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Dick Cantwell and Dave McLean on Magnolia Brewing’s Future under New Ownership

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Earlier this month one of the more unique and creative craft brewery acquisitions was announced as former Elysian Brewing co-founder Dick Cantwell joined with New Belgium Brewing and Belgium’s Oud Beersel to purchase twenty-year-old SF staple Magnolia Brewing. While some saw it as a takeover from rich big dollar players in the industry, others saw it as a second chance for an important brewery struggling to stay afloat after filing for bankruptcy in 2015. Also making the story unusual is Dick Cantwell’s own backstory as a founder of Elysian Brewing and lone dissenter to it’s sale to Anheuser-Busch, also in 2015. A conscientious objector to craft beer buyouts, Dick Cantwell further cemented his status as a hero in the industry and now becomes one of those purchasing another smaller brewer. This story, however, is different as no multi-national conglomerate macro brewer is involved, yet it’s still been met with concern by some fans.

Being a semi-regular at Magnolia Brewing Co. for the last ten plus years and already knowing Magnolia founder Dave McLean and incoming owner Dick Cantwell offered a rare opportunity for me to catch up with them both in San Francisco last week as the deal was being announced.

 

Q: Was the sale forced by the bankruptcy?

Dave Mclean: Yeah. We have been in bankruptcy for 20 months, creeping up on two years. The initial plan was to reorganize our debts in bankruptcy and try to work out payment terms to stretch things out to make sure our debts could be met by cash flow. But it just became impossible, you know we weren’t showing the kind of sales and cash flow rates that could self-fund the bankruptcy exit. So we started looking at outside capital. A company cannot stay in bankruptcy forever and the bank has every right to go like ‘what are you doing? how are you going to get out of it?’ so we felt more pressure because plan A wasn’t really working, plan “B” wasn’t really working so we started to get serious about plan “C” the sales process at the beginning of this year. We engaged with investment banks about potential buyers and I did a lot of outreach on my own and tried to reach out to people who would be a good fit, good stewards for the brand. So ended up in conversations with this group.

 

Q: When did you meet Dave Mclean and have you had an established relationship ahead of the Magnolia sale?

Dick Cantwell: I’ve known Dave for several years.  We’ve run into each other here in SF, but also at events around the country.  We’re also both great friends of Shaun O’ Sullivan of 21A, so also in the same social brewing mix.

 

Dick Cantwell and New Belgium’s Kim Jordan at Elysian’s Great Pumpkin Festival

 

Q: How did the purchase of Magnolia Brewing come about and why not open a brand new brewery without any history or baggage?

Dick Cantwell: We weren’t aware of the bankruptcy situation until just before CBC this year, so Kim and I didn’t have our first conversation with Dave until then.  At that point we mainly talked about what was going on and what he hoped for the future.  I had already been working up a plan with Gert (Christaens of Oud Beersel) to do a brewery/blendery in the area, and while I;d always semi-secretly hoped that New Belgium would be involved with that, it wasn’t until the Magnolia possibility arose that Gert’s and my plan and New Belgium came together on the project.  Gert and I had originally been looking down in San Mateo County, to do more of a farmhouse kind of thing, but we had already decided that we’d probably be more practically situated in either SF or Oakland.  With Magnolia already set up and operating (however strained), and the two locations able to feed each other for variety (which is a scenario I’m very familiar with from my Elysian days), and the ability for New Belgium to play around with both their brand and the collective brand we created, it seemed ideal.  Plus, we love the Magnolia brand and its placement in the Bay Area community.  It seems like a great way for us to come in–not invasively and with respect for what everyone around here has accomplished.

 

 

Q: How did Oud Beersel get involved?

Dave Mclean: That’s something to talk more to Dick about it. My understanding is they had been wanting to do something in America. They decided this fit with the bigger picture.

