Beer Man

Ten Colorado Breweries That Would Make Good Buyout Targets in 2017

Fort Collins Brewery will bite the dust.
Fort Collins Brewery will bite the dust. Fort Collins Brewery
Last week, Fort Collins Brewery became the latest beer maker to be acquired by another company — part of a wave of buyouts, mergers and consolidations that are sweeping the craft-beer industry. In this case, the buyer was Canada's Red Truck Beer Company, which said it plans to close FCB and replace it with its own concept.

Although the new was surprising, it certainly wasn't shocking. On December 16, 2015, we published a list of ten Colorado breweries that would make good buyout targets, leading off with Breckenridge Brewery, which we speculated would be purchased by Anheuser Busch InBev. Just four days later, that exact sequence of events became reality. When Fort Collins Brewery sold, it became the second beer maker on that list to go.

With two of those breweries now gone — and a craft-beer industry that is undergoing enormous changes — it makes sense to add two more breweries to the group and to update the rest of the nominees for 2017.

It's important to point out some consider this list to be unfair speculation. Which is why it's equally important to mention that this isn't a list of breweries that might want to sell; some of the owners would probably never consider it. Rather, it's a list of breweries that would make good targets for other companies or investors.

Tommyknocker Brewery Facebook page
Tommyknocker Brewery
Idaho Springs
Potential buyer: Guinness/Diageo

Like Fort Collins Brewery and Durango Brewing, both of which have been bought out, Tommyknocker is a well-established, and sometimes quaint, Colorado brand. Founded in 1994, Tommyknocker was one of the first microbreweries to make it big, and although it still has a loyal fan base, distribution in other states and a sweet location just off traffic-snarled I-70 in Idaho Springs, the brewery hasn't really kept pace when it comes to marketing and innovation. Neither has Guinness. The pride of Dublin and a onetime powerhouse in the U.S., Guinness is mostly known now as the beer you drink out of plastic cups on St. Patrick's Day. But in January, the brewery, backed by its owner, Diageo — the largest spirits manufacturer in the world — announced that it will open a U.S. brewery in Maryland and focus on creating new "innovation" brands for the U.S. market. What better place to test those brands than in Colorado, with its sophisticated beer lovers and tourists heading to and from the ski resorts and campgrounds? Diageo could keep the Tommyknocker brand, update it and add its own offerings. Plus, with companies like Heineken and Corona buying U.S. breweries, Diageo will need to do the same thing in order to keep pace. As for Tommyknocker's appeal to European beer drinkers, the Colorado brewery established its presence in Helsinki, Finland, two years ago.

click to enlarge AVERY BREWING
Avery Brewing
Avery Brewing
Potential buyer: Dogfish Head/LNK Partners

Sorry, I didn't want to put Avery on this list. But the brewery is in a weird spot. Fiercely independent but also treading water after taking out a lot of debt in a very competitive market, Avery has made some strange choices lately. First it got rid of six of the beers that made it famous, saying they weren't selling, and replaced them with a lineup of unusual but much more approachable beers. More recently, the brewery, which was known for its experimental outlook, seems to be rounding out its portfolio with market-pleasing beers. Still, it's hard to imagine Adam Avery partnering with just anyone, which is why it would make sense for him to team up with the "off-centered" Dogfish Head brewery and LNK Partners, the private-equity firm that owns 15 percent of the Delaware superstar. The move would give Dogfish a place to make beer in the West and expand its distribution. The new Boulder campus would also fit well with what Dogfish does in Delaware. And finally, the move would make poetic and PR sense. Adam Avery and Sam Calagione go way back, meaning Avery could get some cash and some support in that competitive market without "selling out."

