Stone Brewing's 'True Craft' Venture Is Officially Dead

Discussion in 'Beer News & Releases' started by herrburgess, Jul 2, 2019.

  1. herrburgess

    herrburgess Meyvn (1,100) Nov 4, 2009 South Carolina
    Industry

    "Three years later, Stone has officially confirmed that True Craft is dead, having apparently never made any investments into small breweries. The statement from Stone co-founder Greg Koch is quite opaque, but it sounds like the company was never able to compete in terms of valuations in the way it wanted to.

    'That hasn’t been active for some months,” said Koch, in reference to True Craft, speaking with the website PACIFIC San Diego.'"

    https://amp.pastemagazine.com/artic...ings-true-craft-venture-is-officially-de.html
     
  2. QuakeAttack

    QuakeAttack Zealot (504) Mar 19, 2012 California

    Nice idea, but not surprised, as Stone has obviously struggled with the business side of operations.
     
  3. AZBeerDude72

    AZBeerDude72 Poo-Bah (1,792) Jun 10, 2016 Arizona
    Society Trader

    Stone sure has some hiccups going on lately.
     
  4. beertunes

    beertunes Poo-Bah (6,338) Sep 24, 2007 Kyrgyzstan
    Trader

    Huh? This was ever a realistic thing? Folks actually bought in on the scam? And now, Now!, folks are disappointed?

    So not shocked.
     
  5. AlcahueteJ

    AlcahueteJ Meyvn (1,088) Dec 4, 2004 Massachusetts

    I dunno, it worked out for Sam Adams buying Dogfish Head.

    Probably not the exact same thing, but still...
     
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  6. Domingo

    Domingo Poo-Bah (2,618) Apr 23, 2005 Colorado
    Society

    From the outside looking in it seems like Stone's recent business moves have all been "Fire, Ready, Aim."
     
  7. jesskidden

    jesskidden Poo-Bah (1,853) Aug 10, 2005 New Jersey
    Society Trader

    After two months, that analysis might be a bit premature...:wink:
     
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  8. AlcahueteJ

    AlcahueteJ Meyvn (1,088) Dec 4, 2004 Massachusetts

    Ha, well at least they successfully bought a company, and convinced them not to sell out.

    Stone didn't even make it that far.
     
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  9. muck1979

    muck1979 Initiate (65) Jul 3, 2005 Minnesota

    Long live True Craft?
     
  10. chipawayboy

    chipawayboy Devotee (435) Oct 26, 2007 Massachusetts
    Trader

    Never has a brewery fallen off my radar as fast as stone. Still have a bunch of cellared OG from 12/13 and lots of great memories of course.
     
  11. jesskidden

    jesskidden Poo-Bah (1,853) Aug 10, 2005 New Jersey
    Society Trader

    [​IMG]
    So, the value of my Stone breweriana just went up?
     
  12. VitisVinifera

    VitisVinifera Initiate (124) Feb 25, 2013 California

    I'm sure when it sank in that the world isn't their oyster, as evidenced in Berlin, throwing money around blindly suddenly didn't look so smart.
     
  13. Hoppedelic

    Hoppedelic Devotee (438) Dec 6, 2010 California
    Society Trader

    Not sure I get it. Stone is still true independent craft and they haven’t sold out. If they ever do sell out then yeah those would be pretty fun to have haha.
     
    chrismattlin likes this.
  14. herrburgess

    herrburgess Meyvn (1,100) Nov 4, 2009 South Carolina
    Industry

    I think bc that's the name of the initiative, not just a description of their philosophies
     
  15. JackHorzempa

    JackHorzempa Poo-Bah (4,155) Dec 15, 2005 Pennsylvania
    Society

    From the linked article:

    “…the presumed reclamation of its $100 million fund, might have more to do with the fortunes of Stone itself, which sold its Berlin brewery to Brewdog this April after admitting that they’d bitten off more than they could chew. Was the closure of True Craft as simple as the parent company needing that funding money back?”

    Does anybody know how much money Stone received from BrewDog for the sale of the Berlin Brewery?

    Cheers!

    @StoneBrewing
     
    FBarber likes this.
  16. Hoppedelic

    Hoppedelic Devotee (438) Dec 6, 2010 California
    Society Trader

    I think the name of the venture was “True Craft” while “True Independent Craft” is one of their slogans.
     
