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Offline mr. furley

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Shelton Brothers is done
« on: November 05, 2020, 03:08:50 PM »
https://www.goodbeerhunting.com/sightlines/2020/11/5/shelton-brothers-ceases-operations

After 24 years, Shelton Brothers, America’s most influential importer of Belgian and European beers, will soon cease operations.

The Belchertown, Massachusetts-based importer of renowned brands that include Cantillon, Drie Fonteinen, Fantôme, De La Senne, and others says it has been forced into liquidation by its bank.

The company was founded in 1996 by brothers Dan, Joel, and Will Shelton and has served as an importer of more than 150 of the world’s best breweries, as well as a distribution partner for American breweries, cideries, and meaderies including Jolly Pumpkin Artisan Ales, Anchorage Brewing Company, and Saint Somewhere. The company’s annual beer event, The Festival, is considered one of the most prestigious global beer events and is attended by some of the most revered brewers in the world.

Dan Shelton says the company owes money to Berkshire Bank, to breweries, and vendors. He says Shelton Brothers has shed 25 staff from its payroll, and that the bank will likely seize its assets—including beer and wine. Shelton declined to share how much he currently owes and how much his remaining assets are worth.

“Basically they have rights to every last paper clip that belongs to Shelton Brothers,” Shelton says. “They’re going to take that and they’re going to sell it. We’re trying to get them to sell it to people who will treat it right, buy the assets—the beer we have in the warehouse—and continue the business.”

Right now, though, it’s unclear who, if anyone, would take over importation of the brands currently in Shelton Brothers’ portfolio. The company wants a say in who does, but it’s not certain whether it has authority to influence the bank’s decision.

WHY IT MATTERS

Shelton Brothers has been the premier importer of beer in the U.S., and the American availability of some of the world’s most respected beers is now in question. Dan Shelton says it’s the company’s hope that the “people we know will take on our assets” to ensure the portfolio continues to be sold stateside, referencing his preference that he have a say in who takes over importation of those brands. But that’s far from certain.

Shelton cites the economic upheaval caused by COVID-19 as the primary cause of the company’s insolvency. Bars and restaurants were responsible for 50% of Shelton Brothers’ sales, he says, and when most were forced to close in March as a result of the pandemic, revenues dried up. Then, in May, court records show Shelton Brothers was ordered to pay $2.1 million to Chicago-area beer distributor River North to resolve a lawsuit over distribution rights dating back to 2011; Shelton says he continued to dispute this judgment until August 2020.

The two factors—the legal judgment and the loss of on-premise sales—were too much for the company to survive.

“Our [sales] numbers from February to March went to shit. I mean really shit. In March, we did 15 percent of what we’d done the previous year,” he says.

Shelton says on-premise sales have improved as bars and restaurants have been able to reopen, but the bank that controls the company’s $3.5 million line of credit was not willing to wait any longer for loan repayment. Earlier this year, Shelton Brothers was in the process of moving its business to another bank that it perceived as more understanding of its debts, but that fell through in the economic turbulence following the coronavirus outbreak.

“The virus completely killed the on-premise business, which is where people were more willing to try our huge range of beers,” he says. “It’s picking up now, but not enough for the bank. And we can’t find another bank.”

Shelton notes these negotiations with his bank come with immense personal stress to him and his family. He says that as part of his agreement with the bank to obtain a line of credit for Shelton Brothers, he signed a personal guarantee making him responsible for any disparity between what the bank gets from the sale of Shelton Brothers' assets and the current amount advanced on the line of credit. Shelton says there’s likely to be at least a $1 million discrepancy, and he expects to file personal bankruptcy and potentially lose his family’s home in Massachusetts, which has served as the company’s offices for more than a decade. Shelton and his family have been living in Germany since the late summer.

While COVID-19 was an unforeseen blow, Shelton dates the company’s cash-flow problems back to 2018. Prior to that, Shelton asserts business was good with annual revenue in excess of $10 million. But those revenues were heavily dependent on selling products from two beer companies: Copenhagen-based Mikkeller and McAlester, Oklahoma-based Prairie Artisan Ales. Together, Shelton says, sales of the two beer brands made up half of Shelton Brothers’ revenue.

