Sale Impending, Smuttynose Brewing Owners Take Pride in What They've Built

Jan 29, 2018

Smuttynose co-owners Peter Egelston and Joanne Francis
Credit Jason Moon for NHPR

One of the state’s most iconic brands, Smuttynose Brewing Company, has hit hard times. Earlier this month the company announced it would be put up for sale at an auction after 24 years of craft brewing in New Hampshire.

NHPR’s Jason Moon recently spent an afternoon with co-owners Peter Egelston and Joanne Francis to talk about how we got here and what’s ahead for the company they built. 

He recently joined NHPR's Peter Biello to talk about what he learned.

The transcript below had been lightly edited.

I know there’s an auction scheduled for March 9. Do we know anything about what will happen to the brewery and its employees afterwards?

Not until we know who the buyer is. But co-owners Peter Egelston and Joanne Francis tell me they’ve already had a lot of inquiries from interested parties.

When I visited the brewery last week, I wanted to get an idea of how one of these potential buyers might look at it, so I asked Egelston and Francis to give me a tour.

As we walked around I was really struck by how everything still feels brand new. Their facility in Hampton only just opened in 2014. It has all this state-of-the-art brewing equipment built in Germany and a bottling machine that can put out 300 bottles a minute. And all of it sparkles in a sort of stainless-steel newness.

The facility was also built to the highest standards for environmental friendliness, with locally sourced building materials and LED lights that switch on you as move around the building.

Egelston told me his favorite spot is on the production floor when the bottling machine is running. He says he likes to come down from his office, grab a beer off the line and just watch the machine run.

By the end of the tour we were standing in the shipping warehouse, surrounded by cases of Smuttynose stacked way above our heads. And Egelston, reflecting on everything we’d just seen, says “for the right buyer coming in, this is going to be a great opportunity. I can almost find myself being excited on their behalf,” he adds with a laugh.

“Almost?” I asked him.

"I’ll get there,” he said.  “I’m almost there. Almost there.”

I think that moment captured a lot about where Egelston and Francis are right now -- feeling both pride for what they’ve accomplished and disappointment that the future of the company is now out of their hands.

Credit Jason Moon for NHPR

Did they say more about how things got to that point? This is a very popular brewery, right?

When they first announced the sale in a press release they mentioned the explosion in number of microbreweries as a factor. But speaking to both Egelston and Francis last week they said it was a lot of different things at once.

Egelston says among the factors was a change in consumption habits driven by all these new choices. As more beers pop up around the country, consumers are less interested in finding their favorite beer and sticking to it. Instead, Egelston says, they are interested in finding what’s next. He says it’s a change he really started to notice this summer when was pouring beers at festivals.

“Typically what I do is ask people what beers they enjoyed, cause I want to learn what people are talking about," Egelston said. "And over and over again people would describe a beer that they had just tried, that they really liked. But they couldn’t remember who made it. And I thought, ‘man, that’s not a good sign for our industry. It’s not a good sign for people who want to develop a brand.’”

Egelston says this trend is particularly hard on a medium-sized brewery like theirs, because they need to keep growing into new markets to stay profitable. And he says this shift in the market happened right as they made a big investment in the new plant. So they ended up in a sort of downward spiral where right as they needed to invest in more marketing, they didn’t have a lot of cash on hand to do so.

Credit Courtesy Smuttynose Brewing Company

Smuttynose is known for being a very environmentally conscious brand. Did they regret making some of those investments in green tech now that they’re in this situation?

Definitely no regrets. They said given the chance, they would invest in all the same environmentally responsible tech all over. It’s one of the things they say they are most proud of. They’re proud of how they brew the beer, and of course proud of the beer itself. And as Francis says, they are confident consumers who recognize the quality.

“You know, when people are done trying a lot of other beers from other breweries that may not resonate with them,” Francis says, “they will always say ‘but you guys just make the best fill in the blank’ whatever it is that they love, Old Brown Dog or the Finest Kind. We can proudly stand by everything that we’ve made.”

So they’re approaching this moment with a lot of reflection but I should also say they’re also managing to keep their sense of humor, too. When I asked what it was like to break the news to the staff, Francis responded, “It was super fun -- I wish I could do it again!” with a big laugh.

They say it’s also helped to receive what they say is a huge amount of support from their fans locally and beyond.

What will be their relationship with the company after it is sold?

That really depends on who buys it and what they want to do with it. One possible outcome is that the buyer comes on as a new partner and Egelston and Francis will stay on, and that’s something both say they’re open to. So we’ll just have to wait and see.