Alchemy And Angels
News broke yesterday that Alchemy & Science, itself a subsidiary of Sam Adams brewers Boston Beer Co. (SAM), bought out L.A.’s Angel City Brewing, which Michael Bowe established in 2004. A&S is spearheaded by Alan Newman, who founded Magic Hat Brewery in Burlington, VT, in 1994, which is now under the umbrella of North American Breweries. As a native Angeleno, I was interested to hear more about Newman’s new project. I spoke with him via cell phone from an LA-based Office Depot since he is literally in the process of setting up an LA-based office.
Los Angeles is just now, once again, getting its feet wet in the craft brewing industry and timing, as they say (including Newman), is everything. He’s looking forward to exploring LA culture—beer and otherwise. Having helped put Vermont on the beer map, the state that boasts the most breweries per capita (over 20), I asked Newman about brewing in LA, which most likely has the fewest breweries per capita (under 6) of any major US city.
All About Beer Magazine: How’s your new brewery coming along?
Alan Newman: We’re 3 months away from TTB permitting. The brewery should be up and running before approval. When a new owner buys they have to reapply. We’re a new owner. Michael… moved the brewery from Torrance and I don’t think it was fully licensed, but it wouldn’t have mattered.
AAB: How’d this come about?
Newman: By coincidence. I like the LA market. And I’ve known Michael for 15 years. Over dinner with him, talking about what’s going on, he said, “Why don’t you buy mine.” It was just that simple.
AAB: So if Alchemy & Science isn’t brewing beer under its own label, is this a farm situation, perhaps like Tenth & Blake from MillerCoors (that owns Leinenkugel’s, Terrapin, etc)? Or maybe like Craft Brewers Alliance (Widmer Bros, Redhook, Kona)?
Newman: I’m not trying to be evasive. I’ve never had a conversation with (Tenth & Blake) ever. Nor with Kurt (Widmer) in years. I believe that craft beer is really about meeting the need for the customer profile. I’ve always felt that one of the things we had going at Magic Hat was that we operated independently. Were we? No! We had venture capitalists. But to the world we appeared independent. The more you can keep things small, the more you can accomplish things.
This is our (A&S)’s first project. This will operate independent of anything else we do. It will share a marketing staff and some back-end stuff, but when it comes to brewing and selling beer, all that will be done independently by people at Angel City.
AAB: What’s Boston Beer’s involvement?
Newman: I deal with (founder) Jim (Koch) and (CEO) Martin (Roper). We have a weekly conference call. They’ve yet to say no to anything or push back on anything. I pretty much have a clean sheet of paper. They’re a great financial partner. The advantage of them over past equity partners is they’re not looking for a short way to grow the business. It’s very different than even with a flip intention in mind.
It’s the best of both worlds. We operate on an indie basis. Do they know what I’m doing? Sure. Sometimes I go to them for advice because they’re smart people. I personally have nothing to do with Boston Beer people.
AAB: The press release for this has the phrase “Legacy Solutions.” Is that something Fritz Maytag and Ken Allen grappled with in selling Anchor and Anderson Valley Brewing, respectively?
Newman: We’re pretty opportunistic. The goal is to not overeat and get so stuffed that we can’t get up from the table. We don’t know where that number is. Can we operate two entities? Four? I just don’t know. Over time we’ll start sorting that out.
There are probably more potential deals that we can handle, and some we’ll turn down. The only thing off our plate is anything that’s Sam Adams related.
My conversations with Jim didn’t start until after that (Maytag’s and Allen’s sales). Both were long done by then. But there needs to be a caretaker for some of these brands. Otherwise it falls to the private equity people. Totally different set of methods. There are going to be more (Maytags and Allens) that want to get out, and to maximize their out.
Michael (Bowe) just had his 60th birthday. He was tired out. He got close to the finish line but got so worn out getting there that he just couldn’t take it home. You’d have to ask him, but he felt we’d protect the legacy of his own brand.
AAB: So what do you have in mind for Angel City?
Newman: Our hope is to become one of the breweries to drive the category. Our goals are quite simple, same as I had at Magic Hat: To become part of the community. LA is not my home. I’ll be out here almost full time to understand how Angel City becomes part of the renaissance in downtown LA. How do we become a good corporate citizen and drive its growth and become a favorite son. I don’t have a magic wand.
AAB: Is Michael out entirely?
Newman: He has a consulting relationship. He doesn’t know what he’s gonna do next in life. We have a good relationship. But his relationship moving forward is loose at the moment. We don’t have a new brewer yet.
AAB: You won’t find it at Office Depot…