By Pete Dunlop
For the Oregon Beer Growler
There will be another "new" brewery in Portland early next year. Fat Head’s Brewery, launched in 2014, is slated to close in January. Look for it to be replaced sometime in the first quarter of 2018 by Von Ebert Brewing, which will be operated by current Fat Head’s franchisee, Tom Cook.
News of Fat Head’s closure initially caused a stir in beer circles and on social media. A lot of fans wondered why the apparently successful brewpub would close. In fact, the closure has nothing at all to do with the wellbeing of the business here.
What's actually at work is that corporate Fat Head’s, based in Ohio, has a lot going on in its home market. Rather than continue to focus on the remote Portland outpost, the company and Cook mutually decided to end the franchise arrangement.
“We were unable to agree on a vision for the future,” said Fat Head’s founder Glenn Benigni, “As a result, we’ve mutually decided to close the Fat Head’s location in Portland, pouring our last beer in early 2018. We’d like to say thanks to the beautiful city of Portland and all of the customers who joined us there over the years. It has been a pleasure serving you.”
Cook offered similar thoughts.
“I know it sounds like spin," he said via email. "But this is exactly what happened. They wanted to focus their energies on the Midwest, where they have a lot going on with a new production brewery and the new Canton brewpub. I wanted to focus on Portland. We decided it's probably best for them to pursue their plans in the Midwest and for me to do my own thing out there."
He admits it wasn't an easy decision. The franchise has been highly successful here. Indeed, the success of Fat Head’s surprised more than a few in the beer geek crowd. Many thought an out-of-state chain would quickly collapse in beer-wacky Beervana. It didn't happen.
"I think we succeeded here because we built a talented team and gave it the right tools," wrote Cook, who added current employees will have the opportunity to continue on. "There's no way I would be doing what I'm doing with Von Ebert if my team here wasn’t staying and fully behind me. This wasn’t an easy decision, but I think it's the right decision for everyone."
Von Ebert, when it opens, will specialize in hoppy brews from head brewer, Eric Van Tassel. Sean Burke, formerly of The Commons, is also part of the Von Ebert Brewing team. Burke's talent for making uniquely interesting beers is well known. Cook expects the team to release 100 or so unique beers a year, including American, German, Belgian and barrel-aged varieties.
"Von Ebert Brewing is a new concept, where Northwest family traditions meet innovative ideas in craft brewing,” said Cook in a press release. "We’re excited to unveil a completely new experience for customers, blending our brewing expertise with the adventurous flavors Portland has come to love."
The pub will feature what he refers to as "elevated American pub food." That includes items like traditional German pretzels with beer cheese, stone oven-baked pizzas, cheeseburgers stacked high with locally sourced meats, decadent sandwiches and smoked wings.
"True to our character, our menu will combine classic pub fares with the kind of top-tier quality local ingredients you can only find in Portland," Cook said.
Many in and around the craft beer industry are aware that Cook had quietly planned to open a brewpub in the vacated RingSide Grill space adjacent to Glendoveer Golf Course in Northeast Portland. Evidently, those plans will be more or less on hold until he clears some regulatory hurdles.
"There's more to come on this," he wrote. "I don’t want to comment or give a timeline until I finish with the City of Portland. I would hate to promise something and then learn we can’t do it."
Many wonder about the Von Ebert name and logo. It’s obviously a strong departure from Fat Heads and has no apparent connection to Portland. What’s it all about?
"My great grandmother came to the United States from Germany and her last name was Ebert," Cook wrote. "She gave up quite a bit in Germany to bring my family here, so I wanted to pay some respect to my immigrant family. ‘Eber’ in German means boar, thus the boar in the logo."
Von Ebert Brewing will open sometime in early 2018. Watch for updates on social media or check the company website at vonebertbrewing.com.
By Ezra Johnson-Greenough
For the Oregon Beer Growler
In March, Portland’s Metalcraft Fabrication shut down after facing a federal lien, causing the company’s bank funds to be emptied, according to industry insiders. Owner Charlie Frye acknowledged the bank had closed accounts, but did not address this specifically when asked for comment.
