Old Dominion Sold. A-B involved?

[MeridianFC]

I was in a location where my big ears picked up some news: that the O.D. sale is about to be finalized though not to the initial party we'd all thought. Apprently Fordham with some backing (Anheuser-Busch) are taking over. The question is how much backing and what the status of brewing in Ashburn will be. I think the discussion about A-B looking to horn in on regional brewing has come up here before. Some of the stuff I've heard is not very cool. At all.

How Fordham, an much smaller concern, are leveraging this is anyone's guess.

Earlier articles:

http://www.findarticles.com/p/articles/mi_m3469/is_12_57/ai_n16119154

http://www.beerscribe.com/news.html

[MeridianFC]

Actually seems like it's a done deal with A-B 49%.

[chazwicke]

Yikes! I just posted about some rumors I had heard on DC-Beer. Looks like bad things are happening...

[chazwicke]

Looks like bad things really are happening. Just got confirmation, sort of, from a very reliable source.

[MeridianFC]

Yikes doesn't even begin to cover it. There are so many levels to it, that it's hard to take in. It seemed like the ownership group that had been in place was a natural and for this to come out of left field, even in spite of all the rumors about A-B sniffing around the regionals, is quite a blow.

As I said to someone earlier, while no fan of the big three, I also am not a kneejerk reactionary, I just can't see anything good coming of this. While it's a different situation I keep thinking of Celis.

[Lew Bryson]

Ah...not to be The Martian In The Room, but exactly why does an A-B minority ownership necessarily mean very bad things? If someone knows more than they're saying, that's one thing, and I get it, but if it's just the usual craftbrewer's formulation of A-B=The Boogieman, well, come on, guys: Widmer hasn't gone to hell anymore than they ever had before (sorry, I just don't care for the Hefe at all), Redhook was early, but never the groundbreaker Sierra Nevada was, and Kona's looking pretty good these days. Why judge A-B by Miller's mistakes?

I have received an e-mail from the inside at OD that essentially said no one's job was safe, but that's not really that shocking, considering some of the revelations that have come out about how OD was operating (I'm NOT implying malfeasance, just an apparent lack of best practices). I'm curious about how Fordham's financing this, but they've been coming up with money to open new places pretty regularly (Savage, Rehoboth, Inner Harbor, Roadhouse), so maybe it's not so mysterious as all that.

What I'm real curious about is where this puts Southern, the big plant outside Dover...that's not actually the Fordham brewery. It's a technically separate operation that brews for Fordham under license, as I understand it. If Fordham shifts production to OD, or vice versa, I can't imagine they'll want to keep both in operation. Anybody got thoughts on that?

Anybody got any thoughts on why I'm posting this here on RB, when I rarely even show up here, instead of DC-beer or BeerAdvocate? Because believe me, I got no idea. Other than that it was really good to see Mark Silva in Denver, I mean. Cheers, folks!

Lew

[Lew Bryson]

Originally posted by Lew Bryson
What I'm real curious about is where this puts Southern, the big plant outside Dover...that's not actually the Fordham brewery. It's a technically separate operation that brews for Fordham under license, as I understand it. If Fordham shifts production to OD, or vice versa, I can't imagine they'll want to keep both in operation. Anybody got thoughts on that?


Just got information by e-mail: the actual buyer is Southern, not Fordham. Very interesting.

[steveh]

Originally posted by Lew Bryson
Widmer hasn't gone to hell anymore than they ever had before (sorry, I just don't care for the Hefe at all), Redhook was early, but never the groundbreaker Sierra Nevada was, and Kona's looking pretty good these days.

Thanks for supporting what I've been trying to point out forever (in both cases - the Widmer Hefe included). And so far, Goose Island is still readily available, in all styles, on shelves around Northern Illinois.

S.

