Legacy Breweries, the craft brewery investment rollup led by beer industry veteran Don Bryant, has set its sights on Colorado, where its Aspen Brewing has struck a deal to acquire Capitol Creek Brewery.
The deal, which is expected to close June 1, will link Aspen-based Aspen Brewing, which Legacy acquired in 2019, and Basalt-based Capitol, giving the two craft breweries a combined 10,000 barrels of production capacity to serve both breweries’ on-site pubs. This move marks a geographic change for Legacy, which previously struck deals in Oregon with Ninkasi Brewing and Laurelwood in 2019.
“We’re actively looking at a number of facilities within Aspen, the whole ski area,” said Bryant who serves as Legacy’s CEO. “Our goal is to be able to own substantial restaurants and tasting locations in the prime resort area.”
Financial terms of the deal were not disclosed, but Capitol Creek was listed for sale on BizBuySell earlier this year for $625,000. According to the listing, Capitol Creek generated gross revenue of $1.6 million annually.
Restaurateur Bill Johnson founded Capitol Creek in 2017, and BizBuySell listed his reason for selling as “to focus on their other restaurant.” Johnson owns the Aspen Public House at the city’s Wheeler Opera House, according to the Aspen Times. Capitol Creek general manager James Hauser and brewmaster Jerod Day will stay on following the transition.
Legacy plans to enhance the at-the-brewery experience for both brands by adding a tasting room to Aspen Brewing’s location, recruiting experienced chefs and outsourcing Capitol Creek’s core production to Aspen Brewing’s facility about 20 miles away, freeing its brewers to experiment.
“Our goal is to be really a destination for both food and beer, so we’re bringing in high-end chefs and some of the learnings from Aspen,” Bryant said. “At the same time, we’re going to retain all five brewers [at Capitol Creek] and they’ll be able to get into the small batch and innovation brewing.”
The land around Aspen and in the Roaring Fork Valley, where both breweries are located, is agriculturally rich, which makes it unique for the region. The company plans to take advantage of local ingredients for its food and beer menus, as well as a potential spirits endeavor.
“We’re looking at getting into a distillery and doing local blueberries, local spruce tips, all that,” Bryant said. “You can do that in Aspen. You can’t do that in most of the state of Colorado.”
The city of Aspen is wary of large commercial development, particularly national chains, and Bryant is confident Aspen Brewing will face little competition from potential new brewpubs or taprooms.
“If you go to Vail or Copper or any of the ski resorts, they’re very, very commercial; you’ve got all these big money chains coming in, big investment,” he said. “Aspen refuses to let any of that happen. If you go into Aspen, you can’t get a Starbucks, you can’t get McDonald’s. So for us being the brewery there, there will likely never be another brewery because they’re very, very concerned about maintaining the ecosystem.”
The region saw a sustained tourism boom last summer that Legacy hopes will have visitors flocking to Aspen Brewing and Capitol Creek, the latter of which can host 200 people on its patio.
“It is kind of a strange situation that obviously COVID decimated on-premise, globally speaking,” Bryant said. “In Aspen, where people couldn’t travel internationally, they could go to Aspen, and so locally, our restaurants in Aspen are up 35-40%, during COVID.”
Capitol Creek’s draft system will be ripped out and rebuilt to increase its draft handles from 15 to as many as 50. However, Legacy has no plans to expand distribution of the Capitol Creek brand, which has some local distributed draft presence.
“We will do some very, very limited canning just for the local market,” Bryant said. “We want to keep that its own brand. We distribute to some local restaurants that are kind of friends and family, and we like to keep it that way.”
Aspen Brewing distributes within Colorado, a footprint Legacy pared down following the 2019 acquisition, and is now “guardedly optimistic” about expanding. Last year, Aspen Brewing produced about 6,000 barrels of beer, while Capitol Creek produced about 600.
“We’re doing some partnerships that are going to allow us to expand further into more states where Aspen is aspirational,” Bryant said.
Legacy has several undisclosed partnerships in the works, and by 2022, the company believes capacity across its brewery portfolio could reach 125,000 barrels.
“We’re far from done,” Bryant said. “This is just the start in Colorado, so we’re very active now with actually six different breweries in Colorado in terms of what’s the best fit.”
The deal is the third craft-on-craft acquisition of 2021, following Deschutes’ acquisition of Boneyard Brewing in March and Firestone Walker’s acquisition of the Cali Squeeze brand from SLO Brewing in April.