Make us your home page
Instagram

Tampa's Cigar City Brewing sold to Oskar Blues Brewery in Colorado

Joey Redner has sold controlling interest of Tampa's Cigar City Brewing Company to Boston-based Fireman Capital Partners. JAMES BORCHUCK   |   Times


Joey Redner has sold controlling interest of Tampa's Cigar City Brewing Company to Boston-based Fireman Capital Partners. JAMES BORCHUCK | Times

TAMPA — Cigar City Brewing, the independent brewery that helped put Tampa Bay on the map for craft beer, announced Monday that it has agreed to sell a controlling interest of the company to another craft brewery in Colorado.

Cigar City founder and CEO Joey Redner will remain an owner at the brewery and production will continue for now in Tampa Bay. But more importantly, the acquisition will allow Cigar City Brewing to grow.

The financial partner in the transaction is a Boston-based private equity firm, Fireman Capital.

The firm already backs craft breweries like Oskar Blues Brewery in Colorado, Perrin Brewing in Michigan and the Utah Brewers Cooperative outfit, which includes brands like Wasatch and Squatters. With Cigar City, this collective of five craft breweries from across the country will make United Craft Brews LLC., a holding company that will act as a investment fund.

The opportunity to partner with Oskar Blues sealed the deal, Redner said.

"The main reason for the transaction is that we have reached the end of our runway as a brewery. We are maxed out production wise," Redner told the Tampa Bay Times by email Monday. "I don't like to borrow money and the next phase was going to require massive capital. Oskar Blues has know-how and capacity, but more importantly they have a similar culture. It is no secret in craft beer circles that at Cigar City we have often looked to Oskar Blues as sort of older brothers. We have emulated and learned from them. So the opportunity to team up made sense."

Terms with Oskar and Fireman were not disclosed. The deal is expected to close within 90 days.

"Cigar City has great beer, a great following and great culture. We see them pushing the boundaries and doing creative things on the beer side and now we have a way to provide them with additional resources," said Chad Melis, marketing director at Oskar Blues Brewery. "Cigar City will continue to do what they've always been doing. You'd be an idiot to change that."

Redner, 43, said he's staying on and will have an ownership in the new entity. The sale also allows his father and business partner Joe Redner liquidity for his 44 percent stake in Cigar City, according to Brewbound, an industry publication.

Cigar City Brewing began in 2009, and has grown to produce nearly 60,000 barrels of beer as of 2015. Oskar Blues produced 192,000 barrels last year. A craft brewery is defined as producing less than 6 million barrels of beer a year by the Brewer's Association. For perspective, Anheuser-Busch brewed 125 million barrels.

Cigar City is credited with leading the charge for craft beer in Tampa Bay and around the state. Tampa Bay is now home to dozens of breweries. Redner said that the partnership will provide additional investment for Cigar City's infrastructure and growth in Florida.

"(The sale) means capacity, sales support, technical and operational know-how and capital for growth," Redner said. "It will mean that Cigar City Brewing will be able to get bigger and better and continue to be a part of the Tampa Bay craft beer brewing community."

It's not uncommon for fast-growing breweries to be acquired by capital investment firms as they look for new ways to grow, said Bart Watson, an economist with the Brewer's Association. Last month, Victory Brewing Company in Pennsylvania and Southern Tier Brewing Company in New York merged under Artisanal Brewing Ventures to pool resources. San Diego-based Ballast Point Brewing & Spirits was bought by Constellation Brands in November for nearly $1 billion.

"Most of the country's 4,000 craft breweries aren't the size or the scope of Cigar City Brewing," Watson said. "But this is becoming a new opportunity to grow, especially in the Southeast, which is still considered largely untapped for craft brewing. We'll continue to see more growth there."

Watson said he doesn't see it changing Cigar City's operation or impact in Florida in any way in the short term, at least.

"This is a group that is comprised of other small breweries. It would be very different if Cigar City was purchased by Anheuser-Busch," he said.

Redner said Cigar City was in discussions with Anheuser-Busch InBev and had signed a letter of intent with them late last year, according to Brewbound, but the deal fell a part.

Some Florida craft brewers are unsure how to feel about the deal.

"This has never happened before, so I don't really know what will happen next," said Mike Halker, president of the Florida Brewers Guild and owner of Due South Brewing in Boynton Beach. "It's definitely a trend in our industry right now. All I know is that I have no intention of selling my brewery."