[MeridianFC]

Re: Widmer, I agree their beers ain't much. As far as Redhook they've gone up and down and back up again. I remember when I first had 'em in Seattle I thought they were some of the best brews I'd ever had, then they expanded and the quality seemed to really go downhill, but they since rebounded (in spite of or because of A-B's involvement).

I think a lot of the fear folks have is based on not just brewing history but business history in general, when the big boys come in and take over any local enterprise. Certainly there are many cases of a white knight salvaging a situation but there are plenty of cases of the oppposite. Some of what I've heard does not give me a good feeling. I know at the end of the day dollars speak but it did seem like, from a consumer standpoint mind, that the native buying group that was in place was a natural.

As Lew notes there is the question about this ownership group owning two production facilities (what is Southern's capacity?). I'd think that Dominion is currently the larger set up but I wonder if tax set up/expansion favors Delaware?

In the end I'm just praying the don't dick with the Tuppers products.

Anybody got any thoughts on why I'm posting this here on RB, when I rarely even show up here, instead of DC-beer or BeerAdvocate? Because believe me, I got no idea. Other than that it was really good to see Mark Silva in Denver, I mean. Cheers, folks!

Our winning smiles?

[kinjar]

I'd say my biggest concern is watching a rare "local" establishment stop being "local". OD always had the perception of being a successful brewer. Obviously, the perception may not have reflected a financial reality.

Bottom line is that I'll still buy OD products as long as I still enjoy them.

[steveh]

Originally posted by Lew Bryson
Anybody got any thoughts on why I'm posting this here on RB, when I rarely even show up here, instead of DC-beer or BeerAdvocate? Because believe me, I got no idea. Other than that it was really good to see Mark Silva in Denver, I mean. Cheers, folks!

Maybe because we tend to be more fun and less impressed by in-your-face only beers? Maybe because we're more loveable? Don't know Lew, but it sounds like it's leaving a bad taste in your mouth... hope not.

S.

[MeridianFC]

I even took a bath today.

[MeridianFC]

As far as this story personally I'd break it down into best and worst case scenarios:

Best: Nothing changes. OD continues to make it's beer, the occasional standout seasonal, runs a nifty brewpub with fine takeout service, and all the good local folks keep their jobs. Maybe they bring the Fordham portfolio to Ashburn, OD does plenty of contract work already.

Worst: They wind up shop, keep the name and move everything to Delaware, all the specialties and contracts here get hosed (adios Tuppers) and we weap and wail and gnash teeth.

Then there's all the variations inbetween.

[Mill Rat]

Given that OD was in facing a long dark tunnel anyway, I'll take seeing a little light at the far end as a qualified positive. Granted, it could be the proverbial headlamp, but OD was quickly runnng out of options, and the tunnel looking more like an abyss.

BTW, Lew, welcome! To use some Chicago analogies, I reckon this site to be more like quaffing a few brews with the regulars at Miller's Pub, where BA reminds me more of doing so at Wrigley Field. Different sort of venues, each with it's own attractions, but here you get to have more of a conversation instead of shouting out your opinions as fast and loud as you can.

[jjpm74]

If this means me being able to buy OD locally (especially their barley wine), I'm a happy camper. I really enjoy their beers.

[Lew Bryson]

Originally posted by kinjar
Bottom line is that I'll still buy OD products as long as I still enjoy them.

100% with you there, and that's how it ought to be.

[Lew Bryson]

Originally posted by steveh
Maybe because we tend to be more fun and less impressed by in-your-face only beers? Maybe because we're more loveable? Don't know Lew, but it sounds like it's leaving a bad taste in your mouth... hope not.

Nah, no bad taste here, must be that dang lack of clarity in my writing again. Sorry if anyone got THAT impression. Dunno why I'm not here more often, honestly. Because you guys AREN'T as impressed by over-stuffed burrito beers...and you're not 24 year old screamers, either. And no one's got a chip on their shoulder. Hmmm....

[MeridianFC]

DUDE I TOTAL GOT RIPPED ONA 450IBU AZZZKKKKIICCKCER!!!!!!!!!!!!!!!!!!!!!!!

