It seems incredible to consider that as recently as a few months ago, beer from San Diego’s Green Flash Brewing was available in all 50 states of the U.S.A. Hell, some of that old beer is still sitting on store shelves in Atlanta as I type this—I just saw plenty of it in the past weekend, despite the fact that Green Flash pulled out of this state in January, one of 33 it was leaving at the time.
In fact, it was only last week that I wrote this piece, asking “what is going on with Green Flash’s contraction and its unnamed new investors?” At the time, I was concerned about the recent announcement that the brewery had taken on new investors with the stated goal of aiding in “strategic overhaul of the company’s operations,” which sounded like far too important a task to be conducted by a partner the brewery wasn’t even going to publicly name. Especially when said news came after Green Flash announced the closure of their $20 million brewery in Virginia Beach, which had opened only two years earlier in 2016.
Now, however, things make a bit more sense, as Tuesday brings the following news: Comerica Bank, the brewery’s largest lender, has foreclosed on its loans, meaning that Green Flash’s financial woes were even more desperate than any of the beer community realized. Moreover, Comerica Bank has already sold the assets of both Green Flash and Alpine Beer Co. via a foreclosure sale that closed on March 30, 2018, meaning the company no longer owns the Green Flash and Alpine Beer Co. brands. Those are now owned by a Michigan risk management company called WCIPA, LLC. What they’ll do with the brands, we currently have no idea, although the statement from former Green Flash President and CEO Mike Hinkley makes it sound as if the brands will somehow continue to exist, while simultaneously, “GFBC, Inc. and Alpine Beer Company will be wound down and dissolved.”
Are these brands going to end up being contract-brewed by some new brewery, keeping iconic beers like Green Flash West Coast IPA or Alpine Beer Co. Nelson IPA in a quasi-legitimate state? It’s impossible to say. We can only share the official memo that Hinkley sent to more than 100 GF and Alpine shareholders this morning. It’s an unfortunate turn of events that has become all too familiar in 2017 and 2018, as growth in the craft beer industry has slowed. It’s become clear that the companies in the most danger are those like Green Flash and Smuttynose, which spent (and borrowed) large sums to fuel ambitious expansion plans, only to find that growth didn’t follow as projected.
Here is Hinkley’s full statement:
Dear GFBC, Inc. Shareholders,
On behalf of myself and the Board of Directors of GFBC, Inc. (the “Company”), I am truly sorry to report that the Company’s senior lender, Comerica Bank, has foreclosed on its loans and sold the assets of the Company (other than the Virginia Beach brewery) to WC IPA LLC through a foreclosure sale which closed on March 30, 2018. As such, the Company no longer owns the Green Flash and Alpine businesses. Comerica Bank is currently conducting a separate process to sell the Virginia Beach brewery.
After a general slowdown in the craft beer industry, coupled with intense competition and a slowdown of our business, we could not service the debt that we took on to build the Virginia Beach brewery, and in early 2018, the Company defaulted on its loans with Comerica Bank. While we took substantial efforts to recapitalize the Company over the past several months, both before and after the bank default, we were ultimately unable to close a transaction.
While the Green Flash and Alpine brands will continue they will do so under new ownership, and GFBC, Inc. and Alpine Beer Company will be wound down and dissolved. I sincerely thank you for your support over the years.
Sincerely, Mike Hinkley CEO GFBC, Inc.
Meanwhile, beer writer Andy Crouch offers a bit more information on the transaction via Twitter.
A private equity group, led by Richard Lobo, has purchased the assets of Green Flash Brewing through a bank foreclosure sale. Lobo, who is involved with CHS Capital and Muirlands Capital LLC, was previously a member of Green Flash’s corporate board.
— Andy Crouch (@BeerScribe) April 3, 2018