Then in 2018, Shelton says, both Mikkeller and Prairie decided to no longer do business with Shelton Brothers. The way Shelton describes it, the companies “decided they were so big, they didn’t need us any more.” Prairie owner Zach Prichard doesn’t dispute this, saying that by 2018, the model of having a broker in the U.S. didn’t fit the brewery’s business model.

Shelton says Mikkeller’s decision to sever the business relationship left Shelton Brothers with between $1.5 million-$2 million of Mikkeller beer in inventory. He says the beer was difficult to sell because Mikkeller had opened a San Diego brewery, selling that beer for half the price of its imported beer. (Mikkeller did not dispute these assertions, and a representative for the brewery says there is no conflict between the two parties.) After two years, Mikkeller bought back most of the beer inventory from Shelton Brothers, but in the meantime, that inventory dragged down the importer’s balance sheets.

“The bank noticed and started complaining and decided that we were goners and have been trying to push us out for two years,” he says.

While lawsuits, soured business deals, and COVID-19 all came to a head for Shelton Brothers this year, some people see the changing nature of the American beer industry as a factor in its declining fortunes, too.

“Fundamentally, part of Shelton’s problem is that some of the older brands might be offering a product that’s also brewed domestically,” says Paul Jones, co-founder of Cloudwater Brew Co. in Manchester, England, which exports its beer to the U.S. through Shelton Brothers. “You can get beautiful Saison made in America and it doesn’t come with all the prestige or mystique of Belgian-produced Saison, but it’s just as interesting to the modern consumer, maybe more interesting.”

Michael Roper, owner of Hopleaf, a Belgian beer bar and restaurant in Chicago, says he’s seen these changing consumer preferences first-hand. He says drinkers’ interest in American breweries has come at the expense of European imports.

“If you’re selling mostly very esoteric, expensive import brands, you probably have been struggling for some time,” Roper says.

But he also cites problems specific to Shelton Brothers, including its legal battle with River North. The company is as well known for its beer portfolio as for its lawsuits and “brash public persona,” as writer Andy Crouch put it in a 2017 BeerAdvocate article about the company. “In a trade built on collegiality, Dan developed a reputation for trashing his competitors,” Crouch wrote.

“Why do things have to be so unfriendly and so controversial?” Roper says. “It’s always been more pleasant to deal with other importers. […] Why don’t [Shelton Brothers] just go into a market and sell beer like everybody else does? Enough of the intrigue.”

Roper hopes that the breweries in Shelton Brothers’ portfolio end up with a new importer so Hopleaf can continue selling them. He says it’s likely another importer would want to bring beer from darling brands like Cantillon and Dieu du Ciel to the United States, but is less certain about the fate of obscure brands from countries like Norway or Finland.

The American future for brands in the portfolio is also top of mind for Paul Jones. He hopes he can find a way to continue selling his beer in the U.S., and hopes the same for the other breweries the company imports. He says Shelton Brothers has owed money to Cloudwater for a year, but despite that debt, he still has “warm feelings” toward the company, its staff, and its legacy.

“There’s something in that Shelton catalogue that feels timeless,” he says. “Through these beers, you have an opportunity to experience not just a different flavor or presentation of beer, but something of a timeless and prevailing culture of beer.”

In Jones’ mind, that part of Shelton Brothers’ decades-long legacy—regardless of what comes next—is solidified.

“Shelton gave American consumers a chance to experience what beer has always been. The saddest thing in my mind is that if that link to beer’s entire history is severed by Shelton ceasing to exist.”




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Offline BryanC

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Re: Shelton Brothers is done
« Reply #1 on: November 05, 2020, 03:34:50 PM »
Wow

Offline flyingbison

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Re: Shelton Brothers is done
« Reply #2 on: November 05, 2020, 03:47:18 PM »
« Last Edit: November 05, 2020, 04:57:57 PM by flyingbison »

Offline mr. furley

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Re: Shelton Brothers is done
« Reply #3 on: November 05, 2020, 03:51:53 PM »
banks are truly loan sharks. they don't care what happened, they want their fucking pretzel monies.

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Offline beastiefan2k

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Re: Shelton Brothers is done
« Reply #4 on: November 05, 2020, 04:18:03 PM »
end of an era. it seems that it was more than one thing. Whats the deal with this Chicago distributor and a $2 million lawsuit?

