Celis Financial Woes

Discussion in 'Beer News & Releases' started by champ103, May 6, 2019.

  1. champ103

    champ103 Poo-Bah (4,411) Sep 3, 2007 Texas
    Society

    I'll post this here instead of the Southwest forum, because I think this is pretty big news and I know a lot people outside of our market has a fondness for the brand, and its history (Mods if you think this should be in the Southwest forum feel free to move it). I was really excited when Celis came back, with the family, and thought they made an excellent product. Having not had the original version (I moved to Houston in 2007), but Celis White quickly became a staple in my fridge.

    Well, I haven't seen any Celis around lately and come to find out they pulled out of Houston altogether. Then I came across this article...

    https://www.brewbound.com/news/as-r...rsist-celis-brewerys-future-remains-uncertain

    "Sources who spoke to Brewbound said the Celis operation was in trouble soon after opening in 2017. The company reportedly overspent on a 50,000-barrel brewery in northwest Austin and built financial models that required high double-digit, year-over-year growth in order to service debt."

    When will brewery owners realize you can't count on "double-digit, year-over-year growth?" Man, I hope they straighten this out and I can get me some Celis White again soon...
     
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  2. drtth

    drtth Poo-Bah (3,821) Nov 25, 2007 Pennsylvania

    This is depressing news.

    It's a shame that when they were doing their business plan there had already been 5 years of so of double digit growth in craft beer sales. If there had been a few ups and downs in percentage sales they might have been more cautious/less optimistic.
     
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  3. JackHorzempa

    JackHorzempa Poo-Bah (3,950) Dec 15, 2005 Pennsylvania
    Society

    From the article:

    “The new investor group has tapped former Big Bend Brewing Company vice president of operations Mahala Guevara and brewmaster Jan Matysiak as consultants to assess the viability of an acquisition. Recall that Big Bend, also based in Texas, suspended operations after six years at the end of 2018, citing market headwinds and the collapse of Canadian equipment manufacturer Diversified Metal Engineering.”

    That is an interesting ‘twist’ in utilizing folks from a failed business to evaluate Celis. I suppose this sorta makes sense since they have experience in having to close their business of Big Bend and are familiar with the business dynamics of today’s craft beer market.

    These are indeed very competitive times for the craft beer industry. Hopefully Celis will find a way forward here and not have to close down operations.

    Cheers!
     
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  4. drtth

    drtth Poo-Bah (3,821) Nov 25, 2007 Pennsylvania

    Sounds to me like a good idea. As a friend of mine used to say, "I have to learn from the mistakes of others. I don't have enough time to make them all myself."
     
  5. donspublic

    donspublic Poo-Bah (1,684) Aug 4, 2014 Texas
    Society Trader

    It was just bad timing, as we are seeing with a lot of breweries. The white and raspberry, were frequent purchases, and I took a lot of that to Florida. One of my favorite beers of theirs is Citrus Grandis, but after getting an initial push last year after entering the market, it never showed up again. It is still languishing on the shelves with a Feb ?? 2017 brew date. I would hate to see the White disappear again, it is such a great drinking low ABV beer
     
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  6. eppCOS

    eppCOS Champion (834) Jun 27, 2015 Colorado
    Society

    Tragic, like it's the 1990s all over again.
     
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  7. jesskidden

    jesskidden Poo-Bah (1,747) Aug 10, 2005 New Jersey
    Society

    Well, except that's there no more Philip Morris-owned Miller Brewing Co. to buy it completely (they'd bought into it in '95) and then close it down all within the year 2000.
     
    Bitterbill likes this.
  8. mig100

    mig100 Meyvn (1,276) Aug 3, 2014 Texas
    Society Trader

    Love Celis and Celis White in particular. I think the issue here was the 50,000 barrel brewery. Why on earth would anyone come out of the gate with that much capacity? Just plain financially irresponsible.
     
