Weyerbacher, one of the region’s original crop of craft breweries that helped turn Philadelphia into a renowned beer destination, has sold a majority stake to an investment group and is undergoing a Chapter 11 bankruptcy restructuring.
On its face, the news sounds dismal, another loss for the increasingly crowded craft brewing industry, which is experiencing a minor shakeout/buyout spree as its numbers surged to more than 7,000 operations nationwide.
But new Weyerbacher president Josh Lampe views the change as a positive step, he said, one that sets the 24-year-old company on the path to profitability — and helps advance its goal of eventually returning to being family-run.
Ownership of the Easton, Pa., brewery is now 55 percent in the hands of Philly-based investment group 1518 Holdings LLC, which Lampe described as “the right fit at the right time.” Although he was looking to avoid the bankruptcy filing, Lampe said, it was part of the deal. Eventually, once the company is on solid footing, he plans to launch an employee stock ownership offering.
“The ESOP is the end game for the equity people,” Lampe said. “That’s why I wanted to go with [them]. Everyone who works here really feels like they’re part of a family.”
The company currently says it has around 30 full-time employees, with another 20 employed part-time.
Contract brewing and a Philly taproom
Weyerbacher’s 2015 purchase of a new $2 million brewing system proved to be something of a boondoggle, leaving the company overburdened with debt — “We’d been looking for new partners for a few years,” Lampe said — while providing it with excess capacity.
That brewing capacity will form a cornerstone of the business plan going forward.
“We’re working on diversification,” Lampe told Billy Penn. “We make great beer, and will continue to do that. But with how saturated the market is getting, we need to do more.”
That something more will come in a variety of forms, including contract brewing for smaller upstarts and the rollout of a line of craft spirits in partnership with Triple Sun Spirits.
Lampe also teased the possibility of a Weyerbacher taproom opening in Philly proper sometime soon, joining its second outpost recently launched in New Hope.
“We’ll just keep going down Broad Street,” he said, laughing. “We’re right off Route 611, which turns into Broad, and that’s one of the reasons I looked at New Hope. We would very much like to get something in Philly.”
Philadelphia is one of Weyerbacher’s core markets, along with New Jersey and the Lehigh Valley, Lampe said, and distributors in those areas should expect the same high-quality product without some of the production snags of recent years.
Overall the brewery currently distributes in 23 states, a relatively huge footprint Lampe said was mandated by the fact that the core beers the brewery is known for — Merry Monks, Imperial Pumpkin, Blithering Idiot — are all high-octane.
“People can put down three [Yards] Philly Pale Ales or one Merry Monks,” Lampe said, “so you need a wider distribution network.
Craft spirits are coming too
Under the new ownership structure, Weyerbacher production will continue as usual, Lampe confirmed, under the direction of his brother Chris, who has worked at the brewhouse for 14 years. Their mother, Barbara Lampe, cofounded the brewery with namesake partner Dan Weirbach in 1995. Both of them had stepped back in recent years after Josh, a former marketing exec, came in a few years ago to try to right the ship. Weirbach will remain a consultant and shareholder, according to Brewbound.
Last year the brewery produced 11,000 barrels of Weyerbacher-branded liquid, nearly half of it the flagship Merry Monks. That’s a serious underutilization of the facility’s 30,000-barrel capacity, which Lampe said could easily be doubled with the addition of more fermenting tanks.
Adding capacity might actually happen if the contract brewing play works the way ownership wants it too.
“There’s a bunch of other great breweries that are growing,” Lampe said citing Funk Brewing as one of its initial contract customers. “For people our size, the ability to help some others grow is a great opportunity. It’s a great way to keep that friendly, collaborative feeling — that’s what drew me to craft beer, made me love the business.”
Also look for the rollout of a craft spirits line. Jester’s Tale Vodka is already available for purchase as Triple Sun Spirits’ Emmaus, Pa., tasting room, and a gin will be introduced soon. Whiskey is also in the plans.
“We make great beer and great beer makes great whiskey,” Lampe said. “Working to expand the brand smartly is something I really want to do.”