Four Peaks Planning to Stay Regional

Original Article via Steven Totten, Phoenix Business Journal

When Four Peaks Brewing Co., Arizona’s largest brewery, was acquired by Anheuser-Busch InBev (NYSE: BUD) — one of the world’s largest beer distributors — people were afraid there would be major changes to the brewery.

“People didn’t understand what it meant and they thought we would change,” said Four Peaks co-founder Randy Schultz. “They thought we’d have Bud Light on tap and all the sudden we wouldn’t be in charge, but I think over the past year we’ve proven that’s not the case. Our beer is getting better and better all the time.”

Schultz, along with co-founders Jim Scussel and Andy Ingram, said since the acquisition in late 2015, most changes have been behind the scenes, and that Anheuser has given them more resources and let them retain control.

“When we were negotiating, they were like, ‘We’re not here to change you guys. You’re not broken, we’re not here to fix you. We just want to accelerate and amplify what you guys can do,'” said Ingram. “The remarkable part is it’s not up to AB, it’s up to us. It’s amazing how much restraint they have.”

Since the brewery’s inception 20 years ago, the Four Peaks founders have made sure their growth was steady, or as Scussel said, “not calculated, but calm with control.”

“We’ve never tried to grow too fast,” said Scussel. “When you grow too fast you lose a lot of what you’re aiming for.”

Even with the acquisition, which allowed the brewery to expand its distribution out of state for the first time to Nevada, New Mexico and southern California, Four Peaks has never expanded its barrel capacity beyond 10 percent to 34 percent.

Part of that limited growth was because of Arizona regulations on brewing capacity, in which a microbrewery could only produce up to 40,000 barrels of beer, self-distribute 3,000 cases and operate restaurants.

“The laws always kept us at bay,” said Schultz. “We were always bumping against that.”

The law changed in 2015 with Senate Bill 1030, and brewers can now produce more than 200,000 barrels of beer per year and operate up to seven retail shops under a microbrewer license.

But even with the new regulations, Four Peaks has kept growth on the conservative side.

“I tell people we’re lazy, but we’re not lazy. It just makes more sense to keep the beer in the state,” said Scussel. “You save on transportation, you save on marketing, you save on distributors — a lot of headaches. So our thought is if we could sell every drop in Arizona, why would you go out of state? We went really deep in Arizona, worked every corner of the market. It was more efficient for us to send someone to Flagstaff or Tucson than L.A. or San Diego.”

Even when demand was high, Four Peaks’ founder stayed the course.

“Our distributor, Hensley, they were always begging for more beer, but why would we ship it anywhere else when we can supply it to them, and then even having them saying, ‘Give us more’ and we say we can’t,” said Scussel. “There’s a lot of other breweries that have a more shotgun approach, like a Green Flash that is in all 50 states now that barely brews any more than we do. That’s their philosophy, and that may work for them, but not for us.”

Despite the restraint, Four Peaks still has plans to continue more distribution outside Arizona: distribution in Texas, Hawaii and Colorado will likely happen this year.

“We’re really gonna be regional. We did New Mexico, Nevada and California all the way up to Santa Barbara, and we’ve got those others on the horizon,” said Scussel. “From there, maybe the Midwest. We’re from Minnesota and we’ve got a lot of contacts there, so it would be fun to sell in our home state. But other than that we’re gonna try to keep going deep in those states.”