Food Service & Agriculture, Manufacturing, and Retail

Perrin is poised for growth

New owner is ready to expand into the packaged beer market.

August 7, 2015
| By Pat Evans |
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Perrin Brewing
Perrin Brewing Co. is situated on 10 acres of land in Comstock Park, leaving plenty of room for expansion. Courtesy Perrin Brewing

(As seen on WZZM TV 13) An 11-week retirement was enough for Keith Klopcic.

The former co-owner of West Side Beer Distributing was unhappy with his newfound freedom after leaving the company to allow his brother and nephews to take control.

“It was nothing other than family planning,” Klopcic said. “I did some soul searching, and the best thing for the business was for my brother to take over and for me to retire.

“It was 11 weeks of me not being a happy dude. You work for so long and you stop. … It didn’t work.”

Before long, Randy Perrin, one of the co-founders of Perrin Brewing Co., began speaking with Klopcic about the possibility of taking over the Comstock Park brewery.

Klopcic was considering the idea and went to talk to his friend Dale Katechis, the founder of Colorado’s Oskar Blues Brewery. Klopcic knew Katechis because West Side Beer Distributing was Oskar Blues’ distributor in the area, and he also had spent time with him when his son was interning at the brewery in Colorado.

Still, Klopcic said he wasn’t aware Katechis had the intention of acquiring a network of regional breweries across the nation on top of his company’s facilities in Colorado and North Carolina.

The two checked out the Perrin operation and soon were saying, “Why don’t we buy it?”

Perrin named his price, and they were able to make it work, Klopcic said, adding the Boston-based private equity firm, Fireman Capital, is acting as the bank for the purchase.

The deal was approved and finalized the last week of July, but Klopcic has run the company for the last three months under an operating agreement.

Terms of the deal were not released, but Klopcic put up a majority of the money and is now president. He said having one of the pioneers of craft beer in the ownership group is great, and a better option than going it alone.

The majority ownership and the jobs of nearly 50 full-time equivalent employees remain intact, Klopcic said.

“It was a good proposition. It was a good deal for Randy and a good deal for me,” he said. “I know business, how to run a business, but I’ve never run a brewery. That’s how Dale has spent his life, so we put the pie together.”

Under Perrin for the first two-plus years of operation, Perrin Brewing has flourished in the draft distributing network in West Michigan, with many tap accounts having two or more handles. The brewery has more than 700 tap handles across the state.

That market penetration means Perrin is one of the largest breweries in the state, brewing 13,700 barrels in 2014.

The previous ownership’s delayed efforts to delve into packaged sales was one of the major pieces that attracted Klopcic to the brewery. The day the deal closed, a canning line was delivered and pushed online to help get Perrin beers to market.

Currently, the brewery is selling a few brands out of the taproom, but on Sept. 14 it will take three brands — Gold Ale, Black Ale and 98 Problems IPA — to West Michigan retailers.

As a former wholesaler, Klopcic understands the value packaged sales can add to a brewery. In light lager sales, the packaged-to-draft ratio is 15-85. In craft, it is split about 50-50, so without beers in retailers such as Meijer stores, he sees plenty of growth ahead. Growth outside of the West Michigan area also is accelerating, he said.

Aside from Portland, Oregon-based Widmer Brothers more than two decades ago, Klopcic can’t point to another brewery the size of Perrin that has relied so heavily on draft sales.

“(Randy Perrin) did a great job building Perrin and taking it to the level it’s at,” Klopcic said. “At least 50 percent of the market we haven’t even touched yet. By opening the packaging, that’s all in front of us and we’re excited about it.”

As they open up the packaging market, Klopcic said the brewery will stick to accessible beers, but the production team, led by brewer John Stewart, also will continue to brew innovative products like No Rules, a Vietnamese porter.

“That’s what sets us apart is we do have accessible beers,” he said. “Everybody can have something.”

As examples he pointed to Grapefruit IPA, which is currently sold in the taproom in cans and likely will hit the market next year, and Blackberry IPA, which is now available in cans in the taproom.

The packaging growth will be aided by several new 150-barrel fermenters arriving at the facility through the next two quarters. Klopcic said he expects the brewery to finish at approximately 20,000 barrels this year and more than 30,000 next year.

Within the walls of the current facility, Klopcic said Perrin can brew up to 55,000 barrels annually, but there’s also plenty of room to expand the facility.

“We are fortunate — due to Randy’s foresight — that we own 10 acres,” he said. “That’s a lot of space. We have a lot of land to work with.”

He said all the increases will be Perrin beer; there are no intentions to brew Oskar Blues beer at the facility.

Klopcic is excited by the growth prospects of Perrin, fueled by the expertise of Oskar Blues.

Beverage industry publication Brewbound reported in May that Oskar Blues — one of the nation’s top 25 breweries — will use investments from Fireman’s to acquire several more craft breweries across the country. Fireman’s also owns stakes in two Utah breweries.

Speculation around private equity firms and plans to take craft breweries public have circulated, but Klopcic said he could not comment on how it would affect Perrin if it were to happen.

Boston Beer Co., maker of Samuel Adams, and Craft Brew Alliance are the only two publicly traded craft beer companies.

In July, it was reported by Reuters that Atlanta-based SweetWater Brewing Co. is preparing for an initial public offering after receiving a minority investment from private equity firm TSG Consumer Partners in 2014. SweetWater is reportedly valued in the hundreds of millions, brewing nearly 200,000 barrels last year, just behind Founders Brewing Co. — No. 17 — on the Brewers Association list of Top 50 Craft Brewers.

Klopcic’s focus is on growing the business. The 11 weeks of retirement allowed him some thinking time, and he’s glad he’s taken on this new role.

“This was something that happened, and I was like, ‘I’ll kick myself in the butt if I don’t do this,’” he said. “I’m re-energized and I’m having a blast.”

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