In another blow to midsize brewers, the beloved brewery is desperately seeking a buyer.
One of the more iconic names in East Coast brewing, New Hampshire’s Smuttynose, is about to get a major shakeup – and may never be the same again, if it continues at all. This news comes just days after another midsize brewer, California’s Green Flash, announced its own significant downsizing due to financial issues.
Smuttynose was never one of the country’s largest craft brewers, only producing about 50,000 barrels at its peak, but as a strong regional presence, the brand’s beers have been a staple on shelves throughout the Northeast. More importantly, since opening in 1994, Smuttynose has always been active on the craft beer scene. In its heyday, the late ‘90s and aughts, the brewery was known for pushing the latest trends: hoppy IPAs and big imperial beers. But in a telling sign of the times, the company announced yesterday that its entire operation will but put up for auction if it can’t find a buyer before March. The industry trends that Smuttynose used to thrive on have shifted and left the brewery behind.
At the heart of Smuttynose’s trouble is a craft beer trend we discussed for much of last year: Growth in the craft beer sector has slowed, but at the same time, the number of breweries continues to grow almost exponentially, topping 6,000 at the end of last year. Many of these new and smaller breweries are continuing to do solid business, meaning much of the overall sales slowdown is coming from larger legacy brands like Smuttynose. Smaller brewers have a number of advantages: First, craft drinkers tend to inherently respect locally-produced products. Second, the craft crowd also has a love of scarcity, making hard-to-come-by beers from small operations that much more desirable. Third, smaller brewers can more quickly adapt to changing tastes, a constant within the craft beer world. Meanwhile, larger brewers have to make large decisions, and Smuttynose also blames the choice to invest in a state-of-the-art, LEED-Gold Certified brewery as part of its financial problems – a move that coincided with two years of sales declines after two decades of growth.
“The company’s financial models were based on 20 years of consistent growth but the explosion of microbreweries has led to changing dynamics in the marketplace,” owner Peter Egelston said in a statement. “This dramatic shift occurred just as Smuttynose committed to a major infrastructure investment with the construction of the new production facility. As the turmoil in the marketplace stabilizes, Smuttynose, a trusted brand with strong consumer loyalty, can regain its footing with a major infusion of capital.”
That last line is important. Smuttynose isn’t done yet. And it may never be. The company is set to be sold at bank auction on March 9. For fans of the brand and its 68 employees, the best case scenario would be that an angel investor swoops in, keeps the company afloat, and things go on same as before. However, on the opposite end of the spectrum, the business could theoretically be bought just for its fancy new facility and that could be the end of the brand as we know it.
For now, in an open letter on the company’s website, Egelston and his wife say it’s business as usual. “We’re strongly committed to making sure this transition is as smooth as possible, and to help the company’s new owner or partner embark on a successful next chapter for Smuttynose and its wonderful staff,” they wrote. “We want to emphasize Smuttynose Brewing company is open, brewing our fine beers daily and serving delicious food at Hayseed Restaurant.”
The letter ends with the Egelstons writing, “Many of you have asked how you can help…keep drinking Smuttynose brews and send your rich aunt or uncle our way!” Sadly, you also may want to drink one because it might be the last Smuttynose beer you ever have.