Author Archives: Steve Hindy

OTTAWAY BROTHERS ASSUME LEADERSHIP ROLES AT BROOKLYN BREWERY

Brooklyn-Brewery

And so Eric Ottaway is now CEO of Brooklyn Brewery and his brother Robin is President.  This is the first changing of the guard at the brewery since it was started by me and my downstairs Brooklyn neighbor, Tom Potter, in 1987.  Tom was the first CEO and I was the first President.

Tom sold his voting stock to the Ottaway family in 2003 and went on to found the New York Distilling Co., makers of several fine gins and, soon, some great rye whiskey.  I sold my voting stock a couple of years ago.  I remain as the full-time Chairman of the Board.

Many of the brewery founders of my generation have moved on.  Some have sold their companies to the large brewers; some have sold to an Employee Stock Ownership Plan and some have sold to private equity companies.  Some have taken their company public.  So far as I know, Brooklyn is unique in passing control from the founders to a new private ownership group, in this case the Ottaway family.

This sort of transaction requires a good deal of trust.  I still have a significant common stock holding in the brewery, so the future success of the company is very important to me.  I made the decision a few years ago that the Ottaways’ control of the brewery would ultimately mean my stock would be more valuable than if I shared control with them.

It is not just about money.  One of the objectives that Tom and I established when we started the company was we wanted to be a good corporate citizen of Brooklyn and New York City.  Instead of spending money on advertising, we donated beer, and in some cases money, to charitable organizations, arts organizations and causes we believed in.  I am confident that the Ottaway family is committed to this course.

Serendipitously, the Ottaway family has very deep roots in Brooklyn.  Robin and Eric’s great-great uncle, John B. Woodward, a Civil War general, ran for mayor of Brooklyn in 1885 when Brooklyn was an independent city.  He also was chairman of the Brooklyn Institute of Art and Science, which managed the Brooklyn Museum, the Brooklyn Botanic Garden, the Brooklyn Academy of Music and the Brooklyn Children’s Museum.  David’s grandmother was a graduate of Brooklyn’s Packer Collegiate Institute.  She also was a significant contributor to the school and the Brooklyn Academy of Music.  Robin’s two children, Avery and Reese, both attend Packer.  Robin now serves on the Board of Directors of the Brooklyn Historical Society.

So far, the Ottaway family stewardship of the brewery has been exemplary.  For many years, we distributed our own beer and other craft beers in New York and Massachusetts.  We sold those distribution companies in 2003 and focused exclusively on growing the Brooklyn brand.  In the five years ending in 2013, the brewery nearly tripled in size, from 75,000 barrels in annual production to 217,000 barrels.  Under Robin’s sales and marketing leadership, the brewery has enjoyed steady growth domestically, with a conservative approach to expansion.  Brooklyn beers now are available in 25 states and the District of Columbia.  The marketing department, which for many years was staffed by me and our great designer, Milton Glaser, now has a dozen people who have greatly enhanced our digital and social media capabilities.

Eight years ago, our fine brewmaster, Garrett Oliver, was invited to Copenhagen to receive the prestigious “Semper Ardens” award from the Carlsberg Brewery.  Garrett joined the Brooklyn Brewery in 1994 and in addition to developing Brooklyn Black Chocolate Stout and Brooklyn East India Pale Ale and many other beers, wrote “The Brewmasters Table,” widely considered the definitive book on beer and food pairing.  The award recognized his contributions to the world’s beer industry and culture.  Garrett has been further awarded over the years with numerous accolades including, most recently, a James Beard Award.

At the same time, Carlsberg expressed interest in importing Brooklyn beers to Scandinavia.  We were already selling beer in those countries with small importers.  Since Carlsberg took over, our exports to Scandinavia have exploded.  Sweden is our second biggest market after New York.  That relationship has largely been developed by Eric and the champion of craft beer at Carlsberg, Joakim Losin.  Eric and Joakim together hatched the plan for the Brooklyn-Carlsberg joint venture that led to the creation of the Nya Carnegiebryggeriet in Stockholm.  There may be more such projects in the future.  Eric also developed our exports to the United Kingdom through a great partner, James Clay & Sons.

Robin has overseen our exports to the other half of the world, Asia.  Exports have become a significant part of our sales, about 34% this year, and growing rapidly.  We are working on a plan to build a million barrel brewery in New York City to meet the growing demand for our domestic and import markets.

In retrospect, this international orientation is not surprising.  I met Robin and Eric in 1981 in Cairo, Egypt.  At the time, I was a Middle East correspondent for The Associated Press and their father, David, was the Washington Post correspondent.  Not long after we arrived in Egypt in August 1981, David and I were sitting next to each other at the parade where Egyptian President Anwar Sadat was assassinated on October 6.  We became close friends of the Ottaways.  We used to do Thanksgiving and a New Year’s Day brunch party together at our apartment in Cairo.

Eric was 12 when I met him, and Robin was 8.  Eric went off to Lawrenceville, New Jersey, to prep school in 1982.  Robin stayed with his parents in Cairo.  He used to help my wife, Ellen Foote, take care of our two children, Sam, who was born in Beirut in 1980, and Lily, born in Cairo in 1983.  Somewhere, we have a photo of Robin holding Lily in his lap.