Kent Bailey, founder of Coppertail Brewing Co. in Tampa, said Cigar City's success will help other breweries in the region.

"It will help spread Tampa's reputation for outstanding craft beer to more markets nationwide," Bailey said. "Ultimately that will help the Tampa craft beer scene by generating more beer tourism and by creating more demand for Tampa beer in other states. Florida beer can compete on the national playing field alongside beer from California, Colorado, or wherever."

Justine Griffin can be reached at [email protected] Follow @SunBizGriffin

Cigar City Brewing:

HISTORY: Cigar City began in 2009 with just Redner and his head brewer, Wayne Wambles, making beer at the time. It's now one of the largest breweries in the state, producing nearly 61,000 barrels of beer in 2015.

NO. OF EMPLOYEES: 82

WHERE: Cigar City has a tap room at its production facility in Tampa. The company also brews beer out of Tampa International Airport at a brewpub in airside terminal C.

IF YOU GO: 3924 W. Spruce St., Tampa

Craft beer in Florida by the numbers:

NO. OF BREWERIES: 111, a 146 percent growth from 2011-2014

BREWERIES PER CAPITA: 43rd in the country

ECONOMIC IMPACT: $2 billion

BARRELS OF BEER PRODUCED: 1.1 million annually

GALLONS DRANK: 2.4 per adult of legal drinking age

Source: Brewers Association

Tampa's Cigar City Brewing sold to Oskar Blues Brewery in Colorado 03/14/16 [Last modified: Monday, March 14, 2016 5:44pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Jordan Park to get $20 million makeover and new senior housing

    Real Estate

    By WAVENEY ANN MOORE

    Times Staff Writer

    ST. PETERSBURG —The St. Petersburg Housing Authority, which bought back the troubled Jordan Park public housing complex this year, plans to spend about $20 million to improve the 237-unit property and construct a new three-story building for …

    Jordan Park, the historic public housing complex, is back in the hands of the St. Petersburg Housing Authority. The agency is working to improve the 237-unit complex. But the latest plan to build a new three-story building for seniors will mean 31 families have to find new homes. [LARA CERRI   |   Tampa Bay Times]
  2. Coming soon at two Tampa Bay area hospitals: a cancer treatment that could replace chemo

    Health

    A new cancer treatment that could eventually replace chemotherapy and bone marrow transplants — along with their debilitating side effects — soon will be offered at two of Tampa Bay's top-tier hospitals.

    Dr. Frederick Locke at Moffitt Cancer Center in Tampa is a principal investigator for an experimental therapy that retrains white blood cells in the body's immune system to fight cancer cells. The U.S. Food and Drug Administration approved these so-called "CAR-T" treatments for adults this month. In trials, 82 percent of cases responded well to the treatment, and 44 percent are still in remission at least eight months later, Locke said. [CHRIS URSO   |   Times]
  3. Regulator blasts Wells Fargo for deceptive auto insurance program

    Banking

    Wells Fargo engaged in unfair and deceptive practices, failed to properly manage risks and hasn't set aside enough money to pay back the customers it harmed, according to a confidential report by federal regulators.

    Wells Fargo engaged in unfair and deceptive practices, failed to properly manage risks and hasn't set aside enough money to pay back the customers it harmed, according to a confidential report by federal regulators.
[Photo by Spencer Platt/Getty Images, 2017]
  4. McDonald's soft serve in Florida is made with handshakes and happy cows

    Consumer

    Floridians licked nine million McDonald's vanilla cones last year.

    Calves play with a rubber toy at the Milking R Dairy in Okeechobee, FL. Owners Sutton Rucks, Jr., and his wife Kris Rucks sell their milk to SouthEast Dairies cooperative, Edward Coryn of Dairy Mix in St. Petersburg buys it, transforms it into soft-serve ice cream base, and sells it to all the McDonald's. SCOTT KEELER   |   Times

  5. Hurricane Irma thrashed Tampa Bay homes sales in September

    Real Estate

    Hurricane Irma not only downed thousands of trees throughout the Tampa Bay area: It also sent home sales plunging in September.

    This home on Tampa's Davis Islands home sold in September for $5.2 million, making it the priciest sale of the month in the Tampa Bay area.
[Courtesy of Judson Brady Photography]