Thursday, September 10, 2020

In Memory of Jack Curtin, part 5: "Stockbrokers Gone Wild" or "IPO guys turned loose in the world of IPAs"

[Click the picture for access to a 6-page PDF version of the article]

Alrighty, this is where things really get good in this look back on the life of Jack Curtin as seen through his beer writing. The '90s were mostly a mess, a confusing mess. As I came of (legal) drinking age in the early '90s, I searched out different and great-tasting beer, particularly that of the local nature. Dock Street Bohemian Pilsner was one of the first I'd find along the way. Drank plenty of Red Bell and Independence as well, and not so much from the Ortlieb's brewery.

I was simple-minded in those days; I wanted to find it and drink it. I didn't care so much about the business aspects. Here in Philly, there was plenty of business relationships and dealings and it was downright confusing. It wasn't until the 2000s when I began digging deeper into was happening behind the brewhouse and the front-of-the-house facade, eventually beginning my own writing/blogging in 2005. The people, the places, the relationships, and of course the beer all inspired and informed my own writing. Curtin was a good example for me to watch.

That's why this article was so important to me (and, hence, some of the highlighting you'll see in my scanned PDF version of the article above). Jack, as clearly as could be expected of anyone...even on the inside!, lays out the people, the brands, the places, and the maniacal business dealings that enveloped much of the local beer scene in the 1990s of Philadelphia proper. It helped give me perspective and background into my own understanding of the local scene.

If you weren't around back then, you should find this extremely useful in understanding some of the mess, but you'll also find some names that you'll recognize as still part of today's beer scene. That's enough from me, now it's your turn. Have it at. It'll take you some time to consume it all. It's only six pages, but it's chock full of people and information that is so fascinating to me and, I'm trusting, to at least a few of you as well.

So this article was written for the Summer 2006 edition of American Brewer, which specializes in the reporting the "business of beer". Again, my primary M.O. here with this series comes in two flavors—to honor Jack's work and to create a place where key articles can be found in the great wilds of the internet for future readers. I don't know that this type of detailed article that I'm sharing with you today can be found elsewhere. But, I don't claim to be all-knowing (though, Google should be, right?!), so please correct me if I'm wrong.

As mentioned before, please feel free to comment your own memories and share around your social networks. Enjoy and Cheers!

Stockbrokers Gone Wild

The improbable tale of Mr. Grape Juicy Juice and Mr. Enjoy It While You Can and how they nearly destroyed Philadelphia craft brewing as they blundered through the 90s.

The second dumbest thing Jim Bell, CEO of the Red Bell Brewing Company, ever said to a reporter, he said to me during an interview in 1995, as he explained his initial conversation with his brewer, Jim Cancro, when they were setting up the brewery: "I suggested that he come up with something like Budweiser, because that sells so well." The dumbest thing Jim Bell ever said? A year or so later, he famously told the Philadelphia Inquirer that he preferred drinking Grape Juicy Juice to his own beer.

Neither of those memorable quotes take the grand prize for Stupidest Thing Said By A Brewery CEO in the early days of Philadelphia's craft brewing renaissance, however. That honor was garnered by Bob Connor of Independence Brewing Company, who at least got points for style. He gave this profound advice to the world in two-foot high letters during a half million dollar billboard advertising campaign: "Independence-enjoy it while it lasts."

Bell and Connor were the poster boys for a stretch of beer madness which almost destroyed Philadelphia's incipient craft brewing industry in the '90s. Seriously, these guys screwed things up so royally that I once suggested to Tom Kehoe and his then partner, who were struggling to keep tiny Yards Brewing afloat amidst the madness, that they ought to quit brewing to become brokers and go foul up the stock market just as a "sauce for the gander" gesture.

To be fair, though, at least an honorable mention for that unholy era needs must be given Henry Ortlieb, scion of a famous local brewing family, who arrived late, came up fast on the outside, and was a prime player at the end when everybody ran right off the cliff like cartoon characters, hung in the air momentarily and then went crashing down. It was one helluva grand finish, admittedly, an everybody-gets-into-the-act implosion which might most accurately be described as an epic...well, we don't use that sort of language around here but, it begins with "cluster".

