Cape May Brewing to Shut Down Self-Distro Arm and Sell Rights to Molson Coors Network in NJ

Cape May Brewing, New Jersey’s largest regional craft brewer by volume, will sell its brand rights and wind down operations of Cape Beverage, its distribution arm, the company announced today.

The rights to Cape May’s portfolio will go to four wholesalers in Molson Coors’ New Jersey network:

  • Hammonton-based Kramer Beverage Company;
  • Union-based Peerless Beverage Company;
  • Freehold-based Shope Point Distributing;
  • And Hawthorne-based Kohler Distributing.

“In finding the right partners to take the distribution reins from us, we followed our own advice and sought out companies who know what they do better than anyone,” Cape May president Frank Stempin said in a press release. “We chose four companies who demonstrate what’s possible when you focus on one thing and execute with excellence. Kramer, Kohler, Peerless, and Shore Point are all family-owned companies who have amassed formidable distribution expertise over the generations.

“Their deep understanding of the landscape will enable them to seamlessly continue to serve our valued customers with the same dedication and efficiency they have come to expect from Cape Beverage over the years,” he continued.

Kramer – which serves Atlantic, Burlington, Cape May, Cumberland, Gloucester, Mercer and Salem counties – will carry “a majority of Cape May Brewing inventory,” the release said. Last year, the brewery produced 46,163 barrels of beer, according to the May/June issue of the Brewers Association’s (BA) New Brewer.

Financial terms were not disclosed. The sale involves between 350,000 and 400,000 cases, Beer Marketer’s Insights reported.

With proceeds from the sale, Cape May plans to invest in “expanded production, state-of-the-art brewing equipment, and growth of footprint,” Stempin said in the release.

Cape May hoped the acquisition of Somerdale-based Flying Fish, which was announced in April, would help it increase production. However, the sale was called off in June, cutting Cape May off from access to Flying Fish’s 25,000 barrels of production capacity.

The brewery’s new wholesaler partners will begin selling Cape May products on September 25. Cape May said it will “actively support former employees of Cape Beverage Distributing, offering job placement assistance, severance, and continuation of benefits packages to aid in this transition.” Nearly 20 jobs were eliminated with the closure of the wholesaler, Cape May told Brewbound.

Cape Beverage launched in 2019 and served New Jersey’s full 21-county footprint. Brands in its portfolio have included Dock Street Brewery, Vault Brewing, Stewart’s and Hard Rock beverages, Grüvi, vonC Brewing, Big Storm Brewing and Full Circle Brewing. The 11 brands in Cape Beverage’s book “are in wind down mode at this point and will have the opportunity to go to another distributor,” Stempin told Brewbound.

Earlier this year, Cape May partnered with three Molson Coors-aligned wholesalers in Pennsylvania to expand its footprint there. It also distributes to Delaware.

The news of Cape Beverage’s closure is the latest blow to distributed craft in the Garden State. It follows Sheehan Family Companies agreeing to sell its New Jersey craft-focused distribution business Hunterdon to Anheuser-Busch’s network in the state.

Five A-B distributors – High Grade, Ritchie & Page, Northern Eagle, Harrison and Konrad – will take over distribution of more than 1.2 million cases of beer, including offerings from Founders, Lagunitas, Allagash, Stone, Tröegs and CANarchy, Beer Marketer’s Insights reported earlier this month. The deal is expected to close by early December.

Cape May isn’t the first regional craft player to wrap up its distribution business in recent years. In September 2021, Everett, Massachusetts-based Night Shift Brewing sold the rights to its brands to Sheehan Family Companies and wrapped up its distribution arms in Massachusetts and Connecticut.

Editor’s note: this story was updated at 2:15 p.m. ET on September 22 to include comments from Cape May Brewing.