Speakeasy Saved: San Francisco Brewery Purchased by Former Beer Distributor

Speakeasy Ales & Lagers has officially staved off extinction.

Two months after announcing plans to cease brewing operations and ready for a sale, the San Francisco-based brewery today said former Horizon Beverage Company owner Cestra Butner, via the newly launched “Hunters Point Brewery” holding company, had acquired its brewing equipment assets and brands.

Specific financial terms of the deal, which closed on May 8, were not disclosed, according to a press release.

“We were one the first companies to expand their distribution beyond San Francisco,” Butner, who distributed Speakeasy products for “five to six years,” said in the release. “I thought it would be a shame if the brand, and one of the few production breweries left in San Francisco, disappeared because of financial problems. Keeping Speakeasy’s San Francisco born and brewed tradition alive is very important to me.”

According to brewery spokesman Brian Stechschulte, the sale did not include Speakeasy’s previous debt liability. Jigsaw Advisors, a turnaround management firm appointed to run the brewery in March, will reportedly use proceeds from the sale to pay outstanding debts owed to vendors, including its primary creditor, Union Bank, he said.

Sam Cappione, who most recently consulted for Anheuser-Busch InBev and has held positions with Horizon Beverage Company as well as Craft Brew Alliance, was named Speakeasy’s new vice president and general manager and will oversee all aspects of company’s operations.

Speakeasy-branded beers will continue to be brewed at its 1195 Evans Ave. location near the Hunters Point neighborhood of San Francisco, Stechschulte said.

“We are meeting tomorrow and hashing out a plan to get things up and running as fast as possible,” he said, adding that brewing had not occurred at the location in about a month.

According to Eugene Pak, a food and beverage attorney with Wendel Rosen Black & Dean, a provision within California’s alcoholic beverage law will allow Hunters Point Brewery to apply for a temporary brewing permit and continue producing beer during an ownership transfer, a process that could take between 90 and 180 days.

In the interim, some Speakeasy products will continue to be contract brewed under the supervision of New York’s Shmaltz Brewing, who was tapped in mid-March to produce beer on behalf of San Francisco brewery. Under that arrangement, Shmaltz was granted the exclusive right to produce Speakeasy beer for 90 days while a sale of the brewery was finalized.

As of press time, it is unclear whether Speakeasy’s new owners would renew the contract brewing agreement with Shmaltz.

“We’re brewing away and looking forward to a couple more months,” Shmaltz founder Jeremy Cowan wrote to Brewbound, adding that he hoped Speakeasy would continue using his brewery for the production of beer sold on the east coast.

“I am really excited for the new owners, and the staff coming back on full speed ahead,” he added. “We’ve been in touch a lot through the process and this should be a great next step.”

According to Stechschulte, eight brewery employees who remained with the company over the last two months will retain their jobs. Speakeasy is also hoping to rehire former employees who remain jobless, he added.

“We have to see where our needs are,” he said.

In early March, when Speakeasy founder Forest Gray first announced that his company was “financially insolvent,” 48 brewery employees were terminated.

The company is also working to re-establish relationships with raw ingredients suppliers and other vendors, Stechschulte said.

“We are happy to have the opportunity to get back up and running,” he said. “We know it will take a while, but we think we can still make a dent in the market.”

The Speakeasy Saga: Timeline and Key Details

  • On March 10, Speakeasy announced plans to indefinitely cease brewing, packaging and taproom operations.
  • On March 13, the company agreed to enter receivership and Jigsaw Advisors was appointed to run the failing brewery after it neglected to make payments to Union Bank, its primary creditor, and other vendors.
  • In early April, it was revealed that Shmaltz Brewing had signed a 90-day contract brewing agreement with Speakeasy (in mid-March) that enabled the San Francisco brewery to keep beer in the marketplace while bids for the company were submitted.
  • On May 8 a sale to Hunters Point Brewery, owned by former Horizon Beverage owner Cestra “Ces” Butner, was finalized.
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