The Lost Abbey exiting its longtime home

Last November, Tomme Arthur, co-founder of The Lost Abbey and its associated brands, Port Brewing and The Hop Concept, announced he and his fellow business partners intentions to adjust the companies operations and efficiencies. The aim was to reduce the footprint at its San Marcos headquarters by half, and replace its 30-barrel brewhouse and corresponding tanks with a smaller system and cellar in order to match current production goals versus growth targets established when The Lost Abbey debuted in 2006. Arthur referred to the game plan as “growing down” in an effort to ensure the longevity of the business, and foresaw several potential scenarios playing out. Over the past four months, Arthur and company have been exploring options and working with the company’s landlord to find a workable situation. Today, Arthur is ready to share a solution he has come to that involves the local brewing concern with which he originally rose to prominence and went on to establish The Lost Abbey and its associated brands, and he’s doing so in an open letter presented via our Voices of San Diego Beer series.

Faith & Perseverance

by Tomme Arthur, Managing Partner, The Lost Abbey

The following is a letter to my friends in the brewing community, our families and The Lost Abbey / Port Brewing faithful.

It’s 8:30 a.m. on Thursday, March 2, 2023. In half-an-hour, we will convene our staff and discuss the future of our operations. When we founded this company 17 years ago, I had no thought of meetings like this being part of our weekly makeup, but here we are. Each and every day there are new challenges. That’s the thing about entrepreneurship…you’re constantly evaluating, revising and executing.

In many ways, all breweries have been going through this for years now. As owners, we get out of bed each day. We check the pulse of the business, our staff and even the economy (I wonder if the Fed is raising rates again). We converse amongst employees, owners, journalists and even our families. Each of these discussions creates an opportunity to seek clarity, direction and affirmation that the decisions we are making are correct. 

Some days we look brilliant and other days not very much, and there is always a mental scorecard running in my head. Lately, the wins have been too few and the losses far more gut-wrenching. I go home each night and ask myself, did we win enough today? Most days it doesn’t feel like we won anything. I’m sure my brewery-owning friends reading this are nodding their heads silently in agreement. I’ve never felt so deflated by the process.

It’s crazy…I have been in this business for 27 years and I am constantly asking myself, when did l unlearn everything that brought us here? Because more often than not, that’s what it feels like right now. The playbooks have changed, the rules have been altered and in some ways beer doesn’t even taste like beer anymore. Three crazy years brought us to a place no one could have imagined.”

Tomme Arthur, Managing Partner, The Lost Abbey

When COVID hit, I believe that all of us as owners, employees and customers had the same emotions. We’d never been through a world-stopping pandemic before, but like every other challenge thrown our way, we rose in solidarity knowing the goal was to overcome. It didn’t matter whether you were a business owner, customer or employee, everyone felt it was a speed bump and we’d all come out the other side just fine. But did we? So much has changed since March 15, 2020.

What even gave us the right to think this? Life actually. We are an incredibly resilient species, so it’s in our DNA to think this way. As an entrepreneur whose chief job is to be in the business of staying in business, my singular job is to find the pathways to adapt, overcome and conquer challenges hurled at us. This is why I get out of bed every day. Being a business owner means I signed up for this shit.

But insufferable things happened along the way to conquering these challenges. We were met with even more and still more of them. The “Great Resignation” brought our staffing levels to a new reality, supply chains morphed into the least predictable part of our operations and, of course, inflation hit families and operations big and small in every facet of their daily lives.

Yesterday they declared the pandemic to be “officially over”. While it’s true on the surface that we don’t face the same dire straits we did three years ago, the lingering effects are here to stay. For us brewery owners and hospitality-focused companies, the effects have been devastating.  

A few months back we noted that we were actively engaged in a process called “growing down”. Getting to a smaller, more manageable space was the only way we could survive this new world.

Today, we are announcing a major shift in the way we conduct our business. After 17 years of producing Port Brewing and The Lost Abbey beers in one facility, we are separating the business entities. On the surface, this should not be shocking news. Our operations have become too unwieldy and scattered. This will bring us renewed focus. We believe this is the best pathway forward and will create new synergies for all of our brands.

The Lost Abbey will be moving out of our original brewing space in San Marcos and we will establish a new home from which to continue producing our world-class beers. Meanwhile, Pizza Port Brewing will take control of the San Marcos brewing facility in order to grow its business. 

As part of this article, San Diego Beer News founder Brandon Hernández asked me to answer the following questions. Hopefully my responses will provide clarity on the decisions that were made and what brought us to this place. I thank him for the space and I especially want to take a moment to pause and tell anyone listening that if you need a hand, an ear to bend or even a cold pint, please hit me up. We aren’t alone in our frustrations or the feelings about the turn of events we have all just experienced.

What’s transpired since our last article where you outlined the need to get the company sized to where it should be?

One of the biggest unknowns when we engaged in the process of “growing down” was the landlord and our lease renewal. We had an option on the entire 40,000 square feet of building, which we knew we couldn’t execute. However, we thought the landlord would be amenable to our space giveback plan. Ultimately, they did agree to take back space, but the vision they had for the suites did not match ours. In this process. it became painfully obvious that we could not execute the lease as they provided without sacrificing our barrel program and many of the best beers The Lost Abbey is known for.

Our conversations continued amongst the partners about distributed brands, sales teams and hospitality footprints. Each of these discussions led to an internal dialogue that we were ostensibly running two very different models. The distributed brands were led by Port Brewing (Mongo Double IPA and Wipeout IPA) along with The Hop Concept (Dank and Sticky, et. al.). These were beers with good market positions, chain placements and the velocity required to be in the sets. Still, these brands needed more attention and resources. We just didn’t have the ability to commit to them the way they needed.