SWEATY MONKBALLS TRIPLE TRIPLE IZ DA BOMB!

LOLFTOLOL.

er...you were sayin.

[HogieWan]

Originally posted by jjpm74
If this means me being able to buy OD locally (especially their barley wine), I'm a happy camper. I really enjoy their beers.

I really loved their lager - I only got it once in a trade. I'm excited by this deal because i may see more of it here.

[MeridianFC]

I'd be surprised even with the sale if you started to see OD product as far afield as you both are. I think the A-B plan is regional in nature and OD barely have market penetration in their own backyard, I guess the first order of business, providing the first order of business isn't moving the brewery to Delaware, is to deal with the DC metro area. Or maybe not.

I've been advised to not paint AB with Miller's brush, but I do have to look there for a cautionary tale. Miller's first order of business when the took majority control of Celis was to shrink their distribution territory. Granted this may not be an apple to apple comparison.

[HogieWan]

I see redhook in a lot of places, so I'm guessing I have a better chance now with OD

[chazwicke]

OD brands may not even survive. If the plant is going to be used for Southern / Fordham products. I had heard that the OD brands were to be sold off. That is one of the rumors floating around. I'd not expect OD brands to travel that far afield either. Even if they do, It may not be the same product. Not sure the same brewers will even be brewing. So much is apparently up in the air.

[kinjar]

Originally posted by chazwicke
OD brands may not even survive.

Better start hoarding the Oak Barrel Stout

[Wit Memo Jeff]

I'm holding my breathe and hoping for the best. I love OD and hope their beers survive. In the best case scenario, OD beers will be more widely available in local bars and restaurants. As good as the beers are, OD taps shouldn't be so scarce. They are much less common than they were some years back. I believe OD is poorly served by its distributor.

[Derekt2]

Originally posted by Wit Memo Jeff
I'm holding my breathe and hoping for the best. I love OD and hope their beers survive. In the best case scenario, OD beers will be more widely available in local bars and restaurants. As good as the beers are, OD taps shouldn't be so scarce. They are much less common than they were some years back. I believe OD is poorly served by its distributor.

Cough, or it's sales staff, cough. I've never seen their guy but once at a festivals (theirs!). Tom Czisaukus of Clipper City, otoh, I see around town maybe once every ten days.

[Wit Memo Jeff]

Originally posted by Derekt2
Cough, or it's sales staff, cough. I've never seen their guy but once at a festivals (theirs!). Tom Czisaukus of Clipper City, otoh, I see around town maybe once every ten days.

You may be on to something. The only person from Dominion I've seen around town, aside from Bob Tupper, of course, was Jerry Bailey himself, at Chevy Chase.

I've come to know Tom from seeing him around the DC area promoting Clipper City products. A great guy.

[jjpm74]

Originally posted by chazwicke
OD brands may not even survive. If the plant is going to be used for Southern / Fordham products. I had heard that the OD brands were to be sold off.

I hope not. I'd rather see them stay local than sell off/contract away the OD recipes. The last few times that's happened to a brewery I liked (Post Road, Catamount as local examples for me), in one instance only a single recipe is still brewed and it pales in comparison to what it was like when it was independantly brewed and in the other case, the brewery and label are completely gone despite Harpoon's best attempts to keep them afloat.

On the Celis comparison, besides for it being a different company, it was also a different era. Things are different now and the macros are trying to regain the marketshare and appeal to a wider audience. Back when Celis was purchased, there was little worry about something else filling the void. In today's complicated world of brewpubs, microbreweries (both local and regional), craft breweries of all sizes and macros that specialize in pale lagers, there are always new breweries opening to fill the void left behind. What we're seeing now is a return to the setup that was present in this country before prohibition. I don't think we'll see the consolidation we saw in the 60s and 70s in the beer industry again in this country.