Dick Cantwell: Actually, the initial discussions that developed into this venture were between Gert and me, about putting together a brewery in the US where we could brew new beers and do blends using Oud Beersel-produced lambic.  He and I worked on a business plan here and there over a period of more than a year, with the location of somewhere in the Bay Area in mind.  First, we had thought of some outlying area, probably south of SF such as San Mateo County, but on reflection, we decided that the larger customer base in either Oakland or SF would be a safer idea.  I know there’s plenty of precedent for breweries in the provinces getting their doors battered down by people eager to buy their special releases, but I think it’s a mistake to make that assumption in your business plan.
What does Oud Beersel get out of it?  The opportunity to do something totally new, and to enhance the profile of the blendery in Beersel for some more sales, sure, but mainly as a leading experimenter and creator of new beers.  If you’ve ever met Gert, you know that while he’s acutely conscious and respectful of Belgian beer culture and traditional lambic production, he’s willing to try some un-traditional methods of wort production, for example, as well as aging and blending.  He’s also extremely collaborative.  Kim and I were at Toer de Gueuze this year, and managed to visit a number of lambic blenderies during the two-day fest.  Unlike the others (where of course we had lots of wonderful beers), Gert had a half-dozen or so collaborations on offer, produced in conjunction with breweries in Belgium, Norway, Italy and the US (Tansatlantique Kriek).  People from each of those breweries were on hand.
So Oud Beersel doesn’t “need” a West Coast facility.  But since Gert hooked up with me, and eventually with New Belgium, and the Magnolia opportunity arose, that’s where it’ll be.

I would like to stress that we will not be producing beer that we will call lambic.  We will be brewing spontaneously-inoculated beers, aging in wood and blending beers using Gert’s lambic, but they will be unique beers not pretending to any tradition that belongs and originates in Belgium.

 

Q: Why does it work for you? what makes it a good fit?

Dave Mclean: They are all awesome beer people and brewers and breweries. What makes me excited about it is the potential to work with people I admire or know or I admired for many, many, many years. To embrace that as a way that Magnolia gets to go forward and get out of bankruptcy and retain all it’s employees and be the brand I have always wanted it to be and steer it along a path and do that with an all-star group of people I admire and like. It’s pretty cool, It works. There has never really been a roadmap for what I wanted to do with Magnolia. I opened a brewpub in Haight in ‘1997 I wasn’t necessarily thinking I was going to make it a bigger brand and distribute and didn’t necessarily mean to attach ourselves to the parallel artisan food movement and tie our food story with the beer story, those things just evolved. So I have just tried to remain over the years, including now, open minded about what Magnolia can morph itself into. Now there is a whole bunch of fun possibilities that Magnolia can become and do and participate in, so it feels like the sky is the limit.

 

Q: How do your particular beer and food sensibilities align with the Magnolia brand?

Dick Cantwell: Dave and the Magnolia folks have put together a great sensibility and expectation as to quality where both the beer and the food is concerned.  Both Kim and I are fairly adventurous cooks, and we appreciate that.  We’ve enjoyed the development of the gastropub movement here and in the UK, and look forward to having input and enjoyment there as well.

 

Q: Was there ever any discussion about it becoming a whole different brand or new name?

Dave Mclean: No not really. They have shown a lot of love and respect for the Magnolia brand and it’s iconic San Francisco status. Most conversations evolved about how to make it all fit together and make the new things additive and make the new things be their own but also supporting the Magnolia identity so the people of San Francisco still have a Magnolia.

 

Q: It’s interesting what is being talked about with the Gueuze/Lambic since you have been on the traditional English Ale and Cask beer, how does that affect the brand, the company and the vision for the beers?

Dave Mclean: So much of that is still TBD. How to make it all fit together, how to make all the stories sing together, be harmonious and all make sense but I think at the end of the day and if I really strip it away and think about at the core what it’s really all about, they are all awesome beer people…and I think we are pretty cool beer people here too at Magnolia. and if everyone’s hearts are in the right place about trying to make really delicious well-made beer and try to do cool things from that perspective we will find a way to make it all work together because that’s what it’s all about, just really good beer.

 

Q: So will you continue with most of the mainstays (cask and traditional English-style ales)?

Dave Mclean: Again it’s all sort of TBD but as it stands at the moment Magnolia has a lot of beers that have become classics for us and certain new beers we do are in the same realm as the classics and I think the idea is Magnolia continues to make a lot of Magnolia centric things, some old, some new. And then side-by-side with that some new stuff, sort of a band that comes together, I don’t want to say supergroup, but it’s a bunch of people coming from separate backgrounds and perspectives and coming together under one roof that ideally the beer drinker is rewarded by just the fact that there is that much going on.

