Deal Book

10 Barrel Brewing Co. partners Chris Cox and Garret Wales described on Thursday events that after nine months ended with Anheuser-Busch buying the brewery in December.

• In 2013, the partners contacted brokers around the country to find a partner with experience and capital to expand the company.

• Anheuser-Busch expressed interest; a broker followed up with a call.

• Three days later, the head of mergers and acquisition for Anheuser-Busch arrived in Bend.

• 10 Barrel offered 25 percent interest in the brewery; Anheuser-Busch wanted “total acquisition.”

• The partners reconsidered after Anheuser-Busch agreed to retain all employees and keep the partners on the job.

• Anheuser-Busch made an offer in late July. “One of the most amazing days of our lives,” Cox said.

• Hours later, 10 Barrel learned that a bottle of Swill, its sour fruit beer, had exploded in Idaho. Next morning, July 30, according to The Bulletin, the partners recalled Swill, believing they had sunk the deal.

• Anheuser-Busch, although not happy with the recall, “respected our decision,” Cox said, “and they stuck with the offer.”

Back in November, when Garrett Wales and brothers Jeremy and Chris Cox announced that they’d sold 10 Barrel Brewing Co., they promised nothing would change.

It didn’t turn out that way.

Thursday evening, before a packed house of about 300 people at McMenamins Old St. Francis School, Wales and Chris Cox said some things have changed: The new owners, Anheuser-Busch, are sinking $10 million into expanding the brewery, along with six new 400-barrel tanks and new hires. And they’ve lost one employee, a sales representative in Seattle, out of about 215.

“There is change,” Cox said. “We’re on record saying, ‘Nothing’s going to change.’ There is change.”

For the first time since they announced the sale, Cox and Wales for nearly an hour publicly shared that story at a Pub Talk held by Economic Development for Central Oregon. With swagger, humor and pints in their hands, they also fielded questions about the transaction that riled thousands of craft-brew aficionados while elevating Bend’s profile in the brewing industry.

“As far as apologizing, I don’t want this to come out the wrong way, but we promised we’d be really honest, upfront and transparent,” Wales said, responding to a question about backlash from the sale. “We feel 100 percent that we have absolutely nothing to apologize for, and never would we apologize for the sale.”

Ringing applause followed from an audience composed largely of business people and entrepreneurs. The brewery profits no longer stay in Bend, but its jobs and paychecks do, he added. Let the beer speak for itself, and if, in six months, the quality declines, Wales said, “shame on us.”

Jessi Lord, EDCO marketing manager, said the positive response to Wales and Cox’s talk surprised her. “It was nice to hear all the support from the room, and I think it’s important for these guys to be there,” she said. “They’re business leaders in the community.”

Lord said the 10 Barrel talk, which was streamed to two additional rooms, drew the largest audience at a Pub Talk for a presentation of its kind. Only the Bend Venture Conference in October filled as many seats, she said.

Friday, Anheuser-Busch announced its purchase of another craft brewer, Elysian Brewing Co., of Seattle. Elysian, maker of Immortal IPA, turned out 50,000 barrels of beer last year. It becomes the fourth brewer in the craft division of Anheuser-Busch, the U.S. arm of the world’s largest brewer, Anheuser-Busch InBev.

“We’re stoked,” Wales said Friday of the Elysian deal. It adds to the stable of brewers and labels that 10 Barrel gets to works with, he said.

Prior to the 10 Barrel sale, which closed in December, the partners were on the hunt for another source of capital, not a buyer, Cox said. Events that ended with the sale began when Bend-based 10 Barrel started selling beer in Portland through an Anheuser-Busch franchisee, Maletis Beverage, of Portland.

“That was, unknowingly, what got us here today,” Wales said. Anheuser-Busch had only recently allowed its franchisees to distribute beers outside its own portfolio. “That got us, early on, when it was a lot more feasible, into that A-B distribution network,” he said.

The brewery will not hang the Anheuser-Busch logo on the building, and will continue to close on snow days so employees can ski, the partners said. “Anheuser-Busch doesn’t really like that,” Cox said, but “they signed up for this game.”

He gave a short answer to an audience member who asked if 10 Barrel relinquished creative control to Anheuser-Busch: “No.”

— Reporter: 541-617-7815, jditzler@bendbulletin.com

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