Brewscape: The Latest Craft Beer Brand News

Brooklyn Brewery Takes Minority Stake in Hoplark, Forms Strategic Partnership

Brooklyn Brewery has taken a minority stake in Boulder, Colorado-based non-alcoholic (NA) hop tea maker Hoplark as part of a Series A funding round, the two companies announced September 11.

The New York City-headquartered craft brewery has forged “a comprehensive long-term strategic partnership” that will allow Hoplark to leverage Brooklyn’s infrastructure for production, warehousing, logistics, sales and administration.

Hoplark will also work with Brooklyn’s sales team “to broaden its representation with wholesalers and retailers around the country.”

Whipstitch Capital served as Hoplark’s financial advisor on the transaction. Financial details were not disclosed.

“We’re ecstatic with this financing and strategic partnership with Brooklyn Brewery,” Hoplark founder Dean Eberhardt said in the announcement. “As many people know, we’ve been production constrained for the last 18 months, and we can’t wait to be able to keep up with the consumers who have been emptying our cans off the shelf faster than we can replenish them.

Now we can lean back into working with our wholesale and retail partners to expand our sales to their maximum potential.”

Brooklyn Brewery CEO Eric Ottoway added: “The true attraction here goes way beyond just sales and logistics. We are captivated by Hoplark’s novel technological approach to hops. Their willingness to challenge established practices and think outside the box is extremely evident. They have crafted a unique brand narrative around using hops in a ‘triple zero’ concept – no alcohol, calories, or sugar – that is unparalleled in the beverage industry.”

Hoplark CEO Betsy Frost, who joined the company in January, said “this partnership is the next big step in supercharging Hoplark’s potential.”

In January, Hoplark reorganized the company into two subsidiaries: Hoplark, which will oversee the core brand, and Hoplark Labs, a tech-driven division that will launch new beverage brands and products under the leadership of Eberhardt.

Brooklyn Brewery was among the first craft breweries to push into the NA beer space, with its Special Effects line, which launched in Sweden in 2018 and hit the U.S. in 2020.

Brooklyn Brewery has continued to expand its NA investment, launching a NA variety pack in late 2021. Dollar sales for the variety pack are up +95% and volume +73.8% year-over-year in the last 52 weeks (ending August 12) in NIQ-tracked off premise channels, according to data shared by 3 Tier Beverages. The offering is Brooklyn’s third-largest by dollar sales, behind Brooklyn Lager and Black Chocolate Stout, with more than $1.1 million in sales in the period.

Vermont’s Lost Nation Seeks New Equity Partner or Turnkey Sale

Earlier this year, a listing popped up for Lost Nation Brewing in Morrisville, Vermont.

The Beer Advocate forum lit up with questions and concerns about the brewery’s future, while other posters expressed sadness.

After receiving interest from a few parties over the summer, Lost Nation co-founder Allen Van Anda told Brewbound that he pulled the listing. He described the number of “tire kickers” and “interested parties” as “mind boggling.” However a sale of the business has yet to materialize, and time is beginning to run out on Lost Nation.

Lost Nation is in a similar position to Weathered Souls, Van Anda said. He and Lost Nation co-founder Jamie Griffith dissolved their partnership last October after around a decade in business together. They had founded the brewery in 2012 after working together at the Von Trapp Brewery in Stowe.

The partnership was no longer working for either party, Van Anda said. So the founders decided to go their separate ways. As cracks formed in the foundation of the partnership of Lost Nation’s founders, the business was struggling from a “perfect storm” of a COVID-19 hangover and an oversaturated craft beer market.

Lost Nation and Van Anda are now at a crossroads. He’s seeking a new equity partner to buy out Griffith’s stake in the business or a complete turnkey sale of the brewery. Both options remain on the table.

Should someone purchase the business outright, they’ll be buying a brewery with a capacity of around 8,000 barrels annually, a 50-seat restaurant and taproom and a 200-seat outdoor beer garden. They’ll also be receiving a warehouse that was converted to a live music venue.