[ratman03]

Originally posted by jjpm74
I hope not. I'd rather see them stay local than sell off/contract away the OD recipes. The last few times that's happened to a brewery I liked (Post Road, Catamount as local examples for me), in one instance only a single recipe is still brewed and it pales in comparison to what it was like when it was independantly brewed

Ah, somebody remembers Catamount. The Porter was my favorite. Nice and roasty.

I don't think we'll see the consolidation we saw in the 60s and 70s in the beer industry again in this country.

Let's hope not. I think there are enough people that realize that with certain products (beer among them), the best quality product comes from smaller operations. Nothing wrong with just being a brewpub or a great regional brewery. It seems that going national and keeping the quality is very difficult -- especially when you get the bean counters involved.

As far as Old Dominion, I hadn't the chance to try their beer :( If they do start selling off labels, that pretty much seals it. Same recipe brewed in a different location does not equal same beer, unfortunately.

[ratman03]

Originally posted by Lew Bryson
Nah, no bad taste here, must be that dang lack of clarity in my writing again. Sorry if anyone got THAT impression. Dunno why I'm not here more often, honestly. Because you guys AREN'T as impressed by over-stuffed burrito beers...and you're not 24 year old screamers, either. And no one's got a chip on their shoulder. Hmmm....

That seems to be a problem everywhere on the internet. I suppose that as an adult I notice it more, but the web has given rise to a class of younger folks who know very little about a lot. They know bits of information and trivial facts, and they think that makes them smart. Information does NOT equal understanding however :rolleyes:

I'm reminded of the quote: "Never before have so many known so little about so much."

Please stick around. Your essay on Big Beers struck a chord with many of us.

Cheers!

[chazwicke]

Originally posted by ratman03


1. Ah, somebody remembers Catamount. The Porter was my favorite. Nice and roasty.




2. As far as Old Dominion, I hadn't the chance to try their beer :( If they do start selling off labels, that pretty much seals it. Same recipe brewed in a different location does not equal same beer, unfortunately.

1. I toured the Catamount brewery years ago. It was one of the better brewery tours I have taken. Incidentally Old Dominions tour has also always been a good one.

2. I agree once a beer is moved to a new brewery it never seems quite the same. I'm also concerned about Youngs move from Wandsworth. I'm hoping their beers remain as good. I'll check it out on my next foray in March.

[chazwicke]

And now I see this comment / question from Martin Wooster on DC-Beer about another local operation:

"An advertisement in the new MID-ATLANTIC BREWING NEWS
has Shenandoah Brewing putting all of its microbrewery
equipment up for sale. What's this all about?"

While Shenandoah was never in the same league as Old Dominion I hope they are not going down too.

[kinjar]

Originally posted by chazwicke
While Shenandoah was never in the same league as Old Dominion I hope they are not going down too.

I agree. I think they've always suffered from a lack of a true brewpub to go eat at. I know they "serve" lunch, but its basically a just several types of chili.

I can always convince my wife to go to a Sweetwater, OD or Cap City for a meal, why would I bother going there.

That said, they did provide the highlight of the OD festival (for me) this year - their Chocolate Donut Stout.

[TedE]

Originally posted by chazwicke
And now I see this comment / question from Martin Wooster on DC-Beer about another local operation:

"An advertisement in the new MID-ATLANTIC BREWING NEWS
has Shenandoah Brewing putting all of its microbrewery
equipment up for sale. What's this all about?"

While Shenandoah was never in the same league as Old Dominion I hope they are not going down too.
I really, REALLY hope this isn't the case. We've enjoyed brewing there in the past, and we were planning on bottling a specially labeled beer this summer to serve at our wedding in the fall!! In the event it IS the case, anybody know of another brew-on-premise operation locally? I've homebrewed in the distant past, but D.C. apartment living doesn't lend itself to the enterprise.

