MIDDLEBURY — Bridgewater Corners-based Long Trail Brewing Co. is on the verge of acquiring Middlebury-based Otter Creek Brewing and Wolaver’s Certified Organic in a deal expected to make the Exchange Street brewery more financially stable and competitive.
The transaction, which Long Trail Co-owner and President Brian Walsh said should be completed by the end of the year, will allow Otter Creek Brewing to keep its Otter Creek and Wolaver’s Certified Organic brands and will not result in any job losses at the Middlebury brewery. In fact, the more affluent Long Trail will be able to infuse Otter Creek and Wolaver’s with more resources to strengthen its marketing and production capacities to a point where the local brewery may be able to add workers in the future, officials said.
“From our perspective, this is a great deal,” said Bill Hill, Otter Creek/Wolaver’s vice president and chief financial officer. “This will allow us to compete more effectively in a more dynamic craft beer landscape.”
Meanwhile, the acquisition gives Long Trail more production capacity and greater penetration into the craft beer market. Together, Long Trail, Otter Creek and Wolaver’s will be able to generate a combined total of 100,000 barrels of beer each year (Long Trail produces about 76,000 barrels and Otter Creek about 25,000). That gives the expanded operation a 7.5-percent share of the beer market in Vermont and places it among the top 15 craft beer producers in the nation, according to Walsh.
“We’re very excited about that,” he said of the added clout and capability Long Trail will get by adding Otter Creek Brewing and Wolaver’s to its portfolio.
Walsh said the Otter Creek/Wolaver’s acquisition makes sense for Long Trail on several fronts.
First, he noted an increasing trend of mergers among brewers — such as SABMiller Brewing and Molson Coors. Competing against the larger companies is becoming increasingly difficult for the smaller brewers.
“The craft (beer) industry is growing and we have to grow with that business,” Walsh said. “Business has gotten a little more competitive.”
Another reason the deal appealed to Long Trail officials is because of Otter Creek Brewing’s “green” practices. Wolaver’s was one of the first companies in the nation to produce certified organic ales.
“That really matches up with Long Trail,” Walsh said.
Long Trail has itself espoused an “ECO Brew” operating philosophy through which it practices environmentally sensitive brewing. Those practices include water conservation; recovering and reusing heat from the beer making process; offering free spent mash to local dairy farmers for cattle feed; and sourcing a large portion of the company’s electricity needs through the Central Vermont Public Service Corp.’s Cow Power program. Cow Power features energy made through a special process on some Vermont farms through which methane from manure is converted into energy.
Long Trail’s ECO Brew program earned the 2009 “Vermont Governor’s Award for Environmental Excellence.”
Otter Creek Brewing has also recycled heat, provided spent grain to farmers, used biodiesel, and purchased locally grown ingredients whenever possible for its beer.
Walsh added another good reason for the merger of the companies: Transportation. Long Trail beverages are currently distributed throughout New England, New York, New Jersey and Pennsylvania, for a total of nine states. Otter Creek and Wolaver’s are now available in 15 states.
“We can now take Long Trail and go into six additional states,” Walsh said.
News of the acquisition has been well received by Otter Creek Brewing and Wolaver’s 31 employees, according to Hill.
“They are excited,” Hill said, adding many workers were relieved to hear some false rumors about the deal laid to rest.
Word of the acquisition comes at a time when Otter Creek/Wolaver’s was in the process of making some extensive improvements to the company, in the production, marketing and labeling areas.
“This is sort of a reward at the end of a long trail of turning the company around,” Hill said, adding employees are gratified that they now work at a business that is on a more sound footing.
“This is a company that will be around for years to come,” Hill said. “It’s a company that is financially stronger.”
Walsh said Long Trail has signed a “letter of intent” to purchase the Otter Creek and Wolaver’s companies for an undisclosed price. Some improvements to the brewery are likely to follow after the deal is finalized.
“We would expect, upon closing, to do some upgrades to the brewery to increase the capacity and efficiency of the brewery, as well as do some renovations to create a better office working environment for our employees,” Walsh said.
Otter Creek Brewing/Wolaver’s owner and President Morgan Wolaver could not be reached for comment as the Addison Independent went to press.
Wolaver and his family bought the business in 2002 from founder Lawrence Miller, who established Otter Creek Brewing in 1991.
“It’s gratifying to see the brand continue through all these years and have a great beer in the community,” said Miller, who continues to reside in Addison County with his family, and works in Middlebury as chief executive of Danforth Pewter. “It is encouraging that a strong, well-established company is buying it.”
Long Trail was founded in 1989 by Andy Pherson, who sold the company three years ago to a group that includes Walsh. Long Trail currently has around 60 employees producing several varieties of year-round and seasonal beers.
Robin Scheu, executive director of the Addison County Economic Development Corp., said she is pleased to hear that Long Trail’s plans include maintaining the existing workforce and making the operation stronger.
“If we can keep two companies like this in Vermont financially healthy, that’s a win,” Scheu said. “Wouldn’t it be great if they could expand?”