ARENA – Tom Porter met Kirby Nelson at a 1999 meeting of the Wisconsin Brewers Guild in the back room of the former J.T. Whitney & # 39; s Brewpub on the west side of Madison.
Deb Carey, the co-founder of New Glarus Brewing Co., was there. So were other heavyweights of craft beer: Randy Sprecher of Sprecher Brewing Co. in Milwaukee, Rob Larson of Tyranena Brewing Co. in Lake Mills and John Zappa, the brewmaster of Stevens Point Brewery.
That night a friendship formed between Nelson, the award-winning brewmaster at Capital Brewery in Middleton, and Porter, who would open his Lake Louie Brewing Co. six months later at Arena. Nelson, after 25 years with Capital, would go to help found the Wisconsin Brewing Co. in Verona in 2013.
Now, the two brewers will work under the same roof.
In what is believed to be the first acquisition of a Wisconsin-based brewing and mortar brewing company by another state-owned craft brewer, WBC agreed to buy Lake Louie's assets and brands. And it occurs as the industry has evolved dramatically, it has become more competitive and as the overall production of craft beer in the state has slowed from its rapid upward pace.
"He has taught me a lot," Porter said of Nelson. "To have us in the same building will be crazy."
But the purchase, revealed exclusively to the Wisconsin State Journal, is just one of the big changes in the store for the WBC.
Expected $ 6 million expansion
In an effort to diversify and grow its business, WBC is planning a $ 6 million expansion and will begin this fall producing non-alcoholic nutritional and health drinks for other companies under contract. The measure could add 80,000 barrels of production per year to the Verona brewery, which in 2018 produced 18,404 barrels of beer for itself and for other beer under contract. That made it the fourth largest craft brewery in the state, according to data from the State Department of Taxation.
But unlike beer, which may take weeks or even months to ferment in expensive tanks, non-alcoholic products can be mixed one day and packaged and shipped to the next. They will also help reinforce the final balance of the brewery in a market filled with dozens of other beers.
Carl Nolen, president of WBC, said the project will add a high-speed canning line for this fall, which will end the beer in trucks at Stevens Point Brewery for packaging and allow WBC to pack a wide range of other products. A second phase could add up to 40,000 square feet of space by mid-2020.
Meanwhile, WBC continues to diversify into a broad range of beverage categories, but not soft drinks. The company will begin production this fall for two companies in the health and nutrition fields and a craft brewery, all outside of Wisconsin.
"We do not only see ourselves as brewers," said Nolen, the former president of Capital Brewery who tried to buy the company before opening WBC with his brother Mark Nolen, Nelson and other investors. "We are a beverage company, everything is on the table.
In the Lake Louie agreement, Porter will retain ownership of its brewing facilities in Arena. He and his three employees, including veteran brewer Tim Wauters, will go to work for WBC and brands like Warped Speed Scotch Ale and Tommy's Porter will still be produced by WBC. The distribution will not change and fermentation and fermentation tanks of 15 barrels of the Arena brewery will be leased to Porter by WBC for the production and research and development of small batches for Lake Louie and WBC beers. Warped Speed, which is sold in barrels, is already being produced in Verona, since it represents approximately one third of Lake Louie's sales. Once the WBC expansion is completed, all production of small lots of Lake Louie and WBC will move to Verona and the brewing team in Arena will likely be sold by Porter.
"We want (Tom) to supervise Lake Louie's production because he's Lake Louie," Nolen said. "We want Lake Louie to grow as hard as we can and innovate and evolve towards different products. Not all agreements have to happen, but agreements that make sense that we want to happen. We think it's a great opportunity. "
Nolen believes that Lake Louie, which does not have a marketing or sales department, could grow to 10,000 barrels from the 3,295 barrels produced in 2018, which represented a 17.6% decrease compared to 2017, according to data from the state Department of Revenue. compiled by Wisconsin Brewers. Guild. That anticipated growth will be achieved through an increase in marketing and sales at WBC, which has a tasting room and its extensive Backyard beer garden that last year combined to attract 100,000 people to the brewery.
The Lake Louie logo will be released on the brewery side on July 1, when the deal is expected to close. Porter, an avid guitarist and collector, will take the stage on Thursday at 6 p.m. on WBC with the band The Growlers to celebrate the deal.
"We are the first to do this, but we will not be the last," Porter said of a state-owned craft brewery with an installation that sells to another state-owned craft beer company. "Quality control is key, but the competition has advanced a lot. When there were 30 breweries, you could be pretty good at this job. Now you have to be crazy-good aircraft pilot. "
Opened in 2000
When Porter opened its brewery in January 2000, there were 1,564 breweries across the country. Today, according to the Brewers Association, there are more than 7,450 breweries with more on the way that offer an unprecedented beer selection for consumers who have abandoned brand loyalty for exploration. The movement, with nearly 180 breweries and breweries in Wisconsin, has also challenged beer companies, regardless of size, to take up space on the shelves of retail stores and coveted in bars and restaurants.
The purchase of WBC in Lake Louie comes less than two weeks after Boston Beer Co. announced plans to buy Dogfish Head for $ 300 million, due to the same market pressures.
"There are many options for consumers, and that's good, but the challenge, of course, is for small and medium breweries to maintain their production level and remain relevant," said Mark Garthwaite, executive director of the Wisconsin Brewers Guild. I'm glad Lake Louie stays at home in Wisconsin, but the most important thing is that (with) the people I know and respect. I think the Lake Louie brands will be in good hands. "
Back in rural Iowa County, the Sand Pines & Sand Barrens State Natural Area lies between the Wisconsin River and the Porter property, which houses its extensive house full of guitars, retro furniture and a growing collection of Japanese betting games Pachinko The only pier on the half acre of Lake Louie, named after his uncle who bought the property in 1989, is under water and the turtles will soon begin to cross Porter's gravel road.
When Nolen arrived last week for a visit, Porter, who can fix every piece of his brewery equipment, wasted trying to find a part for the brewery's filtration system and lamenting the loss of the blue pearl and bass that They died in their lake in the lake. winter. Porter's gazebo was also decimated by the deer.
Porter is about to retire, both knees have been replaced and he is coming out of the successful treatment of prostate cancer. The diagnosis occurred last summer in the midst of negotiations with WBC, which delayed the sale.
"All this was put on hold because when I got the diagnosis, it was not a very good diagnosis," Porter said. "But they put me in treatment and it was amazing and I'm fine, I'm probably going to live another 20 years, so I have to pay my promissory notes."
Porter started Lake Louie after mortgaging his home and collecting his 401 (k) retirement account. He put together a three-barrel brewery in a 576-square-foot storage shed on 18 acres that he bought from his uncle Louie and where Porter built his house in 1992.
After the first year of brewing, Porter took his beer in three taverns in the area and delivered the barrels in his Geo Prizm. Word spread, and by 2002 he was forced to spend $ 650,000 to add 1,500 square feet of space and equipment. He followed it in 2007 with an addition of 1,800 square feet and spent $ 175,000 in 2011 to add fermentation and shiny tanks. That same year, a bottle of Porter's Kiss the Lips API was among the Wisconsin beers served at the White House during President Barack Obama's Super Bowl party.
Now, by selling to the CMB, Porter is entering a new phase of his career, and one that he hopes will grow into his beloved brands.
"The old line that I've been using for some years now is that" Oh, yeah, there's a new brewery in Wisconsin every month, but you do not see them pouring more concrete into the liquor store, right? " # 39; They're not adding, "said Porter." You have to keep the presence in. And that's where all this marketing knowledge comes in. If you're cool, great, if you're not, you're done. "