  17. jasonmason

    jasonmason Initiate (180) Oct 6, 2004 California

    In other Stone oddities - has anyone ever heard a definitive answer as to why the Bastard beers were spun off into their own brand? I just looked at that Arrogant Consortia site and it only shows Arrogant Bastard, Barrel-aged AB, and that dumb Metallica beer as actively produced. All the other beers listed are basically a boneyard of beers gone by (Double Bastard and variations) or beers that should never have been (Crime, Punishment).

    Was that just another of Stone's withered-on-the-vine projects, or was there ever some grander idea behind it?
     
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  18. herrburgess

    herrburgess Meyvn (1,100) Nov 4, 2009 South Carolina
    Industry

    Greg? That you?
     
  19. Beer_Stan

    Beer_Stan Initiate (121) Mar 15, 2014 California
    Trader

    “The unfortunate fact of the matter is that some of the valuations coming from the buyouts by companies such as Constellation Brands and AB InBev have skewed the market."

    Is he saying that Ballast Points and the like's buyouts sank true craft because other brewery's CEOs are just looking for a payday?
     
  20. BeardedWalrus

    BeardedWalrus Disciple (326) Jun 5, 2018 North Carolina
    Trader

    Is this the reason I can't find any fresh Double Bastard?
     
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  21. VitisVinifera

    VitisVinifera Initiate (124) Feb 25, 2013 California

    I'm sure they could pick up Iron Triangle for cheap. It'll come with some baggage though.
     
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  22. drtth

    drtth Poo-Bah (4,006) Nov 25, 2007 Pennsylvania

    I'd suggest that the over inflated purchases of breweries like Ballest Point gave other brewery owners an inflated expectation as to what a 25% share of their own brewery would be worth.
     
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  23. drtth

    drtth Poo-Bah (4,006) Nov 25, 2007 Pennsylvania

    IIRC they weren't interesting in acquiring 100% of any brewery, only a minority 25% or less share
     
  24. herrburgess

    herrburgess Meyvn (1,100) Nov 4, 2009 South Carolina
    Industry

    I'd probably agree with that...at the time Stone launched this initiative. Currently, however, I'd be willing to bet there are a ton of places that'd sell their soul more or less for some of that $100M. I think this story started with a place in nearby High Point NC looking for just that type of support...and were unable to find anyone at Stone who'd even answer their correspondence.
     
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  25. drtth

    drtth Poo-Bah (4,006) Nov 25, 2007 Pennsylvania

    Roughly when was that?

    Note: If it was after they begain the overly ambitious Berlin venture...
     
  26. herrburgess

    herrburgess Meyvn (1,100) Nov 4, 2009 South Carolina
    Industry

    2016. so, yeah, after Berlin....
     
    drtth likes this.
  27. Prince_Casual

    Prince_Casual Disciple (327) Nov 3, 2012 District of Columbia
    Trader

    I think that's exactly what he's saying.

    Reminds me of what Jerry Garcia said about the Grateful Dead:
    “We've been trying to sell out for years, but nobody's buying!”
     
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  28. Snowcrash000

    Snowcrash000 Poo-Bah (2,200) Oct 4, 2017 Germany
    Moderator Society Trader

    Didn't they stop making Double Bastard in 2017...?
     
    #28 Snowcrash000, Jul 3, 2019
    Last edited: Jul 3, 2019
  29. rgordon

    rgordon Savant (974) Apr 26, 2012 North Carolina

    They were not arrogant enough?
     
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  30. islay

    islay Aspirant (289) Jan 6, 2008 Minnesota
    Trader

    The buyout market for craft breweries has changed markedly since Stone announced the True Craft plan in 2016. AB InBev stopped buying up craft breweries in 2017, and that cessation largely obviated True Craft's raison d'etre. There's not much need to save breweries from that awful fate (sarcasm) of a multi-million dollar purchase by a multi-national macrobrewing company anymore given that such potential buyers largely have lost interest. In related news, the profit potential of large, distribution-oriented craft breweries looks much dimmer than it did in 2016, as Stone knows all too well. The new trend is toward diversifying away from dependence solely on craft beer, such as by producing hard seltzers. Koch is wise to be reducing his craft beer-related holdings, as he did by selling the Berlin brewery, instead of sticking to outdated strategies and doubling down.
     
