THE GIST
Tree House Brewing will have some help financing the build out of a massive new production facility in Charlton, Mass. On Thursday, MassDevelopment, a state-supported economic development agency, issued a $7.7 million bond to help finance the estimated $18.5 million project. The new brewery, slated to open in 2017, is expected to be capable of producing 150,000 barrels per year when maxed out. The company, whose beers are highly renowned but scarce, anticipates producing nearly 13,000 barrels this year.
WHY IT MATTERS
In four short years, Tree House has emerged as one of the most reputable craft breweries in the game, catapulted by its hazy, citrusy IPAs like the coveted flagship, Julius. That’s not lost on founder Nate Lanier, who says he marvels at the rate of growth they’ve enjoyed “nearly constantly.”
“We started with nothing but a barn and a dream,” he tells GBH. “The brewery started in a Coleman cooler just over four years ago. None of us expected or predicted this. It’s insane! It’s impossible to distill all my thoughts about what we’ve done and how far we have come in a short time.”
The bond itself was issued on behalf of Landreau Realty, LLC, which will own the land upon which the brewery is built, per a notice of public hearing from earlier this summer. Tree House, meanwhile, will put the secured financing to use acquiring furniture, fixtures, and manufacturing equipment.
For MassDevelopment, this is the latest in a string of investments in the state’s burgeoning craft beer space. In the last few years, the agency has issued loans to Notch Brewing, Night Shift Brewing, Newburyport Brewing, and more, during times of expansion. In a news release, MassDevelopment president and CEO Marty Jones celebrated Tree House for exemplifying "the type of creativity, dedication and entrepreneurial spirit that has put Massachusetts’ world-class craft brewers and food manufacturers on the map.”
“We are pleased to help invest in Tree House Brewing Company’s expansion into Charlton, and are grateful to Country Bank for its flexibility in putting together a unique financing solution with the Small Business Administration, and to the Town of Charlton for it important partnership on this project.”
To that end, Lanier expounded on what breweries need to consider before taking on this sort of debt. “The best advice I can give anyone considering borrowing money is to think about what happens if it all goes wrong,” he tells GBH. “Keep your financials tight. Think about the worst-case scenario. Demonstrate that you have really thought things through.”
As for the new brewery itself, the Charlton location—roughly 20 miles from its current headquarters in Monson—will enable the company to vastly ramp up production. However, current plans call for the continuation of its gradual pace of growth. Rather than storming area tap lines and shelves, Tree House intends to continue selling the majority of its beer right from the point of production directly to customers.
While the brewing won't hit that 150K cap for a while, the Tree House team does expect to quickly start producing 30,000 BBLs/year. And as Lanier told Brewbound back in March, they think they might be able to sell that much in-house at the new, larger space. For those of you keeping score at home, the back-of-the-envelope math on 30K BBLs worth of $16 tallboy four-packs sold direct adds up to $29,760,000.
And when the new facility is up and running, the Monson location will remain operational, but “transition into an innovative mixed fermentation and barrel aging space,” Lanier says.
“The hope is greater availability of core beers will spread the crowds throughout the week allowing us to curate a first rate and relaxed drinking experience at both facilities,” he adds. “The space surrounding Charlton is incredible, and I don’t say that lightly. Monson is incredible too, and we have plans to make it even better once we find our footing in Charlton.”
—Dave Eisenberg