Dick Cantwell: Absolutely.  Dave has fostered a culture of cask–especially at the Magnolia pub–that makes it work: good selection, expert execution, and sufficient customer attention to sell through the beers fast enough to keep them in good shape.  Another bit of ancient history: I wrote what I think is one of the seminal articles on producing traditional cask ale in America (along with Fal Allen, now of Anderson Valley, and Kevin Forhan, now of Flying Bike Brewing Cooperative in Seattle) for Brewing Techniques in about 1993.  And I love Milds, though I’m not sure we need two of them on at all times.

 

Q for Dick: How does Magnolia’s emphasis on traditional English ales align with what kind of beers you would like to make and the Lambic production?

Dick Cantwell: You might recall that I spent 2 1/2 years brewing at Pike Place Brewery in Seattle.  We were one of the first US breweries with access to Crisp malts, and Charles Finkel insisted on the use of traditional English stuff–Maris Otter, Goldings and Fuggles and all that.  I didn’t get so strongly into the American thing until I moved to Big Time (sister brewpub to Triple Rock), and then onward to Elysian, but even then I’d work in English stuff.  I do expect that we’ll compress the English-style beers to allow space for new, more American-style stuff, as well as Oud Beersel draft and whatever we all decide to bring in and produce from New Belgium.  And by the way, there are strong historical ties between the traditions of Belgian sour beer and Britain already.  The Rodenbachs got some of their ideas for aging in wood from Greene KIng, and the very word brettanomyces connotes British beer.  Harmony involves lots of different parts, not just the melody produced in a few voices.

 

Magnolia Smokestack

 

Q: Is it literally all going to be under one roof? I am curious how the coolship is going to be added and if its made in the same space?

Dave Mclean: It’s definitely intended to be here (Dogpatch).

Dick Cantwell: Well, now that all this has actually happened, I can get some current quotes from fabricators for the coolship.  Gert has already alerted me about some available foeders.  We are also talking to the landlords at Smokestack about taking over enough additional space to make room for some of these things, as well as additional public space.

 

Q: Is there any concern about having all those wild yeast and bacteria in this space?

Dave Mclean: I have never been that concerned about that in general with our barrel-aging, there is plenty of breweries that have successfully navigated that, it’s just about having good practices and separate hoses and gaskets. There is a best practice for having multiple things like that going on. There is going to be a lot of procedural stuff.

 

Q: Magnolia has always had a great food program balancing American pub food with British food and it goes well with the beers they have been making. With a new line of Belgian collabs and Lambics does it call for a different menu or perhaps a separate pub or tasting room with it’s own Belgian flair like the Magnolia Smokestack focuses on BBQ?

Dick Cantwell: Easy there!  You’re absolutely right that the introduction of new beer styles representative of other cuisines and cultures calls for some response from the menu.  We’re not thinking yet about another pub, though.  We’ve got plenty to work with for the moment. Plus, Magnolia has never shied away from Belgian styles or other areas of brewing.

 

Q: Who is going to handle the creative aspect of the beer? Is it going to be you and Dick deciding that?

Dave Mclean: A big part of that, an awesome part is that Dick’s back in brewing. He is also someone I have admired for a long time, I have read his books and looked up to as a brewer. I have my Magnolia-centric beer that I would like to stick around and move forward but I also cant wait to have some sense from Dick about what he wants to do and make that happen. I think to be honest I suspect that he will drive and the overall big picture as what this place is doing as far as brewing wise and the new stuff that is intended, and that’s cool. I was talking to Seth the other day about this, just like how amazing the opportunity is if your really into beer and brewing you just gotta keep your ego in check, this is an opportunity for everything we do here to get better through more eyes and tastebuds on the beers and process to the access to raw materials that we may not have. Everything about it is sort of cued up to potentially make it all better including the existing regular beer which is sort of a life-long quest. If you really dive in and say this is what I am going to do with my life, which I have for the last twenty-five years, the last twenty with Magnolia and five years preparing. It’s about the long game, always trying to become a better brewer and make better and better beer. It seems like this presents an amazing opportunity. We will sit down and figure out just what this looks like.

 

Q: What will your particular roles and titles be?

Dave Mclean: I don’t know. I just gotta figure out what I gotta be when I grow up.

