As craft continues to grow up, an increasing number of small brewery owners — especially those who’ve been in business for more than 20 years — are starting to look for the exit. That means that succession planning is more top-of mind than ever for aging brewery owners looking to retire and cash in on years of brand building.
But where small business owners in other industries might look to private equity as way to grow rapidly and exit stage left, craft brewers seem more apt to wait for the curtain call.
“They [private equity firms] are out there and they are looking,” said Heavy Seas founder Hugh Sisson. “If you don’t really care what happens when you walk out the door, then a private equity offering is probably something that makes sense. You need to understand that they are not really going to care about the business beyond how much money it is going to make them.”
At 59 years of age, Sisson is one of those brewers currently evaluating his exit strategy.
“Sometime in the next five years, I will cease the day-to-day operations,” he said. “It’s a young person’s game. I still enjoy what I do a great deal but I don’t hit the bars as hard as I used to. I just can’t do it.”
It’s not just the toils of neverending drinking sessions at bars and beer fests that lead brewers to consider hanging up the mash tun. When a brewery adds barrels, they also add new sets of challenges and headaches. Managing increased production and distribution logistics, maintaining a constant stream of marketing initiatives and selling efforts, and balancing product consistency with the desire to be innovative becomes increasingly difficult.
So what exit strategies exist for those brewers looking to take their final bow?
Brewbound asked Kim Jordan, the co-founder of New Belgium, to share her insight into succession planning. Earlier this year, Jordan solved any ownership succession planning issues when she sold her controlling interest in the brewery to its employees through the company’s employee stock ownership program. It was a decision that many in the space have applauded because it gave the impression that Jordan was able to sell without selling out, while leaving New Belgium 100 percent employee owned.
In our latest video segment from last week’s Craft Brewers Conference, Jordan explains why she opted to sell to her employees and discusses the other options that exist for craft brewers looking to wave goodbye.