Ales & Lagers in the Boston market beginning in 2015, but stopped carrying when Speakeasy retrenched in 2017.