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Victory & Southern Tier Announce Merger

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Victory Brewing, of Downington, Pennsylvania, and Southern Tier Brewing, of Lakewood, New York, announced today a merger between their two companies. Essentially, they’ve created a holding company called Artisanal Brewing Ventures (ABV) for both companies, and ABV will essentially own both breweries. Here’s how they characterize the newly created entity in their joint press release.

Artisanal Brewing Ventures is located in Charlotte, NC and was formed by Phin and Sara DeMink and Ulysses Management LLC; a New York based family office, with the vision of creating a home for like-minded, best-in-class craft breweries in close partnership with their founders. Ulysses Management was founded 20 years ago by Joshua Nash as the successor firm to the pioneering investment firm Odyssey Partners, LP. Ulysses invests in profitable, well-established companies with tangible, competitive advantages with the goal to build long-term value that benefits all stakeholders. To learn more about Ulysses Management please visit www.ulyssesmgmt.com.

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Here’s more from the press release, which is on Southern Tier’s website:

Having just marked 20 years in the craft brewing industry, Victory Brewing Company (Victory) proudly announces a landmark alliance with Southern Tier Brewing Company (Southern Tier) under parent company Artisanal Brewing Ventures (ABV). As the first major transaction of 2016 within the rapidly evolving craft beer industry, this union presents a new model for craft beer partnerships by preserving brewery independence while pooling deep collective resources.

The new strategic framework between ABV, Victory and Southern Tier provides capital, security and vision for the future. ABV, formed to unify independent craft brewers and distillers, embraces the collaborative craft spirit while administering crucial growth resources. Arlington Capital Advisors acted as exclusive financial consultant to Victory. Wells Fargo’s Beverage Finance group provided capital to support the investment and continued growth at ABV. The transaction is expected to close within the next 60 days.

Under the umbrella of ABV, Victory and Southern Tier will independently operate their breweries, commanding a joint capacity of over 800,000 barrels of potential annual production. This alliance creates one of the largest brewers in the Northeast and ranks within the top 15 craft brewing companies in the United States according to Brewers Association criteria with combined 2015 shipments of over 250,000 barrels. With a world-class roster of complementary beer brands and an even stronger standing in the marketplace, ABV will shepherd Victory and Southern Tier in collaborative sales and marketing efforts to strengthen, support and expand its distributor and retail partnerships. Victory and Southern Tier brands will become increasingly available to loyal and new consumers across their combined markets as a direct result of this union.

“The craft beer community is at its most critical moment since its inception as larger brewing corporations have bought into our grassroots movement, irrevocably changing the marketplace. Like-minded brewers such as Victory and Southern Tier can preserve our character, culture and products by banding together,” said Bill Covaleski, Founder and Brewmaster of Victory Brewing Company. “Allied we can continue to innovate and best serve the audience who fueled our growth through their loyal thirst.”

“Having gotten to know Phin, John and the whole management team, I am more excited than ever about the innovations that lie in our collective futures. One walk through their brewery and I knew that Southern Tier had the same belief in quality and excellence that has driven our culture for 20 years,” explains Ron Barchet, COO of Victory Brewing Company.

The Victory and Southern Tier leadership teams and employees will remain intact. Bill Covaleski and Ron Barchet of Victory, who will become significant shareholders in ABV, will join the Artisanal Brewing Ventures’ Board of Directors. CEO John Coleman and CFO Bill Wild will lead ABV’s management team.

“This is exactly the kind of alliance we imagined when we created Artisanal Brewing Ventures in 2014,” said Phin DeMink, founder of Southern Tier Brewing Company and also a major shareholder in ABV. “This is a concept that was specifically designed by and for craft brewers, so we can focus on the things we’re best at while creating meaningful scale advantages. I’m proud to see this model validated and am grateful that my friends Ron and Bill have become our partners.”

“This is the ultimate craft beer collaboration. It is an honor to be associated with these pioneering entrepreneurs who have been contributing to the industry since craft’s early days,” said John Coleman, CEO of ABV. “I look forward to guiding these two truly great organizations forward as they collaborate, innovate and share best practices.”

“I believe this is a watershed transaction for the craft brewing world. This union of two great regional players preserves their independence and distinct cultures while sharing administrative and management functions to support deeper investment in sales, marketing and innovation,” commented Vann Russell, Managing Director and Founder of Arlington Capital.

This is something that has been in the works for many months. The trademark application for ABV was filed last year, in late August. That suggests that the deal would have been all but done if they’d progressed to the point of getting the new logo trademarked.

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Here’s more from the press release on the two companies.

About Victory Brewing Company

Victory Brewing Company is a craft brewery headquartered in Downingtown, PA. Founded by childhood friends, Bill Covaleski and Ron Barchet, Victory officially opened its doors in February of 1996. Victory’s second state of the art brewery opened in February of 2014 in Parkesburg, PA to serve fans of fully flavored beers in 37 states with innovative beers melding European ingredients and technology with American creativity. In addition to the original Downingtown brewpub, Victory’s second brewpub is in Kennett Square, while Parkesburg recently launched self-guided tours and the third brewpub.

