Brewing Up Succession

Written by Matt Karnick, Vice President - Commercial Banking

When meeting with clients and prospects, there is one topic that seems to come up regularly… succession planning.

The phrase itself can cause anxiety. Maybe that anxiety is linked to the amount time it takes to craft the perfect plan, or maybe it’s the nagging reminder that a plan is not in place

There are several viable options for every situation. It may be transitioning ownership to a family member or a sale to a key employee. Maybe it is selling to, or partnering with a competitor.

One option that has been gaining momentum with craft breweries is the implementation of an Employee Stock Ownership Plan (ESOP) for the transition.

Check out this month’s top resources to learn more about ESOPs:

• Does an ESOP Make Sense? Craft Beer’s Growth and Consolidation
  UC San Diego’s Damien Vira looks at the advantages, drawbacks and comes
  up with a conclusion if and ESOP is a viable option for craft breweries.

• ESOPs in the Craft Brewing Industry
  Tim Steward (Employee Benefits Attorney and Shareholder at DeWitt, Ross & Stevens S.C.) further explains what an ESOP is, what are the advantages and
  what are the concerns/fables.  New Belgium Brewing, Deschutes Brewery and
  Full Sail Brewing are also highlight as breweries that have used an ESOP for succession planning.

• Top 5 Reasons Craft Brewers are Turning to ESOPs
  In this Brewbound article, Rocky Fiore (Managing Director and Principal at Prairie Capital Advisors) put together a quick read highlighting the benefits of an ESOP for craft breweries.

As a commercial lender in the food and beverage division of First Business, I have worked with many companies during their succession plan journeys to provide insight, advice and financing. Having had the privilege to work with craft breweries, I have gained a higher level of understanding of your industry and its capital needs.

If you have questions or would like to discuss succession planning further, please contact me at 608-232-5926.

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