10 Barrel Brewing Co. One Year After Its Sale To A-B InBev

About one year ago the news broke that 10 Barrel Brewing of Bend, Oregon had sold its brewing operations to the world’s largest brewer, Anheuser-Busch InBev. Since the news of this sale went public on November 5, 2014, many in the craft beer world were shocked about this business transaction. Many rumors circulated on what would happen to the brewery’s beer quality and its talent pool of its “Rock Star” brewers consisting of Jimmy Seifrit, Tonya Cornett, Shawn Kelso and the then recently hired Whitney Burnside.

One year later all four brewers are still employed by 10 Barrel and with this investment from the multinational company A-B InBev, most of the brewery’s other employees stayed on as well. With its growth the brewery is now up to around 60 employees at its 18th Street Brewery in Bend. In the last few years there was already a 10K square foot addition added to the original 15k square foot production facility that opened in 2012. In the coming year there are much larger expansion plans in the works. To learn more about these plans I was recently treated to a trip to Bend along with a few other beer writers to visit with the brewers and management team at 10 Barrel to learn more about what the future holds for this brewery that now falls under the A-B InBev umbrella of brands.

When the group of writers met up with two of 10 Barrel’s original three co-founders, brothers Jeremy and Chris Cox, it was quite evident that the brother’s casual demeanor has not changed all that much. We quickly learned that both of A-B InBev’s Pacific Northwest brands, 10 Barrel and Elysian Brewing, are both now distributed in the New York City market with the cost of its kegs in the $225 range. Both brands wanted to be accessible to its U.S. corporate offices of its parent company. In recent months 10 Barrel has expanded its distribution to California, Colorado, and areas of Nevada along with its core Oregon, Washington and Idaho distribution.

And it’s not this expansion into new markets that is driving the sales at 10 Barrel. When reviewing the latest Oregon Liquor Control Commission sales report of beer sold in Oregon by Oregon breweries the amount of beer sold by 10 Barrel has increased since its sale to A-B InBev. The latest numbers available are for August 2015 and comparing these numbers to those from August 2014 its amount of barrels sold year to date increased from 17,091 in 2014 to 22,847 in 2015. To put this into perspective during this same time frame both Craft Brew Alliance (Widmer, Redhook, Kona) and Deschutes Brewery both saw declines in year to date sales within the state of Oregon.

With this extra distribution means that the current 10 Barrel production brewery is about to be maxed out at 70K barrels per year. With its new financial backers 10 Barrel will now build a new 50K square foot building in the neighboring vacant lot to the south of its existing facility. This new building that will be twice the size of its current facility will be home to a brand new Krones Packaging line, larger cold storage and a few other treats such as a new tasting room. The existing building will continue to house the brewhouse and additional fermentation tanks that will bring up its capacity to 120K barrels per year.

This investment isn’t something that is being taken lightly as $15M will be sunk into the new building. The new Krones Packaging line will be a drastic improvement from its current packaging line. Once online next summer, 10 Barrel will be able to package various bottle sizes including cork and cage bottles all on the same line as packaging various size cans all the way down to an 8 oz size all in a 1.5 hour changeover window. The brewery is also in the process of replacing its 50L (13.2 gal) kegs to more common larger ½ Barrel (15.5 gal) keg that will assist in cleaning up its price book.

Even prior to this new phase there has been a considerable amount of money invested in its current Bend facility including a $250K QA/QC Lab. In the past most of the local Central Oregon breweries relied on assistance from Deschutes Brewery when the need arose to analyze a beer. Now 10 Barrel is in the position to offer the same service to the ever-growing number of Central Oregon breweries.

Speaking of money the Cox brothers simply stated that money is now not an issue as A-B InBev is open to anything 10 Barrel needs or wants. “If its good for the brand lets do it,” states Chris Cox. He even goes on to mention that they have no budgetary restrictions now. I somehow question that rationale as there must be a bottom line that has to be met just as in any other brewery.

Its not only the brewery that is being reinvested in as after the acquisition took place last year many of 10 Barrel’s brewery employees received pay increases and benefits. This also meant that the Cox brothers along with their other co-founder, Garrett Wales, now have a boss to report to and that person is Andy Goeler, CEO of craft at A-B InBev. Goeler is the one that is going after the craft breweries that A-B InBev has been adding to its portfolio.

There are quite a few things in the pipeline for 2016 at 10 Barrel. As Chris stated, “We want to sell our brand everywhere.” This also means that since the Bend brewery is approaching capacity that now one of its beers, Pray For Snow, is jointly being brewed at A-B InBev’s Fort Collins, Colorado Budweiser brewery. Pray For Snow is still being brewed in Bend but with its potential growth in Colorado that is one beer that the Bud plant could brew and brew correctly. When pressed about any other varieties being brewed at non-10 Barrel facilities Seifrit mentioned that these larger brewing facilities are just not currently set up to brew hop forward beers.

Speaking of hops, 10 Barrel is still working on its existing hop contracts that are only mildly supplemented by A-B InBev owned Elk Mountain Farm in Bonners Ferry, Idaho. When asked Seifrit stated, “Only about 7% of our hops are coming from Elk Mountain.” 10 Barrel also continues to use malt predominately from Great Western Malting and not the house malt from Anheuser-Busch.

But probably the news that will be a delight to many craft beer fans is that the brewery’s coveted Crush series under the direction of Cornett, will be packaged in 4-pack 11 oz clear “Stubby” bottles beginning with Cucumber Crush in April 2016. This will eventually lead into additional varieties including Apricot, Lemon and Strawberry. For fans of the Crush series from outside the state of Oregon you may be out of luck as the initial launch will only be within the Beaver State.

However this is not the only new project that Cornett has been working on in her R&D brewery. She has also been working on a cider during the past two years. It was Cornett that approached the original ownership prior to any A-B InBev involvement and wanted to develop a cider that is, “As approachable as possible.” 10 Barrel will purchase the apple juice from an outside source but will ferment this dry cider on site in its Bend production brewery. The targeted plan is for 6-pack 12 oz bottles come Spring 2016 and to distribute the planned 6.5% ABV cider throughout its entire distribution footprint.

In other news the 10 Barrel management team still considers itself in the pub business and has plans to open its next pub location in Denver, Colorado. They are currently negotiating a the lease for this potential property. As Jeremy Cox puts it, “Pubs are a huge piece of the brewery.” He hopes to see expansion with pubs into California in the future. And for those of us in Portland, the rooftop deck is still coming to the its Pearl District location with an updated goal of a Spring 2016 opening.

Tonight, Tuesday, October 27, the 10 Barrel crew including 75% of its “Rock Star” brewers will be at Belmont Station from 5:00 to 7:00pm. In attendance will be Jimmy Seifrit, Shawn Kelso, and Whitney Burnside along with founders Jeremy and Chris Cox for an evening of rare beers from all three 10 Barrel locations. Tonight’s taplist will feature Big Daddy Fresh Hop IPA (Boise), Idahop Fresh Hop (Boise), Bine Plucker Fresh Hop (Boise), Apricot Crush (Bend), and Pearl IPA (Portland).

Here are more photos from 10 Barrel Brewing and its Bend production brewery……