In a move that underscores just how quickly the craft beer segment has evolved, Shmaltz Brewing Company today announced plans to vacate an upstate New York brewing facility that it built just five years ago.
The company — which launched in 1996 as a contract-brewed, Jewish-themed craft brand – has sold its brewery equipment assets to Queens-based Singlecut Beersmiths for an undisclosed sum.
Singlecut owner Rich Buceta will take over Shmaltz Brewing’s 30,000-barrel Clifton Park facility later this year, pending federal and state licensing approvals.
Meanwhile, Shmaltz will retain ownership of the Shmaltz, He’brew, Alphabet City and 518/838 offerings. The company will also maintain control of its licensing agreement with CBS for a line of Star Trek-themed beers, brewery founder Jeremy Cowan said.
Shmaltz beers will continue to be produced at the Clifton Park brewery during the ownership transition, Cowan added, and employees working at the facility will be retained.
The sale, which was finalized last week, comes about one month after Shmaltz inked a brand management partnership with Artisanal Imports that more than doubled its sales staff.
Together, the moves are part of what Cowan described as “aggressive adaptation” at a time when more than 6,300 companies are competing for thinner slices of a craft beer pie that is growing at a slower pace than previous years.
“There is plenty of pressure on small-to-medium-sized brands,” Cowan told Brewbound. “I’ve been working on ways to evolve the company, and this was a pretty awesome opportunity.”
The move away from owning a production facility also marks a return to the somewhat nomadic contract-brewing model that Cowan helped popularize in the early 2000s.
Cowan launched Shmaltz Brewing – and his He’brew line of beer – in San Francisco 22 years ago. As the story goes, he hand-delivered the first 100 cases of beer from “the back of his Grandmother’s Volvo.”
“As a contract brewer, I will have a ton more experience than the last time I did it,” he said, explaining that he now knows his way around a brewery better than before.
Over the years, Cowan scaled distribution into 30 states and launched the Coney Island brand of craft beers in 2007. Six years later, Alchemy & Science, a division of Boston Beer Company, purchased those offerings for $2.9 million.
At the time of the sale, Coney Island brands accounted for about half of the 12,000 barrels Shmaltz produced in 2013 and proceeds helped finance the construction of a $3.25 million Clifton Park facility.
Since 2013, however, the number of U.S. craft breweries has more than doubled, and production of Shmaltz Brewing’s owned brands shrunk to about 6,000 barrels in 2017.
“The original business model was to be a much smaller brewery,” he conceded. “After I sold Coney Island, I wanted to expand Shmaltz and He’brew and introduce new brands. We have been doing that, but just the scale of the brewery has been a bit of a challenge – to use it most efficiently and profitably.”
Cowan, who used a combination of debt and private investment to finance the Clifton Park facility, will use funds from the asset sale to “clean up” his balance sheet, he said.
“This gives me some working capital moving forward, so I can focus on brand building,” he added.
Future brewing partners have not been identified, but Cowan said he is hoping to produce smaller batches of his products at various facilities around the U.S.
“Now I have so much more flexibility, geographically,” he said.
A press release with additional information is included below.
Shmaltz Brewing Company announces the asset sale of its Clifton Park, NY brewing facility.
Clifton Park, NY — Monday, May 21, 2018 — Shmaltz Brewing Company has sold its Clifton Park, NY, brewery assets to Rich Buceta, Owner of Queens-based SingleCut Beersmiths . Shmaltz has sold only the equipment and the facility but retains full ownership and control of all its brands under the Shmaltz Brewing and He’brew Beer lineup as well as its new upstate New York 518/838 Craft line, its recently acquired and redesigned Alphabet City brands, and its exclusive licensing agreement with CBS for the line of custom Star Trek themed beers. Shmaltz retains all the intellectual property, trademarks, artwork, copyrights, designs and associated assets that have so clearly identified the Shmaltz family of beers for over 21 years.
During a transitional period extending through late 2018, Shmaltz will continue to brew, package and operate as it has been doing for the 5 years since it opened the brewery in 2013. The flow of Shmaltz brands to all its wholesale and retail customers such as core offerings Slingshot, Hop Manna, Messiah and RIPA will continue exactly the same as will coming releases of Hop Momma IPA, Chanukah in Funk, She’brew, and Jewbelation 22. The 518/838 Craft lineup will continue to explore flavors and collaborations based in the local area codes using New York State ingredients under Shmaltz’s NYS Farm Brewers License. The new Alphabet City Village IPA and 7th St Blonde will expand to grow alongside the special releases of Loisaida in July and Sugar Plum Fairy for the holidays.
Shmaltz will initially maintain all of its current brewing, packaging and production team through the transition during which time the new operator will be obtaining its federal and state licenses and take over all operations.
Shmaltz will continue through late 2018 to run its 2000 sq ft tasting room and host the brewery events that have grown so much over the years including its 5 Year Anniversary Beer Festival bash in June and Black Friday Black Beer Fest in the fall.