Dick Cantwell: I’ve never been one much for titles.  All I ever called myself at Elysian was Head Brewer, since I felt that I lacked the education to deserve the Brewmaster moniker.  Magnolia has Head Brewers at each location, so that designation is taken.  I guess I’ll be the ‘Whatever in charge of brewing operations’.  I will be working with Dave and the other brewers on both old and new beers, coming up with it’s of new stuff cooperatively but also casting a glance at all the recipes.

 

Q: When will we start seeing changes and new beers coming out of Magnolia Brewing and anything in particular we can expect other than the announced Lambics?

Dick Cantwell: The first order of business is doing things the same way with the beers.  Very soon, however, we’ll be making room for some of the other things I’ve mentioned.  Seth, the Head Brewer at Smokestack, is soon to produce a double IPA he’s had in mind.  Then I’ll probably suggest something.  I’ve recently finished up a book on “Eclectic” IPA (IPA containing fruits or vegetables, herbs, spices and wood and sour treatments), so you can imagine I’ll be working stuff like that in, as well as particular styles I just love to make.  I’d like to sneak in some lagers–Dortmunder, Maibock–and some Belgian stuff of my own.  We’ll have a lot of tools to work with, between what Magnolia has already done well, the stuff I’ll suggest, Oud Beersel beers already being produced, New Belgium wood beers (for example) we can ship in to blend (as well as having back-and-forth between the New Belgium and Magnolia brewing staffs), and the spontaneous stuff we’ll be producing down the line.   It’s a lot to figure out and to decide on.

 

Dave Mclean – Magnolia founder at the Dogpatch brewery

 

Q: Does it feel weird not owning the brewery anymore?

Dave Mclean: Absolutely. I have lived and breathed Magnolia, including its startup period the last twenty-five years and I would be lying if I didnt say it was strange but also I am really excited about the direction it is going in. I feel like other people are asking me a lot more ‘are you ok, how do you feel about this?’ more than I am. I am a little sad and it’s a little bittersweet. It’s like a baby of mine that I spent the last twenty-five years and intend to spend my entire life doing that and I hope I still get to do that. It does feel weird, it doesn’t feel bad it just feels kind of weird. But that has been part of the Magnolia story all along and my life philosphy, except change, embrace change, it’s the kind of things that keep you on your toes and keep you honest when you say those kinds of things and then you get into a situation like this where ‘did you really mean that? and if you did than this is kind of a good thing and see where the adventure takes you next’

 

Q: You still own Alembic right?

Dave Mclean: Yeah I am part of it. I own a small stake.

 

Q: I also hear you own a Maltster?

Dave Mclean: Yes I have an even smaller stake in that. But I am active in it’s management. I am super excited about that, we are going to start malting next week. Floor malting in Alameda in the bay area using all California grown barley. That’s a total passion, labor of love thing that I particularly like because I want Magnolia and California to have locally malted California grown grains. Even in a non-malty beer I like the contribution the malt gives. This project, emerald malting it’s called, is an awesome opportunity to be a part of.

 

Q: What is the longterm goal with Magnolia Brewing ?

Dick Cantwell: As we implement all these various projects, we need to be mindful of the market and the industry.  I don’t think anyone has even mentioned anything very ambitious in terms of expansion.  We’d like to add enough in the way of tanks, etc. to have the place run smoothly and be responsive to all the ideas we have and will be developing.  This will be an experimenting brewery that’s quick on its feet.  That’s the beauty of being small.

Founder of The New School and most frequent contributor Ezra Johnson-Greenough has worked in the craft beer industry for almost 10 years, doing everything from illustrating beer labels to bartending at renowned beer bars and breweries like Belmont Station, Apex, Laurelwood and Upright Brewing. He has also had a hand in creating events like the Portland Fruit Beer Festival, Portland Beer Week, and the Brewing up Cocktails series. He is available for freelance consultation in marketing, events, graphic design and branding. Contact: [email protected]

1 Comment

  1. Herlinda

    August 27, 2017 at 1:35 pm

    Very Nice article; glad to see all the new ideas with so much experience behind them. . BTW the new malt house is called Admiral Malt; not emerald. Gives a nod to the old
    Alameda naval base it’s on
    Cheers!

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