Craft brewer survives ‘ big beer’ encroachment

For Dale Katechis, finding the right partners proved key to helping Oskar Blues grow while maintaining its independent spirit

LONGMONT, COLO. Craft brewer Dale Katechis has some beer he wants to sell you. And coffee and doughnuts, bison burgers and tacos. And maybe a handmade bike.

Katechis presides over Oskar Blues, a company anchored by Dale’s Pale Ale and his other Oskar Blues beers available nationwide. It has grown to become the 10th- largest craft brewer in the USA and 18th- largest brewer overall. But without the recognition that going it alone might put the company at risk, that growth — and the ability to experiment with other business concepts — wasn’t certain.

Huge competitors such as Anheuser- Busch Inbev and Miller-Coors, eyeing the public’s fondness for brews from smaller outfits, set out on a wave of consolidation that has made it tough for some craft brewers to thrive.

For Katechis, survival meant getting bigger himself — but finding a way to do it that would allow Oskar Blues to maintain its roots and independent spirit. He credits a series of partnerships for helping the company to become a craft- brewing legend while fending off overtures from multinational conglomerations many craft- beer enthusiasts blame for killing off smaller brands.

“I was a mediocre home brewer, but I loved the puzzle of business, of finding people who did know how to do things right,” Katechis says.

Craft brewing has had a wave of mergers and outright buyouts over the past five years: Goose Island Beer Co. in Chicago and Ballast Point Brewing Co. in San Diego have been acquired by Anheuser- Busch and Constellation Brands, respectively. Heineken owns Lagunitas. MillerCoors has Blue Moon.

Oskar Blues also has expanded by buying smaller breweries. The difference? Those smaller breweries remain largely independent, acting more as partners than brands bought to protect market share. Take the relationship between Oskar Blues and Michigan’s Perrin Brewing. Launched in 2012, Perrin quickly became one of Michigan’s biggest craft brewers before Katechis and Michigan- based business partner Keith Klopcic bought out its founder in 2015. Becoming part of Oskar Blues helped Perrin expand its distribution far beyond Michigan by tapping its relationship with fellow subsidiary Cigar City Brewing in Tampa.

John Stewart, Perrin’s director of brewing operations, said the relationship with Oskar Blues helped Perrin start canning its beers and acquire new ingredients, such as hops or malts, they might not otherwise been able to track down. “It’s really cool to be able to pick up the phone and have those guys on your team.”

And as craft beer gets increasingly competitive, Stewart said the financial partnership with Oskar Blues is “going to be vital, really. You’re either going to have to be really, really big, or you’re going to have to have these types of partnerships.”

Today, Perrin distributes in Colorado, Florida and New York City, and its sales volume leaped from 12,000 barrels in 2015 to 23,500 barrels last year, and a predicted 30,000 to 40,000 barrels this year.

“I don’t want to say it was as easy as turning up a light switch, but it made the task much, much quicker and easier,” Klopcic said.

Visiting the headquarters, it’s easy to see Oskar Blues has managed to scale up without losing its sense of self. An underdog spirit is everywhere: A sign dubs the building the “Anti- Corporate Headquarters,” even though 900 people now work for the company. Dudes on skateboards zip around the brewery. Without the bureaucracy of many large corporations, the company has been able to experiment with new businesses. Tucked into a spare room a couple of guys are roasting and tasting coffee for the company’s new Hotbox Roasters, a standalone coffee- and- doughnut shop in Denver. The company also has CHUBurger restaurants, which are fast- casual burger restaurants, and a CyclHOPS Mexican Bike CANtina, which combines bikes and beer.

These days, the company is majority- owned by Boston- area investment group Fireman Capital Partners. Fireman’s investment allowed Oskar Blues to expand its brewing capacity and to buy Perrin and Florida’s Cigar City Brewing. Each brewery remains run by its local managers, with input from Fireman’s Dan Fireman and Katechis. Under the craft beer industry’s Brewer’s Association guidelines, Oskar Blues remains a craft brewer because it’s owned by a private equity firm, not a multinational conglomerate brewer.

“No one brewery is the same. I think that they very much respect the culture and what made that beer successful, and they’re hyper- focused on having that remain intact,” Fireman said. “Dale really built this brand by focusing on people and being relevant in the local market.”

Fireman sees Oskar Blues as a safe harbor for smaller brewers who want to maintain their independence while benefitting from the resources and expertise of Katechis and his crew. “We go out of our way to understand their culture and empower them to keep creating,” he said.

Back in Longmont, Katechis is working hard to maintain the anti- corporate culture that has gotten Oskar Blues where it is today. He’s already eyeing his next venture, canned wine, and remains open to additional partnerships with the right small brewers.

“There is an authenticity and passion to what we do because we are living it,” he says. “We all understand that we have to make a buck, but at the core, that’s not what we focus on. We did what we thought was important and figured the money would come. And it has.”

“There is an authenticity and passion to what we do because we are living it.” Dale Katechis

TREVOR HUGHES, USA TODAY Oskar Blues founder Dale Katechis, outside the company’s Anti- Corporate Headquarters in Longmont, Colo., is eyeing his next venture, canned wine.