Schlafly Sold Again: Sage Capital Sells Controlling Stake in Saint Louis Brewery Back to Family

The Schlafly family once again has controlling interest of The Saint Louis Brewery, makers of Schlafly Beer.

More than seven years after acquiring a majority interest in the Saint Louis craft brewery, private equity firm Sage Capital, as well as several current and former Schlafly Beer employees, including co-founder Dan Kopman, have sold their stakes in the business to a new investor group led by David Schlafly, a real estate developer and cousin of brewery co-founder Tom Schlafly.

Specific financial terms of the deal, which closed May 3, were not disclosed. Following the transaction, the new investor group, including members of the Schlafly family, as well as individual investors, will control 80 percent of the company.

A group of investors from Sage Capital, including partner Spencer Finney, will retain a 20 percent stake in the business.

Speaking to Brewbound, David Schlafly said his first goal was to return ownership of the brewery to the Schlafly family and close friends.

“Through the virtue of that, the brewery can do what it’s always done — it can lead in making great beer,” he said. “Quality companies like Schlafly are very rare, and [they] are things you want to be a part of.”

In 2012, Tom Schlafly and brewery co-founder Dan Kopman sold a 60 percent stake in The Saint Louis Brewery to Sage Capital. At the time, Tom Schlafly retained 20 percent of the business, while Kopman maintained a 10 percent stake.

Following the recent transaction, Tom Schlafly now owns 17 percent of the company and remains chairman of the company’s five-member board. Meanwhile, Kopman, who departed The Saint Louis Brewery at the end of 2016 and currently serves as the CEO of Baltimore’s Heavy Seas Beer, has sold his stake in the business.

In an email to Brewbound, Kopman called the deal “very good news for Schlafly Beer, their hard-working employees and the St. Louis community.”

“We [my wife Sheena Cook and I] are very pleased for David, Tom and other members of the Schlafly family,” he wrote.

David Schlafly, who also invested in 2012 alongside Sage Capital, gradually increased his stake in the business over several years, he said. About two years ago, he was appointed to the brewery’s board of directors.

David Schlafly confirmed that his stake is “equal to or slightly greater” than Tom Schlafly’s 17 percent ownership stake.

Moving forward, David Schlafly will serve as director of The Saint Louis Brewery, while continuing his work in commercial real estate as president of the Schlafly Corporation. In doing so, he has taken on a more formal role in a business that, similar to other regional breweries, has declined in recent years. Sales of Schlafly’s products declined 13 percent in both 2016 and 2017, according to estimates from the industry trade group the Brewers Association (BA).

In 2017, the last year in which production numbers were available, Schlafly brewed about 45,000 barrels of beer, down from a peak of 60,000 barrels in 2015. Tom Schlafly told Brewbound that the company’s production had declined even further in 2018, but was unable to provide final production figures.

Nevertheless, David and Tom Schlafly remain bullish on the growth prospects of the beer category. According to Tom Schlafly, the company has an opportunity to succeed because of its “history of quality and excellence.”

“Can I prove that empirically? Not yet,” he said. “But it’s just an instinct that I have that as consumers become more knowledgeable, they recognize that we have brewed dozens of styles in perfect compliance with the established standards.”

Schlafly’s brand image was damaged last December following the circulation of a newsletter to bars and restaurants that criticized another local competitor, 4 Hands Brewing. Following the debacle, The Saint Louis Brewery and 4 Hands issued a joint statement in which the maker of Schlafly Beer apologized on behalf of an unnamed “senior executive” who had “caused negative and misleading information to be circulated about 4 Hands” via an anonymous newsletter. Then-CEO James Pedegraft abruptly resigned from the company days before the joint statement, and it is widely understood that he was responsible for designing and distributing the disparaging remarks.

While the company had been searching for a new CEO, that process has been temporarily put on hold. David Schlafly said he is “very confident” in the company’s current leadership team of interim CEO Emily Parker and CFO Fran Caradonna, who was hired in March.

Sage Capital co-founder John Lemkemeier did not return messages from Brewbound seeking comment.

A press release with additional information is included below.

THE SAINT LOUIS BREWERY SHIFTS MAJORITY OWNERSHIP BACK TO THE SCHLAFLY FAMILY

David Schlafly, Co-founder Tom Schlafly’s cousin and commercial real estate developer, named as Director for St. Louis’ largest locally owned craft brewery

(ST. LOUIS; May 6, 2019)—The Saint Louis Brewery, makers of Schlafly Beer, announces today that David Schlafly, along with a group of local investors, has acquired the controlling interest in the brewery. David is a cousin of co-founder Tom Schlafly, meaning the new ownership structure allows the Schlafly family to continue the Schlafly Beer legacy into the future.

Tom Schlafly states, “I am delighted to have David join the Schlafly team. Throughout his career, he has been an advocate for the betterment of our community – both on a civic and cultural level. He has a track record for success in business, and his work has led to the redevelopment of Maplewood, a commitment that has served our Schlafly Bottleworks location well.”

While Tom Schlafly will remain Chairman of the Board, David Schlafly plans to be actively involved as a Director of the company. “The Saint Louis Brewery is part of our family’s legacy. I’ll be working with the Schlafly team to continue to advance its leadership in the craft beer industry and support neighborhood renewal. We are proud to be a St. Louis family-owned brewery.”

Private equity firm, Sage Capital, as well as several current and former employees chose to sell some of their units, shifting a majority ownership stake to David Schlafly and the group of investors. Tom Schlafly and Sage Capital will remain minority stakeholders for the brewery with representation on the board of directors.

In addition to his active involvement within the Schlafly Beer organization, David Schlafly will continue his commercial real estate work. He will also continue to participate in civic and charitable causes. He currently serves on the board of Laumeier Sculpture Park, and he is the former Chairman for the Creve Coeur Economic Commission and President of Housing for Senior Services at Catholic Charities St. Louis. He was also named the Maplewood Businessman of the Year in 2014.

About Schlafly Beer

Schlafly Beer, Missouri’s largest locally owned, independent craft brewery, proudly offers over 60 unique styles of beer. Each is handmade at the Tap Room in Midtown St. Louis or Schlafly Bottleworks in Maplewood. Utilizing 102 hop varietals, 77 malts and grains, 59 different spices and fruits and 10 separate yeast strains from around the globe, Schlafly also works with local suppliers for everything from farm-fresh food to packaging and labeling. As part of its commitment to sustainability, Schlafly donates spent grain to local farmers to feed their livestock and utilizes 100% renewable energy throughout its operations. The largest Missouri-owned-and-operated beer maker offers free tours of the Tap Room (2100 Locust Street) every Sunday from 12:30 p.m. to 4:30 p.m. on the hour and Schlafly Bottleworks (7260 Southwest Avenue) from noon to 5 p.m. every half hour on Fridays, Saturdays and Sundays. The brand continues to define craft across 12 states and throughout countless fine establishments, backyards and basement bars. Join us at either of our locations and on Facebook, Instagram, and Twitter. For a full listing of seasonal and year-round beers and for information on distribution, visit Schlafly.com.