When the time to retire arrives and the conditions are right, a brewery owner must decide what to do with the company. In some cases they can simply decide to close the doors, sell the equipment and walk away, living happily in consumers’ minds as a memory. In other instances a decision is made to sell the business.
There are options but the plan to an eventual sale should be a long process in an owner’s mind, thinking about what they would like to see the business become and who will be at the reins. Three possible paths for finding a suitable new owner are a generational sale, creating an employee stock ownership plan, or selling to an outside company or individual.
Jason Sleeman, the Vice President for Craft Beverage Lending at United Community Bank in Woodstock, Georgia spoke with Beer Edge editor John Holl about the three options.
Generational
Many small businesses, especially owners who have children, often hope that the next generation will take over one day and continue to make the family proud. There are of course family brewing dynasties at breweries that go back for generations. There are equally notable examples where a second generation had little to no interest in continuing their parent’s legacy.
Sleeman suggests that if a brewery wants to go the generational route the two sides should have experience working together in a “two-way street” scenario, and even better if the experience happened outside of the brewing industry. Working together for a while to see what strengths each generation can bring, and what each can learn from each other is important.
“I’ve found that when two generations have strengths that are complementary, the sale can work, but there should also be a shared passion for the business and a desire to build on tradition,” he says.
Employee Stock Ownership Plan
When founders are able to grow responsibly and get out of any debt that a start up or expansion might have caused, Sleepman has seen a trend among brewery owners creating an employee stock ownership plan (ESOP).
He says an ESOP, which many brewers have started, can be a good way to see a brewery continue beyond an original owner’s lifetime by dedicated employees who want to be a part of a business and to help see it grow. There are many factors to consider before going this route, but Sleeman says it might be an option for breweries that experience high employee engagement outside of normal duties and responsibilities.
“It works when employees are invested in the place as more than just their job,” he says.
Outside Sale
If an outside company purchases a brewery the business will likely change, but those selling can shop around for buyers who align with their principles. This can mean keeping employees and equipment, or a commitment to recipes. Other sales might result in a turnkey operation where the new owners will strip all memory of the previous brewery business. Once the paperwork is signed, however, the new owners may change things around. There are brokers and sites that can connect buyers and sellers.
Whatever is behind the decision to sell, finding a buyer that is aligned with the ethos of the brewery can offer peace of mind. Or, finding a buyer interested in a location and equipment can offer a proper buffer for retirement.