January 10, 2019 600 AM
No more beer from out here
FAR WEST TEXAS – The two remaining employees of Big Bend Brewing Co. were in Alpine this week canning the last beer that will be produced, but just for a while, they hope.
“We have two beers already made getting ready to release for distribution,” company vice president of operations Mahala Guevara said Tuesday from the Alpine facility. “A second is brewed but not bottled.”
The Alpine-based six-year-old craft brewery on December 21, 2018 posted on its Facebook page that “with heavy hearts, we announce that Big Bend Brewing Co. will suspend all operations, including taproom sales in the Alpine facility, effective December 31, 2018.”
Things were going so well for “the beer from out here” (Far West Texas) – the company’s catch phrase – that last year it announced plans to expand operations in San Antonio.
Guevara and brewmaster Jan Matysiak, who had moved to San Antonio, had come from the Alamo City to take care of the final canning. The firm’s 14 other employees have been let go.
Guevara and Matysiak readied a new, Brewster County Brand Stout beer – in 600 cans, she said.
“Jan and I drove out here,” and without a distribution system, they’ll load up their cars and take the brew to wholesalers in Dallas and San Antonio who said they would market it, she said. There’s also a 214-can special Valentine’s Day beer already made in hopes that the brewing company’s annual soiree in Valentine will take place on February 14.
“We’re still trying to figure out a small-scale, super-bootstrap Valentine’s Day party,” she said. A series of unfortunate events led to the closure, she said, but there’s hope that the company could rebound.
According to Brewbound, a craft beer news, jobs, and events website, Big Bend Brewing had paid a Canadian firm, Diversified Metal Engineering (DME), more than $1 million in equipment for its San Antonio operation. DME went into receivership in December before the equipment was delivered.
DME’s collapse was just one of the factors that forced Big Bend to suspend operations, Guevara said. The company also struggled to complete a capital raise that was intended to help fund the brewery in San Antonio. That location was slated to open in the spring of 2019 and, in addition to financing constraints, construction delays also contributed to the decision to cease operations, she said, adding that their San Antonio landlord got behind on promised improvements.
“We have been struggling . . . to finalize the capital raise for our San Antonio expansion, and many people who expressed early interest and made pre-commitments had their decisions affected by the changing financial climate of the craft beer sector,” Guevara said.
DME’s troubles, along with slowing growth in the craft beer industry, made it “way more challenging” to secure new investment, she added.
Guevara said the San Antonio project is “at a full stop” until a new investor can be brought on board.
“The brewery is just waiting to be built,” she said, adding that the company holds a 20-year lease on the property. “We just can’t get it across the finish line.”
In an effort to secure new investment, Guevara and Matysiak have reached an agreement with Big Bend founder and CEO Matt Kruger (who has property investments in Marfa) and partner and president
Justin Yarborough, formerly of Alpine, to remain with the company through the beginning of this year.
The company had previously received minority funding from a group of investors that included Dylan Bates — a manager of WC IPA LLC, the holding company that acquired San Diego’s Green Flash Brewing via a foreclosure sale in April — in 2016 and 2017, but the group is no longer invested in Big Bend as last year.
Initial Big Bend Brewing Co. investors Charles Mallory, who owns the Hotel Limpia in Fort Davis and the Holland Hotel and The Maverick Inn in Alpine, and Conrad Wos, divested several
years ago, Guevara told the Sentinel.
DME Group’s financial troubles have left hundreds of North American craft brewery owners who had already shelled out millions of dollars in equipment deposits in limbo.
According to documents filed in the Supreme Court of Prince Edward Island, as of November 22, DME owes more than $13.5 million to the Royal Bank of Canada and other creditors, including brewery clients and about 250 employees that work at its Canadian manufacturing facilities.
DME reportedly would have required an infusion of $3.7 million to continue operations, but the company could not secure additional funding from its bank or from a Toronto-based venture capital firm, which acquired a majority stake in the business in 2015.
“We really needed that San Antonio brewery to open for us to be financially sustainable,” she said, adding that Big Bend had maxed out production at its Alpine brewery and was supplementing its volume by contract brewing at Brew Hub in Florida.
However, she said Big Bend is “particularly vulnerable” because its contract brewing arrangement isn’t financially sustainable over a long period of time.
“Depending on how this shakes out, it materially impacts our project,” she added.
Still, Guevara remains hopeful that Big Bend will still receive its equipment due to the company’s lender, Live Oak Bank, holding a security interest in the equipment.
“I do think there’s a chance that everything works out,” she said. Indeed, there may be reason for hope. The Canadian Broadcasting Company reported that DMC’s receiver plans to bring in some workers to complete existing projects.
The craft beer industry has grown exponentially over the years, resulting in small market share for each brewery. “But we were growing while others weren’t,” Guevara said.
The company’s Facebook post noted that, “we’ve had some tremendous successes: we won the Gold medal in the World Beer Cup for our National Park Hefeweizen (among 30 other medals in 2018!), we’ve built an amazing team, we’ve made delicious beer and shared it with wonderful people, and we’ve worked with some of the best partners in the business. We’re proud of what we have built, and what we have accomplished.” Guevara remains hopeful that Big Bend Brewing will be back.
“We have a real chance to reopen,” Guevara said. “It depends on finding a capital partner. We feel like we created a lot of value in great beers, a solid brand, and have enjoyed a tremendous amount of support throughout the state.”