Alpine Updates

Uh, what? My statement makes perfect sense, fueling expansion on ONLY PROFIT is hard, most people would take on debt. I think that, for some reason, Alpine doesn't want that. (I don't know their situation, as far as I know no one does, but the fact that he's looking for individual investors tells me that either he doesn't like bank loans or they won't lend to him for some reason.) And the first statement makes perfect sense, expansion is expensive and Alpine's beer is fairly cheap. They could be charging $10 or more a bomber, but they're not. They also distribute far more than they need to (which drives down profits). If they charged more and sold more out of the brewery they'd make more money and have more capital for profits.

What part of that doesn't make sense?

 

Its not that the first part doesn't make sense, its that you're making a lot of assumptions about cost and how much money Alpine actually makes from its beer.

The part that doesn't make sense to me is where you're saying he's not getting equity financing and also not doing debt financing and he has no capital at the same time. Securing production contracts isn't free; Alpine can't have no capital, no equity financing AND no debt financing.

This is getting away from the point, which is that I don't necessarily agree its the "logical next step" in expanding. If outsourcing was cheaper in the long run than simple local expansion, everyone would do it.

 

The capital necessary for contract brewing is substantially less than what's necessary to expand the brewery (or at least the expansion that Alpine was looking into). The business likely generates enough of a profit to float things like production, but that's an order of magnitude less than building a new facility.

Cheaper in the long run isn't the key point for Alpine though, it's a matter of what's a viable option NOW. Contract brewing likely will end up being more expensive in the long run, but you also have to factor in the opportunity cost of not fulfilling demand for your beer.

A full analysis of the business side of Alpine is well beyond the scope of this sort of conversation, especially since most of us (maybe all of us) have no insight into Alpine's books. However, Pat is faced with, essentially, three choices since they failed to secure investors with their private offering last year:

1) Go into debt to finance the expansion - he either can't or doesn't want to do this, but it's obviously not something he's pursuing right now.
2) Contract brew as a stop-gap measure until he can (presumably) attempt another round of financing.
3) Maintain current capacity.

When I said a page ago that his chances of securing investors down the road won't be any better, it had nothing to do with his decision to contract brew - I actually think that's a fairly good option for them at this juncture. Their demand far, far outstrips their supply, and their lack of quality control is as much a detriment as any sense of terroir is a benefit. Contract brewing _should_ end up as a net positive on their bottom line and hopefully put them in a better position to expand down the road.

My personal feelings on their ability to expand down the road have far more to do with general trends in the economy, the sustainability of craft beer's growth, and how attractive Alpine would be as an investment relative to other breweries who might be seeking investors. No one is going to make a financial decision on investing based on whether they contract brewed for a couple years.

 

I think The Bruery (Reserve Society/Hoader's Society), Cigar City (El Catador), Crooked Stave (Cellar Reserve), and Hill Farmstead (Collected Works) would all disagree with that.

 

You do understand that being in a subscription club is just paying money for a product, right?

This is a pretty well thought out post. I don't necessarily disagree, I just think its weird it ever got to this point given the popularity of Alpine's beer (and really they're my favorite brewery).

 

Three bottles per beer type, not total.

 

Yes, but for all intents and purposes, it's an interest free loan until they are able to deliver the product.

 

Its really nothing like that any more than any other non contemporaneous transaction is a "loan." By that definition we could call AleSmith selling VCSS on the 5th and delivering on the 10th a short term loan.

 

Exactly. This is nothing more than getting some advanced liquidity.

 

TL: DR

"Why don't these shitty breweries just brew beer as good as Alpine?"

 

I can't count the number of times I've told them to increase their prices. (Also, Hi, Steve!)

 

You seem to get really hung up on pointless semantics.

 

Where's the "don't like" button?

 

This new batch of Ugly is awesome.

 

Agreed. As good as Wookey Jack is, Ugly is quite a bit better.

 

Is it always so regular IPA-like in its flavor? I thought it tasted great but got no contribution from the dark malts at all.

 

I've only had it once before (last year) and I remember it being similar but maybe a little bit more on the roastier side. Although I definitely got a small amount of dark malt from this year's batch, which is the perfect amount for me.

 

I don't remember it having that hop profile before but it's been along time since I've had it (I know I didn't try the last release).

 

Everyone thinks an argument they aren't winning is a pointless semantics.

 

Forgive me for not going through all 24 pages of this thread, but can someone confirm or deny with whom and when Alpine is going to partner with to increase output/distribution?