The closure came as somewhat of a shock since Metalcraft was one of the greater success stories in Oregon’s craft beer industry. Co-owner Charlie Frye came from well-established manufacturer JV Northwest to found an innovative brewery-centric fabricator. Metalcraft reportedly made more than 1,000 tanks for businesses in 30 states and three countries in the last 10 years, including equipment for some of our state’s best breweries like Breakside Brewery and pFriem Family Brewers.
Many are left wondering how a company that was once praised by beer makers and business journals alike can suddenly close and see some of its relationships with clients go sour.
Charlie Frye and his then-wife Jen Baque opened Metalcraft in 2007, starting off welding furniture and building facade components before picking up work fixing tanks and equipment for breweries. By 2015, the business expanded by moving into a huge new warehouse to become one of the few U.S. fabricators that could make larger equipment — tanks more than a couple hundred barrels and brewhouses beyond 30 barrels. And just last year, Metalcraft teamed with Pelican Brewing Company to develop a new dry-hopping method. The resulting “Hopinator” received a rave review from brewmaster Darron Welch, who said Metalcraft “perfected a design that was exactly what we wanted. Not every fabricator would have been that patient.”
However, it wasn’t long after that when Metalcraft began scrambling to keep the doors open long enough to finish millions of dollars’ worth of projects.
“A number of factors contributed to Metalcraft’s demise,” said Frye in my original article breaking the closure for newschoolbeer.com, “the greatest one being several unforeseen challenges associated with our expansion.”
Metalcraft entered the brewery fabrication business at just the right time — before the big boom that would become the industry’s largest period of growth, post-2010. Growth was quick and used equipment became scarce, which led to longer lead times and down payments. Industry sources familiar with the matter indicated these upfront down payments ranged from 15-40 percent.
“The company got themselves into a cash crunch,” said Thad Fisco of Portland Kettle Works, another local fabricator that has offered to help finish Metalcraft’s work for clients. “[Metalcraft] ignored some basic fundamentals to maintain cash to finish deals. You begin to burn those deposits to finish projects that were contracted previously.” There are no rules against operating this way.
According to Fisco, this is “unfortunately not an uncommon occurrence in the manufacturing industry.”
The practice of taking on new jobs and even discounting them in a mad dash to use that money to finish past work that may not have even gotten underway “unintentionally turns into a Ponzi scheme.” Fisco says this is a critical issue for the industry overall and one that he expects could cause a few more fabricators to go bankrupt.
You might be wondering if this has anything to do with the unsustainable growth of the craft beer industry. Yes, a little. As brewers get bigger, and some more desperate to compete, they may plop down huge sums of money upfront without checking a fabricator’s creditworthiness.
Meanwhile there is mounting competition from China where fabricators routinely offer a cheaper but lower-quality product. Some American companies have even stooped to selling Chinese equipment and marketing it as U.S. made, according to Fisco. However, the larger the tanks, the higher the shipping costs, and that can decrease margins and any competitive advantage.
According to comments Frye made to me in March, he laid off 35 employees, which would’ve been a significant cut to the 50-60 people he reported would be hired by 2015. He also hinted at some financial mismanagement, saying “a business owner should always be aware that their finances are in order and those trusted to manage them are qualified to do so.”
Frye declined to answer additional questions, stating “I'm not prepared to give any more interviews at this time.” For now, then, it’s impossible to know the full story of what happened to Metalcraft. But its failure is bad for both the brewery fabrication business as well as brewers and should serve as a wakeup call to each.
When fabricators go bust, some brewers who have sunk large sums of money into equipment will have invested too much to recover. That may include some of Metalcraft’s clients. Bill Baburek of Infusion Brewing Company in Benson, Neb. is one of those affected by the closure. “They took $45,000 dollars in deposit money from us in late December,” Baburek said, “for a $60,000 tank order, and now we get nothing for it!”
“If another company the size of Metalcraft or bigger goes down, it’s going to be a big deal,” warned Fisco. “It starts to tear the fabric of the system that is in place ... people that are looking to buy right now should take a moment to check the credit of the people they are looking at doing business with. Find out what’s going on with the business before jumping in with both feet.”
Stories from the print edition of the Oregon Beer Growler.