Big investment dollars continue to flow into the craft brewing industry’s top companies. Southern Tier Brewing Co. is the latest to sell a stake of its operations to an investment firm (terms undisclosed) in the hopes of further taking over the craft beer landscape. Founder Phin DeMink will retain a financial stake and maintain some level of leadership.
Southern Tier says this new partnership with Ulysses Management LLC, a New York-based family investment firm, will support the company’s continued expansion, new distribution support, sales force growth and enhanced branding and marketing initiatives.
Some commentary from DeMink on how the changing landscape of the craft beer industry makes big, strategic moves like this necessary:
“The industry is maturing and increasing competition is forcing brewers to adapt,” DeMink said. “I think a patient long-term partnership with people who appreciate the craft movement can play an important role in helping the brewery reach its full potential. Our relationship with Ulysses is exciting for Southern Tier because we now have the capital base to support our ambitious growth plans with major investments in people, process and infrastructure.”
The first step in this brave new world for Southern Tier begins with the hire of John Coleman as CEO, effective Sept. 22. Coleman is a 25-year veteran of the beer business. He is a former president and COO of Pabst Brewing Co. and, before that, enjoyed a successful career at Anheuser-Busch, culminating in the role of SVP sales, western region. Most recently, Coleman has been working with craft distillery brands to develop new paths to market and facilitate distribution relationships.
“I’m excited to have John as a member of the Southern Tier team because I think the brewery has an amazing opportunity and I want to make sure we seize it. We’ll do well over 100,000 barrels this year with growth in excess of 40 percent, but that’s really just scratching the surface when you consider the bigger picture,” DeMink said. “We’ve always made the highest quality beer. This is about building an organization that can sustain and improve upon our high standards of excellence as we grow. This will allow me to focus on what I love best — making beer and innovating. I can’t wait to start designing the future of Southern Tier together.”
Southern Tier, founded in 2003 by Phin and Sara DeMink in Lakewood, N.Y., was already one of the fastest growing craft brewers in the United States, with average annual volume growth of 48 percent since inception. Southern Tier constructed a new brewery in 2009 and has since undergone a series of expansions, increasing annual capacity to over 200,000 barrels. This August, it launched the DeMunck’s Hard Cider brand and will be opening a sister craft distillery in 2015.
“We’re honored that Phin and Sara have chosen to partner with us. They’ve created something of enduring value and we’re looking forward to growing Southern Tier together,” said Paul Barnett, managing director of Ulysses Management. “We have deep respect for the grassroots origin of craft beer and how it’s been able to transform the beer industry for the better. This is part of a fundamental revolution towards authenticity in what people consume, and we feel a great affinity for the movement both personally and professionally. Southern Tier will remain a proudly independent leading craft brewer while benefiting from the tools and resources of a larger organization.”
The Ulysses investment is subject to licensing approval. First Beverage Group acted as adviser to Southern Tier Brewing Co.