Frederick Brewing owner has big plans for little beer

Micro specialist hopes expanded production will lift plant's shares

Breweries

April 29, 2000|By Rona Kobell | Rona Kobell,SUN STAFF

When C. David Snyder bought Frederick Brewing Co. in August, a cold six-pack of Wild Goose might have looked like a better investment.

The Maryland brewing company's second-quarter sales had dropped 37 percent to $1 million. Its sales force had dwindled to just two for its Mid-Atlantic customer base. The only good news was its $748,000 loss -- an improvement over the $1.9 million loss the brewery posted in the second quarter of 1998.

"The numbers were disastrous," Snyder said yesterday. "There wasn't much that was going right."

Snyder had been trying to buy the brewery a few weeks earlier, but the deal fell through. Armed with the new quarterly numbers, his privately held company, Snyder International Brewing Group, bought a controlling interest in Frederick for $2 million in cash.

As a specialty beer drinker, Snyder was familiar with Frederick's Wild Goose and Blue Ridge brands. But he bought Frederick for its brewing plant, which has a capacity of about 100,000 barrels a year. The plant cost Frederick $8 million, and it was operating at 25 percent capacity.

Snyder needed Frederick's facility to bottle Little Kings, the signature beer of the Hudepohl-Schoenling Brewing Co., a small Cincinnati brewery Snyder also owned. Snyder had been paying Boston Beer Inc., the brewer of Samuel Adams beer, $1 million a year for bottling under a contract that would expire in 2001.

Now that Snyder has Frederick, he plans to purchase another small specialty beer company on the East Coast this year and is looking into a West Coast outpost for next year. That would mean more hires at the 35-employee brewery, and more trips to Frederick for the 47-year-old software entrepreneur from Cleveland.

"We have focused entirely on cleaning up our act," said Snyder, in town this weekend because Frederick is the official beer sponsor of the third annual Baltimore Waterfront Festival.

Strong words for a guy who entered the beer business to save his favorite brand.

In August 1998, Snyder sold his software consulting company, Realogic Inc. He was looking for investments when a friend called with news that Crooked River Brewing Co. was going out of business. Rather than face the prospect of a refrigerator without his favorite Extra Special Bitter, Snyder bought the company.

"Frankly, I thought that was the end of my brew days," he said.

News that Little Kings was for sale a year later tugged at his nostalgic side. The diminutive green bottle contains 5.5 percent alcohol, and was a hit on Ohio campuses when Snyder was in college.

Snyder said he hopes Little Kings will follow the success of another green bottle -- Latrobe Brewing Co.'s Rolling Rock. To that end, last week he hired Latrobe veteran Al Spinelli as Frederick Brewing's executive vice president and general manager.

Spinelli, who worked his way through college on Rolling Rock's production lines, said turning a beer brand from a regional to a national success takes about eight years. Snyder's three breweries now have a combined sales staff of 17, and Spinelli predicts that Frederick's outlook will improve when it shifts Little Kings' production.

Whether those changes will lift the company's shares, which gained 10.12 cents yesterday to close at 52.13 cents, is difficult to predict.

K. Timothy Swanson, a beer analyst with A. G. Edwards in St. Louis, said the specialty-beer market has fallen since the microbrew craze of the mid-1990s, in part because the infusion of new brands confused customers.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.