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Bill Covaleski and Ron Barchet.

About Southern Tier Brewing Company

In 2002 Phin and Sara DeMink founded Southern Tier Brewing Company in Lakewood, New York with the vision of reviving the practice of small batch brewing to a region rich in brewing tradition. Following several expansions from 2009 through 2013 Southern Tier now ships over 100,000 barrels annually to 33 states to meet growing demand for Southern Tier’s diverse portfolio of innovative beers that embody the spirit of American craft brewing. In 2015 Southern Tier Distilling Company was formed to create innovative small batch spirits using unique local ingredients under a New York farm-distilling license.

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Sara and Phin DeMink,

Patent No. 1017086A: Process Of Removing Alcohol From And Purifying Beer

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Today in 1912, US Patent 1017086 A was issued, an invention of Henry E. Deckebach, for his “Process of Removing Alcohol From and Purifying Beer.” There’s no Abstract, although in the description it includes this summary:

The process of treating beer consisting of withdrawing it from the fermenting tub, passing heated, compressed air through it, carrying off the air, sending the beer a strainer, returning it from the strainer to the fermenting tub, and continuing the circulation until the beer has been lowered to the desired temperature.

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Asahi Likely To Buy Grolsch, Meantime & Peroni

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Anhesuer-Busch InBev has been trying to sell off their Grolsch, Meantime and Peroni, since acquiring SABMiller last year. ABI confirmed this morning that they’ve received a binding offer to purchase the three beer brands from Japan’s Asahi Breweries. According to Just Drinks, “Asahi has been granted a ‘period of exclusivity’ related to the purchase, which, AB InBev flagged, is ‘conditional on the successful closing of the recommended acquisition of SABMiller by AB InBev.'” The amount offered by Asahi is 2.55 billion euros (around $2.86 billion in U.S. dollars) and which, if accepted, would go a long way toward addressing regulatory concerns about the acquisition of SABMiller by ABI. Reuters also has more about the particulars.

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The Asahi Breweries headquarters in Tokyo, from a trip I took there to judge a beer competition in 2013.

Patent No. 1171306A: Method Of Dealcoholizing Beer

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Today in 1916, US Patent 1171306 A was issued, an invention of William Becker and Daniel Hayden Montgomery, for their “Method of Dealcoholizing Beer.” There’s no Abstract, although in the description it includes this summary:

What we claim is:

1. The herein described method of dealcoholizing beverages, the same consisting in raising the temperature of a charge of such beverage to substantially 167 F., then converting the charge into spray to permit it to give off its alcohol, then raising the charge a ain to a temperature no higher than at rst, then repeating this process, and finally cooling the product and conducting it to a point of storage.

2. The herein described method of dealcoholizing beverages, the same consisting in raising the temperature of a charge of such beverage to not over 167 F., then spraying the’ charge into a sheet and subjecting the sheet to substantially the same temperature to permit it to give off its alcohol, then collecting the charge and raising it again to substantially the same temperature, then repeating this process, and finally cooling the product and conducting it to a point of storage.

3. The herein described. method of dealcoholizing beverages, the-same consisting in raising the temperature of a charge of such beverage to not over 167 F., then spraying the charge into a sheet and subjecting the sheet to substantially the same temperature to permit it to give off its alcohol, then collecting the treated beverage, cooling it, and finally conducting it to a point of storage.

4. The herein described method of dealcoholizing beverages, the same consisting in spraying the beverage, collecting the spray into a flowing sheet and subjecting it to heat to raise its temperature to not over 167 F. and cause it to give off the alcohol, then collecting the beverage without its alcohol vapors and again heating it to substantially the same temperature, then pumping it back and retreating it, and finally conveying the de-alcoholized beverage to a point of storage.

Must have been pretty important given Prohibition was about to start in just a few years.
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Patent No. 123390A: Improvement In Beer And Water Coolers

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Today in 1872, US Patent 123390 A was issued, an invention of Charles Geenen, for his “Improvement in Beer and Water Coolers.” There’s no Abstract, although in the description it includes this summary:

My device relates to that class of coolers or refrigerators which have an interior ice-receptacle, an outer inclosed chamber, in which is placed some non-conducting material or substance, and an intermediate chamber or chambers, in which, and through which, the beer is made to pass directly from the barrel or vessel in which the beer is contained. The object which I have in viewing my device is to furnish a cooler or refrigerator which Shall be portable, cheap, and conveniently handled or moved from one place or position to another in a store or other room, wherever it may be required to use it, and, at the same time, easily attached, by means of pipes, flexible or otherwise, to the barrel or vessel containing the beer which it is desired to cool; but my improvement will be more clearly understood by reference to the annexed drawing, whereon all that I claim as pertaining thereto is very clearly shown, and on Which- Y Figure l represents a perspective view of the cooler as when complete and ready for use. Fig. 2 is a vertical section of the same.

