In the second such deal in a week involving a venerable local craft brewery, Magnolia Brewing has been sold to New Belgium Brewing Company, the makers of Fat Tire. The deal, as the Chronicle reports, comes out of bankruptcy proceedings at Magnolia that we first learned about in late 2015, and it follows quickly on last week's news that iconic SF brewery Anchor was sold to Japan's Sapporo Holdings. The purchase price for Magnolia: $2.7 million.
Founded out of its flagship brewpub at Haight and Masonic, Magnolia was one of the early upstarts in the local craft beer scene that took shape in the last two decades, following its opening in 1997. Founder Dave McLean began brewing house beers, often in the English styles he prefers, out of the basement of the brewpub, where production of about seven barrels a year continues to this day. In 2014, Magnolia expanded with a larger brewery, pub, and BBQ restaurant in Dogpatch where they have a capacity of 30 barrels, but thus far the company stopped short of any mass-market bottling effort with its beer, sticking instead to selling growlers out of its brewpubs and at places like Whole Foods.
At the time of the 2015 bankruptcy filing, McLean told the SF Business Times that his was a "cautionary tale for growing food and beverage businesses in the Bay Area," and he said the move was necessary despite the fact that "Our two restaurants are busy, sales are strong, and we're seeing really great growth in our beer distribution." McLean implied that one of the biggest obstacles was growing competition.
A similar fate befell Speakeasy Brewing earlier this year, which underwent a quick expansion in recent years only to declare themselves financially insolvent and briefly shutting down in March. The business was quickly snapped up, however, by new owner Hunters Point Brewery, and that sale was made official in May.
Business will continue as usual for Magnolia, however McLean is being replaced as head brewer by Dick Cantwell, founder of Elysian Brewing, though McLean is expected to work side-by-side with Cantwell, as Eater reports.
With a capacity of one million barrels a year between their two facilities in Colorado and North Carolina, New Belgium is still considered a craft brewer by the industry, but obviously one at a different tier than Magnolia.
New Belgium founder Kim Jordan tells the Chronicle, "Dave and Magnolia are great friends of ours. They’re venerable in San Francisco and have a lot of heritage." There's a hint that Jordan wants to bring a New Belgium operation to San Francisco, and also part of the deal is a partnership with Belgian brewery Oud Beersel, which is expected to collaborate with McLean and Cantwell on a series of "spontaneously fermented beers" under the Magnolia label.
In any event, long live Magnolia!