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  31. QuakeAttack

    QuakeAttack Zealot (504) Mar 19, 2012 California

    I would love to know the answer to this question. If i remember correctly, at that time, one of their brewer's or original owners left and the market direction changed from the original lineup to more of just IPAs to reflect the "I want only IPAs" market at the time. Add the Berlin expansion which seemed to be Greg's baby and Stone seemed to lost it's focus.

    As far as the "True Craft" ventures, I think that it was noble thought, but not really sure the purpose in the brewery industry. In the tech industry, ventures are focused on investing in new companies in your market space or new markets rather than investing heavily in your own R&D. As an investor, you may eventually purchase in the future or just partner. For Stone, I guess the idea was to foster craft beer over macro by providing funding outside of normal channels. There really isn't an innovation aspect, nor do I think that they were looking to purchase those companies. I guess Stone could provide guidance/expertise on distribution, marketing, and other operations, but it appears that they weren't able to really focus on it (whether resources or other).
     
  32. oldbean

    oldbean Disciple (343) Jun 30, 2005 Massachusetts

    You too could still be trying to sell off collaboration beers brewed for the groundbreaking of a venture that has already failed.

    Seriously though, anyone that's doing well enough for Stone to want to invest in them... probably doesn't particularly need money or advice from Stone.
     
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  33. stevepat

    stevepat Crusader (783) Mar 12, 2013 California
    Trader

    This made me think this could be a real interesting venture if someone like stone or Sierra Nevada or new Belgium were to send dedicated scouts to find small but interesting breweries and support their growth
     
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  34. zid

    zid Meyvn (1,333) Feb 15, 2010 New York
    Society Trader

    Stone wanted to keep the "personality" of Arrogant Bastard while allowing Stone to also distance itself from it (personality wise) in order to not be defined by it.
     
    SunDevilBeer likes this.
  35. zid

    zid Meyvn (1,333) Feb 15, 2010 New York
    Society Trader

    Yeah, I remember an interview with Koch a few months ago when he said that True Craft just couldn't come to fruition because of the market realities at the time and how some company evaluations were too optimistic to allow folks to arrive at term agreements.
     
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  36. peteboiler

    peteboiler Initiate (139) Dec 16, 2010 Florida

    I really, really liked 'WUSSIE' from Arrogant Bastard. Sad to hear it is gone...
     
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  37. VoodooBear

    VoodooBear Defender (658) Aug 25, 2012 Puerto Rico
    Trader

    Yeah, a 100 million fund isn't gonna do much when "Friendly Neighborhood Craft Brewery XYZ" that's been open for five years, got a couple of news stories on local media and has a semblance of hype; values a quarter of their "brand" at $50 million. And you have Big Beverage chomping at the bit to pay that and then some for the "privilege" of owning said quarter of that brand.

    This isn't surprising at all.
     
  38. islay

    islay Aspirant (289) Jan 6, 2008 Minnesota
    Trader

    I'm not buying that brewery owners expect massive valuations in 2019. I do believe there was a brief period in the mid-'10s around the time of the realized billion-dollar valuations of Ballast Point and Lagunitas that craft breweries owners' eyes filled with dollar signs, and I'm sure there are some delusional owners still around (often the same folks who still are working against common sense on massive expansions). But many owners of distribution-oriented craft breweries already are feeling the pain of legions of smaller breweries nipping at their heels and of flattened craft beer sales, know full well and regret that they missed the peak of the market, and would love to cash out at much lower prices than they might've commanded a few years ago. This is a buyer's market; it's just that there aren't many interested buyers right now, and craft brewery owners have just enough pride and a smidgeon of remaining optimism not to sell at the bargain basement prices that they realistically could draw.
     
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  39. FatBoyGotSwagger

    FatBoyGotSwagger Meyvn (1,364) Apr 4, 2009 Pennsylvania

    Want to see a buyer's market? Wait a few more years and some of these owners will sell for the price of their initial investment, just to cut losses.
     
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  40. oldbean

    oldbean Disciple (343) Jun 30, 2005 Massachusetts

    The thing is, what a makes a business an attractive investment is the potential for rapid growth, but who even wants to grow rapidly in craft anymore?
     
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