1995 until early 2002 in Philadelphia was a time of phantom brewpubs, debt-buying-debt financial maneuvering, outlandish (and often pure fantasy) news releases dutifully printed in their entirety by unquestioning local business pages and millions of dollars tossed to the winds, leading eventually to hapless innocents getting caught up in the web of the guilty during the great comic fiasco that ended it all, the saga of what came to be known as the "Your Name Here" Brewpub.

There's a great book begging to be written telling the whole story (hint, hint, should any publishers be reading), but there aren't enough pages to do the deed here. best I can offer is a freeform riff about a pair of clueless IPO guys turned loose in the world of IPAs, stockbrokers gone wild who grabbed onto what they thought would be a cash cow and proceeded to mindlessly slaughter it before the can-you-believe-this? eyes of unhappy investors and bemused competitors.

When the dauntless duo arrived on the scene, craft brewing in Philadelphia was represented by two brewpubs, the Samuel Adams Brewhouse, an extract brewery which had opened in late 1989, and Dock Street Brewery & Restaurant, which opened in 1990, building on the success of the contract-brewed ale it had been selling in the region since 1987. Red Bell came along in 1993, after Cancro, a civil engineer and homebrewer, approached Bell, whom he'd met when both were lifeguards, about developing a brewpub. When that proved to be unworkable, they formed the brewing company and began contract brewing their first beers, Red Bell Blonde and Red Bell Amber, at The Lion in Wilkes-Barre. They were a disaster-much of the problem, it should be noted, the result of dreadful quality control in the packaging rather than the nature of the beers themselves. The brewery also launched a dreadful ad campaign for the Blonde label which featured some long-forgotten and offensive sexual innuendos, offending a good segment of population, certainly the female half. Red Bell was forced to withdraw from the market for several months to get its act together.

Independence was launched when Connor saw what Bell was doing and decided to emulate his former cohort. He hired award-winning brewer Bill Moore away from Stoudts and they too began by trying to secure various downtown locations for a brewpub. When that failed, Independence opened a production brewery in Northeast Philadelphia in February 1995, releasing their first beers, Independence Ale and Independence Golden Lager, that spring, at just the time as Yards was coming to market with its soon-to-be cult favorite cask-conditioned Extra Special Ale.

Early on, prospects for both newcomers seemed favorable enough, since both had decent plants and quality brewers. Indeed, Moore was a brewing superstar: during a run of slightly more than five years at Stoudts, he had a hand in producing 14 GABF medal beers. His position as the founding brewer paid early dividends for Independence (where he was working with 40 barrel JVN brewhouse, high speed bottling line, automated kegging line, and the tankage to support its 25,000 barrel annual capacity) as he garnered GABF Gold for his Franklinfest and Bronze for his Golden Ale in 1996 and another Bronze for Franklinfest in 1998. He also got World Beer Cup Medals for the same beers in those years, a Gold and two Bronzes. It was in the afterglow of the 1996 medals that Connor took the company public with a $6 million offering, an achievement that the frustrated Bell never managed to match.

Cancro began earning props too, as his brewing skills matured once Red Bell acquired the former P.A. Poth Brewery in Philadelphia's old Brewerytown section and got a 40bbl system up and running in the spring of1996. Plus, while Moore was a one-man show, Cancro had some impressive backup. He was assisted in the early going by Brandon Greenwood, fresh out of the famed Herriot-Watt brewing program in Scotland (before he left, Greenwood formulated Red Bell Wee Heavy, which might well be the most fondly remembered beer from those days), and Bob Barrar, who is today a virtual "medal machine" for Iron Hill Brewery & Restaurant at both GABF and World Beer Cup, first plied his trade at Red Bell, staying until the bitter end.