[Chiliman101]

Originally posted by chazwicke
And now I see this comment / question from Martin Wooster on DC-Beer about another local operation:

"An advertisement in the new MID-ATLANTIC BREWING NEWS
has Shenandoah Brewing putting all of its microbrewery
equipment up for sale. What's this all about?"

While Shenandoah was never in the same league as Old Dominion I hope they are not going down too.

That may what this is. I came across it a month or two ago

http://www.businessresale.net/display.php?id=146445

[Derekt2]

If only I had the money. I could be a homebrew shop and a small-scale brewery. I'd love to be able to offer you a case of freshly made Saison along with your basic brewing set-up.

[kinjar]

Originally posted by TedE
anybody know of another brew-on-premise operation locally?

If you don't mind going up to Frederick:

http://www.flyingbarrel.com/

[HogieWan]

Originally posted by Derekt2
If only I had the money. I could be a homebrew shop and a small-scale brewery. I'd love to be able to offer you a case of freshly made Saison along with your basic brewing set-up.

why should a new homebrewer have to buy EMPTY bottles?!?!

[chazwicke]

Looks like this is gonna be the buyer http://www.abwholesaler.com/southernbeverage/home




EDIT: Maybe not. There seems to be a couple of places going by Southern Beverage or some other closely spelled form.

[TedE]

Originally posted by kinjar
If you don't mind going up to Frederick:

http://www.flyingbarrel.com/
Sorry to keep this of topic, but thanks for the info! I'll keep an eye on Shenandoah with this place in mind.

[MeridianFC]

As a funny aside, I was down at North Beach this weekend (West Side of the bay for those not in the know). There's a small bar there called Thursdays, all the usual B/M/C but they did have one tap of Beamish and Fordham Helles. Hmmmm, well at least it's drinkable brew.

[Insidious Rex]

So does this mean the Old Dominion Festival will feature MTV and wet t shirt contests next year? Or will the new money at OD nix the idea of the OD Festival all together as a non money maker?

[chazwicke]

I talked to Bob and Ellie Tupper last night at RFD. They assure me that the Tuppers beers will continue hopefully at Old Dominion but if not, they will be produced elsewhere.

[Chiliman101]

Yet another rep I plan on peppering with questions at our beer tasting on Monday.

[newportstorm]

Originally posted by MeridianFC
As a funny aside, I was down at North Beach this weekend (West Side of the bay for those not in the know). There's a small bar there called Thursdays, all the usual B/M/C but they did have one tap of Beamish and Fordham Helles. Hmmmm, well at least it's drinkable brew.

The news of Beamish pulling out of the US market came down in February, so that keg may have been as much as 10 months old.
Drinkable, but enjoyable?

[kinjar]

Full article from the post - topic of today's blog post on real beer:

Old Dominion Brewery Sale Appears Imminent

By Thomas Heath
Washington Post Staff Writer
Monday, January 8, 2007; D01

Old Dominion Brewing, whose pub is a favorite of the high-tech crowd near Dulles International Airport and whose microbrews are sold throughout the Mid-Atlantic region, is close to being sold -- and the buyers may be connected to the most macro brewery of all.

Old Dominion President Jerry Bailey said the sale could happen any day. He declined to identify the buyers, but people close to the microbrewery said the sale would involve Ram's Head Tavern, a Baltimore-based brewery chain, and beer giant Anheuser-Busch.

Regulars are already getting nervous. "The concern is growing over whether they will continue to sell those same beers," said Jack Chungo, 54, a salesman who is a frequent customer. "The majority of people I know have a particular favorite."

Kyle Muehlhauser, a principal at Ram's Head Tavern, did not return phone calls and messages left for him. A spokesman for Anheuser-Busch said the company had no comment.

Bailey said he thought it was unlikely the new owners would change the beers.

"I can't imagine anybody buying a place like this and not keeping the only thing we got," Bailey said. "The brand is the most valuable thing we own."

"We have signed a letter of intent with someone, but we are not confirming or denying any of the other stuff," said Bailey, adding that he was selling the company in order to liquidate his equity.

