A partnership between Firestone Walker Brewing Co. and Belgium-based brewery Duvel Moortgat will allow the craft brewery to grow in Paso Robles and eventually distribute to more locations in the U.S. and even abroad, co-founder Adam Firestone said Friday.
Firestone Walker announced Thursday that it will combine its company with Duvel Moortgat, which has acquired other U.S. craft breweries. But this transaction, Firestone said, is not an acquisition or even a merger. “We called it a combination for lack of a better description,” Firestone said. “They’ve committed importantly to major capital that lets us grow.
“Truly, making beer is expensive, and the equipment is expensive,” he added. “We just didn’t want to partner with a banker, and we felt if we could have a relationship, we wanted it to be with a brewer — someone who understood us and what we’re all about.”
Firestone Walker, which has operated on the Central Coast since 1996, said in a news release that it will continue to “operate independently in Paso Robles under its current leadership of David Walker and Adam Firestone.”
Premium content for only $0.99
For the most comprehensive local coverage, subscribe today.
Firestone said there are no plans to merge distribution companies or sales teams. There will, however, be a sharing of skills and connections that could benefit both brewers: For example, Duvel gets a better rate through a glass supplier in the Midwest, and the Belgian brewer is interested in tapping into Firestone’s hop providers.
“The most important thing that we can do for Firestone Walker is to help David and Adam manage the exponential growth that their team and their brewery is experiencing right now by providing financial and production capacity to support them,” Simon Thorpe, president of Duvel Moortgat USA, said in a news release.
Firestone Walker will be the third U.S.-based craft brewery to combine operations with Duvel, founded in Belgium in 1871. Duvel has owned Cooperstown, N.Y.-based Brewery Ommegang since the early 2000s, and in 2014, the brewery acquired Kansas City, Mo.-based Boulevard Brewing Co.
Other San Luis Obispo County brewers saw the collaboration as a positive step.
“It should make Firestone stronger on some levels and really strengthen Duvel’s West Coast presence,” observed George Peterson, owner of Central Coast Brewing in San Luis Obispo.
“The team up there is strong, and the team that’s going to stay there is going to be strong because there’s no reason to muck with it,” he said of Firestone Walker. “And if it’s truly a collaboration, then full steam ahead.”
Tyler Clark, secretary of the Central Coast Brewers Consortium and owner of The Libertine Pub, said he hoped the move would put a spotlight on the Central Coast’s craft breweries — and perhaps not just on Firestone Walker, which he referred to as “the godfather” of area breweries.
“We’re not a huge market here, and I think people a lot of times look past us,” Clark said. “It validates what we’re doing on this local level.”
“It’s a cool company that they’re merging with,” he added. “It’s not like some crappy, soulless brewery from nowhere that just cares about numbers.”
No financial information regarding Duvel’s investment in Firestone Walker was released Thursday night. Industry rumors put the deal at anywhere from $100 million to $250 million, but Firestone declined to disclose details Friday, saying he did not know where those figures originated.
For Duvel, “there’s certainly a profit motive,” he said. “I hope it would elevate their entire portfolio in terms of all the breweries they own or invest in. We hope to get to Europe one day and fall into their distribution.”
The agreement was signed earlier this week, and the transaction is expected to close later this year. Firestone said the breweries had been talking for about two years: “It was dating. We got engaged maybe three to four months ago.”
In the news release, Firestone and Walker said that Duvel is expected to help Firestone Walker, the 16th largest craft brewery in the U.S. in beer sales volume in 2014, “develop our capacity across the U.S. in a conservative and thoughtful way by consummating a lifelong tie with this family-owned international craft brewer, who continue their commitment to participating in the American Craft Revolution.”
In a statement posted to its website, Firestone Walker elaborated: “Duvel Moortgat’s investment in us is an elegant solution that will enable us to grow within a framework that meets our standards — all without losing focus on the traits that got us here.”
Just a few weeks ago, Firestone Walker received approval from the Paso Robles Planning Commission for a new warehouse and parking space in an approximately $6 million expansion of its campus on the south end of town.
The expansion, which will likely begin later this year, will add 9,000 square feet of office and warehouse space to an existing 19,500-square-foot building, a new 55,000-square-foot warehouse and 39 more parking spaces.
In addition, Firestone said future plans include building a second brewhouse to take some of the pressure off its original 17-year-old brewhouse.
“Two years ago we knew we needed the warehouse, and how do you get there?” Firestone said. “To do it purely on cash flow is really challenging.”
A midsized operation that last year brewed 208,000 barrels, Firestone Walker was established in 1996 in Santa Barbara County and opened in Paso Robles in 2001.
It also owns a location in Buellton, which includes a restaurant and bar, as well as Barrelworks, the brewery’s barrel-aged and wild ale beer project. The company is also expanding into the Los Angeles area with a new taproom and experimental brewhouse in Venice that’s expected to open this year.
Firestone said the brewery will brew about 275,000 barrels this year, calling it the upper limit of what the current operation can produce.
Firestone Walker distributes in 21 states but in time could grow its territory or establish a better presence in some of those states.
For sentimental reasons, Firestone said he would like to expand into Ohio. His great-grandfather, tire magnate Harvey Firestone, grew the Firestone Tire and Rubber Co. in Ohio to become the largest tire manufacturer in the United States.
“We also feel like we want the opportunity to, one day, export some of our high-end beers to Europe,” Firestone said. “I think it would be really cool to have a San Luis Obispo County beer sold in Berlin or Munich.”