Good Beer Hunting


Where There's Smoke — Fireman Capital Acquires one of Florida's Finest

Cigar City has been growing like a tasty weed down in Florida since 2009. In those seven years, they've worked themselves into a frenzy, years ahead of their market, before getting caught in a phase that’s somewhere between "New Glarus of the South Atlantic" and "world’s largest nano brewery." Oh, and they're also producing more new beers than just about any other brewery in the country each year and trying find enough steel to fill with Jai Alai.

Founder Joey Redner has fought off AB-InBev buyout rumors numerous times over the years, and no wonder. Cigar City is the only compelling target for acquisition in the region for anyone bent on growth, and the brewery's been outsourcing some production to Brew Hub to keep up with demand. But even in the midst of those rumors, Redner has been transparent in admitting having met with AB, just as most acquisition targets have done over the past few years before pulling the trigger with another suitor. Like so many other negotiations, this one was close to happening. Very close, actually: with a signed letter of intent, AB let the clock run out on. 

And today, Chris Furnari of Brewbound broke the proper story of Cigar City's majority stake being sold to Fireman Capital. 

Selling to AB-InBev is far from the only option in today's increasingly complex craft market, and it's the responsibility of every brewery owner to consider options, learn about their business' value, and even leverage those early meetings into better opportunities before making a final decision. So many craft brewery acquisitions have gone down exactly this way, despite all the press releases that make deals ultimately seem like fated lovers. 

These days, there’s a bit of showmanship among startup brewers as they leave behind the so-called “cushy corporate jobs” and take the deep dive into the hard work of brewing. And when they succeed, the acquiescence to that same corporate life of running a regional brewery is often done silently, without a hint of narrative irony. But that’s not Redner’s way. 

In fact, he often describes having started Cigar City as an unintentional-but-inevitable move. Back in 1994 when he was a local beer writer, Joey was just trying to wrap his head around the idea. “I started gathering all the information I needed to understand what a craft brewery business might look like, mostly because I figured somebody was going to do it eventually and I could go work for that person.”

Within a few years, his name was on the door. And being early in a scene like Florida's meant holding on to some wild reins. "The growth for us has been so fast that we haven't been able to slowly build towards things that other breweries do over 10-15 years,” he says.

When I visited this past December to work with the sales and marketing teams on the launch of Cigar City Lager, I saw the same brewery I saw back in 2013. Only this time there were more people, more beer, and a production schedule that looked like a serial killer's conspiracy wall. And with the questions spinning around the room (“Can we get more Jai Alai?" "Do we have enough new beers in the taproom?" "Is there any White Oak left?" "When is that Hunahpu announcement going out?”), it was chaotic. To their credit, they encouraged me to see the controlled part of that chaos. 

I’ve worked with—and in—a number of companies that went from those initial half-dozen employees to bursting at the seams like a Tokyo subway train in just a few years. They all reach a breaking point. But what you do when you reach that point defines the future of that business—and it’s all rooted in the psyche of your leader. 

Some companies opt to re-organize, restructure, and get “more professional.” A mentor of mine, on the brink of being run out of his own company after 20 years, once looked back at his agency and lamented, “I’ll never understand why a company thinks that once it’s ‘made it,’ they need to change everything that got them here in the first place as if they were just goddamn lucky.” In this scenario, the "professional" hires come pouring in as fast as the scrappy center of the business leaves. 

Other companies continue to spin in the direction they have since day one, just wider and faster, doing their best to hold on before the center falls apart. These companies never lose that special something, but they do find themselves taking on big challenges completely foreign to their expertise. Suddenly, a brewery known for its inventiveness, constant iteration, and always-new approach to brewing needs to wrap its head around sales forecasting, outsourcing, and human resources. The soul might remain, but it likely gets majorly bummed out in the process.

Fireman Capital may be the way someone like Redner can thread the needle on growth and culture. It's a private equity firm out of Boston that’s behind the Oskar Blues venture, using a $132.8 million investment in 2015 to scale them nationally across three production locations in the U.S. It also formed a new holdings company, United Craft Brews, that includes Oskar Blues, Perrin Brewing in Michigan, Salt Lake Brewing Company, and now, Cigar City. 

If the Oskar Blues scenario is any indication of what’s to come, it won't be timid. I’d expect to see a flame shooting from behind Cigar City as they dominate their home territory, and proceed to start knocking on the doors of the neighboring states in the South Atlantic that remain vastly underserved by craft beer. Oskar Blues has announced two breweries—one in North Carolina and another on its way in Austin, Texas—in the time it takes most folks to get the permits for one. If that kind of development team gets its way, I’d imagine Jai Alai’s production constraints disappear. And with Lager on the way, it can’t happen soon enough. 

All that hustle is likely to keep Cigar City on it’s trajectory of “world’s largest nano brewery” even as it simultaneously marches toward world-domination mode. And before you judge, realize, that's not much of a choice. Anyone producing north of 50,000 barrels is a major competitive target for both macro and craft brewers of size, especially in a market with as much growth opportunity as Florida right now. Cigar City is going to needs its friends. 

But what about the soul of Cigar City? Anyone who’s met Redner knows the stoic and energetic man who’s always anxiously looking for something to do to avoid idle chatter. Even in his own brewery, surrounded by an army of young, capable hands, his first instinct it to do the job himself. Two years ago I got to see another side of Redner, screaming and cackling as we tore through the Grand Canyon rapids on a cross-country tour with Sierra Nevada. He's a bit ageless that way.

But a couple months ago, in private, Redner remarked on the irony of his position, describing a business he never thought he’d end up with in a million years, and questioning if he had the skill set for—and interest in—a role so far from the entrepreneurial brewer he was just seven short years ago. Cigar City is a living, breathing thing, and Redner clearly wants the best for it. Even if it means taking a humble step aside, he seems interested in what that’d mean, for both the brewery and for himself.

It's Redner's apparent permeability, his ability to share nuanced, vague bits of information, both emotive and analytical, in order to obtain far more insight from others in the business, that makes him such a killer in the negotiating chair. It's a bit of a family trait. 

Sitting at the end of a conference table with the morning newspaper, coffee steaming in a styrofoam cup, reading glasses hanging on the end of his nose: this was the first time I saw Redner as the clever, contemplative type. He was clear, honest, and self-aware in a way that so few are. This was a guy that only a couple months later would roll up his investment into one of the most aggressive and fastest-growing entities in beer. Of course, there's more than one side to the man. 

“I’ve really enjoyed working down in Ybor at the cidery lately,” he told me then. “It’s really simple and it’s really hands-on. It feels good.”

Words + Photos by Michael Kiser