Offline fRed Scare

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Re: Shelton Brothers is done
« Reply #5 on: November 05, 2020, 04:33:15 PM »
Quote
Then in 2018, Shelton says, both Mikkeller and Prairie decided to no longer do business with Shelton Brothers.

I don't care what your business model is, if you lose 50% of your sales in one fell swoop, you're gonna be in a world of pain.
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Offline emerge

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Re: Shelton Brothers is done
« Reply #6 on: November 05, 2020, 04:37:38 PM »
end of an era. it seems that it was more than one thing. Whats the deal with this Chicago distributor and a $2 million lawsuit?


They don’t have a good history with their distributor here:
https://www.guysdrinkingbeer.com/chicago-shelton-brothers/

Wondering what will happen to Do Right Distro, who was handling the Shelton stuff recently.
Also Mark in STL... :(

Offline Tip Top

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Re: Shelton Brothers is done
« Reply #7 on: November 06, 2020, 07:20:16 AM »
end of an era. it seems that it was more than one thing. Whats the deal with this Chicago distributor and a $2 million lawsuit?


They don’t have a good history with their distributor here:
https://www.guysdrinkingbeer.com/chicago-shelton-brothers/

Wondering what will happen to Do Right Distro, who was handling the Shelton stuff recently.
Also Mark in STL... :(

Lakeshore Beverage is far from perfect as well. 

Offline emerge

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Re: Shelton Brothers is done
« Reply #8 on: November 06, 2020, 12:33:48 PM »
end of an era. it seems that it was more than one thing. Whats the deal with this Chicago distributor and a $2 million lawsuit?


They don’t have a good history with their distributor here:
https://www.guysdrinkingbeer.com/chicago-shelton-brothers/

Wondering what will happen to Do Right Distro, who was handling the Shelton stuff recently.
Also Mark in STL... :(

Lakeshore Beverage is far from perfect as well.
Right, didn’t mean to imply Shelton was the only one at fault here, just that they have a history.

Offline emerge

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Re: Shelton Brothers is done
« Reply #9 on: November 09, 2020, 08:09:25 PM »
Hmmmmmm

Quote
I did hear from someone inside the industry that Shelton isn't actually in real danger. This move is to remove Dan from the business and restructure debt in a more manageable way. Time will tell if that's accurate but I am curious about the outcome of Shelton Fest 2020/2021

*posted on another beer forum

Offline beastiefan2k

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Re: Shelton Brothers is done
« Reply #10 on: November 09, 2020, 11:38:16 PM »
Hmmmmmm

Quote
I did hear from someone inside the industry that Shelton isn't actually in real danger. This move is to remove Dan from the business and restructure debt in a more manageable way. Time will tell if that's accurate but I am curious about the outcome of Shelton Fest 2020/2021

*posted on another beer forum
Even more dramatic.

Offline bakes

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Re: Shelton Brothers is done
« Reply #11 on: November 10, 2020, 12:59:48 AM »
Hmmmmmm

Quote
I did hear from someone inside the industry that Shelton isn't actually in real danger. This move is to remove Dan from the business and restructure debt in a more manageable way. Time will tell if that's accurate but I am curious about the outcome of Shelton Fest 2020/2021

*posted on another beer forum

Innnnnnteresting.  I always found Dan to be opinionated to the point of abrasiveness.
My friends say I'm like doing the laundry and forgetting the bleach: I'm not as bright as I could be.

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Offline emerge

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Re: Shelton Brothers is done
« Reply #12 on: November 10, 2020, 09:47:23 AM »
Hmmmmmm

Quote
I did hear from someone inside the industry that Shelton isn't actually in real danger. This move is to remove Dan from the business and restructure debt in a more manageable way. Time will tell if that's accurate but I am curious about the outcome of Shelton Fest 2020/2021

*posted on another beer forum

Innnnnnteresting.  I always found Dan to be opinionated to the point of abrasiveness.

Just a rumor, we'll have to wait and see if it's even true. I agree, he comes off as a huge dbag, especially at that lambic summit in Philly years ago.