The Lost Abbey has always been a much smaller brand in our portfolio than most realize. We love to talk about how it’s “a little brewery with a big reputation” and what that means to the real world. Today, The Lost Abbey is the forward-facing side of our brewery operations and it’s the one that has the most connected consumerism. We see it every day in our tasting room and the three satellite locations we operate, as well. This level of introspection showed us the crossroads of our operations and two divergent paths.

Of course, we knew this was how our business operated and we were prepared to continue a shared footprint with sour and non-sour beers, but the landlord ultimately forced our hand. So, in January we ramped up the process and agreed that splitting the company into two distinct parts was the best pathway forward to engage.

How will Pizza Port organize its footprint at the Mata Way facility?

Production of Port Brewing and The Hop Concept brands will remain at 155 Mata Way in San Marcos.  As part of this process, they will retain the brewing staff necessary to make the beers in this portfolio as well as flex in some extra capacity needs for Pizza Port. The landlord has agreed to a footprint that includes three contiguous suites and 20,000 square feet.

As configured, this space gets Pizza Port an additional 25,000 barrels of production, which they can grow into in the coming years. The trajectory of brewing at Bressi Ranch is nearing the upper limits, so this asset and brand acquisition makes complete sense. Port Brewing and The Hop Concept brands will be managed by their staff as well as their excellent sales team and ambassadors. It’s a great handoff to a set of like-minded individuals who know hoppy beers and how to sell them.

Additionally, there is an expectation that more 19.2-ounce cans of Swami’s IPA will need to be produced, and I believe the draft business for California Honey Ale and Chronic Amber Ale are growing. We also produced over 4,000 barrels of Port and Hop Concept brands, so the tanks should be getting filled regularly.

How will the transition of the space work and will The Lost Abbey’s satellites remain open?

There are tons of moving pieces at this point, but we know some of the details look thusly. Pizza Port will be renewing the lease on the space, which expires on May 31, 2023. The Lost Abbey will continue to occupy the space until then. We have determined the tasting room will close in San Marcos on May 1. We will need to vacate the space in order to tear out the current tasting room and hopefully relocate portions of it.

All of The Lost Abbey’s other tasting room—The Church in downtown’s East Village, The Confessional in Cardiff-by-the-Sea, The Sanctuary in San Elijo Hills—will remain open. From now through June 30, beers from Port Brewing and The Hop Concept will be available on tap and to-go at each of those spaces. This will allow us enough time to secure a brewery space for production of The Lost Abbey’s beers and develop some great new offerings to pour through our faucets, since the Port Brewing and Hop Concept brands will be transferring to Pizza Port stewardship. As such, we won’t have shared production on these beers, and they will no longer be part of The Lost Abbey’s portfolio. We can, however, expect to see more of our Tiny Bubbles line. Our fans should expect to see Brutus and Friends having fun with hops and new IPA recipes on a regular basis. We also hope to expand on some of our Khárisma hard tea offerings.

As far as the individuals who staff The Lost Abbey’s venues, the original brewery tasting room has been operating with only two staff members. We will do everything in our power to retain them, but all of our hospitality centers have been running very lean staff totals post-pandemic.

What sorts of new recipes will The Lost Abbey introduce and where will they be brewed?

We have a whole host of things we have had to shelve on this year’s calendar that we’re hoping to hit go on. On The Lost Abbey side of things, we will be launching Peach Afternoon cans in late March and ideally other flavors in the future. There is a recipe for a Brett-finished hop-forward idea called “Café Bier”, which is the sort of thing you would expect to find in a Belgian café. The process of “growing down” and moving out to a smaller brewing kit should afford us numerous opportunities to explore fun new things.

As far as where we will produce our beers, both new and old, that’s a big TBD right now. We obviously have many friends in the brewing universe and here in San Diego. In the spirit of collaborating, we might have a few homes for the beers, so if there are friends with space, please hit us up. Ideally, we can find a space to initiate an alternating-proprietorship agreement, which would give us control over all facets of our production.

What are your goals as you “grow down” and what will you require to accomplish them?

Pick up any business book and inevitably you will find a section imploring business owners to find their focus. So, throughout this process we have identified the places we need to live moving forward. We know that we have a larger hospitality footprint than ever before, so this guides many of the conversations about how to structure our company for future success. Getting back to a smaller size will present so many opportunities for us. It’s mind-boggling to think of what we have had to punt on over the years because the brewing system was far too large to adequately service our needs. Hopefully, all of the conversations that have led us to this point will allow us to solidify the operations and set us off on the journey we love dearly.

Looking back on The Lost Abbey’s 17-year history, what stands out?

When I think about our accomplishments, it amazes me how each and every year we continue to excel at this style of brewing. The makeup of our crew has varied since we opened, but each and every employee has contributed to our sustained excellence. It’s honestly mind-blowing when I think of it, And the craziest part for me is that I don’t associate that greatness with only the production crew. Top-to-bottom, we have handed the reins to some brilliant minds and, collectively, they have all pulled us to this place of world-class beers. I cannot thank them and their families for the profound work they provided.

We have built something incredible in 17 short years and now it’s time to continue that tradition with additional partners on board. My feeling is we have been authentic to ourselves, we know our consumers and the capacity to continue this excellence should resonate with those who wish to be part of a great small pool of investors who care about us and the beers we make.  

I believe in our future, and while the business of craft beer is very different from when we first started, what hasn’t changed is a belief that what we’re doing each day matters. It matters to people we’ve yet to meet and places that haven’t called our name. That feeling never gets old.

Parties interested in reaching Arthur regarding potential investment opportunities can do so by clicking here.

---