Should someone buy into Lost Nation as an equity partner to Van Anda for $250,000, they’ll essentially be giving the business a clean slate. Van Anda said he’s negotiated a deal with the brewery’s bank to refinance its note should the investment come through.

“$250,000 would save this brewery,” he said.

“We live in the fastest growing community in the state of Vermont,” he continued. “It just takes the right person to believe in it, and it’s going to take off. It’s just going to fly.”

Time is running short though. Van Anda initially believed after his partnership with Griffith ended that the brewery wouldn’t survive to see the summer. However, he credited Lost Nation’s “amazingly dedicated small staff” and restaurant business “floating cash flow” with keeping the Lost Nation alive.

Now, Van Anda expects the end of fall foliage to lead to a slowdown in Lost Nation’s business. Without a clear path forward, Van Anda has been reluctant to brew beer. Lost Nation has subsisted on batches of Pilsner and Mosaic brewed in January but supply is beginning to dry up.

Interested parties can contact Van Anda at allen@lostnationbrewing.com.

Hard Seltzer Brand Mighty Swell Acquired

Austin, Texas-based hard seltzer brand Mighty Swell has been acquired by Lemonati LLC, according to a press release from buy-side advisory firm Houlihan Lokey.

The transaction closed on July 28. However, the deal announcement was made August 24 by Houlihan Lokey.

Lemonati is described as “the beverage alcohol division of a major international company, recognized globally for its expertise in developing and manufacturing citrus flavors, organic flavors, beverage flavors, essential citrus oils, and other flavors that are applicable across a wide variety of finished food, beverage, and consumer products.”

Houlihan Lokey senior VP Sam Scanlan told Brewbound that family-owned Lemonati was looking to create a beverage-alcohol division but instead opted to acquire Mighty Swell and bring CEO Jeana Harrington onto the Lemonati team.

The issues for Mighty Swell began earlier this year when a round of funding expected to come through by December fell through.

“By February, it was getting a little dire in terms of being able to fund the year’s production going into the spring,” Harrington told Brewbound.

This led Mighty Swell to explore merger-and-acquisition options while it was gearing up to brew the bulk of its production for the summer selling season. Without the funding, Mighty Swell was unable to brew a follow-up batch of product in March, leading the company to allocate product in order to maintain its chain placements, Harrington said. She credited her team and Mighty Swell’s wholesalers with holding onto many of those placements.

Future production won’t be an issue with new ownership backing Mighty Swell and Lemonati, Harrington said.

“It’s gonna give us the opportunity and the resources to not have to fundraise again, which is a big plus for me and the leadership because that can take up a lot of time,” she added.

Lemonati will operate with little intervention from the family that bought Mighty Swell.

Harrington said their desire is to remain private and uninvolved in the business, allowing her and her team to run the new alcoholic beverage division of the company as a siloed business.

Following the sale, Mighty Swell did the first of two “big production runs” at City Brewing’s facility in Memphis, with product beginning to ship now, Harrington said. The company is also exploring West Coast production as expansion west is under consideration.

Mighty Swell brand family sales in off-premise retailers tracked by NIQ have declined -19.1%, to around $5.9 million, while volume declined -24% for the 52-week period ending August 12, according to data shared by 3 Tier Beverage. Declines accelerated in the latest four-week period, with dollars -47.8% and volume -50.5%, according to data shared by the firm.

Weathered Souls Seeks Equity Partner to Take Over Co-Founder’s Majority Share

The craft brewery that led the Black is Beautiful charitable beer initiative is seeking a new equity partner to buy out one of its co-founders and take a majority stake in the business.

Weathered Souls Brewing Company co-founder Mike Holt in September declared he is seeking an exit from the San Antonio craft brewery that he helped found with Marcus Baskerville in 2016.

“Building this alongside Marcus, and alongside all of the incredible people who helped get Weathered Souls to where it is today, that’s been the adventure of my life,” Holt said in the announcement. “Now it’s time for someone else to continue that good work, whether it’s raising millions to support charitable organizations in Black communities across the country, winning awards for making some of the best beer on the market, or just creating an environment where everyone can feel comfortable enjoying craft beer regardless of who they are.