  9. jesskidden

    jesskidden Poo-Bah (1,747) Aug 10, 2005 New Jersey
    Society

    What happened to the deal with Atwater to "share" the brewery?
    That and the fact that the orginal Celis was selling 20k bbl/year in the 1990s (bigger than Rogue, Great Lakes and Bell's) probably influenced the decision on the size of brewery.
     
  10. mig100

    mig100 Meyvn (1,276) Aug 3, 2014 Texas
    Society Trader

    That's impressive and crazy to think, but even based on that it's an ignorant line of thinking.

    I can't help but wonder if the family was oversold on it, and taken advantage of by either business partners and/or vendors. Or the goal was quick acquisition. Either way, a terrible move.
     
    KarlHungus likes this.
  11. stevepat

    stevepat Zealot (556) Mar 12, 2013 California
    Trader

    was the brewery they bought custom built or did they buy an already existing brewhouse?

    If the latter there seems like more wiggle room for loose secondary income streams planned that didn't come to fruition. If the former then it definitely seems like someone got upsold hard
     
  12. afterexile

    afterexile Initiate (116) Nov 29, 2005 Pennsylvania

    I too was excited to see that the family was bringing it back & disappointed in not seeing any around my area.. I wish them all the best. My memories of Celis White before Miller bought it was a perfect beer. Absolutely delicious. The beer that built Blue Moon.
     
  13. SunDevilBeer

    SunDevilBeer Defender (622) May 9, 2003 Massachusetts

    That's a shame. Fond memories of enjoying the original Grand Cru when I lived in TX, was looking forward to trying it again.
     
  14. jesskidden

    jesskidden Poo-Bah (1,747) Aug 10, 2005 New Jersey
    Society

    Doing research on a slightly different topic, came across an article from a Texas paper before Celis opened in Austin (snip):
    [​IMG]
     
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  15. honkey

    honkey Zealot (550) Aug 28, 2010 Arizona
    Society Industry

    Out of curiosity, has anyone done a side-by-side with their Wit and Hoegarden? I’ve heard from several people that they’re the same recipe.
     
  16. mig100

    mig100 Meyvn (1,276) Aug 3, 2014 Texas
    Society Trader

    Interesting, and that original brewery failed miserably. Instead of trying to keep the new venture small, manageable and profitable... they made the same mistake again.
     
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  17. jesskidden

    jesskidden Poo-Bah (1,747) Aug 10, 2005 New Jersey
    Society

    Celis' history is a sad one but few would say it "failed miserably". The brewery went from brewing 6,000 bbl/yr in 1992, reaching their peak barrelage of 24k bbl/yr in both 1996 and 1997 when the were ~57th largest brewery in the US. They were #27 of the old IBS's* "Top 50 Craft Brewing Co." list in 1995 (*pre-Brewers Association).

    Celis sold a controlling share of the business to the Miller Brewing Co. in 1995, looking for financial and distribution help. In 2000, Miller bought out the Celis family in April (the original deal allowed for that), only to then close the brewery and put it up for sale by the end of the year - most industry sources assume it was Miller's parent company, Philip Morris which caused the closing.

    Well, I guess I just don't see a 50k bbl/yr capacity brewery as unmanageable or excessively large for the two brewing companies involved. Don't have the financials, but I imagine one builds as large a brewery as one can afford within reason.

    OTOH, the history of "reborn" early well-respected craft brands has not been good - things didn't work out for the new versions of New Albion, Tupper's Hop Pocket, Rhino Chasers and the new owners of Catamount (Harpoon) and Pete's (Gambrinus) eventually folded those brands.
     
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  18. mig100

    mig100 Meyvn (1,276) Aug 3, 2014 Texas
    Society Trader

    This hasn't been the case for years. 50k bbl/yr is excessively large for a craft brewery opening up in 2017.

    I take back failed miserably, but either way, the point is that it didn't work.
     
  19. jesskidden

    jesskidden Poo-Bah (1,747) Aug 10, 2005 New Jersey
    Society

    That's always been the Celis' claim - their current website says:
    ... but, of course, neither Cascades or Willamette hops were commercially available in 1965, so, as with many other brewers, "original recipe" means something other than what one would suppose.