Shmaltz will be announcing new brewing partners in the coming months and intends to remain brewing with the highest quality craft brewers in its current home state in New York as well as the possibility of brewing again in its birthplace in California. Shmaltz will now also pursue the opportunity to brew special batches and collaborations in new locations around the country.
In preparation for its return to focusing on brand building and growth, Shmaltz recently announced a new national sales and marketing partnership with Artisanal brands that will complement the core Shmaltz team in Upstate New York, NYC, and the San Francisco Bay Area. Selling alongside iconic brewers such as Bosteels (Triple Karmeliet) and La Trappe as well as new American craft including Fulton (MN) and Whiner (IL), the Artisanal network of 15 full time sales professionals covering nearly all 50 states will focus primarily on current Shmaltz markets including New York City (Sarene Distributing), Florida/OH/IN (Cavalier), new wholesalers in California (Young’s Market) and Texas (Full Clip), and nearly 30 current markets. Artisanal and Shmaltz may also expand to additional territories in the coming months, including Nevada and Maine with others to follow.
Current Shmaltz full-time sales staff will remain focused independently in upstate New York with our largest wholesaler (Saratoga Eagle), Western NY (Rhino, Sanzone, Northern and Oswego Eagle) and Massachusetts (Girardi, Horizon) as well as with the Alphabet City brand in NYC (Manhattan Beer) and New Jersey (Black River Traders).
Shmaltz is also exited to share details soon with a slew of new and expanding projects. Under its NYS Farm Brewers license, Shmaltz is opening a new retail tasting room and bottle shop in the heart of Troy, NY, focused on its 518 Craft line as well as NYS beer, spirits, and ciders. Shmaltz will also be expanding and releasing new offerings from its acclaimed barrel aged sour program under its current brands as well as new labels to follow. Additionally, the long awaited first offerings from the small batch craft distillation project, Shmaltz Liquor, with its Jewbelation series aged for over 7 years in separate Bourbon barrels from Hudson Valley, Buffalo Trace, and a rare Pappy Van Winkle, will be released later this year with more craft distilling plans to come.
Shmaltz is proud to have grown the Clifton Park brewery from 8,000 barrels annually to over 26,000 barrels of production in 5 years, brewing a blend of its own proprietary award-winning beers as well as having contract brewed for such well respected partners as A&S/Boston Beer (Coney Island), Bronx Brewery, Speakeasy, Heartland and Foreign Objects. Shmaltz also more than doubled its production staff from 8 to 20 full time employees.
Shmaltz will continue to call upstate New York its home, and this change will allow, founder and owner Jeremy Cowan and his dedicated and passionate staff to focus full time on the sales, marketing, and product development so crucial to grow brands in the craft beer world at home, regionally and nationally.
Shmaltz would also like to welcome SingleCut Beersmiths to the Capital Region. The Queens-based brewery has been making some incredible beers for the past 5 years, and Shmaltz is excited for them as they take over the brewery and are able to make the beers their fans have been asking for.
As has been its tradition for over 21 years, Shmaltz remains as dedicated as ever to the creative and relentless pursuit and celebration of Quality, Community, and of course a more than hearty serving of Shtick. Many more details to follow about the evolution of Shmaltz Brewing’s next craft beer adventures – L’Chaim, Tribe!
About Shmaltz Brewing Company
Founder and owner Jeremy Cowan established Shmaltz Brewing in San Francisco in 1996. The first 100 cases of He’brew Beer® were hand-bottled and delivered throughout the Bay Area from the back of his Grandmother’s Volvo. Shmaltz Brewing now sells He’brew Beer across 30 states, through 40 wholesalers and in nearly 5,000 retailers.
After 17 years of being an outspoken cheerleader for contract brewing, Cowan and staff opened their own New York State production brewery in 2013 in Clifton Park, 10 minutes north of Albany. Shmaltz’s home boasts a 50-barrel brewhouse with 30,000 barrels of annual capacity and packages a diverse and tasty variety of core and seasonal favorites in 12 and 22-ounce bottles and kegs. The Shmaltz Tasting Room is open six days a week (Tues-Sun) and offers tours, barrel-aged previews, beer- to-go, and special releases.
RateBeer.com ranked Shmaltz as one of the “Top 100 Brewers in the World” in 2013, and the brewery recently brought home 1 platinum, 10 gold and 6 silver medals from the World Beer Championships.
In the past several years, Shmaltz Brewing introduced its line of upstate New York focused farm beers under the 518/838 Craft brand name, acquired and rebranded the Alphabet City Brewing beers, and signed an exclusive licensing agreement with CBS for a series of Star Trek beers distributed through its sales network. In 2018, Shmaltz also signed a national sales and marketing partnership with Artisanal brands, who represents renown brewers such as Bosteels (Triple Karmeliet), La Trappe, and American craft brewers Fulton (MN) and Whiner (IL).