The small contract brewing operation, Odonata Beer Co., recently made the announcement to shut down operations indefinitely.
Peter Hoey, the brand’s Co-Founder who previously worked at Sierra Nevada and Bison Brewing, explained that after crunching the numbers it simply didn’t make sense to continue Odonata’s operations.
“The product wasn’t the problem,” said Hoey. “All of the expenses were eating away at our margins and there wasn’t much left to live on.”
With respect to quality, Hoey isn’t blowing smoke.
With 55 reviews on Beer Advocate and an overall A- rating for their flagship saison style, it wasn’t a lack of quality that caused the demise of the brand.
“It was well received and well-reviewed,” he said. “We just weren’t able to make a living at it with the structure we had on the business side of things.”
Hoey had been contract brewing through Sudwerk Brewing in Davis, CA. His goal when he first started the brand was to offer consumers a premium product at a good price-point. His 22oz bottles sold for around $6.00 at retail.
“I think we had the second cheapest saison on the market in California,” he said.
Looking back Hoey admits that had his price point been higher, he would have not only made more on margins, but also sold more beer.
“For really avid craft beer fans, price can be an indicator of quality,” he said. “We had some retailers tell us that if we put it in a cork top bottle and charge $10, they would sell more.”
But Hoey was limited by the constraints of his contract brewing partner, Sudwerk, whose bottling line could not accommodate such packaging.
“At the end of the day, you’re not your contract brewing partner’s number one priority,” he said. “You are something they do on the side because they have extra tank space, and that can be tough.”
When it came time to decide whether or not to brew another batch of beer, Hoey searched for other potential contract brewing partners, but came up empty.
“The good news for the industry is that the breweries that are doing that sort of thing, are doing really well,” he said. “The bad news for me was that they didn’t have any excess capacity.”
So Hoey made the tough decision to call it quits and put a saison recipe – that once took home the gold medal at the 2006 Great American Beer Festival – back into his so called “bag of tricks.”
As for craft beer, Hoey’s future is undecided. In the meantime, he is consulting for new beer brands looking to capitalize on the recent growth in the craft beer segment.