The sale this week of Kansas City standout Boulevard to a Belgian firm (no worries, purists – this Belgian firm is Duvel, not InBev) has raised once more the question of what happens next for the early generation of breweries who led the craft beer revolution in the 1980s and ’90s. Already, we’ve seen Fritz Maytag sell his Anchor brewery, and New Albion founder Jack McAuliffe is long retired. Goose Island‘s John Hall decided to sell his Chicago brewery to Anheuser-Busch rather than have son Greg take over.

The Street has an interesting discussion of what all this portends this morning, noting that many of the familiar names in brewing – Ken Grossman of Sierra Nevada, Jim Koch of Sam Adams, Kim Jordan of New Belgium, among others – are nearing retirement age.

“As the folks at American Brewer suggested last year, succession planning is becoming a more pressing issue among small brewers as the pioneers of the microbrew movement consider life after the brewery,” Jason Notte writes in The Street piece.

Companies are taking various approaches. Grossman is bringing his kids into the business. Koch went public and turned his Boston Beer Company into a traditional shareholder-led company. Jordan sold the company to a consortium of her employees.

The website Brewbound, meanwhile, had a great roundup talking to bankers, who say the time for these aging brewers to sell is now and predicting more such deals in the near future. It also catalogs the uneasiness in the beer community, who worry about how to strike a balance between corporate survival for their favorite brands and maintaining that creative, anarchic spirit that drove the craft brew movement in the first place.

“I would say people who were in the ‘Class of ‘88 or ‘89’ should be thinking through issues like this,” Craig Farlie, the managing director of investment banking firm Farlie Turner & Company, told Brewbound. “They have gotten to the point where they have spent 25 years building a business and if they don’t have a coherent plan for succession, they are ignoring one of their primary responsibilities as the architect of the business.”

Here in Sonoma County, we have two of these pioneering breweries remaining: Bear Republic and Lagunitas.

Bear Republic appears to be headed down the same family dynasty path as Grossman, with the torch passing from founder Richard Norgrove to son (and cofounder) Richard.

Lagunitas is a different story. Founder Tony Magee has no kids. And he makes no secret of his disdain for the way people like Koch and Jordan are handling their succession planning.

“It’s a way to cash out,” he told me in a lengthy interview earlier this year.

And he doesn’t plan to sell – ever.

“There’s no plan to sell the business at any point … a few months ago, the largest brewer in the world came here to talk about what our intentions might be. I said, no, there is not much to talk about here,” he said.

“This is my life’s work; Why would I want to turn it into cash?” he said. “I mean, you don’t raise kids to sell ‘em. You raise kids to send them off into the world and continue to explore the future for you. That’s what Lagunitas is going to do.”

But it leaves Lagunitas in a difficult position. As much as any brewery in the country, Lagunitas is dependent on the quirky vision of its founder; in many respects, the brewery’s personality IS Tony’s personality. Tony insists the future leadership will come from the inside.

“I am on the die-on-payroll plan … I am here for the duration,” he said. “It important that a business grown and be healthy because it’s got to outlive me. So there will be a new generation of leaders. Already we’re training and grooming and try to find people who can grow with the company and become its future leaders. It’s already started.”

Tony is 53 now and shows no sign of slowing down. It will be interesting, however, to see how the company’s succession plan looks in another 10 years.

– Sean Scully

UPDATED 3:11 p.m. w/ Brewbound story.

 

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