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Here’s a condensed list of the top 10 most interesting learnings I got out of CBC16 (in no particular order.)  Of course there were a ton more but if I listed them all out I think you all would not read them.

Enjoy and we hope to see you next year.


  1. It’s a struggle and a hassle to Manage Kegs well throughout the ecosystem.—Good thing KegMetrics is now in Beta and ready to rock and roll.
  2. Cambridge Brewing Company Heather Ale is brewed without hops (Heather Flowers) and FANTASTIC!
  3. Gruits: Before the age of hop beers, Gruits filled the mugs. I’m inspired to brew Gruits now.
  4. Marketing 101: Know Who your market is, What they want, Why they want it, When they can get it, How they can get it?—Seems simple but yet so few don’t think this way.
  5. Marketing 101: You can get a media list from the Brewers Association if you’re a member
  6. M&A on Breweries: The general consensus among investors in breweries is that we are not at the top of the market right now for valuations of breweries. Having said that if you are ready to sell, or otherwise exit you don’t want to wait to the top of the market because then you will miss it.  An acquisition can take between 3 to 5 years of the sellers commitment (prep time for sale all the way through transition employment fulfillment).  Management of the brewery is a critical factor in the multiple valuation a brewery might get.  Takeaway:  Invest heavily in your people and process.
    • Specifically, if you look at the number of Permits being filed for, and then estimate where those breweries still in planning will be in two years you can estimate where the market is.
  7. Planning Strategy: If I was opening a brewery today I would:
    • Find where there is a hole in the local market by looking at where permits have been filed and where breweries currently are
    • Sign a lease that guaranteed exclusivity for breweries in the landlord’s buildings within a certain range of my brewery.
    • Establish my strategy for what makes me different and how I can sustain that over the next 5 years.
    • Invest heavily in my people
    • Plan to Export to Korea (apparently they drink A LOT of beer).
  8. Trends that drive up Brewery Values
    • MacroEconomics are Good: Banks are lending and interest rates are low. Debt to equity right now is ~2x earnings which is not what it was 4 years ago.  This fuels growth and drives value up.
    • The Brewery Sector is Solid.
    • Fairly stable and financially healthy breweries.
  9. Free CashFlow and Multiples
    • Free Cashflow (FCF) for a brewery is basically EBIT (earnings before interest and tax)
    • Multiples are about growth. People pay you a multiple of your free cashflow based on many likely future looking factors of your business and acquisition value.  For a manufacturing business multiples can be between 4x and 8x of your FCF.  Note that 8x is super awesome so likely not the case in most M&A situations.
    • Example: EBIT is $5m and a 6x multiple means Enterprise Value= $30m
  10. There’s more than just margin: Stores that only look at margin to judge the profitability of a product are flawed
    • For example: Wine turns about 20 per yr, Beer turns about 40, Spirits are about 12 turns per year.
    • While margin on wine is more, profit is higher on beer because it turns more.



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