tbo: Tampa Bay Online.
Tuesday, Sep 26, 2017
  • Home
Business News

Cigar City acquired by Colorado peer

TAMPA — Rachael Starcher is a big fan of Cigar City beer.

How big? Starcher, her husband and a friend drove down from Morgantown, West Virginia, this weekend to attend Cigar City’s annual Hunahpu’s Day release party for the revered seasonal stout.

On Monday, the trio were seated at a table outside the Cigar City tasting room on Spruce Street, sipping “everything they have,” when they learned the Tampa craft brewer had been acquired by Oskar Blues Brewery of Longmont, Colorado.

“I would be surprised if anything would change,” said Starcher, a medical student. “They obviously have some of the greatest beer in America. ... When you get to a certain level, you need the resources that only bigger companies have. If you want to step it up, you have to have those connections. I have no problem with it.”

That’s an attitude Cigar City founder Joey Redner hopes will take hold as word spreads that the local institution, which produces Jai Alai India Pale Ale and other award-winning beers and is credited with making Tampa a leading center of craft brewing, has been sold.

Fireman Capital Partners, a Boston-based private equity firm, is the financial partner in the deal, bringing Cigar City into a bullpen of craft brewers that include Oskar Blue, Perrin Brewing of Comstock Park, Michigan, and the Utah Brewers Cooperative, which includes the Wasatch and Squatters brands.

Redner had a message Monday for loyal customers who may have panicked when they got the news.

“Relax. Have a beer,” Redner said in an email exchange with the Tampa Tribune. “Nothing is changing. I am staying put. The brewery is staying put. I still have a lot of skin in the game via the ownership entity that has been created via the Oskar Blues holding company. I don’t own the majority of the company anymore, but I am still very significantly invested in the future of Cigar City Brewing, only now I have partners with the technical and operational know-how to sustain our growth.”

Redner, who launched the brewery in 2009, had been in discussions with Anheuser-Busch InBev about a possible deal, raising eyebrows among craft beer aficionados with an aversion to the world’s largest brewer.

“A lot of us are really happy,” said Sean Wallace, a packaging employee at Cigar City who sipped a beer on the tasting room porch after his Monday shift. “It’s nice the craft beer community came together and kept us within instead of letting a bigger company like InBev buy us out.”

Chad Melis, marketing director at Oskar Blues, said the cultural match between Cigar City and the other breweries was key to the deal.

“That’s really at the core of why we’re going down this path with Cigar City. If you look at what Joey has created down there, they’ve created a huge following because they have great beers, a great brand and a real culture,” Melis said.

Terms were not disclosed. Redner said the deal came together over the last two weeks.

One thing will change with the deal, he said: “I just won’t be freaking out about how I scrape up the money for growth.”

The sale, set to close in 60 days, would give Redner capital to expand the operation. Although demand for his beers has soared, Redner has been averse to bank debt to grow Cigar City, which brews just over 61,000 barrels last year and is “100 percent tapped out.”

It would also open access to capacity at the other breweries under the United Craft Brews banner.

“We haven’t buttoned up all our plans for growth yet, but we will work with the Oskar Blues team in the coming weeks and months to formulate a plan that works,” Redner said.

He said he will retain an ownership stake and take a seat on the board of the new entity, while his father and business partner, Joe Redner Sr., would be “moving on.”

Large brewers, venture funds formed by craft brewers and traditional private equity firms have been snapping up craft breweries nationwide. While the local brewers carried just 11 percent of the overall U.S. beer market in 2014, the latest figures available, they produced 22.2 million barrels, an 18 percent annual rise in volume and a 22 percent annual increase in retail dollar value, according to the Brewers Association.

The total beer market was up only 0.5 percent in 2014.

The craft beer news website Brewbound, which broke the news of the acquisition Monday morning, said 2015 was a record year for mergers and acquisitions among craft brewers, with more than two dozen deals announced.

There are now more than 50 craft brewers and brewpubs in the Tampa Bay area, up from just 15 two years ago. Last week, USA Today named Tampa the third-best beer scene in the nation, behind only Grand Rapids, Mich., and Fort Collins, Colo.

The news of the Cigar City acquisition came after 4,000 craft beer lovers descended on Fort Cotanchobee Park in downtown Tampa on Saturday for the annual unveiling of the brewer’s Hunahpu’s Imperial Stout, a seasonal brew traditionally released on the second Saturday in March.

Starcher, the medical student from West Virginia, enjoyed the party despite catching a bit of a sunburn. She wished Cigar City well under the new arrangement.

“As long as they’re still making good beer, we’ll still be drinking it,” she said.

jstockfisch@tampatrib.com

(813) 259-7834

Weather Center

10Weather WTSP

Comments