    M. Jackson's take on Celis White in the mid-1990s (so,post Miller's buy-in) was that it was "...very similar (to Hoegaarden)...but perhaps softer, less flowery, and with more fruity acidity." ---Ultimate Beer, 1998 - First US ed.


    Yeah, that does seem to be true generally and in the case of the Celis brewery currently. I imagine they thought, erroneously, that they weren't a "new" brewing company, but reopening an old one with a new facility, and with a partner, Atwater (but haven't found out what happened to that aspect of the deal). Atwater, a few years early in 2013, was planning an even larger brewery in Texas, according to Brewbound at the time:
     
    #19 jesskidden, May 15, 2019
    Last edited: May 15, 2019
  20. dennis3951

    dennis3951 Champion (883) Mar 6, 2008 New Jersey

    When Celis White was 1st brewed in the USA were there any other white ales being brewed here, My friend and I all liked it a lot but it was the only beer of that style around in North NJ.
     
  21. jeebeel

    jeebeel Initiate (163) Jun 17, 2003 Texas

    @SunDevilBeer, the original Grand Cru was also my favorite Celis beer back in the day, and IMO the resurrected version of it that I had earlier this year was not the same quality that I remember. It was too sweet and rich, and difficult to drink more than one (not a problem with the original one). But I know that you would have liked to decide this for yourself, and, yes, a shame that this didn't work out like Celis planned.
     
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  22. SunDevilBeer

    SunDevilBeer Defender (622) May 9, 2003 Massachusetts

    Thanks for letting me know that I wasn’t missing out on much.

    About 5-6 years ago I had the contract-brewed version at a random bar in the Boston ‘burbs that was shipped a few cases. I really enjoyed it, but after that drop (I must’ve drank half of it) , it never appeared again.
     
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  23. CB_Michigan

    CB_Michigan Disciple (357) Sep 4, 2014 Illinois
    Society

    It's interesting to read that article and see how optimistic Atwater's projections were. I don't know what their current production stats are, but this article stated that they were looking to get to 50K barrels in 2018, a pretty steep falloff from what the owner predicted in 2014.

    As for what happened with the Austin deal? Well, they've been rumored to be looking to open places in Chicago, Boston, and North Carolina, but none of those seemed to have panned out either. If anything, it seems like they got blindsided by the shift to local beers. Good for them, I guess, that they didn't dig themselves into a hole by expanding.
     
  24. drtth

    drtth Poo-Bah (3,821) Nov 25, 2007 Pennsylvania

    Blind sided by two things I think. First there is the shift to local as you suggest, and second there is the overall decline in annual sales growth for craft beer. I'd bet the 2014 prediction was based, at least in part, on the 9-10 year history of double digit increases in annual sales for the craft in general.

    https://www.brewersassociation.org/...sociation-announces-2013-craft-brewer-growth/
     
  25. zid

    zid Meyvn (1,266) Feb 15, 2010 New York
    Society Trader

    Celis supposedly described his US beer as the original Hoegaarden recipe. The implication is that the beer called Hoegaarden had drifted over the years due to Celis himself and then by the hand of (what is now) AB InBev. The thing is, Hoegaarden itself is also marketed as "the original" witbier and their story claims that the beer dates back to the 15th century and that Celis wanted to "preserve the original recipe" when he went into action in the '60s... or at the least - Hoegaarden was "inspired by" the beer from centuries past. The combined path of logic could mean that Celis' US beer was what was brewed centuries ago. Of course, this isn't the case, and one shouldn't expect too much validity behind (nor cohesion with) the various marketing that's designed to sell the beers. Before Celis, witbier was supposedly very acidic. People today make comparisons to young lambic. There are conflicting stories about the use of spices. Some claim the spices were there from the monks in the beginning and had ties to gruit. Others claim this started with Celis. @jesskidden - please correct me if I'm making any stupid mistakes.