Nico Freccia, the co-founder of San Francisco’s 21st Amendment didn’t go looking for a new partnership with Colorado’s Funkwerks, and New York’s Brooklyn Brewery. Like some of the best ideas in life, it grew organically.
The beer business is changing rapidly. Big beer companies like Anheuser Busch and Heineken are buying American craft breweries, and with that comes extra capital and big resources. There’s a battle for shelf space, raw materials, and consumer attention, and Freccia knew a change in strategy would be needed to keep up. “If you’re a small brewery, the local demand helps you survive. If you’re a big brewery, you have the cash to weather the storm. If you’re mid-size like us, the waves seem to hit harder,” he said.
Looking at the beer landscape, Freccia needed feet on the street. 21A is in 24 states with 20 representatives. Plus, they recently built a shiny new 500,000 barrel a year brewery to help handle current demand, but also future needs. “It’s time to secure our future,” he stated.
“Craft breweries are inherently inefficient. If we share resources, brain power, and industry knowledge, we can succeed.”
“Brooklyn Brewery comes from an iconic American city and brews iconic beer. Plus they have some of the best international partnerships of any craft brewery,” Freccia said. Brooklyn Lager, a Vienna lager, leads their portfolio. 21st Amendment hails from San Francisco with an all-can line up that leads with a west-coast IPA. “We have complimentary lineup synergies.”
“Funkwerks is a great, niche piece of this puzzle,” Freccia said. “Their lineup of saisons, sour, and American wild ales really create a complimentary portfolio across the three companies.”
Joining forces in order to better compete is not a new idea. Someone just needed to run point on the plan. Brooklyn has the much-needed experience to assume the role.
Whereas 21A has 20 sales reps for the U.S., Brooklyn touts 15 just for New York alone. Funkwerks sells in 7 states, but only has 2 salespeople and they are both in Colorado. As of January 1st, 2018 that all changes. All the sales reps will now work for Brooklyn Brewery.
Pretty much overnight, Brooklyn will have a west coast presence, and 21st Amendment will have access to brewery’s rep army in New York. Funkwerks will soon become a national name also, once the trio forms an incredibly robust network.
As far as 21A and Brooklyn are concerned, they are already 70% aligned with the same distributors in states to which they ship already. “It’s all about finding better efficiencies in each other, not forcing changes.”
Brooklyn is a minority investor in both 21st Amendment and Funkwerks. Freccia tells Beer Street Journal that the cash infusion will serve two purposes: pay down debt and make capital improvements at the San Leandro facility.
Don’t go looking for a new holding company, or new company name. You’ll see all three logos on business cards. “They all look great together,” he said.
21st Amendment has one customer now instead of 100+ distributors across the country – Brooklyn Brewery. Brooklyn will handle the clerical work and the beer orders.
21A built in extra capacity at the San Leandro facility, so you might see Brooklyn Brewery or even Funkwerks being brewed on the west coast, and vice versa.
“This an elegant solution that solidifies our independence,” Freccia said. “Together we are stronger. Together we can succeed.”
Background Image: Carolyn Fong