Jonathan Shikes
Wynkoop Brewing
Potential buyer: Big Red F

Over the past five years, the Breckenridge-Wynkoop restaurant and brewery group has been slowly divesting itself of its properties, like Wazee Supper Club and Gaetano's. In 2015, it unloaded Breckenridge Brewery to AB InBev, shocking many Coloradans. It has also sold most of its real estate, including the buildings housing the Wynkoop and Ale House at Amato's. So it would make sense that the holding company will eventually cash in on a piece of Denver history: the state's oldest brewpub and the legacy of Governor John Hickenlooper, who co-founded the Wynkoop in 1988. The best way to do this with the least amount of backlash? Sell to another homegrown restaurant and brewery group like Big Red F. The property would certainly fit into the portfolio of the company, which owns four Jax Fish Houses, the Post Brewery and the Post Chicken and Beer, Zolo, Centro, Lola and the West End Tavern. The purchase would give Big Red F an opportunity to expand both its brewing operation and its successful chicken-and-beer concept in Denver, just two blocks from Coors Field.

Brandon Marshall
Great Divide Brewing
Potential buyer: Duvel Moortgat or Heineken

Like Ballast Point, Firestone Walker, Boulevard Beer, Goose Island and Lagunitas — all of which were sold in the past few years — Great Divide is a regional powerhouse with a strong identity and a portfolio of beers that are known all across the United States and in Europe. But it may also be a little over-extended, having stopped after the first phase of a planned $38 million new brewing campus. It's hard to image the powers-that-be at Great Divide looking to MillerCoors or Bud for support, but it isn't beyond the realm of possibility that they would consider an offer from Duvel Moortgat Brewery, which owns Boulevard Brewing, Ommegang and Firestone Walker, or Heineken, which now owns Lagunitas. That would allow Great Divide to continue to operate under its own power — at least in the near future — and to fully and quickly utilize the potential of its five-acre property, only a third of which has been built, and massive brewing capacity potential. Last year, Great Divide suffered the worst sales decline in its history, but the brewery is fighting back hard this year with new beers — and it's still one of the shiniest gems in Colorado.

Jonathan Shikes
Crazy Mountain Brewing
Potential buyer: Private equity firm

Since it was founded in 2010, Crazy Mountain has been growing crazy-fast. After a quick ramp-up at their original brewery in the Vail Valley, owners Kevin and Marissa Selvy expanded a couple of times, increased distribution to nearly twenty states and five countries, and reorganized their beer lineup and packaging look. Then they added a second location in Denver — inside the huge former headquarters of Breckenridge Brewery, which moved to Littleton in 2015. The brewery now uses its overwhelming capacity at both locations to contract brew beers for other breweries. But the pace of change at Crazy Mountain sometimes seems unsustainably frenetic. Kevin Selvy is already familiar with the investment world, having come from that industry before he started Crazy Mountain, so it wouldn't be much of leap to see the brewery backed by an equity firm that would help stabilize the brewery and pump some money into the sprawling operation that the Selvys have already built.

click to enlarge JONATHAN SHIKES
Jonathan Shikes
Tivoli Brewing
Potential buyer: Coors

Founded in 2012 by longtime Coors employee Corey Marshall and his wife, Debbie, Tivoli Brewing is an interesting creation. The Marshalls started by buying up the lapsed trademarks to the historic Denver beer name Tivoli — along with several other long-forgotten Denver beer brands like Sigi's, Zangand Neef Brothers — and then brewed some German-style lagers at Prost Brewing.The original Tivoli Brewing was founded in 1900 — the heir to other breweries that had started here in the late 1850s — and operated inside what is now the Auraria Student Union until 1969. In 2016, in cooperation with Metropolitan State University of Denver's hospitality program and the Auraria campus, Tivoli opened its own brewery, taproom and restaurant in that historic building. It's a great story for Denver, but Marshall's ties to Coors, and Coors's ties to Colorado history, make this a natural fit. Now, as Tivoli gets ready to open a brewery in conjunction with Tom's Urban Diner inside the Westin at Denver International Airport this fall, the stakes — and the potential payoffs — will only get higher.

