Modern Times’ owner shares details about AleSmith partnership and more

When AleSmith Brewing owner Peter Zien installed what he affectionately refers to as “the Rolls Royce of brewhouses” – an 80-barrel Krones Steinecker CombiCube model from Germany – he envisioned it turning out batch after batch of his company’s beers. And from Speedway Stout to the locally ubiquitous .394 Pale Ale, it’s done just that. But over the past eight years, that top-tier system has also been used to brew many thousands of barrels of beer for other brands on a contract basis.

In some cases, AleSmith’s contract-brewing clients are startup operations looking to get their beer to market without spending the substantial time and money to locate and secure a production facility, brewing equipment and personnel. More recently, Zien’s brewing team has taken over production of beers for established companies that either no longer have their own breweries or have crunched the numbers and determined it is more economical to go the contract-brewing route. Another San Diego beer concern will soon join the latter contingent, Modern Times Beer.

On Friday, the 10-year-old business’ parent company, Maui-based Craft ‘Ohana, announced it has entered into a partnership that will see AleSmith produce all of Modern Times’ beers. It’s part of a strategic set of moves that will include shutting down Modern Times’ properties in Point Loma’s Midway District, which include a 2,000-square-foot brewery and tasting room dubbed the “Lomaland Fermentorium”, as well as a nearby combination warehouse and event space called “The Fortress of Raditude”.

“Since our announcement, I’ve gotten a lot of messages already about ‘closing Modern Times’. That’s not happening,” says Craft ‘Ohana CEO and native San Diegan Garrett Marrero. “We’re transferring brewing and coffee operations previously based in our Point Loma facility to qualified partners. Our other locations and the business as a whole are continuing on.”

This is a significant development for a company that’s had more than its fair share of ups, downs, twists and turns over the past four years. In 2020, after years of rapid growth, Modern Times was the 40th largest craft brewing company in the country and had built brewpubs and public venues in L.A., Orange and Santa Barbara Counties, Oakland, and Portland, Oregon. But all that expansion spread the company thin, leaving it ill-equipped when the pandemic struck. But universal challenges brought about by COVID-19 were just the start of Modern Times’ ills.

In 2021, founder and CEO Jacob McKean stepped down amid harassment allegations. The following year, the company shuttered all of its public venues outside San Diego County, going from eight to three, as it attempted to rightsize while in the throes of severe financial disarray. Later that year, a court-ordered receivership auction was initiated, in which Maui Brewing Co. (MBC), headed by Marrero, vied to acquire the failing company but was ultimately outbid by Brewery X. That Anaheim-based company pulled out of the sale two weeks later, which cleared the way for MBC to purchase Modern Times, bringing the company under the newly formed Craft ‘Ohana umbrella and giving fans of the company, particularly in San Diego, hope for the future of the brand.

Marrero says the past two years have been difficult. Despite having good people in place, the Point Loma brewery was in bad shape due to lack of proper maintenance, leading to outages that decreased brewery efficiency. Since the acquisition, the facility went from fulfilling less than half its orders to roughly 95%, but in the end, that wasn’t enough, especially in a time when costs are sky-high and consumption and demand for beer is far less than in craft’s heyday of the 2010s. Moving to a more efficient model, in this case contract-brewing, was essential. Marrero is confident it’s the right move, but laments the fact it will mean downsizing the company’s headcount by 50 to 60 employees.

“It truly sucks. It’s emotional. It hurts. As much as I know this is the absolute right decision after going through countless models, this being right for the business doesn’t make it feel good,” says Marrero. “These are business decisions we’re making, but that in no way removes the human element of the team that we genuinely care about. I feel a personal responsibility to every single one of my teammates.”

The move from Point Loma to AleSmith’s facility is expected to take at least 60 days. Marrero reports no employees have been let go yet, and he expects to keep the team intact throughout the transition. That includes staffers at the Lomaland tasting room, which will continue operating per its normal days and hours for the time being.

Given the market and the world we find ourselves in today, we in the industry have got to make decisions very much like if we are on a battlefield. We have to do our best to save and preserve and grow what we can so that not everybody has to feel the decline.”

Garrett Marrero, Co-founder & CEO, Craft ‘Ohana

On top of market conditions and economics, Marrero also cites Midway Rising, a redevelopment project aiming to reimagine the manufacturing-heavy district the company occupies by constructing a new sports arena, urban park, housing, retail and mixed-use spaces, as a key factor motivating Modern Times’ move.

Over the past year, Marrero and Zien, friends going back roughly two decades, discussed the possibility of having AleSmith contract-brew some of Modern Times Beer as a way to temporarily work around the Point Loma facility’s equipment issues. Those discussions broadened as it became clear to Marrero that they would need to move on from their homebase and enter into a full-scale contract-brewing partnership. It was important to Marrero to team with an outfit with a proven track record for producing quality beer, and that their partner be located in San Diego. Marrero and company explored numerous options and potential partners, and, in the end, say there was really only one choice for them.

