In 2015 brewing entrepreneur David Bruce received an email from the Seattle-based Elysian Brewing company in the US with the message that the business was to be sold for $35 million and the assumption was that as an investor he would agree to the deal.
He did agree and shortly afterwards $2.1 million landed in his bank account following the brewery’s purchase by AB InBev. This was a decent return on the $45,000 he had invested in the business in 1993. It was made all the more pleasurable because he had largely forgotten about the investment.
It dated back to a time when Bruce was very active in the US and he made a number of investments that helped the fledgling craft brewing industry and also kick-started the brewpub phenomenon, which until his involvement had not existed in the US.
Following his creation of the groundbreaking Firkin brewpub chain – that began with the first pub in 1979 in south London – he did a presentation at the American Homebrewers Association’s Conference in Boulder, Colorado in 1982. To read the speech click here -> Transcript of American Home Brewers Assoc
At this point he says there were only four craft brewers in the US – Sam Adams, Boulder Brewing Company, Sierra Nevada and Anchor Brewing – and no brewpubs.
Bruce says: “The homebrewers were the start of craft brewing in the US and they were clearly brewing at home. I told them that I’d done four brewpubs in London and just brewed on-site and sold straight to the customers. They could not believe it – beer straight from the brewery to the bar!”
In 1992 he returned to the US having sold off the Firkin chain in 1988 for £6.6 million, which left him with £4.6 million after paying off the loans, and he recognised that craft brewing was really taking off. He met with Englishman abroad Richard Wrigley of the Manhattan Brewing Company and found out the business was for sale – for a mere $1 but with $2 million of debt.
He was dissuaded from investing by Manhattan’s young brewer Garrett Oliver who instead suggested sticking his money in Brooklyn Brewery – which he was involved with alongside Steve Hindy and Tom Potter. It had until that point had its beer brewed under licence at F.X. Matt Brewing Company in Upstate New York but the three of them wanted the funds to set up their own brewing facility.
A meeting was convened between Bruce and Hindy and Potter. A deal was struck whereby Bruce would put in $100,000 along with Roger Looker (formerly of County NatWest bank), Gary Pettet (currently chairman of InnBrighton), Tim Thwaites (then at Whitbread), Mike Mills (then FD at Grosvenor Inns), and Colin Herridge (then secretary of the RFU) who also each put in $100,000.
Around this time Bruce also put $450,000 into Wynkoop Brewing Company having seen its founder John Hickenlooper give a talk at an early craft beer conference in San Francisco. He had set up the first US brewpub in Denver, Colorado having worked to ensure the state was the first to repeal the Prohibition act that did not allow for the production and sale of alcohol to be undertaken on the same premises.
“He got the first brewpub licence in North America and opened the first brewpub on his own but he had no money. I put in the money and he opened seven brewpubs while I was the company’s development director. They were all later sold to the employees,” says Bruce.
As an aside – following his pioneering brewpub venture Hickenlooper became mayor of Denver and such was his success that he then moved on to becoming the Governor of Colorado. “He has transformed the bust State of Colorado into a wealthy state. This was from him legalising cannabis from which massive legal revenues are now generated,” explains Bruce.
The last of Bruce’s financial outlays was with Elysian, which generated a more than fair return. The reality though is that overall the investments he has made in the US craft beer scene have been massively more influential than they have been beneficial to his bank account. The US beer scene would arguably not be as vibrant today if it were not for the early efforts of the likes of Bruce and the other pioneers of the time.
Glynn Davis, editor of Beer Insider