Austin craft brewer expands by swinging a buyout
Uncle Billy’s in Austin has bought a fellow Texas craft brewery as part of a broader expansion plan.
Bob Leggett, who has owned Uncle Billy’s Brewery since June, plans to announce Wednesday that he acquired the Pedernales Brewing name and is producing its Robert Earl Keen and Lobo brands. Terms of the deal were not disclosed.
The beers are being contract-brewed in north Austin at the Celis facility, which also makes the Uncle Billy’s beers that are packaged for distribution, Leggett said.
The Pedernales real estate in Fredericksburg was sold separately to another buyer, Leggett said.
Unlike other headline-grabbing acquisitions that have sparked controversy when a major brewing company adds a smaller brewery to a global lineup, the Uncle Billy’s takeover involves two companies that combined sell fewer than 10,000 barrels annually.
While it’s too early to say whether there’s a larger trend, the head of the Texas Craft Brewers Guild says local consolidation can have merits.
“In some instances, it could be easier than large-scale expansion,” Charles Vallhonrat said in a statement.
Pedernales founder Lee Hereford said the deal saved his brewery, where sales peaked in 2016 and continued to fall afterward despite winning numerous awards in prestigious competitions. Craft beer drinkers like to try many beers, Hereford
said, and it can be tough to generate repeat customers.
He said the larger Uncle Billy’s sales force and Leggett’s national connections through his Austinbased Artisanal Imports company should help Pedernales in the long term.
“There’s a lot of great beer being made in Texas,” Hereford said Tuesday. “I’m glad that we can continue to be among them.”
When the sale was finalized in January, the Pedernales brewery had already brewed and packaged its last batch. Leggett said production began in the new location two weeks later.
“It was imperative that we get the beers over to Celis as soon as possible,” he said.
Leggett, a longtime importer of primarily Belgian beers, said he was looking to add U.S. craft brands to his holdings when he made the deal for Uncle Billy’s.
That brewery, founded in 2006, had begun canning beers from its original brewpub restaurant location on Barton Springs Drive after legislative changes in 2013 made it possible to sell off-site.
Uncle Billy’s changed its license to production brewery, and by early 2017 needed to expand physically. It contracts to have its beers made at the new Celis site in north Austin.
With Uncle Billy’s focused on pale ales, IPAs and other mostly English styles, Leggett envisions getting new customers with the predominantly German styles of the Lobo beers and the lighter fare sold under the Robert Earl Keen name.
The licensing deal with the Texas singer-songwriter will remain in place, Leggett said, with Keen promoting the beers during shows, autograph signings and other events.
“We’ll present him with opportunities,” Leggett said. “I think he’ll present us with ideas a well.”
The deal also has the potential to extend the geographic reach of both breweries. Uncle Billy’s has a stronger presence in Austin-San Antonio, Houston and Dallas-Fort Worth, for example, while Pedernales has more presence in West Texas cities like Amarillo, Lubbock and Midland-Odessa.
Hereford will remain with the company, leading an expanded Pedernales sales team. His head brewer was also hired in Austin to help make the contracted beer.
Uncle Billy’s now produces about 4,000 barrels annually and Pedernales makes about 5,000 between the Lobo and Robert Earl Keen brands.
Leggett said combining marketing efforts should help all brands grow throughout Texas before the company looks out of state.
Uncle Billy’s is distributed in the Houston area by Favorite Brands, while Pedernales is distributed by Bluebonnet.