Offline emerge

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Re: Shelton Brothers is done
« Reply #13 on: November 10, 2020, 03:52:54 PM »
What's next for Shelton Brothers beer importer? How it will impact consumers

Will Cleveland 
Updated 5:29 p.m. ET Nov. 6, 2020

The news of the imminent closure of Shelton Brothers, a pioneering beer importer, rocked the craft beer world Thursday after a report in Good Beer Hunting.

That left many questions swirling about what the future of the Shelton portfoliocould look like and how this will impact American beer drinkers.

The Belchertown, Massachusetts-based importer introduced American consumers to a wide array of classics, including traditional Belgian wild ales and Trappist beers. It's really impossible to overstate how influential Shelton is in the American craft beer evolution.

The entire Shelton portfolio is warehoused at Remarkable Liquids, a beer distributor and in Guilderland, Albany County. Matt Hartman, partner and sales director for Remarkable Liquids, said there is still a big assortment of Shelton-imported beers in the Remarkable warehouse. Remarkable Liquids hold distribution rights for the Shelton portfolio in New York and New Jersey.

"We'll continue to sell it until we're told we can't," Hartman said. "As far as where things are heading, whether it be bankruptcy or something else, I haven't heard. But their inventory is in our warehouse and we are actively and continually bringing into our Remarkable Liquids inventory.

"It's the end of an era and we're hopeful these products do end up making their way into the market where people have seen them in the past."

The future for Shelton, according to GBF, remains hazy. Will someone purchase the assets for future importing? How will this impact American consumers?

Why should consumers care?

Without Shelton Brothers, American craft beer drinkers never would've been introduced to foundational breweries like Cantillon, De La Senne, De Ranke, Blaugies, Thiriez, Drie Fonteinen, Fantôme and a whole host of others. Since it launched in 1996, Shelton has been responsible for educating so many American palates to worldwide classics.

If Shelton imports your brewery, there is a perceived seal of approval. You can almost universally guarantee that the beer is world-class if it is in Shelton's portfolio.

But Kate Bernot wrote in Good Beer Hunting that the company has been forced into liquidation by its bank. Shelton is the importer for more than 150 breweries worldwide. It also served as the distributor for American breweries, meaderies, and cideries such as Michigan's Jolly Pumpkin Artisan Ales and Alaska's Anchorage Brewing Company.

Over the last decade, the company's annual beer event, The Festival, was one of the most prestigious beer events in the world. It brought in some of the most influential breweries in the world and delighted festival-goers with the chance to meet some of the most prestigious brewers.

In 2019, The Festival was held in Buffalo over two days and it attracted sell-out crowds to the city's historic central railroad terminal. (I can honestly say it was the best festival I've ever attended and it was held in the most breath-taking venue I've ever experienced for a beer event.)

Hartman said the importer was of paramount importance in his craft beer journey.

"Any beer geek that has been around for more than eight or 10 years," Hartman saidthey've probably found their way to that through Shelton. Some of my favorite memories are with their products. It's an end of an era. It's unfortunate. It's a sad day."

With the uncertainty caused by the novel coronavirus pandemic, the halt of draft beer sales (with many restaurants and bars closed), and the shift of the beer market toward hyper-local consumption, Shelton managed to stay relevant, Hartman noted.

"They've brought on even newer breweries over the last handful of years," Hartman said. "We'll get those beers in and I've never heard of them. But once I try the beers and do a little research, it's exceptional. They've always had an ability to find exceptional product and good people to work with. I don't know how they do it."

What does the future hold for Shelton?

Hartman said Shelton is current on all payments to Remarkable Liquids and added the partnership between the two companies has been fruitful. He said Shelton is current in all of its payments to Remarkable Liquids.

Dan Shelton told GBH that his company has already laid off 25 employees and added he expects its assets will be seized by the bank, including beer and wine. But Hartman said the legacy of Shelton Brothers will live on. While demand for many classic beers has waned in the hyper-competitive, hyper-local American craft beer scene, people will always want classics, Hartman said.

Therefore, he fully expects these European beers will again find their way into America through a new importer. There will be an opportunity for someone else to keep the torch lit, but Hartman said Remarkable won't be the ones to carry on that legacy. "I am confident we'll know the next steps quickly," he said.