Connor's plan for Independence was to build the largest plant he could and then "grow into it". As a result, while Moore's first run of beers were impressive — I can remember being blown away by my first pint of Independence Ale — most of them were immediately dumbed down to try to appeal to the mass market such growth plans demanded. Contract brewing was also part of the original concept. Independence opened with a contract to produce a house beer for Dave & Buster's a big local sports and entertainment bar, and later did "gimmick" beers for a few accounts, among them Nittany Ale, a beer for Penn State fans packaged in an extremely expensive and hard-to-get blue bottle, and Blue Hen Lager, targeted for Delaware consumers. The brewery later bought both brands outright. They made beers for Reading's short lived Pretzel City and, in a missed opportunity, had conversations with nearby Stoudts, who wanted to leave The Lion (Maryland's Frederick Brewing won that contract).

Then a new general manager brought in from the West Coast shut down contract brewing, saying that the brewery wasn't big enough to handle outside brands because of all the business they were now going to develop. A 1997 newspaper story reported in due course that Independence was about "to purchase three breweries: a regional, a local, and a nationally known brand out of the Pacific Northwest." None of it happened, unless you count the purchase of Gravity Ale, an extract beer that enjoyed some brief popularity, from the failed American U-Brew on-premises operations in Philadelphia, as the "local" purchase. I refuse to, if only because, according to reports, Connor bought it primarily because he admired its advertising campaign. Not surprisingly, the new GM was gone rather quickly.

On the other hand, Red Bell looking to be on the move in 1996-97 — if you weren't looking too closely. They created the first ever brewery and pub in a professional indoor arena at the First Union Center, home to the Philadelphia Flyers and 76ers. They formed a partnership with a venture capital company to create a downtown brewpub at the Reading Terminal Market, right across from a new Convention Center. Unreported and unnoted at the time was that both those facilities had only 10,000bbl [sic] brewhouses, which meant that copious amounts of beer would have to be produced somewhere else, presumably the Brewerytown plant. Those sorts of details, and other pertinent information, were not always available from Red Bell, which was unhindered by all those pesky reporting requirements that Independence labored under as a public company. Not that "information" wasn't proffered; Jim Bell periodically announced soon-to-be-forthcoming new Red Bell brewpubs in news releases that were dutifully printed verbatim. The centerpiece for his mostly-fantasy business blueprint, which quickly became a standing joke among beer cognoscenti, was the never-fulfilled promise of a pub to be built in State College, home of Penn State, "any day now," or the corporate-speak equivalent.

Henry Ortlieb joined the developing circus when Poor Henry's brewpub and brewery opened in the former bottling house of his family's historic brewery in 1997. With the backing of private investors, he installed both a 60,000bbl [sic] brewhouse and small pub system and was counting on his family name (which he couldn't use at that point because Stroh's owned it) to make him a player. But Poor Henry's quickly proved to be of the same ilk as the stockbroker-created companies, an entity spending other people's money at a rate that would give a congressman pause.

In 1988, Independence announce that it would merge with Pittsburgh Brewing Company (who wanted the public shell that Independence provided) and later that it would partner with Capitol City Brewing to create a center city brewpub. Red Bell's pub at the Reading Terminal Market was ready but the brewery was tied up in a serious dispute over cost overruns with its financial partner, GS Capital, a conflict which left the pub standing unused for months and would eventually get Red Bell tossed out of the whole deal by a bankruptcy court. Undaunted, Jim Bell announced that he'd open a downtown brewpub at the same site where Independence and Cap City efforts had already collapsed and, what the heck, maybe merge with Pittsburgh since that Independence deal had also fallen through. Oh yeah, they were also going to acquire The Lion in a hostile takeover. None of those things ever happened.

That same year, Dock Street founder Jeffrey Ware decided to sell his company, a move which turned out to be the tipping point. A group of Ware's original backers took over the pub and changed the name to Dock Street Brasserie. Licensing rights for the contract brews were, according to one inside source, Independence's for the taking, on a handshake agreement, until Connor went to the pub one night, imbibed a bit too much, and started talking about how he'd do things differently. Whether that happened or not, the fact is that Henry Ortlieb ended up with the rights, something nobody saw coming. He started brewing specialty draft versions at his own plant and continued making the flagship Amber Ale at F.X. Matt. That lasted about a year before he ran out of money.

