One of the largest and oldest breweries in Massachusetts has bolstered its increasingly diversified brand portfolio by buying a local competitor.
The Mass Bay Brewing Company, parent of Harpoon and UFO, today announced it has acquired Clown Shoes Beer, a considerably smaller contract operation, but one whose products are widely distributed both throughout and outside the country.
Reached by GBH, Dan Kenary, Mass Bay Brewing co-founder and CEO, says his company, the nation’s 18th largest craft brewery by volume, can provide Clown Shoes with the support and resources necessary to further develop the line.
“We expect to grow the brand in the short term and the longer term,” he tells GBH. “I don’t know if I’d say they’re aggressive plans. But they’re certainly not insignificant for the brand, for both filling in existing markets and maybe new markets.”
Although Clown Shoes distributes in 28 states and five countries, it’s only on pace to produce about 13,000 barrels of beer this year, the company says. Beyond just helping the company grow, the sale also fundamentally changes what Clown Shoes is as a business. Since its founding in 2009, the brewery has contracted all of its production, primarily in Ipswich, Mass. at Mercury Brewing, but with stints elsewhere in the northeast. Now, Clown Shoes can call home two sizable Harpoon breweries in Boston and Windsor, Vermont respectively.
In turn, Gregg Berman, founder of Clown Shoes, writes that the company will now be able to pump out small-batch, state-specific, and barrel-aged beers “at an accelerated rate in 2018.” Berman goes on to clarify, however, that in light of the sale, the company won’t be “Harpoonized,” but that the two companies are naturally simpatico.
“For this partnership to work, everyone needs for us to continue to be Clown Shoes,” Berman says.
That said, the two companies are simpatico in some important ways. For starters, they share distribution alignment in a number of key New England markets. “Then, in other markets, Clown Shoes has really solid local distribution, so we’re not looking to go in and rip things up,” Kenary explains.
But perhaps most importantly, Clown Shoes employees, in their new capacity as Mass Bay employees, are eligible to become employee owners, as Harpoon established an employee stock ownership program (ESOP) back in 2014.
“They were really intrigued by our ESOP,” says Kenary, who says Clown Shoes approached his company last spring to express an interest in selling. “The ESOP really helped us get this deal done. These are guys who believe in independence.”
Adds Berman: “If we get to be part of an independent, employee-owned company, sign us up! But we are still going to be Clown Shoes and Harpoon is still going to be Harpoon. Now we get to have fun playing in the same sandbox for years to come.”
Looking ahead, Kenary says there is also the possibility of building out a dedicated Clown Shoes facility, a project the company has discussed publicly in the past, but has yet to move forward on.
“I would say it’s not front of mind, but it is something that we have collectively talked about,” Kenary says. “If we can hit objectives over the next three to five years, that would absolutely be something we’d look into.”
Although the Clown Shoes deal is a total Mass Bay buyout, the company has pre-existing minor investments in Barrel House Z, another Massachusetts brewery, as well as Latitude Beverage Co., the owner of 90+ Cellars. The acquisition also comes seven months after the company rebranded its UFO line to better separate it from Harpoon to diminish confusion in the marketplace.
“Harpoon consumers are your classic craft consumer,” Kenary says. “The UFO consumer is looking for something lighter, more refreshing, they don’t care about what hops are in the beer. So you know what, we really do have to separate these brands so we speak with more clarity.”
As for whether Mass Bay is done buying up or investing in other beer brands, Kenary says the company has a full plate right now, but will “continue to be opportunistic in the positive sense of the word in that it’s gotta be a win-win for both parties.”
“We feel like with our three brands in house now, UFO, Harpoon, and Clown Shoes, we’ve got a nice product portfolio,” Kenary says.
Terms of the deal were not disclosed.