Beer Man

New Belgium to Buy California's Magnolia Brewing Out of Bankruptcy

New Belgium to Buy California's Magnolia Brewing Out of Bankruptcy
Magnolia Brewing Facebook page
There's no bigger power couple in craft brewing than Kim Jordan and Dick Cantwell. Jordan co-founded New Belgium Brewing, the nation's fourth-largest craft brewery, and is now the executive chairwoman. Cantwell helped start Elysian Brewing in Seattle in 1995 before selling it to Anheuser-Busch InBev in 2015; he left just three months later, saying he had opposed the sale and that as a craft brewer, he just couldn't stay.

Now Jordan and Cantwell are teaming up to take control of Magnolia Brewing, a respected English-style brewpub with two locations in San Francisco, where the two live part-time. Magnolia filed for bankruptcy in 2015 but has continued to operate. On Thursday, Cantwell and New Belgium, along with Belgian lambic producer Oud Beersel, announced that they have purchased Magnolia's assets out of bankruptcy. The newly formed partnership will be a majority-owned subsidiary of New Belgium, with Cantwell and Oud Beersel as minority partners.

"The partnership will continue to operate both Magnolia locations with existing staff and brands," New Belgium says. "Cantwell will head up brewing operations, working alongside Magnolia founder Dave McLean, who will be an employee of the partnership. It will be Dick’s first brewing gig since leaving Elysian."

And the goal isn't to turn Magnolia's two locations into New Belgium brewpubs, but to create something new. "It is likely that much will seem unchanged in Magnolia’s tap lineup, even as new beers are developed and introduced."

Kim Jordan makes up half of a craft-brewing power rcouple. - NEW BELGIUM BREWING
Kim Jordan makes up half of a craft-brewing power rcouple.
New Belgium Brewing
The purchase is yet another way that independent craft brewers have come up with to try to keep each other afloat against competition by corporately owned breweries. In this case, it also provides New Belgium with a way to have more retails outlets for beer, and selling beer directly to customers makes more money for breweries than packaging or kegging it and selling to liquor stores, bars and restaurants.

"For the last several years, we have been looking at ways to diversify and to expand the community of New Belgium a bit," brewery spokesman Bryan Simpson tells Westword. "Our founder and her boyfriend live in San Francisco for a good part of the year, and they know Dave McLean really well. He is in a tight spot, so this worked out in a win-win-win type of way. It gives Magnolia a chance to live on and celebrates the spirit of what has been going on there, and it allows us to carve out some space for Dick."

Simpson says New Belgium isn't actively looking to buy other craft breweries, but that it will look toward other opportunities in the future, noting that "if the right scenario came along, we would be open to it."

Oud Beersel, which has a history going back to 1882 in Brussels, will join the partnership with a special mission in mind: it plans to ship containers of its "traditionally produced and spontaneously fermented" creations to San Francisco, where they will be blended with Magnolia-crafted beers.

To be called a "lambic," a beer must be produced in Belgium, so by sending it to the U.S, "the world’s first dedicated lambic blendery outside of Belgium will be established," New Belgium says. "The project continues New Belgium’s blending work as embodied in Transatlantique Kriek, a beer produced over several years with Oud Beersel and Brouerij Boon, wherein beer was shipped from Belgium for blending with New Belgium wood-aged beers."

New Belgium is also likely to ship beer to San Francisco, where the new owners will install a coolship and a variety of wooden aging vessels.

The transaction is expected to close in September.
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Jonathan Shikes is a Denver native who writes about business and beer for Westword.
Contact: Jonathan Shikes