“The community deserves to see Weathered Souls continue in the hands of someone who will truly be the good steward and community leader that we’ve strived to be ourselves these last few years,” he continued.

Holt is asking interested parties to reach out directly to him at investor@weatheredsouls.beer.

Craft Beer Cellar Founders Offer Belmont and Trinktisch European Food Hall for Sale

Craft Beer Cellar Belmont and Trinktisch European Food Hall are looking for new ownership.

Co-founders Suzanne Schalow and Kate Baker announced their intent to sell the Belmont, Massachusetts-based businesses in a letter to industry members and fans in August.

“We have had the time of our lives being your local beer and wine store, and now your beer hall and gathering place,” Schalow and Baker, who are also married, wrote. “But, we feel that the time has come for us to get back to ourselves, each other, and to look towards building on our experiences to further explore excellence in hospitality, in the retail and restaurant segment (Craft Beer Cellar Co.), and beer industry education, in a new light.”

The duo are “actively seeking a local individual, family, or group, to pick up where we will leave off” and take over the businesses: “someone who has the same fire and drive for providing an exceptional experience, by selling and supporting the very best in beer, wine, cider, food, and more.”

While the sale marks a new chapter for the individual businesses, Schalow and Baker are not done with the Craft Beer Cellar franchise, which includes 11 other locations.

Brewbound caught up with Baker following the announcement to discuss the decision, the interest they’ve received so far, and what’s next for her and Schalow.

Baker shared that four different groups of people have inquired about the business so far.

“It’s also something that it’s just not gonna happen overnight,” she said. “It’s easy to get overexcited, but you have to talk yourself down a little bit.

“We are encouraged by having such interest so early,” she continued.

Although Baker and Schalow are open to selling the businesses separately, the interest they’ve received thus far has been acquiring the package.

“There’s a lot of complementary aspects to having Craft Beer Cellar and Trinktisch right next door to each other,” Baker said, noting that the restaurant’s customers have often stopped by the bottle shop after, to purchase packages of the beers they’ve tried during dinner.

The timeline for a sale is “open ended,” but Baker said the hope is “by the end of the year” the business will be transitioning to new owners and she and Schalow will be in advisory roles.

Baker admitted that the last year and half has been difficult for her and Schalow, with no work-life balance. Baker added that the ideal buyers will have help to divide duties and avoid the grind that they’ve experienced amid labor shortages and the aftermath of the pandemic.

“We didn’t do this because we don’t want to work,” Baker said of offering the businesses for sale. “We love to work, but we absolutely must stop the 14-hour work days six to seven days a week. It’s just not tenable any longer. We’re not old, but we are not 30 years old anymore.”

That’s why she’s been encouraged by the groups that have reached out, with multiple people involved, who will be able to “take something that we think is pretty cool and push the needle forward and make it even better and introduce some changes and streamline efficiencies.”

“All the people that have shown interest have some varying degree of prior experience and beer knowledge – which of course is paramount – restaurant work, etc.,” she said. “We’re not just going to pack our bags and drop the keys on the desk and run away. This means way more to us than that. We want to make sure that we’re leaving all that we’ve done and all that we’ve poured our souls into in good hands and that’s the main goal.

“Our challenge is to not have it leave any sort of a gaping, glaring hole, but to encourage people that we’re leaving it in the hands of somebody that can take it to the next level,” Baker continued. “In fact, we encourage whoever comes in here to do it better because it deserves it and so do the people of Belmont and the surrounding communities.”

Nevertheless, Baker said she and Schalow are “100% completely at peace with” the decision to sell the businesses. Still, she called the decision to sell “bittersweet,” as she and Schalow have built a loyal customer base after 13 years.

“We’ve had a good run,” Baker said. “We’ve had some bumps in the road. We’ve had some great successes. We still love what we do. We are just tired.