“At that Point, Beer was the Hottest Thing”

In his Monday roundup, Stan Hieronymus links to the extraordinary story of Cleveland’s Platform brewery, which launched, exploded in popularity, sold out to AB InBev, collapsed and folded—all in the space of a decade. I wanted to call your attention to the very long piece because it is a perfect example of how “optimism” can be a dangerous thing in an industry. (It’s also a totally engrossing tale.)

The real lessons all arrive in the brewery’s first five years, culminating in ABI purchase in 2019. Writing in the Cleveland Scene, Douglas Trattner describes Platform’s home town in 2014. “In terms of breweries in Cleveland, there was only Great Lakes, Market Garden, Nano Brew, Portside Brewery and tiny Indigo Imp.” He quotes a former employee describing the staid landscape. “Breweries like Great Lakes that were true to their core brands were fading to the backburner a little bit.” It was a city desperate for new breweries—especially modern ones experimenting with new styles. Adopting a business model we all understand now, Platform delivered, releasing as many as 189 beers a year. People lined up for new releases each Friday, and it didn’t seem to matter what was on offer. Platform was poised for growth.

Growth at All Costs

Platform had a lot of ideas about what it wanted to do—too many, it turns out. They toyed with a brewery incubator project and contract brewing. But growth was where they really put their energy, and these other projects withered. Growth was so easy, they didn’t really have to worry about the fundamentals.

“Early on, Platform, unlike most decent-sized breweries, did not maintain an on-site lab, where beers are evaluated for things like quality, shelf-life and stability, and the presence of microorganisms… Within the industry, Platform earned a dubious reputation in terms of consistency and quality, a fact somewhat masked by its commitment to conceiving new brands. But even the brewery’s so-called flagships – beers like Speed Merchant, New Cleveland Palesner and Yammy Yammy – were judged to be unpredictable from batch to batch.”

The story proceeds from there in predictable contours. They took on investors to expand growth, moving production to a bigger facility. This was the “move fast and break things” phase of craft beer, and Trattner describes the lawsuits, disgruntled workers, and unpaid bills that followed. ABI’s purchase is another inexplicable example of someone jumping on the bandwagon without looking too closely. The giant paid a relatively meager sum for Platform—$15 million—but had to immediately sink twice that amount into brewery upgrades. (The sale was the last of ABI’s craft purchases before buying the remainder of Craft Brew Alliance a year later.)

The Dark Shadow of Optimism

Let us recall those heady times. Craft beer was growing by double digit percentages, all on an increasingly large base. The Brewers Association started touting the goal of growing to 20% of the beer market by 2020. As Trattner quotes Ralph Sgro, Platform’s first employee and now owner of Terrestrial Brewing: “At that point, beer was the hottest thing.”

This was the moment of maximum optimism in the industry. And in this case, unearned optimism that concealed a lot of problems. Last week I wrote that Anchor’s decision to reduce its footprint from fifty states to one may seem alarming, but it’s probably a sign of health and realism. Parent company Sapporo has a pessimistic view of the future, so scaling back makes more sense than trying to prop up weak sales in distant markets. Platform is the story of the inverse. Breweries didn’t have to make clean, consistent beer, so they didn’t. They didn’t have to put care into their recipe designs, so they didn’t. They looked to the future with boundless optimism and lunged at all the available growth, not seeing in it the seeds of collapse.

I landed my first writing job by submitting a sample article that we never published. That’s too bad, because it could have served as an important cautionary tale. I wrote about Portland’s Star Brewing, which had recently closed. I interviewed a friend of a friend who’d worked there, and he described a situation much like Platform’s. Star was growing so fast the brewery couldn’t meet orders. Instead of turning customers away, they were putting beer into bottles as soon as five days after mash-in. Ken told me he would sit in the warehouse and listen to the sound of bottles exploding. That was 1997, right before the first craft re-set happen, at the moment of maximum optimism about the future.

To wrap this up, the story of these two breweries, Platform in the mid-teens and Anchor in 2023, tell complimentary tales of how a brewery’s forecast of the future shapes the decisions it makes. For better, and worse.