I returned to New York and settled in Brooklyn in 1984.  Ellen had enough of Third World living and contending with the crazy schedule of a war reporter.  I had become interested in homebrewing while in Cairo.  I met a group of diplomats who had worked in Saudi Arabia where alcoholic beverages were banned.  They brewed their own at home.  When Tom Potter and I decided to start Brooklyn Brewery, I reached out to everyone I knew to see if they were interested in investing.  To my surprise, David Ottaway invested $10,000, mainly on the basis of our friendship.  (Our big angel investor was an entrepreneur named Jay Hall Jr. from my tiny town in southeastern Ohio, Middleport.  But that is another story.)

Eric was just starting his undergraduate study at Yale when he became interested in the brewery.  David asked that the reports that Tom and I regularly circulated to our investors be sent to Eric.  We also arranged to get Eric beer for his college parties.  Then in the mid-1990s, Robin graduated from Colby College in Maine and went to work for a start-up internet company.  He called and asked me if we had thought of developing a website for the brewery.  A what?

The mid-‘90s were the Dot-Com years.  Some craft breweries, like Boston Beer, Red Hook and Mendocino were going public.  Brooklyn Brewery also was courted by several investment banks.  We went to our investors with a plan to look for public money to grow the company.  Eventually, the Ottaways agreed to buy into the company on terms similar to what we would have gotten had we gone public.

I am pleased to report that the Brooklyn Brewery has done much better with the Ottaway investment than most of those craft breweries did with public money.  Only Boston Beer has flourished as a public company.

When David invested, Robin and Eric agreed to run our distributorship in Massachusetts, the Craft Brewers Guild.  They learned the beer business the way Tom and I did: by making, selling and delivering beer, driving trucks and collecting money.  We eventually sold that company to the Sheehan family which owns Anheuser-Busch distributors in several states and now owns Craft Brewers Guild operations in 14 states.

Robin and Eric came to New York and eventually purchased Tom’s voting stock and then mine.

It was a big deal for me, and I think for Robin and Eric, when they assumed those titles last week.  But it was a transition that was made possible by a trust and respect that has developed over the last 33 years since we met in Egypt.  I was 39 when I started the brewery.  I did a double-take when I wrote the news release about the Ottaways’ new titles last week.  Is Robin really 41?  Is Eric really 45?  Am I 65?  Has it really been 27 years?  The answer to all those questions is yes, and I am as excited about the future of Brooklyn Brewery as I was in 1987.

Announcing “Brooklyn Brewery Projects”

N 12th view bb

One of the most surprising developments in the story of Brooklyn Brewery is the number of international opportunities that have presented themselves in the last five years. It’s funny to reflect that many people questioned naming the company Brooklyn when we started 26 years ago.  Some people saw Brooklyn as a symbol of urban decay. Most people saw Brooklyn as a place that immigrants first came when moving to the US, only to eventually make their way into the greater country when they had the means. (One in seven Americans have roots that trace back to Brooklyn.) Few people understood that in the 1970s and 1980s, there were thousands of artists and creative young people flocking to Brooklyn simply because Manhattan had become prohibitively expensive.  They bought up brownstones in Brooklyn Heights and Park Slope and then expanded into surrounding neighborhoods, Fort Greene, Williamsburg, Greenpoint, Bay Ridge, DUMBO.  More recently, the expansion has engulfed once-foresaken Bushwick and Queens’ Ridgewood.  Mayor Bloomberg has credited Brooklyn Brewery with playing an important role in the Brooklyn renaissance, with helping “make Brooklyn cool.”

“Brooklyn” has indeed become a brand.  “Brooklyn” is a great calling card for us, around the United States and the world, opening doors for our beer to enter. Of course just because the door is open, doesn’t mean that one will be invited back. Our Brewmaster, Garrett Oliver, who recently won the James Beard Award for Outstanding Wine, Beer or Spirits Professional, and his team have consistently put out flavorful and rewarding beers that ensure a long lasting appreciation for our definition of “Brooklyn”. This has enabled us to become one of the biggest exporters of American craft beer, with sales in more than 20 countries.  That in turn led to relationships and endeavors with far-flung partners who are now as enthusiastic about craft beer as we are.

It seems that the taste of our American craft beer is starting to inspire more than just a wider appreciation for flavor and experimentation in beer.  We’ve already engaged in some unexpectedly successful projects such as a collaborative line of beers with the Amarcord brewery in Italy called Ama and a “pop-up” bar in a rundown industrial district of the English city of Leeds, an area not unlike the Brooklyn of three decades ago.  The recent opening of Nya Carnegiebryggeriet in Stockholm is a great example of the sort of endeavors we’re pursuing with international partners.  We are looking at similar projects in other European capitals, South America and Asia.  Some will likely be joint ventures on new craft beers for those communities; all will be guided by Brooklyn Brewmaster Garrett Oliver and his brewing team.  All will be focused on educating people about craft beer and about pairing beer with fine food.  We expect that, like our brewery in Williamsburg, Brooklyn, all will act as convivial centers of their communities.

We group these ventures under the heading “Brooklyn Brewery Projects”.

Not all these projects are international. We recently announced a new endeavor with the celebrated Culinary Institute of America, just north of New York City. By 2015, we’ll have inaugurated a new brewing course within the CIA, centered on a new pilot brewery and teaching a beer-focused curriculum that we develop together. Collaborating with one of the world’s top culinary schools accomplishes the same goals of education and community. Indeed, many institutions are beginning to appreciate and align themselves with the values of craft breweries and craft beer.  We are gratified that Brooklyn is part of this exciting world-wide movement.  Stay tuned for news on our next Project.

-Steve Hindy, co-founder and president