Resurrecting A Beer Killed Off By A Horse

15 Apr 2017 | 09.35 am

Resurrecting A Beer Killed Off By A Horse

Smithwick family back in beer business with Sullivan's Ale

15 Apr 2017 | 09.35 am

The Smithwick family from Kilkenny first became involved in brewing ale in 1827. They exited the business in 1965 when Smithwick’s was sold to Guinness. Now the family is back, not with Smithwick’s – still produced in Dublin by Diageo – but with a new brand called Sullivan’s.

Sullivan’s is another historic Kilkenny ale brand. It first appeared in 1702 and went under two centuries later, so the story goes, after the owner bet the brewery on a Deauville horse race. In the fall-out, the Smithwick family acquired the Sullivan’s brand, which they kept when they sold out to Guinness.

These details are important to the new Sullivan’s Brewing Company, which operates through Sullivan’s Craft Brewery (1702) Ltd. In a very crowded craft beer market, Sullivan’s is majoring on the Kilkenny brand heritage to build an appealing story for consumers. Never mind that the ale is brewed in Drogheda; the Sullivan’s principals believe that brand authenticity can be a key differentiator.

Festina Lente

Craft brewery startups are ten a penny in Ireland, and elsewhere too. Unlike most of its peers, the Sullivan’s approach is to build a brand presence first and the brewery later. When the brewing roots stretch as far back as they do for the Smithwick family, the festina lente approach is understandable.

There are three prime movers behind Sullivan’s Brewing, two of them with the Smithwick surname. Paul Smithwick (71) is a former commercial solicitor, and his son Dan Smithwick (33), the venture’s finance director, is an accountant who formerly worked with British Gas and Citi Bank. The eighth and ninth generation Smithwick family members are joined by Alan Quane (49), without whom the Sullivan’s Brewing venture would not be happening.

Quane brings commercial credibility to the project. His former roles included Global Commercial Director for Guinness and Head of Innovation & Strategy for Heineken Europe. Brewing credibility is provided by master brewer Ian Hamilton, who was Head Brewer and Site Director of Smithwick’s Brewery in Kilkenny for over a decade.

Mix the heritage and commercial nous together and there’s a concoction that has impressed a number of American investors. The main investor in Sullivan’s Brewing is 1702 Irish Ales Group LLC, an American partnership led by Citi Bank executive Michael Meade.

American Investments

Through 2016, the LLC made three investments in Sullivan’s totalling €1.4m. California residents John and Anita Browne also chipped in €180,000, while to date the investment by the founders and other members of the Smithwick family has been limited to around €54,000.

Sullivan’s was launched in the summer of 2016, a light beer billed as Maltings Red Ale with 4% alcohol by volume. The company describes Ian Hamilton’s recipe as a ruby tinted classic Irish ale with a depth of malt flavour giving rich biscuit and gentle caramel notes. The beer is brewed with Kilkenny-grown darker malts and three varieties of hop.

Sullivan’s is brewed at the Boyne Brewhouse, also known as the Boann Distillery in Drogheda. This is the distillery/brewery established by Pat Cooney after he sold his drinks distribution company M&J Gleeson to C&C Group. Sub-contracting the brewing in the launch phase for Sullivan’s fits in with Alan Quane’s masterplan of a slow roll-out for the brand.

Sullivan’s was unveiled to the Kilkenny public in August 2016 at a facility called the Sullivan’s Taproom. Since then the draught beer has been introduced to about a dozen pubs in Kilkenny and seven hostelries in Dublin. In the capital, Sullivan’s is on tap in Davy Byrne’s, Lemon & Duke, The Old Stand, The Exchequer, East Side Tavern, The Sugar Club and The Stone Leaf.

Legacy Play

Paul Smithwick was still a teenager when his father Walter sold the family business to Guinness. After a long career in small office commercial law, he was itching to give the brewing business a go, according to Quane.

“Paul has been a solicitor all his life and he was always looking for the opportunity to get back into the brewing world,” says Quane. “We had mutual connections and we met up about two years ago to discuss the Sullivan’s brewing opportunity.

“My take on Paul’s motivation is that brewing is in his DNA and for him Sullivan’s is a legacy play. It also matters to him that when Diageo closed the Smithwick’s brewery in 2013, a city with a brewing heritage of hundreds of years was left without a brewery. Kilkenny really is the historical home of Irish craft brewing, so it was a massive miss not to have a brewing operation there.

“The Smithwick family still owned the IP rights to the Sullivan’s brand, which was a huge business that used to export beer to the US, the UK and Australia. I discussed with Paul the kind of strategy and model that was needed to win in the craft beer space. It wasn’t an instant meeting of the minds but eventually we aligned on a strategy and the business was formed around that. Then we went looking for capital.”

Smithwick family connections led Quane to New York and Michael Meade. “Our American investors are all professional money men who work on Wall Street. They are fun guys who look for opportunities with a differentiated model in high growth sectors. When they looked at the Smithwick family coupled with my global Diageo experience, that ticked the boxes for them.”

Kilkenny Taproom

The Sullivan’s business plan, including a brewery, envisages a €3.85m investment over seven years. “The first three years is really where the cash burn is with all the capital requirements,” says Quane. “When we received funding the first thing we did was the Taproom in Kilkenny. It’s basically a place where we celebrate our story and our beer. I think consumers want to know what’s behind the brand, who’s making it, what the ingredients are, etc.

In Quane’s view, the Sullivan’s venture will be built on three pillars — great beer, great brand story and great route to market. He’s less concerned about building a manufacturing facility. “We are doing it the other way around to many other craft brewers,” he explains. “If you build the brewery first, that soaks up capital and puts pressure on the business to sell a lot of beer quickly. We have gone brand first with a discovery model.”

So does Sullivan’s need its own brewery at all? Last year the company was talking about a Kilkenny brewery becoming operational in Q3 of 2017. That aspiration has been postponed, and one might wonder whether there’s any point if Pat Cooney can brew the beer to the desired standard.

However, Quane insists that Sullivan’s will be brewed in Kilkenny. “What we are working through is the scale of the brewing operation,” he says. “We set out our stall to bring back brewing to Kilkenny and we are not going to deviate from that. We want to do it properly and we will take our time in getting that right. We will build an interactive visitor centre around that Taproom and we will also have a brewing operation there to celebrate the tradition of brewing in Kilkenny.”

The soft launch of Sullivan’s, and sub-contracting the brewing, also minimises financial outlay as the company promoters and their backers judge whether the market wants yet another craft ale.

“We have launched in carefully selected outlets to get a sense of the traction behind the beer and brand, and the reaction has been incredibly positive,” says Quane.

Beer Adventure

“If you want to win in a crowded space you have to bring something very unique to the table and that has to be in the beer and the story behind the beer. Our target consumer is the beer adventurer, someone who will try new beers, and it’s a market that’s growing. Sullivan’s is a genuine Irish brand that goes back to 1702. With that history behind it and our expertise in brewing and branding, we feel we can achieve cut-through.

“At this stage it’s about being clever with the capital we raise. We want to tell our story and brew great beer and that’s what we are doing.”

Photo (l-r): Ian Hamilton, Alan Smithwick, Alan Quane and Paul Smithwick 

 

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