De La Senne/Bellwoods Imperial Donkey, a mixed fermentation English imperial stout aged in wine barrels.Buy Photo
De La Senne/Bellwoods Imperial Donkey, a mixed fermentation English imperial stout aged in wine barrels. (Photo: Will Cleveland/Rochester Democrat and Chronicle)

The company already imports Lough Gill from Ireland and Beau's from Canada. Hartman said his company doesn't have any interest in securing Shelton's assets and contacts right now.

"The availability of the beers won't completely drop off immediately," Hartman said. "A lot of my communications yesterday were with some of the brewers and a lot of retailers having the same concern, 'Oh, that's a real bummer. I don't know if I'll ever see that again.'

"That's a little bit pre-emptive. I think the products will continue to trickle out based on what's in our warehouse. I don't know what the next steps will be as far as getting those beers into the country. But the ones that are getting pulled and the ones people want to see, they'll find their way back in through some importer."

And once that is sorted out, Remarkable, which maintains the franchise rights for these brands, will make sure the beers will be back at your favorite bars and stores.

Offline bakes

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Re: Shelton Brothers is done
« Reply #14 on: November 11, 2020, 03:51:51 PM »
I have met Matt Hartman several times, really good dude.
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Offline emerge

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Re: Shelton Brothers is done
« Reply #15 on: November 11, 2020, 03:56:48 PM »
I have met Matt Hartman several times, really good dude.

Hope they get their inventory out into the market instead of the it getting tied up with the bank and sold to investors or something.

Quote
The entire Shelton portfolio is warehoused at Remarkable Liquids, a beer distributor and in Guilderland, Albany County. Matt Hartman, partner and sales director for Remarkable Liquids, said there is still a big assortment of Shelton-imported beers in the Remarkable warehouse. Remarkable Liquids hold distribution rights for the Shelton portfolio in New York and New Jersey.

"We'll continue to sell it until we're told we can't," Hartman said. "As far as where things are heading, whether it be bankruptcy or something else, I haven't heard. But their inventory is in our warehouse and we are actively and continually bringing into our Remarkable Liquids inventory.

"It's the end of an era and we're hopeful these products do end up making their way into the market where people have seen them in the past."

Offline emerge

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Re: Shelton Brothers is done
« Reply #16 on: February 11, 2021, 03:17:12 PM »
Separate story, but I wonder if the recent Shelton closure had an impact on this decision. Owners looking to cash out, declining sales, etc.

https://www.brewbound.com/news/supplier-news/beer-importer-global-beer-network-becomes-an-employee-owned-company/

Offline beastiefan2k

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Re: Shelton Brothers is done
« Reply #17 on: February 11, 2021, 05:13:24 PM »
Separate story, but I wonder if the recent Shelton closure had an impact on this decision. Owners looking to cash out, declining sales, etc.

https://www.brewbound.com/news/supplier-news/beer-importer-global-beer-network-becomes-an-employee-owned-company/
I’m a big fan of Global Beer (have used their shop often for beer glasses). I don’t know how representative this is for the rest of the beer world. This is a relatively small company with probably less than 30 employees. Plus, the owners have been long time beer fans. I think the succession plan is likely the main reason. Plus, when a major importer like Shelton closes one would think Global Beer is enriched due to lower competition. Plus, they can pick up the some of those brands.

Offline emerge

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Re: Shelton Brothers is done
« Reply #18 on: February 11, 2021, 10:00:44 PM »
Separate story, but I wonder if the recent Shelton closure had an impact on this decision. Owners looking to cash out, declining sales, etc.

https://www.brewbound.com/news/supplier-news/beer-importer-global-beer-network-becomes-an-employee-owned-company/
I’m a big fan of Global Beer (have used their shop often for beer glasses). I don’t know how representative this is for the rest of the beer world. This is a relatively small company with probably less than 30 employees. Plus, the owners have been long time beer fans. I think the succession plan is likely the main reason. Plus, when a major importer like Shelton closes one would think Global Beer is enriched due to lower competition. Plus, they can pick up the some of those brands.

Yeah, maybe the timing is just a coincidence. Just hearing bad news for importers lately. Hopefully they can pick up some of the Shelton portfolio, that’s actually what I was searching for when I saw that article.