click to enlarge DECLARATION BREWING
Declaration Brewing
Declaration Brewing
Potential buyer: BrewDog

Declaration Brewing has been big and brash from the beginning. Founded by a group of science-y people with ties to the extreme-sports industry, it hasn't been shy about doing things on a grand scale, from its brewing system to its beers to its plans for packaging and growth, and even with branding and social-media presence. It's a good bet that Declaration would like to live out a few of its goals — and it has a ways to go, but this lifestyle brand would be a perfect fit for another big, brash brewery that is trying to make inroads in the United States: BrewDog. Founded ten years ago in Scotland by James Watt and Martin Dickie, BrewDog has fifty bars around the world and recently built a 100,000-square-foot brewery in Columbus, Ohio. But Colorado is where the cool is, and BrewDog probably knows that, so it wouldn't be surprising if the company tried to find some like-minded friends here.

click to enlarge DRY DOCK BREWING
Dry Dock Brewing
Dry Dock Brewing
Potential buyer: Constellation Brands

As Dry Dock heads toward its twelfth anniversary, the Aurora favorite is one of the oldest and most decorated of the new wave of taproom-breweries in Colorado. In fact, over the past eight years, it has won 23 medals at the Great American Beer Festival — more than any other Colorado beer maker. Add in the fact that it focuses entirely on Colorado (Dry Dock doesn't distribute outside the state, even though it's one of the fifteen largest breweries in Colorado) yet still has a national following, and the company makes for a delicious target. Although Dry Dock co-owner Kevin DeLange says he and Michelle Reding have no intention of selling — “What am I going to do if I sell out at 41? We want to grow conservatively, and there is no need to sell out," he told Westword in 2015 — I'm guessing they would make a tasty target for someone. And it would be hard to turn down the kind of money that Constellation Brands paid for Ballast Point in San Diego in 2015: a cool $1 billion. Not that Dry Dock is anywhere close in size to Ballast Point, but the companies are similarly well regarded for creativity and innovation. Plus, Dry Dock has two locations, including a large manufacturing warehouse that could quickly be ramped up with a cash injection.

click to enlarge PROST BREWING
Prost Brewing
Prost Brewing
Potential buyer: Private equity firm

Prost was founded by a group of businessmen in 2012, including an experienced Denver restaurateur and bar owner. Since then, it has grown into a LoHi hot spot that focuses entirely on just a few German-style lagers and also recently added a second taproom in the beer-loving college town of Fort Collins. Two years ago, the brewery began packaging, but Prost — which contract-brews for other breweries as well — still has the capacity to make a lot more beer than it currently does. A popular spot with a great location in Lower Highland and approachable beers that appeal to a wide variety of drinkers, Prost seems like a natural moneymaker and a good investment for someone looking to stake a claim to Denver — and there are plenty of outsiders who are doing just that right now.

Denver Beer Co/Gensler
A rendering of Denver Beer Co's planned third location.
Denver Beer Co.
Potential buyer: Anyone

From the very beginning, Denver Beer Co. was built for success: It has a recognizable name, a savvy marketing team, a taproom with one of the best locations in Denver, and a production facility capable of brewing and canning large quantities of beer. More recently, the brewery, founded by Charlie Berger and Patrick Crawford, has also made inroads in liquor stores, distributing a strong lineup of core and seasonal brews that are clearly recognizable, creative and consistent. The owners are even friends with Mayor Michael Hancock and accompanied him on a recent trade mission to Japan. And finally, DBC is getting ready to open its third location, this one in Arvada. As a result, the company — one of the first in Denver's fourth wave of craft breweries — would make a nice target for just about any entity, from a major corporation to an overseas venture to a private equity firm, or even another brewery or restaurant group. Denver Beer Co. is likely to have its dance card filled; whether it dances is another story.

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Jonathan Shikes is a Denver native who writes about business and beer for Westword.
Contact: Jonathan Shikes