Customers who had heard the rumors last week said that they are worried that new ownership would bring in new brands of beer, replacing Old Dominion's house brands, including Dominion Ale, Dominion Lager, Tuppers' Hop Pocket Pils, Old Dubliner and Aviator brews, as well as special beers for each season of the year. Nearly 20 brands, all of which are brewed on site, are sold on tap at the pub. The brewery is in an office park in Ashburn, near the Washington and Old Dominion Trail, and is a favorite stop for runners and bike riders.

Old Dominion also brews special recipes for local restaurants including the Dubliner, J. Paul's and the Hard Times Cafe. Murphy's Grand Irish Pub in Alexandria sells Old Dominion beer under house brands Murphy's Ale and Murphy's Blonde.

Bailey owns 22 percent of the company, which includes the pub as well as the brewery operation. The next biggest partner owns 10 percent, and there are 82 investors, he said.

Bailey, 67, a former employee of the Agency for International Development, founded Old Dominion in 1989. The company started brewing in 1990 and in 2006 sold the equivalent of 27,000 barrels of beer and 6,000 barrels of soft drink, making Old Dominion the 50th-largest brewery in the country, Bailey said. Each barrel is equal to 13.78 cases of 24 bottles each. About half of Old Dominion's beer is sold on tap and the other half in bottles.

"We have done quite well," Bailey said. He estimated that the company is worth $4 million to $6 million, but declined to name the sale price. He said one consultant had estimated the Old Dominion brand alone to be worth $2 million.

A former employee of Old Dominion is scheduled to go on trial this spring on charges of embezzling more than $100,000 from the firm. Bailey said the sale was not related to the incident.

Old Dominion announced last March that it was being sold to one of its managers, but the sale did not go through. Sources familiar with the current deal spoke on the condition of anonymity because the sale has not been completed.

[chazwicke]

Read that. The good news is Jerry seems to think they will keep the beers and pub. I hope so.

[kinjar]

Unfortunately, he said "brand" and not "beer". That doesn't necessarily mean they would keep the same recipes.

But I'll remain optimistic.

[chazwicke]

I've spoken with the Tuppers. Bob assured me that thier beer would still be brewed in the area preferably just like it is now at the Old Dominion plant but if that were not possible it would be brewed to his recipe and standards at another local brewery.

[denver brewhoo]

hmmmm. Wonder who gets to make the call? Mr. Tupper, or somebody whose last name is Busch?

By that I mean--can he walk as the result of the sale? Can he walk if they fail to make "adequate assurances" that process and ingredients won't change? Can he walk if post sale independent investigation reveals those things?

Or can the buyer(s) or their principals decide in their discretion to jettison the contract without monetary recourse to the Tuppers? One would think the Tuppers' contract with OD would have those answers but it's often surprising what possible eventualities contracting parties sometimes forget or don't think to cover.

Certainly his statements to you would indicate Mr Tupper has, or thinks he has, control. Which is good for me at least because I may care more about the Tuppers' beer than any other OD-related thing.

[chazwicke]

Actually he insists on some labor intensive steps and and I know Old Dominion was willing to take them where another brewery might not have. (Seems cleaning those hops from the vessel is a PITA and a hated task by any brewer.) I'm not sure how the contract thing works but I do believe that the Tuppers control theirs. I recall the stories of the developement of the beer and I know they were over at OD for every moment. I too like the Tuppers beers best but another contract New River Pale Ale is very good too and the OD Oak Barrel Stout on draft is a nice brew as well. The Hop Pocket Ale can be sublime on the beer engine.

[MeridianFC]

I dunno, I just dunno.

[kinjar]

Originally posted by chazwicke
I too like the Tuppers beers best but another contract New River Pale Ale is very good too and the OD Oak Barrel Stout on draft is a nice brew as well. The Hop Pocket Ale can be sublime on the beer engine.

I ditto all three of those points.