In April, Modern Times Beer & Coffee CEO Jennifer Briggs announced that the insolvent beverage company’s senior lender, California Bank & Trust, had commenced litigation that would likely result in a court-ordered receivership sale. This followed the nine-year-old Point Loma-based interest’s unsuccessful attempts to negotiate with the bank as it tried to work its way out of the red. In May, Briggs commented that the identity of Modern Times’ purchaser would likely be known by the end of June, and today Hawaii-based Maui Brewing Company (MBC) announced that it has submitted a bid to acquire the company.
“While this is just the first step in a long process, we believe in the Modern Times brand and feel it provides a tremendous opportunity for us,” says MBC founder and CEO Garrett Marrero, who grew up in San Diego before starting his company on its namesake island. “They have an amazing, dedicated team, and we hope to contribute to the next stage in their journey as a craft brewery.”
“It is wonderful that Maui Brewing has been chosen as the initial stalking horse bidder for the assets of Modern Times Beer & Coffee. I have great respect for Garrett, his team and the leadership they give to our industry,” says Modern Times CEO Jennifer Briggs. “It is fun to reflect on the times when I’ve seen Modern Times and Maui Brewing sitting side-by-side on shelves in San Diego.”
MBC ranked as the 43rd largest craft-brewing company by production volume in 2021. That came on the back of unprecedented demand for the 17-year-old interest’s products. Last year saw a 50% increase in demand for the company’s Bikini Blonde Lager and POG Hard Seltzer brands alone. Despite numerous manufacturing advancements, that demand far exceeds the company’s current capabilities. Supply-chain and logistics challenges have made it even more difficult to keep enough product on shelves and at draft accounts.
To help supply as much beer as possible to mainland accounts, the company recently entered into a contract-brewing agreement with Denver, Colorado’s Sleeping Giant Brewing. MBC beer-production kicked off at Sleeping Giant’s facility last month, but it’s not a forever solution. Acquiring Modern Times would provide additional long-term production capabilities as well as the ability to better service Southern California, the company’s second-largest market.
“This is huge for us, and it is certainly special being a San Diego boy. I have followed the Modern Times journey from the beginning and the team there has certainly created something incredible that we look to build on together,” says Marrero. When asked if he will be as famously hands-on with Modern Times should the sale go through, he responds, “I’m a bit of a road warrior, but one of the kicks of this development will be getting to spend a lot more time in my hometown. I will be fully involved with all of the companies, just as I am now.”
Launched in 2013, Modern Times quickly rose to popularity among consumers, particularly younger demographics. The company ranked as the 40th largest craft brewery in the country in 2020. Its slide into debt was mostly the result of an untimely series of events that saw the company open new locations in Los Angeles, Santa Barbara, Oakland and Portland, Oregon, all in 2018. When the pandemic struck, it rendered such public venues nearly obsolete, making money-drains out of would-be cash cows. In February, the company cut its losses, shuttering all four locations and laying off roughly 75 employees to focus solely on its Southern California properties, which include its production brewery in Point Loma, tasting rooms in North Park and Encinitas, and its Anaheim brewpub.
“We believe in the long-term strength and potential of Modern Times, and we are excited to help them grow,” says MBC COO Scott Metzger. “We will likely brew each of our brands at all of our facilities, but we are not merely looking to operate Modern Times breweries as MBC breweries. We are committed to the Modern Times brand and we look forward to add MBC volume where it makes sense.”
Last year, the Maui Brand ‘Ohana (which includes MBC, Maui Hard Seltzer, spirits and canned cocktails under the Kupu Spirits brand and a line of handcrafted Island Sodas) produced a total of 64,000. This year, barrelage is estimated to reach 100,000 barrels between MBC’s production facility in Kihei and Sleeping Giant. The company currently employs 280 between its Kihei headquarters, and its trio of restaurants in Lahaina, Kailua and Waikiki. MBC’s beers are currently distributed in 20 states and three international countries.
“The stalking horse bid is the first step in this court-approved sale process. Onyx Asset Advisors, LLC, the exclusive sales agent, continues dialog with a multitude of potential over-bidders and anticipates a highly competitive court auction in early to mid-June,” says Briggs. “I believe this process will yield a positive outcome.”