When Matthew Osterman, founder and president of Sleeping Giant Brewing Co., the first dedicated contract brewery in the western United States, heard Boulder Beer Co. was shutting down its retail distribution, he proposed a novel idea.
Unlike most contract brewing agreements, where an industrial brewer simply increases a brewery’s capacity by providing access to large scale brewing, canning and packaging equipment, Osterman suggested Sleeping Giant could take over Boulder Beer Co.’s entire retail business. Everything from brewing, canning and packaging, to shipping, marketing and sales.
“For Sleeping Giant, this partnership was an amazing opportunity on multiple levels,” Osterman said. “Our new relationship will allow Sleeping Giant to better understand the distribution, sales and marketing side of the business. Developing this expertise will allow us to assist our contract brewing clients and provide yet another value-add service to our portfolio.”
For Boulder Beer Co., shedding the retail side of its business allows it to focus on what it does best — developing new beers.
No longer having to produce 16,305 barrels of beer as it did in 2018, Boulder Beer also will be able to diversify business at the taproom on 2880 Wilderness Place by removing the fermentation tanks, canning line and other large scale brewing equipment in the production room and turning the space into an event space.
In the meantime, Sleeping Giant will maintain Boulder Beer Co.’s presence in the market, driving people to the taproom when they’re in town.
“We’ve been in business for 40 years, so keeping the legacy of the brand alive in retail is important to us,” said Tess McFadden, Boulder Beer marketing director. “It’s a symbiotic relationship for sure.”
The key to the relationship is Sleeping Giant’s reputation for perfectly matching the flavor profile of different beers.
“It’s very difficult, but that’s our specialty,” Osterman said. “That flavor match is our bread and butter and our reputation speaks for itself. Our goal is not to make our version of a beer. Our goal is to make their beer the way it should be.”
In the first year, Osterman said Sleeping Giant will replicate and continue to distribute Boulder Beer’s most popular brews — Shake Chocolate Porter, Mojo IPA, Buffalo Gold Golden Ale and Hazed & Infused Pale Ale — and evaluate the markets in 26 states in which Boulder Beer is sold, but is not looking to rapidly expand.
As Sleeping Giant works through the inevitable kinks of taking over the retail side of Boulder Beer’s business, it will then look to add more beers in new and different markets.
McFadden said it’s possible Sleeping Giant could even start to distribute Boulder Beer’s seasonal flavors in the near future.
While the two sides are still trying to figure the financials of the deal and whether Sleeping Giant will share profits from Boulder Beer retail sales, Osterman said he believes the model could be duplicated with other breweries.
Sleeping Giant has already received feedback from other companies interested in similar agreements, he said. “I think it’s got a lot of legs and we can take it in a lot of directions, but it all ties back to that mutually beneficial relationship.”