There are few places in the world where the beer industry is more competitive than Colorado. Denver specifically has around 70 breweries (some brands with multiple locations in that number). Renegade Brewing Co. is one of the best, but even that great brand, which started in 2011, is reworking its business plan to offset risk in Denver’s ultra-competitive marketplace. In 2015, Renegade began operating its $1.4 million, 15,000-sq-ft production facility on 925 West First St.
But after only three years, the production facility is up for sale. Why? The rent is too high, and the leased facility wants Renegade to open up a taproom. Renegade does not have a brewpub there, as the original brewery and taproom are just eight blocks south. Plus, with so much local competition and a new strategy that’s focused more on gas station/grocery store sales (which will be selling “full strength” beer next year) and a regional taproom model, Renegade wants to lower its production costs to stay competitive. We reached out to Renegade to get more info, and they gave us this statement from Brian O’Connell, Renegade Brewing founder
We all know the craft beer landscape is ever-changing. With Renegade’s newly formed partnership with Silver Fox Partners in November of 2017, we have taken the last eight months to evaluate the craft beer landscape and form a strategic path forward for Renegade. We have chosen to expand Renegade through additional taproom locations inside and outside of Colorado, and we are currently pursuing retail taproom opportunities. Additionally, our landlord desires a brewery with a retail presence at The Yard, which currently houses only our production. The Yard is an exciting development containing a coffee shop, distillery, board game café and BBQ restaurant located eight blocks south of our original retail location on 9th Avenue. Renegade wishes to spread its geographic retail presence to a regional model, so opening a retail location eight blocks from our existing retail location is not the best option for us. However, this is a wonderful opportunity for a brewery seeking a retail presence in a hot new development in Denver.
That being said, the sale of 1st Ave is a strategic decision, not a financial one, so we will only turn it over to a new brewery for the right offer, and we can be patient in waiting for that. Our manufacturing operation will also continue to expand through optimizing manufacturing costs, especially costs related to rising real estate values. Renegade is currently searching for the long-term home of our manufacturing operations, and we absolutely are committed to growing our current manufacturing operations. There will be no gap in manufacturing for Renegade. We will be continuously producing and shipping throughout our transition. We have been in talks with all of the grocery chains, and we are looking forward to being placed in all of their stores as we go into 2019. We are excited to welcome a new brewery with a retail presence into our Santa Fe neighborhood as we continue to build Santa Fe as one of the premier brewing neighborhoods in Denver.
According to this Westworld story, the sale includes all the equipment, a long lease and a manufacturing capacity of 11,000 bbls per year. Last year, Renegade made another big power move by selling an undisclosed stake to Silver Fox Partners, founded by Anne Mulcahy, the former CEO and chairwoman of the Xerox Corp. This was also a move to stay competitive, the company said at the time.