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Patent No. 3425839A: Continuous Beer Making Process Wherein The Wort And Yeast Are Separated By A Porous Partition

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Today in 1969, US Patent 3425839 A was issued, an invention of Michael Alan Pinnegar, assigned to Brewing Patents Ltd., for his “Continuous Beer Making Process Wherein the Wort and Yeast Are Separated by a Porous Partition.” There’s no Abstract, although in the description it includes this summary:

A potable beer is produced by circulating a body of yeast-containing liquor on one side of a partition and maintaining a moving body of wort on the opposite side of the partition. The partition is porous and has a pore size small enough to effectively bar the passage of yeast cells, but allows the passage of the soluble constituents of the wort and the soluble products resulting from the fermentation of the wort by the yeast.

The present invention relates to the production of potable beer by the fermentation of brewers wort by yeast in a continuous fermentation process. The term continuous fermentation process is used herein to refer to a fermentation process, in which brewers Wort is introduced in a stream into a fermentation zone. The stream of wort can be introduced at either constant or varying rates and may be continuous or discontinuous in the sense of being interrupted at constant or varying intervals. However in the generally preferred procedure brewers wort is introduced into the fermentation zone at a substantially constant rate over a substantial period of time e.g. not less than five days.

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Patent No. 878136A: Brew-House Equipment

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Today in 1908, US Patent 878136 A was issued, an invention of Max Henius, for his “Brew-House Equipment.” There’s no Abstract, although in the description it includes this summary:

The gist of my invention lies in centering about a single point on the brew-house floor, on which the entire apparatus employed in producing the wort is located, all the controlling means for governing and inspecting the operation of the different parts, whereby all such means are rendered conveniently accessible to the manipulation and view of a single operator whose position of duty is at such centering point.

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U. Penn Students Win Prize For 9 Times Faster Brewing Process

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I tend to be skeptical of anyone who claims to be able to shorten the brewing process, especially by up to nine times, since brewing is a pretty time-honored process, improved little by little over the centuries. And generally speaking, speeding up fermentation has rarely resulted in better beer. Of course, there was that flourish of decades beginning with the industrial revolution that speeded up that process considerably, but since then things have slowed down to a more manageable pace. But that’s exactly what got the winners of this year’s Y-Prize, from the University of Pennsylvania, the grand prize $10,000, “for developing a process that speeds up the fermentation process in beer production by up to nine times — while maintaining alcohol quality and composition.”

The three winners, Alexander David, Shashwata Narain and Siddharth Shah, are students in the Wharton School and the School of Engineering and Applied Science. They’ll received “$10,000 and the rights to commercialize the technology through their company,” which they’ve named “Fermento.”

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The Fermento Team: Alexander David, Shashwata Narain and Siddharth Shah

From UPenn:

The Fermento team selected microfluidic fabrication technology developed by Assistant Professor of Bioengineering David Issadore as the basis of their application.

The alcohol in beer is the product of yeast, which metabolically converts sugar found in barley and other grains into ethanol. This fermentation process typically occur in large batch reactors, where a concoction of boiled and strained grain liquid, known as wort, is left mixed with a carefully controlled amount of yeast.

This stage is one of the major bottlenecks of beer production. It can take up to three weeks, as maintaining the correct amount of yeast is a delicate balance.

“There is only a certain amount of yeast cells one can directly add to a batch reactor,” Narain says, “because overpopulation causes physiological stress on the yeast cells, which in turn reduces reaction rate. It takes time for yeast cells to grow and reach a critical mass to produce enough beer. Moreover, the concentration of sugar available to yeast cells is limited because in a large batch solutions, yeast cells don’t consistently interact with sugar molecules.”

Capable of delivering precisely controlled amounts of liquids to exact locations in a conveyer-belt fashion, microfluidics present a possible solution to both of these challenges. Yeast and wort can be introduced to one another in microdroplets, providing the optimal ratio for fermentation each time.

“Microdroplets to speed up fermentation have been tried in labs, but none of the technologies so far are scalable,” Narain says. “This patented technology actually makes the process industrially scalable for the first time, and in a financially feasible manner.”

So who knows. According to another report, “[t]heir advisors include executives from some of the biggest brewers in the world: MillerCoors, Anheuser-Busch InBev, Biocon India and Heineken. And say what you will about them, but those beer companies employ brewers who know how to make beer. So there may be something to it. It will be interesting to see what becomes of the idea.

Patent No. 642548A: Bottle-Filling Machine

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Today in 1900, US Patent 642548 A was issued, an invention of Thomas Howard, for his “Bottle-Filling Machine.” There’s no Abstract, although in the description it includes this summary:

My invention relates to machines for filling bottles with beer or other liquids and is designed to provide certain improvements in the construction of the same whereby the bottles may be fed to and removed from the filling devices from either side, the bottle-necks automatically sealed, except vas to the supply tubes and vent-pipes, when the bottles are in the filling position, the supply of liquid to the bottles automatically turned on and automatically cut off when the mouths of the filling tubes are reached, and the surplus liquid in the filling-tubes and vent-pipes automatically fed into the bottles as the latter are being removed from the filling-tubes.

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