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Could Magic Hat be a local beer on the West Coast?

You don’t have to come here to read that Magic Hat is acquiring Pyramid.

It’s here, there and everywhere. Including the possibility that Pyramid will brew Magic Hat beers for the West Coast and perhaps vice versa.

So some stuff you may not have seen, mostly about the business of beer but bound to affect what ends up happening with the beers themselves.

Magic Hat CEO Martin Kelly previously worked for Pyramid (one of many stops on his resume). He left Pyramid in 2004 and shortly thereafter began at Magic Hat. Vermont Business Magazine provided details in a 2006 profile of Magic Hat founder Alan Newman.

Kelly, a self-described “a corporate gypsy,” served time at Coca Cola, Miller Brewing Co, Borden Foods, and was CEO of Pyramid Brewery, a craft beer company on the West Coast, before he came to Magic Hat to develop a five-year plan.

“I had the explicit intention of not being here more than three months,” Kelly said. “But in working through, I became excited about the potential for Magic Hat: the brand, the company Alan had created, and the opportunity for organic growth and expanding. Alan said, ‘Now, don’t you want to stay on and execute the plan?’ And I said yes.”

According to Kelly, who runs Magic Hat under the whimsical title of Potentate, Pilot & Primary Prestidigitator (P4), he has three major areas of focus: “Build the relevance of our existing brands in existing markets and grow market share; continuously evolve our portfolio of beers to keep it fresh, interesting and relevant to our community of consumers; and maintain our methodical expansion into new markets.”

Shortly before he left Pyramid, Kelly closed a deal to take over Portland Brewing, providing perspective by comparing it to agreements such as Anheuser-Busch taking a stake in Widmer and Redhook.

“The craft brewing business is very competitive and changes daily. To stay ahead, breweries must keep moving forward,” he said. “Some breweries have chosen to go the route of aligning themselves with large, multinational, industrial brewers. We believe that approach can stifle creativity and lead to less choice for consumers. Our approach aligns two independent Northwest breweries and retains the creativity and integrity craft brewers are known for.”

But Portland wasn’t particularly independent after Kelly left Pyramid. The Portland brand essentially disappeared, although MacTarnahan’s seems to be thriving.

That’s good enough reason for me to pass on making predictions. Instead I’ve posted a rather long interview with Kelly from 2002. Lots about distribution, but that’s part of the business of beer.

And he also talked the importance of “where.”

“We are local, we are in Seattle. An import can’t be from Seattle, they can’t,” he said.

So if Magic Hat is brewed in Berkeley and sold in Berkeley is it a local beer or a Vermont beer? And which will Californians want?

I don’t know.

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9 Responses to Could Magic Hat be a local beer on the West Coast?

  1. Swordboarder April 29, 2008 at 11:50 am #

    Is Budweiser brewed in Fairfield, CA a local beer? If they ever brew Widmer in Fairfield, does that make it a local beer?

    This is sad news. Mergers start with great ideas of moving brands around into new markets and it starts out wonderful. As time moves, the company starts wanting to “focus on core brands” and we end up losing the new and the interesting for brand recognition.

  2. Stan Hieronymus April 29, 2008 at 12:51 pm #

    I agree that to be local there needs to be more to a beer than “it was brewed nearby.” Tough to define, though.

  3. Sam April 29, 2008 at 12:59 pm #

    I guess it depends, do you consider Gordon Biersch or Rock Bottom local brewpubs in each of their locations? I allways thought the idea of buying local was to support the local community. So if: 1)Widmer were made in Fairfield, 2)you lived in Fairfield, 3) you bought it…you’d be supporting the guys who brew Widmer in Fairfield, ie supporting people in your community and their jobs. That would also be a yes to drinking Bud from fairfield…just check the can and make sure it isn’t from Baldwinsville.

  4. josh April 29, 2008 at 1:02 pm #

    we get pyramid in colorado, and i’d love to get magic hat here based on this merger. going to college in upstate new york, magic hat was always in the fridge.

    now if i could only get gennesee cream ale here…not really.

  5. Stan Hieronymus April 29, 2008 at 1:28 pm #

    I guess it depends, do you consider Gordon Biersch or Rock Bottom local brewpubs in each of their locations?

    Sam – When Rock Bottom began to expand they’d brewed basically the same beer everywhere, same recipes, etc. My opinion, and maybe only mine, is they became much more local when they gave their brewers some autonomy.

    That started with seasonal/one-off beers, but since has expanded. So the stout you get in Chicago doesn’t have to be the same as in Denver.

  6. Sam April 29, 2008 at 7:18 pm #

    I’m pretty sure you’re not the only one. I’m smiling at the degrees of localness cause it can get slippery, but I understand it.

    The issue just brings up the the dilemma everyone small faces…do you stay small and leave your far away fans (west coasters in Magic’s case) thirsty or do you expand to meet demand, even if it means losing a little intimacy with those fans(or being called not local)? Feels like your damned if you do and damned if you don’t.

    What I like about Magic/Pyramid is they’re leveraging geographic locations of the breweries to expand (as opposed to Flying Dog moving completely from one coast to the other). Magic could have expanded their operations in PA to meet demand in the West, but the shipping costs (and enviro impact) would have been much greater.

  7. Jeff Alworth April 30, 2008 at 11:10 am #

    All I know is that it’s bad news for MacTarnahan’s. The new company may keep around the MacTarnahan’s label for the Oregon market, but it has so little juice, I can’t see it surviving beyond that. And I would expect a slow faze out.

    Magic Hat beers are brewed for the New England market, which is not exactly the same as the West Coast market. They might pick up some share just because they have a funky style, but I don’t seem them creating a base here. Certainly not in Oregon. But with Pyramid’s capacity, maybe it does make sense to try to brew something else for our market.

  8. Stan Hieronymus April 30, 2008 at 11:39 am #

    Jeff – I agree. There would probably be a rush to try Magic Hat, but would it stick? And were it brewed at a Pyramid facility would they be using the Ringwood yeast?

  9. Thomas April 30, 2008 at 12:00 pm #

    I think a large part of it is how much do they actively participate in the community. When our local homebrew club had a competition last year New Belgium and Avery were big supporters for helping us. New Belgium has actively run the Tour de Fat in a number of cities that promotes local biking efforts and other charities. Neither of these companies by brewery location fits as ‘local’ but I know I am not alone in my town considering New Belgium one of our local breweries.

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