As a new century dawned, GS Capital, now the owner of a functioning brewpub with no knowledge of the business and reduced to selling beers from other local micros and even some mass market brews, contacted those new owners of Dock Street (the pub), some of whom formed a separate group and took over running the pub. Down came the Red Bell sign and up went Dock Street, giving the city three distinct entities simultaneously bearing that name: the original pub, the new pub, and the bottled product. In fact, there were actually four Dock Streets, if you count a "brewpub" at the airport which was part of the Terminal operation and also changed its name. That was three too many as far as Jeffrey Ware was concerned, since he only sold licensing rights to the name only for a single pub, his original one, and because Ortlieb, on the fast track to Chapter 11, was no longer producing beer. Ware took the former to court for copyright infringement and regained the Dock Street brand rights at a sheriff's sale.

Independence had been delisted by Nasdaq in 1999 and its brewhouse sold at auction in 2000, but, by golly, Bob Connor still owned the name and he licensed it to the Terminal owners. Here's the deep thinking behind that deal: "The Independence logo is the same shape as the Dock Street signs," pub sales director Suzanne O'Brien told Philadelphia Daily News beer columnist Don Russell when it was announced. At this point, by the way, Connor and Ortlieb had formed some sort of partnership to contract brew their beers (apparently they did at least one batch of Nittany Ale at Jones in Pittsburgh) and they were telling us that there would be both Red Bell and (original) Independence taps at the pub. Never happened.

Have I mentioned that, in its death throes, Independence attempted to save itself by offering to buy Catamount for $900,000? That the original Dock Street re-renamed itself, cleverly enough, Dock Street-The Original and that it began morphing into a dance club called The Mermaid at nights during that incarnation before the ignominy ended with its demise a few months later? That, with an $11.5 million loss on the books, Jim Bell resigned from Red Bell in 2002 right after the State shut down the brewery because of an $80,000 tax debt? That once new management paid off that tax debt, one of those oft-promised Red Bell brewpubs did finally open in the city's Manayunk section, fumbled along for a while without making any beer, then finally made its only batch of wort and closed two weeks later?

Maybe next time. For now, here's how it all turned out...

The Independence Brewpub (in one last blast from the past, or maybe just out of habit, they announced they were going to change their name yet again to the Reading Chop House in May 2002, but that never happened) is an established center city watering hole and tourist attraction, selling all the beers brewer Tim Roberts can make and buying the rest from outside. There is still a Red Bell Brewpub at what is now called the Wachovia Center, but in name only. It is essentially run by the food concessionaire, Aramark, and the majority of the beers are brewed at F.X. Matt, while a few specialty ones are brewed on premises by whichever local brewer or assistant brewer is willing to do the job (for what is reportedly a quite decent fee). The beer is not well cared for (to put it politely) and the location may soon become just another arena bar. Cases of Red Bell Philadelphia Lager still appear on shelves now and then, though it's not clear who actually owns the brand (perhaps F.X. Matt is slowly working down the massive debt it was left with when Ortlieb's went under). A company formed by Rosemarie Certo, Jeff Ware's wife, has resumed contract brewing Dock Street Amber and Dock Street Bohemian Pilsner and is rumored to be looking for space for a small production brewery in the city.

Jim Bell and Bob Connor are gone from the scene. Henry Ortlieb died in a tragic boating accident in Costa Rica on July 4, 2004 and his second brewing venture, Ortlieb's Brewery & Grille in Pottstown, shuttered a few weeks later. Bill Moore, following stops at Sly Fox and Ortlieb's, has resurfaced as brewmaster at Lancaster Brewing Company. Jim Cancro has returned to his engineering career. Brandon Greenwood (after helping found Nodding Head Brewery & Restaurant in center city and a brief stint at The Lion) is now at High Falls Brewery in Rochester, holding the title of Technical Brewer. Bob Barrar, as noted earlier, is with Iron Hill, serving as head brewer at the chain's Media, Pa. pub.

And Yards, the tiny little brewery without high powered investors and public offerings and grandiose schemes to take over the world? Yards will celebrate is 11th anniversary this year, a respected and almost beloved institution which proudly claims the honor that both Red Bell and Independence craved but never earned: Philadelphia's brewery.

© Jack Curtin and Liquid Diet Online, 2006.


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