“My team and I have been from A to Z and back again on ways to move forward and kept coming back to AleSmith, saying, ‘these are the right partners.’ We trust them, we drink their beer, they are artisans but they get the business side of things,” says Marrero. “This partnership is a really positive thing because we have what each other needs and can support each other.”

AleSmith has grown into the biggest contract-brewing concern in San Diego County. Though he didn’t see it coming a decade ago, Zien has embraced this role with open arms, relishing the opportunity to be of service and the challenge of replicating others’ beers on his top-of-the-line brewhouse.

“Our experience collaborating with numerous clients since 2016 with virtually the same AleSmith personnel has provided a solid template for brewing clients’ beers to exacting specifications. These recipes are brewers’ ‘babies’ that they have entrusted to us, and we feel a great responsibility to the client and their customers to brew them precisely as desired,” says Zien. “Garrett and I go way back and have a mutual respect for what we have accomplished with our brands, so inking a partnership with him feels especially good.”

“With everything that is going on in the industry right now, we have been having conversations with great brands about keeping their beers made in San Diego. It is very important to us that we can help these brands remain locally produced,” says AleSmith CEO Brandon Richards. “I love the idea of keeping the jobs in San Diego, as well. In some situations, it allows us to add to our staff. We are known as the craft-beer capital. Let’s keep it that way.”

AleSmith is currently projected to produce between 80,000 and 90,000 barrels of beer in 2025. Modern Times beer figures to account for roughly 15,000 barrels of that total. In order to achieve that, AleSmith will likely need to hire additional personnel. It’s Marrero’s hope that some members from his Point Loma team will be able to catch on at AleSmith, as they are, in his words, the DNA of the company.

“I’ve had a lot of people from other breweries get in touch with me since this news broke, telling me they need people and asking me if I can put my people in front of them,” says Marrero. “We have a lot of quality people I would vouch for and support in transitioning, and encourage you to reach out to us.”

While the Point Loma facility will close, Modern Times’ pair of taprooms will remain operational. Not only that, management is contemplating adding food and coffee elements at North Park’s “Flavordome”, and the potential for a refresh at Encinitas’ “Far West Lounge” which may include evolving the current menu. Marrero says to expect the debut of more satellite locations in the near future, some designed as beer and coffee shops revolving around Modern Times Coffee, a brand that will also live on via an upcoming contract partnership.

This is not right-sizing…this is not corporate cutbacks…this is evolution; evolving to where a brand can be successful in today’s world,” says Marrero. “Yesterday’s world does not work in today’s world, and I tell other brewery owners, if you’re not constantly changing, you’re standing still or moving backward.”

Garrett Marrero, Co-founder & CEO, Craft ‘Ohana

Also adapting to today’s world will be Modern Times’ beer portfolio. Marrero says consumers are growing weary of hyper-rotation and weekly or bi-weekly beer releases from breweries. Furthermore, distributors and retail partners are telling brewing companies they don’t have room to simultaneously stock a multitude of different products from each individual brewery. As such, Modern Times will work on modifying its core line-up, augmenting that with limited releases, the majority of which will be proven fan-favorites or all-new creations.

Modern Times plans to move a small amount of its manufacturing equipment to AleSmith’s facility, putting the remainder of it up for sale. Some of the barrels containing aged beer – an area of particular expertise over the company’s lifespan – will also be transported to Miramar. Beer from some of the remaining barrels will be blended and bottled, with any remaining filled barrels being sold to other breweries.

Not forgotten as Marrero and company move forward are subscribers to Modern Times’ members-only club, The League of Partygoers and Elegant People. Marrero says League members will be fulfilled for the remainder of the year and made whole, something that did not happen under the previous regime. After the end of the year, The League will be dissolved.

In addition to increasing efficiencies for Modern Times, Marrero says adjustments with that brand will allow him and his team to apply appropriate focus on Maui Brewing and Maui Hard Seltzer, which are up a collective 23% year-to-date stateside, helping ensure Craft ‘Ohana remains sturdy as a whole. 

Marrero admits that he wasn’t looking to take Modern Times in this sort of direction when he purchased the company, but feels hopeful for the future. When asked if he’d do it all again given the benefit of hindsight, his response is instantaneous and emphatic.

“Hell yes. I have learned and grown personally and professionally so much over the past few years. I’d do it over again because the value of the lessons was so great, only I’d do exactly what I’m doing today at the beginning. But I don’t regret what we’ve done. We’ve accomplished some great things together.”

Modern Times Beer’s headquarters is located at 3725 Greenwood Street in Point Loma, and its satellite taprooms are located at 470 South Coast Highway 101 in Encinitas and 3000 Upas Street in North Park