BOULDER — Adam Avery launched the brewery with his name in 1993 with a simple idea: “We are going to make great beer.”
“And that worked for 25 years,” he says. But now with the beer industry seeing sales declines and 6,000 more breweries, it’s not enough. “We just have to up our game.”
2018 represents a transformational year at Avery Brewing, one of Colorado’s largest brewers and the makers of popular IPA and barrel-aged beers.
For the first time in 20 years, the company will not grow production volume. Earlier this year, the chief operating officer resigned, and Avery eliminated jobs and restructured its sales department. At the same time, the company launched a rebranding campaign that included revamping its beer lineup.
“This year has been about massive change at Avery Brewing Company,” Avery says, calling it a period to re-evaluate and refocus. “It’s about … maturing, it’s about knowing that we are no longer (brewing) in the alley. We need to be who we intended to be.”
But it’s the framed photo on his office wall — a portrait of a half-empty vintage Mahou bottle — that serves as the biggest sign of change from the past 12 months. In late November 2017, Avery announced he sold 30 percent of the company to the family-owned Spanish megabrewer Mahou San Miguel for an undisclosed sum.
The sale — which closed at the end of March — made Avery Brewing the latest in a series of craft brewers to look for financial security in a bigger company. The deals are designed to help smaller breweries compete in an increasingly crowded market that Avery calls “(expletive) chaos.” The partnership is being watched nationwide as a test case for the future of the beer industry.
Mahou-Avery deal begins to take shape
For consumers, the changes are hard to see so far. The rebranding and new beers began before the sale was announced. The personnel moves extended from the Mahou deal, but Avery says the new sales structure was overdue.
“A lot of the things that hit a lot of other breweries took a lot longer to hit us for whatever reason,” Avery says. And, he adds, “the biggest thing that Mahou has brought to me is their faith even though our sales are not great” this year.
The partnership is starting to take shape, though. Mahou also owns a 30 percent stake in Michigan’s Founders Brewing, which began distribution in Colorado in November. Avery Brewing will make and package Founder’s popular All Day IPA, a hoppy low-alcohol beer, at its Boulder brewery. The first test batches were completed recently and shipped to Michigan for testing.
Avery says other synergies are expected soon, particularly when it comes to buying raw ingredients, such as grain and hops.
“The platform has begun,” he says. But, he cautions, “this is all in flux.”
Mahou, the largest beer maker in Spain, entered the U.S. market in 2011 but does not sell its beer in Colorado. But with the deal, Mahou said it would further the company’s efforts to explore international opportunities with partners would help provide “knowledge of local consumers and markets.”
Avery gets a “hall pass” from backlash after sale
The Mahou deal came 2½ years after Avery Brewing moved from the alley of a business park to a massive $30 million brewery. And its new tanks have not reached capacity. The reason for selling a minority stake in his company, Avery said at the time, was a desire to “fulfill our vision of the new brewery and all of Avery Brewing’s potential.”
Avery says the company looked for a business partner for two years. He met with other breweries and private equity investors but struggled to find the right fit.
Other brewers who sold their companies — even part of them — felt a backlash from consumers. Most notably in Colorado, Breckenridge Brewery’s sale to Belgium-based Anheuser-Busch InBev generated an uproar in the craft beer community.
But Avery’s deal generated, at most, a sense of resignation. “There goes another one…,” one commenter wrote on a forum at the website Beer Advocate.
The sale of a stake in the company means Avery Brewing no longer counts as craft brewer under the definition of the Brewers Association, the Boulder-based trade organization, because it is not independent.
Avery says he is unfazed by the change. “I really don’t care because I know who I am, I know what our brewery is, and I don’t need somebody else to tell me that,” he says. “I don’t even care to be called a craft brewery. I just want to be a great brewery.”
The most apparent manifestation came at the Great American Beer Festival, an event hosted by the association. Because it no longer counted as a craft brewer, Avery Brewing lost its coveted spot at the end of one of the rows, where it had drawn hordes of beer fans each year. Instead, it appeared at a smaller table in a long row of other brewers. It still managed to draw a line.
“To be quite honest, I think we really got a hall pass,” Avery says. “It was just like it was normal, and I think honestly, it’s going to become normal with a lot of deals made.”
One reason is that Avery Brewing continues — so far — to act like a craft brewer and talk like one. In June, the brewery hosted the Avery Invitational, a festival that drew some of the biggest names in craft beer from across the nation.
“For a large percentage of the craft beer industry, I don’t think anything has changed with Avery, says Tim Myers, the owner of Strange Craft Beer Company in Denver.
Myers sees a big difference with Breckenridge Brewery, pointing to what he calls AB InBev’s unfair trade practices to bully other craft breweries out of venues that sell beer. Avery Brewing’s size gives it advantages when it comes to price point, but the brewery is behaving differently.
“Avery and their Spanish brewery partners are not out to put anybody out of business,” Myers says. “That was just a smart financial decision on Adam’s part to cover the cost of building their big production facility.”
Outside a handful of beer bars that adhere to the association’s guidelines and refused to pour Avery beer, the deal had little effect in terms of sales, says Brian “BK” Krueger, the company’s national sales and marketing manager
“The financial structure is a minority investment … and really is secondary to the art of beer and the craft and the quality experience,” he says.
Avery moves forward with “beer first” mantra
Even as it changes, Avery Brewing is looking to reinforce its origins. The new rebranding campaign — which now includes eye-catching white cans with bold artwork — also included the new slogan: “Beer First: The rest will follow.”
“In the end, what we’ve come to understand, and what I’ve been doing for 25 years, is beer first. Everyone here because they want to make great beer,” Avery says.
The next year, Avery Brewing intends to focus on reaching new markets, particularly chain grocery stores, to grow its business across the nation. One strategic priority is spreading the brewery’s brand, in part with help from the marketing experts and firms that work with Mahou.
Despite its veteran status in the industry, Avery says the company is “very under the radar.”
“A lot of that has maybe been purposeful because I didn’t want to be a brand,” he continues. “I wanted to succeed based on the merits of the liquid, not on the merits of how loud I can scream or how flashy my (point-of-sale marketing) can be.
“Obviously that is a little bit naive,” he concludes. “I think people in big business would find that humorous. But I’m in it to make great beer, and I’m not necessarily in it to be a gigantic brewery.”
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