Why Not Sell?
In what wasn't big or important news to most people, what I thought was one of the most significant spirits stories of the past year occurred yesterday in the Pacific Northwest: my friend Steve McCarthy decided to sell his beloved Clear Creek Distillery to Hood River Inc. I was completely caught off guard; especially as I had just done an interview earlier that week about craft distillers where I said most producers will eventually fold or sell, except for a handful of long-established guys like Clear Creek. I didn't see a distillery that centered itself around locally-sourced fruit and esoteric eau-de-vies having much value to a larger company. Nor did I think Steve was looking to get out. And I'm not sure that he was, actually. Hood River might have just come in with an offer that was too good to turn down. I haven't talked to Steve yet, so I don't know for sure.
The money is still flying out there for small producers who have proven they can create a cult following. We're nowhere near the end of this trend. I don't know how many of you noticed that Diageo and P. Diddy bought out Deleon tequila a few weeks back (then completely revamped the staff). Deleon was a family-owned operation that, ironically enough, I thought was Puff Daddy's brand when I first tasted it in 2010. Now it's the Mexican Ron Zacapa. While craft brewing has really put a dent into the international corporate beer business, with a group of die-hard, integrity-focused producers looking to stick it to big cervesa, the craft distillation game seems much easier to co-opt. It's a lot like the model of the Silicon Valley start-up game where a few guys get together, start a tech business, and then sell it to Google for ten million. The costs are higher for a distillery, as are the taxes and the restrictions. It's tougher to get traction in bars and restaurants that are dominated by larger distributors and their numerous perks like extra ad revenue for product placements.
So after working so hard to establish yourself, if a big company comes calling with a big check, why not sell? Especially if you're getting older and your children have no interest in carrying the torch. Many of us on the Peninsula were extremely sad when Joe's of Westlake, a legendary and historic local diner, sold the restaurant and closed down this month. However, the family didn't want to operate it anymore. It wasn't a matter of rent or financial issues. They just wanted to retire and enjoy what years they had left in life. Sometimes selling makes sense--especially right now when people are paying big bucks for distilleries and real estate.
If Clear Creek can be purchased, then anyone is up for grabs. Anyone.